Economic Rationalism in Canberra: A Nation-Building State Changes its Mind

ECONOMIC RATIONALISM IN CANBERRA

ECONOMIC RATIONALISM IN CANBERRA A NATION-BUILDING STATE CHANGES ITS MIND

MICHAEL PUSEY School of Sociology University of New South Wales

The right of the University of Cambridge to print and sell all manner of books was granted by Henry VIII in 1534. The University has printed and published continuously since 1584.

CAMBRIDGE UNIVERSITY PRESS Cambridge New York Port Chester Melbourne Sydney

For my children, Cara and Lisa. Published by the Press Syndicate of the University of Cambridge The Pitt Building, Trumpington Street, Cambridge CB2 1RP, UK 40 West 20th Street, New York, NY 10011, USA 10 Stamford Road, Oakleigh, Melbourne 3166, Australia © Cambridge University Press 1991 First published 1991 Reprinted 1991, 1992 Reprinted with corrections, 1992 National Library of Australia cataloguing-in-publication data:

Pusey, Michael. Economic Rationalism in Canberra. Bibliography, includes index. ISBN 0-521-33422-5. ISBN 0-521-33661-9 (pbk.). 1. Civil service - Australia. 2. Australia - economic policy - 1976-90. 3. Australia - economic policy - 1990 - , 4- Australia - Politics and government. I. Title. 338.994 British Library cataloguing-in-publication data:

Pusey, Michael 1939Economic rationalism in Canberra : a nation-building state changes its mind. 1. Australia, Public administration. I. Title 359.9471 ISBN 0-521-33422-5 ISBN 0-521-33661-9 pbk Library of Congress cataioging-in-publication data:

Pusey, Michael, 1939Economic rationalism in Canberra : a nation-building state changes its mind / Michael Pusey. Includes bibliographical references and index. ISBN 0-521-33422-5. — ISBN 0-521-33661-9 (pbk.) 1. Australia - Economic policy. 2. Australia - Social policy. 3. Australia - Politics and Government - 1945- I. Title. HC603.P87 1991 338.994 -dc20 91-2950 CIP

Transferred to digital printing 2003

iv

CONTENTS

Preface

vii

INTRODUCTION

Canberra in the balance The politics of meaning and the meaning of politics Method and purpose

1 13 23

PART ONE

Canberra: a state apparatus changes its mind CHAPTER 1

Images of contemporary Australia Problems and obstacles Windows and images Conclusion

29 33 37 43

CHAPTER 2

Profiles of Canberra's political administrators Social backgrounds Political orientations Enter the economic rationalists Government and administration under Hawke Technocrats? Conclusion

45 47 56 59 64 67 74

CHAPTER 3

The inner triangle The central agencies The market-oriented departments The program and service departments Conclusion

76 81 90 97 106

CONTENTS

CHAPTER 4

The instrumentation of state power The state changing its mind, or reforming the top of the Public Service Intellectuals and vertical structural integration Rationalisation and lateral structural integration From the invisible to the visible hand: the formal restructuring of Bastille Day 1987 Conclusion

111 113 126 134 146 153

PART TWO

State and society: reflections, refractions, reductions CHAPTER 5

'Rationalisation* and modernity: what has happened to the state's deliberative capacity? Canberra in the Whitlam years: the earlier normative context of reform What has happened to the state's deliberative capacities? The 'demoralisation' of the career service The depoliticisation of the politicisation of an apolitical career service Crisis of the state, or crisis of modernity?

159 160 169 182 188 195

CHAPTER 6

Integrity under stress: the Lucky Country enters the world economy Relative autonomy of the state? Responding to vulnerability (up the creek or down the Murray?) Vulnerability, culture and identity jittering into the future: evaluations and choices

218 224 234

Appendix A: Methods and procedures Appendix B: Major economic trends 1975-88 Appendix C: Major events 1975-90

245 258 260

Notes and References Index

263 301

VI

208 211

PREFACE

This book is the result of four years of work and, more to the point, of much good fortune. I was fortunate to have the support of many institutions and colleagues that I shall do my inadequate best to acknowledge. I was also allowed a unique access to the top echelons of the Canberra state apparatus at what turns out in retrospect to have been an extraordinarily opportune moment in its history. With the benefit of hindsight it is clear that many of the fundamental directions of Australia's passage toward the twenty-first century were either cast or were only just becoming visible in the moments in which this study was made. As events would have it no one before or since could have had quite such a privileged view of those events for a number of reasons. In 1985 and 1986, the costs and benefits of 'economic rationalism', and indeed the winners and losers of that orientation to national policy, were only dimly visible. Moreover, the climate of economic gloom and of general apprehension about the future of this nation had not really pervaded the consciousness of broader sections of the Australian population to the extent that it has today. And so for these and other reasons my respondents were exceptionally open and trusting in all that they proffered to us in the interviews. That is why the first people whom I must thank are the respondents themselves. As the preliminary results of this study attracted national media and press coverage in 1988 and again in late 1990, the changing cast of the Canberra bureaucracy has been increasingly politicised in a way that will please some of my respondents, leave others uncertain or dismayed, and perhaps anger others. Since I have been typed by many (perhaps wrongly) as the first person to have 'blown the whistle on the economic rationalists' in the Canberra administration, I need to tell my readers, and especially my

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ECONOMIC RATIONALISM IN CANBERRA

interviewees, that I have had much difficulty struggling with the responsibilities of my own positions in relations to these developments. Most importantly I need to say to the interviewees, to all of them and perhaps most of all those who do not like the judgments I have made, that I have to the best of my ability responded in kind to the intellectual and moral goodwill that made people open their views to the scrutiny and judgment of someone over whom they would have no sanction. ACKNOWLEDGMENTS Grateful acknowledgments are due to the indispensable assistance of several institutions. Most especially I wish to thank the Australian Research Council that supported the project for three years. And similarly I thank the Public Service Board, its former Chairman Peter Wilenski, and the former Director of the Research Branch, John Russell. The Board gave its official support to the study and was impeccable in its acceptance of my independence and of the guarantees I made to the respondents that no names would be seen or kept by anyone except myself and my interviewers. In a period where teaching and research resources have been extremely scarce I am especially grateful to the University of New South Wales. My colleagues in the School of Sociology and two successive Heads of School, Frances Love joy and Ann Daniel, have helped in every way they could and so did many other colleagues in this vital and stimulating Faculty of Arts and Social Sciences. The Faculty gave me some supplementary research support from its own funds for the best part of five years and, for that whole time, I have been immensely encouraged by the intellectual interest and practical help of our dean, John Milfull. Thanks go also to the staff of the Faculty's Public Sector Research Centre. And of course there would be no book without a publisher and in this case without first the faith and then the gentle and discerning advice of Robin Derricourt, the Managing Editor of Cambridge University Press. My heartfelt thanks go to those many people who gave so much time to the study. In the early stages so many people gave advice, help and encouragement that I have now space only to thank a few of them who must include Jiirgen Habermas, David Bennett, Sol Encel, Mira Crouch, Bob Connel, Chris Selby-Smith, Ivan Szelenyi, John Langmore, Robert van Krieken, Jane Marceau, Gavan McDonell,

vin

PREFACE

Jennifer Wilkinson, Elizabeth Fulop, Pieter Degeling, Stewart Clegg, Frank Jones, John Higley, Stephanie Short, Christine Crowe, Hal Colebatch, Winton Higgins, Tom McCarthy, Gian Poggi, Trevor Matthews, Noel Butlin, Elaine Thompson, and Michael Johnson. I am greatly indebted to Adrian Fordham for his endlessly patient help with technical aspects of the research design and, similarly, to Danny Hassofer for his assistance with the data processing and computing. Tim Rowse and Gillian Evans were wonderfully conscientious and skilled interviewers whom I cannot thank enough. And then there are those people who spent days, and even weeks, working through the drafts. Chris Selby-Smith, Leslie Fallic, John Western, Adrian Fordham, Jocelyn Pixley, and James Guthrie have all, from their widely differing perspectives, given this indispensable page by page criticism. I take all the responsibility for arguments and positions that are mine and often at odds with theirs. My colleague Maria Markus did all this and more and for her intellectual inspiration and friendship I certainly owe more than I can adequately acknowledge. Grant O'Neil and Meagan Chapman helped with some extra research while I was preparing the manuscript that I was then able to give to Carol Dettmann who is the best editor ever, and to Chapter & Verse who did the design work. Michael Pusey Sydney June 1991

INTRODUCTION

CANBERRA IN THE BALANCE

In the whole world cultural specificity and general factors of modernisation are related. The largest field for research in the social sciences is opened up by the comparative study of paths of development, each defined by its mode of relation between reason and cultural specificity - and also by the forms of rupture between them. Alain Touraine, 19891 Instead of the State being regarded any longer as an object of hostility to the labourer, it should now become identified with an interest in his works, and in all workers, extending to them its sympathy and protection, and watching over their welfare and prosperity. Alfred Deakin, 18902

D

eakin, a founding father of the Australian federal state, and one of several liberals and 'men of universal sympathy',3 uttered these words at a time when the 'Lucky Country'4 was the social lighthouse of the world. In these first moments of what was to be 'the age of the common man'5 in this male-oriented society, Australian men at least enjoyed the highest standards of living of any nation on earth. At the time of Federation in 1901 Australia was still, as it would be for much of the first half of this century, the model social democracy of the world, while Sweden (the successor model) was Europe's 'poorhouse fortress'.6 These were the benefits of a nation that was 'born modern' from a knowledge and conviction that the state would be the 'most likely protector of individual rights against other agencies of social coercion' and, indeed, 'that the major constraints on individual liberty were not public but private'.7 One hundred years later, as Canberra is swept by a locust strike of economic rationalism, the fate of

ECONOMIC RATIONALISM IN CANBERRA

this social experiment would seem to be in the unfriendly grip of ideas that come instead from Britain and the United States - the two great 'stateless societies' as Nettl once described them.8 The Australian experiment and its trials in this last quarter of the twentieth century have some universal significance. In the first place these trials measure the impact of modern economics on the destiny and integrity of a nation that has set great store both on the capacity of a state to steer the private economy and, equally, on its capacity to shape and to shelter Australia's own distinctive social democratic 'labourism' in the face of external pressures. Second, it points to the inner workings of a modern state apparatus and to the significance that programs of 'structural adjustment' and 'public sector reform' can have on those bureaucratic and public policy making institutions that alone stand between individual citizens and market structures. And third, since Australia was indeed 'born modern', these trials pose questions and perhaps even some practical answers about the fate and the social meaning of modernisation, culture, and public morality in a supposedly 'post-modern' world. The first four chapters that make up Part One of this book are centrally concerned with top public servants and, more specifically, with over 215 interviewees comprising nearly half of the Senior Executive Service (SES) population in the key departments of the Canberra federal state apparatus. In Australia nearly 20 years ago Encel showed that top public servants are centrally involved with ministers and elected politicians not only in implementing national and public policy but also in its formulation and, equally, in the brokerage of interests and the articulation of national ideals and goals.9 This assessment was later vindicated by the large comparative seven-nation study made by Aberbach and his colleagues in the United States, Britain, France, the Netherlands, West Germany, Sweden, and Italy in the course of the 1970s.10 Nowadays that view of top public servants is shared on both the liberal right and the new (and old) left of the political spectrum, and it is common to both empirical and socialtheoretically driven studies of the modern state. Nothing remains of the old positivist distinction, one that defined a whole generation of policy studies from Woodrow Wilson to Herbert Simon, which says that politicians choose the values of public policy and public servants the neutral means for its implementation. Along with elected politicians and some types of intellectuals, top public servants are the 'switchmen' of history; when they change their minds the destiny of nations takes a different course. It is for just this reason that their dispositions and ideas offer (like Freud's dreams) such a rewarding route for analysis beyond the surface of public politics and into the logic,

INTRODUCTION

the culture, and perhaps even the consciousness and the inner workings of a state apparatus. And so, with material gathered in the middle and late 1980s, these four chapters in Part One reconstruct, from crucial moments in the reform and development of the Canberra bureaucracy, a trend line of change and 'rationalisation' that may set the course of Australia's future for decades to come. In every country from the late 1970s programs of state and public sector reform have been driven by a conservative agenda. Although the vigour and scope of the changes have varied from one nation to another, in every case they followed conservative liberal maxims about the 'crisis' of 'ungovernable democracies' and of 'overloaded' states,11 and always aimed at moving some of the coordination functions of nation-societies away from states and bureaucracies to economies and markets. The justifications are universal and the political rhetoric that has been used to drive the reforms is familiar 'eliminating waste and inefficiency, and feather-bedding', 'saving the taxpayer's dollar', 'streamlining' the public sector, to make it 'lean and strong', and so on. Although the rhetoric may be the same everywhere, the structural context is not and in this respect some features of the Australian situation are important. In the first place, in comparison with other major OECD countries and despite the infrastructure costs to a small nation of some 16 million people in a vast continental territory, Australia has had, for at least a couple of decades, a small public sector, low levels of taxation and public expenditure, and very low levels of social welfare provision.12 Moreover in this Australian federation it was the central Canberra government that accounted, in its own right, for the major part of the fall in general government outlays from 36.9 per cent of GDP in 1984-85, to 32.1 per cent in 1989 and so to the lowest level of commonwealth (federal) government expenditure since 1973-74.13 Another aspect of the Australian context is that the groundwork for both economic and public sector reform was prepared in Australia by the Liberal (conservative) governments of Prime Minister Fraser that held power in Canberra from the end of 1975 to March 1983. Thereafter the reforms were designed and prosecuted not by the Liberals, who have traditionally been the party of business interests, but rather by a succession of Prime Minister Hawke's Labor governments that ruled in Canberra from 1983 into the 1990s. This has meant, among other things, that the major directions of these changes enjoyed a bipartisan consensus without any electorally effective opposition. Moreover, an abrupt contraction in the relative share of commonwealth expenditure produced (without any increases in revenues)

ECONOMIC RATIONALISM IN CANBERRA

a series of large budget surpluses that prompted the Minister of Finance in August 1989 to observe, correctly, that, Tew, if any, peopie would have believed that any Australian government would have engineered those changes. Most would have thought it even less likely that a Labor government would do so.'14 It is within this context that the economic and public sector reforms of the middle and late 1980s were launched. Indeed, the material for this enquiry was gathered just as Australia was presaging its own future first with a shift of its own Westminster/Whitehall Canberra bureaucracy towards a semi-American styled Senior Executive Service and then following the re-election of the Hawke Labor government in 1987 with a second wave of structural reforms which consolidated the institutionalisation of economic rationalism in Canberra. The two first chapters in Part One focus on the salient characteristics of these Senior Executive Service officers. In a search for the imprint of social, structural and cultural factors on the Canberra state apparatus, there is a need to know something about their background and their cast of mind. And here, initially, one can pick out three aspects of a more complex and larger pattern. Social selection is one of the links between social structure and state power. In line with other countries we find that those who come, roughly speaking, from the managerial and professional layer (and so from the top 5 per cent of the population) hold a quarter of the SES positions in the key departments covered here: only about 10 per cent of our respondent SES officers came from families in the 'bottom half of the population on this rough measure of socio-economic status. A grossly disproportionate number of young men from Australia's expensive top private schools are concentrated in some very specific locations - most notably the Treasury. There is also a direct relationship between social background and political orientations inasmuch as this same proportion who come from the top of the social ladder are three times more likely to hold conservative 'new right' political attitudes as those from the bottom half. Further we discover, more significantly, that orientations to policy have comparatively little to do with immediate issues and fashions that are here today and gone tomorrow. Instead the whole cast of policy is grounded in social structure and in the more pervasive and enduring formative influences of socio-economic background, family, and schooling and so in experience that was had some 20, 30 or 40 years earlier. Work in higher administration is so intense that one might have expected it to drown the effects of earlier experience. It is quite remarkable to find that it does not - early experience outweighs several other factors such as age, seniority, and type of work experience

INTRODUCTION

which most people would expect (as it turns out, wrongly) to have a direct and unmediated effect on what public policy makers and managers say and do. Beneath the mantle of other factors the indications are that social origins are important and that, in Canberra at least, 'noblesse n'oblige pas'; those who come from the most privileged social backgrounds are likely to have the most 'anti-social' policy attitudes. A second feature of this profile points away from what was, before Fraser, Thatcher, Reagan, and the Crisis of Democracy, the comfortable conclusion of the seven-nation study that top bureaucrats were 'committed centrists' who would generally serve as a counterweight to the ideological enthusiasms of elected politicians and so preserve a certain equilibrium in struggles over the national policy agenda.15 Top Canberra bureaucrats (certainly those who have prevailed in the 1980s) are nothing of the kind. In terms of an Australian historical and political spectrum, in which Marxist socialist ideas have had even less of an influence than in Britain, they are way to the right of centre. Even among those of our interviewees who designated themselves as 'centre-left', we find that nearly half wanted to see 'more individual initiative' and 'less state provision' and, similarly among several other related variables, that half of them wanted to dismantle a state adjudicated wage-setting system that has as everyone agrees been the mainstay of social democracy in Australia since before Federation in 1901. Indeed, only about one in six of them would fit even a very elastic profile of social democracy - and, as we shall see, it is precisely this minority who have, by no means fortuitously, suffered most from the vigorous changes of the 1980s. Third, it is through the power of a particular university economics curriculum that the recent past has had the strongest hand in casting the nation's future. In the crucial post-war period, the Canberra bureaucracy was largely built on the reputation of a very small and enormously influential group of generously minded economists who served both Labor and Liberal governments for nearly three decades until the late 1970s. Their prestige raised the expectation that the second generation of young economists with an entirely different life experience who now dominate the Canberra state apparatus would bring 'more of the same' attitudes and similar intellectual skills and norms to the policy and management process. Instead we find, much as Keynes would have expected, that 'in the field of economics and political philosophy there are not many who are influenced by new theories after they are 25 or 30 years of age'.16 Through the new generation national policy (and with it perhaps the fate of a nation) is held in the compass of the restrictive, technically-oriented, neoclassical economics curriculum that swept through

ECONOMIC RATIONALISM IN CANBERRA

the economics departments of Australian universities from about 1947 onwards. The older generation of economists typically came from modest social backgrounds and had some historical memory of the Great Depression, of economic crisis and unemployment, of war service and of ordinary life in Australia before the largely post-war, modern-day Canberra was even built. Whatever economics they learned at university was more often learned at night school, set within a liberal arts framework and thus within a philosophically informed view of society and the human condition. It was set too within a national experience in which both the state and the trade union movement along with business interests (well before the notion of Corporatism' was ever invented) were long established as constituents of nationhood, national identity, and economic development. Economists of the newer kind may, in contrast, have acquired what looks more like a trained incapacity to learn from all later experience. That is one inference to be drawn from the fact that a passage through an economics curriculum in their early 20s is the single factor that most strongly sets these young 40 plus-year-old captains of a nation-building state against its historical mission. But of course the public service of a federal and central government is itself a federation of departments17 in which power advantages can sometimes change quite quickly. And so the second half of Part One charts the pattern and impact that various 'selection effects', reforms, and 'rationalisations' have had on what matters, which is the actual structure and dynamic of power. How then is state power organised at this top end of the Canberra apparatus? With this question we take the next step in Chapter 3 and differentiate between three points of an inner triangle that has the three central agency departments (Prime Minister and Cabinet, Treasury and Finance) at its apex and, at the base on one side and in the pre-1987 classification, the market-oriented departments (Trade, Primary Industry, Resources and Energy, and Industry, Technology and Commerce), and on the other side of the base the program and service departments (Health, Social Security, Aboriginal Affairs, Community Services, Veterans' Affairs, and Education). Mirrored in the interfacing characteristics, political dispositions, and world views of top bureaucrats in these three different locations there is really an 'archaeology' in which three layers are sedimented one over the other. The central agencies at the top level represent a new and minimalist laissez-faire state set in norms that come from a dominating neoclassical economic rationalism that is anti-statist, anti-union, and either asocial or anti-social in its basic orientations to policy. By comparison with their counterparts in other departments,

INTRODUCTION

these central agency officers are younger by some five years, are twice as likely to have come from elite expensive Protestant schools, and are more oriented to private satisfactions of what all see as their superior political leverage over ministers and cabinet decisions. At a second level in this archaeology are the residues of an earlier Keynesian interventionist state which is represented here in a more practically oriented, 'hands on' economic calculus grounded in earlier norms of 'practical' cooperation with domestic Australian industry. On the lowest stratum we find the heavily eroded framework of a social democratic and welfare state set in fraying images and norms of society and of social needs. The relative position and the descending order of legitimacy and norm-setting clout of these three 'models of the state' is not something that has come about by accident or purely through some autonomous internal dynamic within the bureaucracy itself. What part have governments per se had in the process? Or, in the words of one person who was influential in early bipartisan moves to make the bureaucracy more obedient, 'who's master and who's servant?'18 It may be that the economists within the bureaucracy have corralled the reformist and economically oriented Hawke Labor government into a narrowing and increasingly exclusive commitment to an economic rationalism that is at odds with the broad thrust of the Australian Labor Party's policies; at odds, too, with some of the key redistributive 'social wage' clauses in its Accord with Australia's highly disciplined and 'economically responsible' trade union movement which is increasingly run by talented but ambivalent 'econocrats'19 in business suits. The preceding Liberal/National Fraser government had already steered the top of the bureaucracy into that course. Yet the evidence shows that under the Hawke Labor governments from 1982 to 1990 the bureaucracy was subject to very strong political control. The relative power positions of the major government departments covered in this study closely replicates the relative strength and representation of the three formally organised factions of this ruling Australian Labor Party in a highly disciplined and effective Cabinet. The government is dominated by its semi-Thatcherite 'Right' faction whose ministers control Prime Minister and Cabinet and Treasury and other key departments. At the other end of the spectrum, the ministers of the social democratic 'Left' faction minority hold 'only' the lean and not so strong program and service departments. Ministers of the 'Centre Left' faction, with an orientation that roughly corresponds to the Right of the British Labour Party, hold many of the portfolios in between. In short, beyond the largely unanswerable chestnut question about who has the greater power, there is the more significant reality

ECONOMIC RATIONALISM W CANBERRA

of an increasingly stable and symbiotic relationship between ministers and top bureaucrats which contrasts sharply with a past in which people on the two sides of this political-administrative relationship were likely to differ in age, life experience, education and social background. Since 1982 the increasingly dominant pattern is one in which ministers and their top SES staff see the world very much as male age-mates through a shared and restricting formative training in economics. Chapter 4 draws the evidence together to plot the trend lines and the dynamic of these reforming 'rationalisations' that swept in two waves through the Canberra state apparatus from 1984 (the first wave) to 1987 (the second wave) and beyond into the 1990s. We find that the managerialists within the newly formed Senior Executive Service, who favoured and then drove the reforms, were more likely to come from higher socio-economic backgrounds. Significantly, they also tend to see the world in terms that neutralise and then reduce the norms of public policy to those of private enterprise. A change of climate that was aimed at opening up the public sector had some clear correlates in the structure and operation of the promotions system during this formative period of the Senior Executive Service (even before its inception, as far back as 1982). Perhaps there is always an inherent possibility that the promotions system of any public service will be captured by minorities and then used, wittingly or unwittingly, to promote more of their own kind. Certainly the evidence suggests that structured inequalities in the classification of SES officers across the different categories of departments, combined with the actual operation of the promotion system, has given a cumulatively disproportionate power to the younger economic rationalists in the central agency departments of Treasury, Finance, and Prime Minister and Cabinet who now comprise some 70 per cent of the Senior Executive Service population of these departments. This is but one aspect of a mobility pattern that selectively ascribes lower status and promotability to generalists and other professionals while at the same time increasing the power, and in some respects the distance, between the central agencies and the industry and service departments over which they have an overwhelming domination. It is a dynamic that must have been already established in the period of the preceding Fraser governments. The process of reform and rationalisation is driven by an intellectual triumph of formal models over practical substance; once again it is almost perfectly replicated in the distribution and kind of 'intellectual' resources. Even at the most elemental level of analysis we see that the central agencies have the largest proportion of Senior

INTRODUCTION

Executive Staff with higher degrees, the market-oriented departments have less, and the program and service departments the fewest. Prime Minister and Cabinet, the department at the top of the pecking order, had the highest proportion and, at the other end, Aboriginal Affairs the lowest. In what turns out to be a complex politics of knowledge, the indications are that there is an equally selective access to outside and overseas experience as well. The people who are most likely to gather expertise overseas are not the people who need to learn how to run programs more effectively but rather those who want to learn how to close them down. All power relationships are, by definition, relational - intellectual power is no exception. The rationalisations have succeeded because older senior managers and policy makers, with more 'real-world' and 'hands-on' experience, have demurred to what they have, albeit under duress, accepted as the superior 'intellectual' capacities of the younger 'whiz kid' econometricians who in turn have killed off their elders' chances of advancement by branding them with accusations of being 'too close to their clients', and 'not sufficiently hard-nosed' or as incapable of taking 'the broader view'. All of this points to a dynamic of rationalisation that was accelerated by the second wave of structural reforms and the formation of the new structure of megadepartments announced July 1987. It is a dynamic that has come 'from the top down', from a strong Cabinet and its coordinating central agencies and so also from 'right to left', across the market-oriented departments and more forcibly still across the program and service departments, in a process that is anything but neutral and which has greatly reduced the redistributive function of the Canberra state apparatus and altered the whole cast of public policy. Part Two of the book is concerned entirely with the broader significance for society of these changing dispositions in the Canberra state apparatus. The framework for interpretation and evaluation rests here in the premise that 'developed' societies are obligatorily coordinated through the two structures of state and economy - and, further, that the features of each are to a large extent given in those of the other. The framework which is outlined in the latter half of this introduction takes from political sociology and social theory another fundamental assumption, one that is shared by both the Right and the Left: namely, that in delivering their functionally indispensable benefits, each of these coordinating structures exacts its own costs both for the individual and for civil society, culture, and identity. At both ends of the spectrum the cast of politics and the costs of coordination are clearly visible. At one end of the spectrum the experience first of

ECONOMIC RATIONALISM IN CANBERRA

the Soviet Union and then of eastern Europe gives its own lessons about what happens to civil society when excessive burdens of coordination are given to states and bureaucracies. On the other hand different forms of social degradation and 'colonisation' appear where laissez-faire has allowed the burden of coordination to move to the other pole, to economy and markets, as it may have done under the auspices of economic rationalism in the 'great stateless societies' of Britain and the United States. In this orienting context social democracy is both in theory and in practice a quest on some imaginary horizontal line for a balance between economy and state. Similarly, on the vertical line, it is equally a quest for a reconciliation of coordination 'from the top down' with norms of democracy grounded per force 'from the bottom up' in immanent requirements of identity, civil society, and culture. We shall reassess the Canberra case study within this larger, and here oversimplified, framework. In looking over the case material we see that the triumph of economic rationalism points to a weakness of culture and civil society which is etched into the images of contemporary Australia that inform much or most of what is done in Canberra. We find that this state apparatus is caught within projections of reality that give primacy to 'the economy', second place to the political order, and third place to the social order. Indeed, perhaps the most central finding is that, since the 1970s, reality has been turned upside down and society has been recast as the object of politics (rather than, at least in the norms of the earlier discourses, as the subject of politics). Further, society has been represented as some sort of stubbornly resisting sludge, as a 'generic externality' and even as an idealised opponent of 'the economy'. The tail that is the economy wags the dog that is society and this inversion forces consideration of how and in what respects culture and identity can have any 'structure forming effects'. How has this taken place? What has happened to the state's deliberative capacity? How has the political-administrative discourse changed? In Chapter 5, which holds the core of the enquiry, these questions lead into a discussion of how it is that certain ideas (principally the idea of an economic 'system' that is not mineral or vegetable, or yellow, or sticky to touch - and which must for that reason be a symbolic and therefore a social construction) - have come to dominate nearly everything that these very intelligent people do in their fateful role as brokers and authors of a nation's destiny? How does, the 'system' acquire 'facticity', independence, objectivity, impersonality, and autonomy?20 In the answers to these questions there is of course no quarrel with economics per se but rather with an underlying scientism that seems to turn arbitrariness into givenness and imperiously

10

INTRODUCTION

asserts its own exclusive evaluative criteria for what will, in the wake of its 'reforms', count as intelligence, ability, and efficacy within and beyond Canberra. What wins is a kind of 'dephenomenalising' abstraction that tries to neutralise the social contexts of program goals in every area, whether it be education, industry support, public health, or water resource management. What counts, further, is the speed, elegance, and agility with which one can create a purely formal and transcontextual commensurability of reference across goals that are then treated as the objects of decisions that will be made on extrinsic criteria ever further removed from real tasks and situations. It is in the ethers of this new culture of political administration that one traces the widening course of whatever it was that critics were trying to identify, about 20 years ago, with such terms as 'technocracy' and 'technocratic positivism' and, more concretely, with images of town planners and huge engineering projects that seemed to push peopie around in a more or less physical sense. After more than two decades of intellectual soul-searching about modernisation and postmodernity, where power is concerned everything that matters now is both formed and intellectually challenged at much higher levels of abstraction and generality. At that reflexive and would-be reflective level, the system is constructed with resources taken selectively from disciplines which are allowing themselves to be reformed as the new 'manipulative sciences': psychology, accountancy, and neoclassical economics. The psychologists turn action, meaning, perception, need, and culture into units of behaviour; the accountants arrange these into organisational structures and technologies of control, evaluation and performance appraisal; and the economists abstract all of this into calculations of 'utility' and then into the models and functional coordinates of a system that becomes autarchic. It is under the aegis of this systems logic that a new generation of 'strategic visionaries' have taken charge of a vigorous program of public sector reform. Within 'the system', their 'mission' has been to 'demoralise' the public sector and so to produce in Canberra, purposely or not, that 'sickness in the soul of the public administrator'21 that now afflicts their American counterparts. In a 'shakeout' that is more like an organised forgetting, whole departments have lost not only their dead wood but also, and not by accident, their wise men and their corporate memories, in reforms that have been depoliticised in the name of 'flexibility, responsiveness and effectiveness'. At the boundary of what was once a friendly and intelligent Australian federal bureaucracy, and in the space that was once a 'public sphere' of constructive deliberation that the bureaucracy had itself nourished, there is instead an insulating distance that protects the

11

ECONOMIC RATIONALISM IN CANBERRA

political-administrative system from both intellectual and 'ordinary' culture, and so from participation, from interpretations of need, and from many of the normal and supposedly normative prerogatives and entitlements of citizenship in a liberal social democracy. In these reforms, and in the contested terms of relationship to the world economy that have driven the politics of reform, there are threats to the independence and integrity of a nation. The obvious disadvantages of geographic and economic isolation in an island continent for a small nation of only 16 million people have a real but limited significance since other nations like Sweden, Switzerland, and even Japan have enjoyed far fewer natural advantages than Australia. The increasing integration of the world economy exerts uneven pressures on different nations that are traceable not just to factors such as size, wealth, and pre-existing levels of industrialisation but also to structurally and culturally conditioned vulnerabilities. From the structural perspectives two questions emerge. First there is cause to ask whether the institutions of a supposedly 'strong' and nation-building state were really the borrowed cladding of a vanishing colonial inheritance that has (especially with the relative decline of Britain and its integration within the EEC) left Australia exposed to a recolonisation in the alien framework of a totalitarian American 'business democracy' along South American lines. Related to this is a the second question that hangs over Australian 'labourism'22 and with it a form of social democracy that was guaranteed not by 'welfare' but by a primary distribution of the nation's income through Australia's unique state-regulated wage-fixing system. That system always depended on 'the relative autonomy of the state', on its capacity to support domestic Australian enterprises both with public investments and tariff protection, and further, on its capacity to coordinate an exceptionally broad array of functions in the service of national development. Consequently, in the wake of the deregulation of first the currency and then the capital markets, further pressures in the late 1980s for the deregulation of the labour market will be seen, in retrospect, to have special significance for the integrity of a nation. From the perspective of civil society and national identity other related questions emerge. Where it has not already succeeded, economic rationalism tests the coherence of a national identity and a political culture that was, on the positive side, 'born modern' and free of the dragging anchors and the traditionalism of the Old World. More specifically it raises a question as to whether the promise of modernisation can be realised in effectively articulated norms and standards that may yet secure the national and public interest in the face of pseudo-universal 'market forces'. Accordingly, in this test,

12

INTRODUCTION

where reaction and closure are likely to be nearly as devastating in their consequences as capitulation, Australia's integrity will depend on the cultural resources that can be brought to the task of redefining the legitimate bounds of economic behaviour. Among the formidable range of pressures that militate against any such reaffirmation of integrity and practical sovereignty, one recognises many of the same conduits and agencies that have helped to mediate economic rationalism into the Canberra state apparatus. These include Australia's foreign-owned media, the New Right 'think tanks' and research centres that have had an enormous success in penetrating the Canberra apparatus, and, thirdly, international economic organisations such as the World Bank and the OECD. There is also need to contend with the diminishing intelligence that is available from an increasingly 'rationalised' Australian university system and, more fundamentally still, in the limitations that are inherent in what Manning Clark, Donald Home, and Hugh Stretton see, in the words of the latter, as 'the poor quality of leading Australians'.23 The stake in the play of these forces is a Canberra state apparatus that also stands 'in the balance' from the broader evaluative and theoretical standpoint.

THE POLITICS OF MEANING AND THE MEANING OF POLITICS In a search for an appropriate way of analysing the 'politics of meaning', Clifford Geertz long ago declared that the scholar has no choice but 'to build the theoretical scaffold at the same time that he constructs his [sic] analysis'.24 In his judgment that was the only way of holding analysis between the two poles of 'vacant generality' and 'blank description'. More than 20 years later it is immeasurably more difficult to find, in any of the social sciences, middle level concepts that can still give any stability of reference in the new morass of philosophical uncertainties which followed the collapse of traditional empiricism. Moreover, as a result of those same troubles, it is clear that the most biased positions of all are those that still hide in the unreformed empiricism of 'value-free' and positive science. Yet now, to survive, we must make sense of the old and the new meaning of politics. That task still asks for an approach that is, in Geertz' rather perfect formulation, 'at once circumstantial enough to carry conviction and abstract enough to forward theory'. In Part Two of this book I have tried to construct the theoretical scaffold through the analysis. It is done, for the most part implicitly, with concepts that come from three areas of debate about state and

13

ECONOMIC RATIONALISM IN CANBERRA

society. These concepts are introduced here with questions and then revealed in a way that will make my own evaluative positions clear. INDEPENDENCE, IDENTITY, AND 'RELATIVE AUTONOMY' Why is a once starving and supposedly ungovernable India going from strength to strength while the nations of South America sink into misery and destruction? Why is Paris still a beautiful city with streets that are safer than those of Washington? Can these questions be answered without some admission that the integrity of a state is at least a necessary and fundamental condition for the benefit and well-being of a national population? That admission runs very much against the grain of an American and British turn of mind that Nettl so aptly dubbed 'intellectual statelessness'.25 What has to be granted nonetheless is that, even from the point of view of economic history, 'the state emerges as the true independent variable, industrialisation being only an intervening variable in countries which are all capitalist in structure'.26 This more adequate assessment rejects, of course, what is again an Anglophone tendency to reduce 'the state' merely to the elected 'government'. It insists instead on a more modern and comprehensive definition of the state that includes the police, the military, the constitution, and especially in terms of our own perspective, the complex of legal, political, and bureaucratic institutions that together, and albeit variably, comprise the state apparatus of 'developed' nations like Australia. From another complementary perspective the state comes into view as an actor and as a complex of legal and bureaucratic institutions that not only 'structure relationships between civil society and public authority in a polity but also structure many crucial relationships within civil society as well'.27 There is scarcely need to add that all this calls up, from the eighteenth century, philosophical commitments that cover a spectrum: at one continental European end, the state is represented as the embodiment of ethics, reason, and collective will; at the other Anglophone, libertarian and Mayflower end, it is cast rather as George III, as the main impediment to 'freedom', to the 'pursuit of individual happiness' and to the natural right to the 'enj oyment of property'. Especially in our time, conflicts of ideology and power are distilled into contests over the proper 'role of the state' and of its relation to 'its' society. These are played out for good and evil through contests over public policy, public sector reform, structural adjustment, and economic modernisation of just the kind that is presented in our case material (in Part One). Several basic and interrelated concepts raise

14

INTRODUCTION

basic problems for consideration. On the one hand there is the notion of 'strong' versus 'weak' states that Peter Katzenstein and Stephen Krasner developed in part to explain relations between the United States and the nations of South America.28 This idea now has an all too fateful relevance to Australia's future which many have already cast in the terms of 'a client state'.29 In these evolving debates it is clear that Australia's predicament has much to do with the irony that its structures are in many essential respects symmetrically opposite to those of the United States (where the state has the full strength of an empire in relation to other foreign states - especially the smaller and middle ranking nations like Australia) but which is, as all the literature agrees, the archetype of a weak state in relation to economic interests within. Conversely, Australia's development was historically led by a 'strong' colonial and post-colonial state: the state led and capital 'followed' in a course which protected domestic industries and their workers from what would have otherwise have been crushing external pressures. There is no necessary relationship between the external independence of a state apparatus and its internal authority (in principle the two can vary independently). However in the case of Australia they are in practice almost two faces of the one coin. The 'relative autonomy' of the state is a concept that has suffered both from excessive abstraction30 and from flaws in a Marxist economic determinism of interests over civil society.31 If the 'relative autonomy' of the state is indeed to be understood as a measure of a state's independence from 'vested interests' and so of its capacity to hold economic development and private behaviour within the discipline of the 'generalisable', common, and public interest, then it is always imperfect and at the same time historically variable - for example most states muster a good deal of relative autonomy in the face of wartime emergencies. At this crucial and testing moment in the history of a nation which is, perhaps more than ever before, alone in the world without protective regional associations (like the EEC), there is a need to ask how much effective authority of this ostensibly strong state apparatus will survive the current changes. The narrow calculus of determining interests of the old Marxism was always misleading and, if any reminder was necessary, the events and thawing of Eastern Europe show that national identity has sometimes very dramatic 'structure forming effects' and that a culturally secured identity can, as in Poland, survive even 40 years of repression. And so 'relative autonomy' and other concepts that define the integrity and authority of a democratic state are, from another broader point of view, measured in terms of the ideological susceptibilities of a

15

ECONOMIC RATIONALISM IN CANBERRA

culture and a population accustomed to placing great trust in the coordinative functions of a very new and modern federal state apparatus. To all appearances, this apparatus was a highly professionalised post-World War II phenomenon (almost the model of the New Class) - male-dominated, of course, but less reclusive and introverted than Whitehall and certainly more deliberately distanced from special interests than Washington. In the case of small and middle ranking nations like Australia, the integrity of the state (and this means among other things its work of brokerage and intermediation) is tested amid the strains that emerge, in the new world economic order, between internationally coordinated positions and movements of capital, and the increasingly defensive positions of labour movements that remain perforce bound by the inherited structural and other particularities of national context and situation. These strains point once again, via the social structure, to the allegiances and intellectual orientations of national elites.32 Where the captains of business are nationalists first and capitalists second, both the national interest and the integrity of the state can be more easily secured within corporatist arrangements that respect identity as in Sweden and other countries of Western Europe. Conversely the case material in this book points instead to a more unfavourable situation, one more like South America than Sweden, in which key public and private elites are drawn into an anti-social internationalism that is set, with them, on overwhelming whatever independence and 'relative autonomy' stands in its way. CRISIS OF THE STATE, CRISIS OF SOCIETY? Every program of public sector reform poses its own question as to whether this or that reform, or structural adjustment, or saving, or expenditure review process, is a worthwhile and desirable innovation. At the same moment it quite inexorably begs or addresses a very large question indeed - what is the appropriate relation between the state apparatus and its society ? This is a complex matter and one that points to a literature that is hierarchically organised into four levels. At the lowest level of abstraction one can deal with the specific decisions of organisations. The problem here is that the decisions of organisations borrow their meaning, and even their validity, from a second level at which they are aggregated into something called 'public policy' (or even theories of organisational behaviour). At the second level it is plain enough that various articles of public policy are derivations, at a third level, from theories of the state. The problem here is that since none of

16

INTRODUCTION

these contain even a single molecule of sodium or iron they must be symbolic constructions, and cultural artifacts which come from society itself, and from social theories that explain how societies (and social actors, and cultures) construct, maintain, and reproduce themselves. The sociologist cannot avoid these problems or accept conventional demarcations between 'economies' and 'polities' and 'administration* as anything more than temporary expedients because these are also social constructions.33 The concepts that have guided this inquiry came initially from debates in the mid and late-1970s about the so-called 'crisis of the state'. These debates that broke out over what was previously (apart from the orthodox Marxist challenge) little more than a grumbling observation that at the end of the postwar boom the states of the 'developed' nations were in a condition of 'directionless consensus', and 'pluralistic stagnation'. 34 Thereafter those debates between Habermas, Offe, O'Connor and others on the Left, and Crozier and the Crisis of Democracy on the liberal Right, and then the American 'neoconservatives', shared an essential presupposition: whether the crisis was a 'fiscal crisis', a 'legitimation crisis', an 'overload crisis', a 'rationality crisis', or a 'motivation crisis', in all these forms it was assumed, correctly, that the 'crisis of the state' was epiphenomenal and, further, that it could not be solved with nuts 'n bolts solutions because it had a social origin - or perhaps, more accurately, because its origin lay in a relationship between state and society. These debates have an ongoing contemporary relevance because, as Part Two of this book demonstrates, they bring to the fore central problems that must be faced in deciding the criteria for 'progress' and modernisation that are at the root of every judgment about what can, or should, count as 'development', and thereafter, as 'reform', 'innovation', 'efficiency', 'facilitation' or whatever. From out of these debates the parallel lines of the state/society problem can be followed along a trajectory that reaches a ceiling of abstraction in the literature about modernity versus post-modernity. It is a trajectory that passes through this study and poses a central question that can be stated very abruptly indeed: is society plastic? Does it in practice bend to fit its own coordinating structures - markets and states? An affirmative answer gives the most powerful ruling elites what they usually seek, namely the certainty (both 'moral' and 'intellectual') that the highest form of leadership, responsibility, and 'states-man-ship' is successful manipulation. Yet there is more to it than that and at the root of this real and fateful question lies a conflict between the competing claims of social integration and system integration. And so the question recurs: is social integration in the form of 'consensus' and stable identity merely the product of system

17

ECONOMIC RATIONALISM IN CANBERRA

integration (successful coordination), or is it rather that the coherence and functional integrity of 'the system' (the coordinating structures, and the state ) are grounded in identity, civil society, community, and everyday culture(s)? These questions go straight to the problem of social reproduction and to the metatheoretical quandary that hangs over all state action and 'policy' and, more directly, over all that has been done in Canberra: what is to be done to make sure that in ten years' time 'our society' is in as good or better shape than it is today? One answer is given in the economic rationalism that is to a large extent the object of this study. The presumption of that economic rationalism is that the reproduction of society turns increasingly, or even exclusively, on a strengthened mode of system integration in which the burden of coordination is passed from the inferior medium of coordination of state bureaucracy to the supposedly better one of the economy. At the metatheoretical level this presumption, which presents itself as the obligatory frame for all policy, has a brilliant prophet and advocate in Luhmann who says, without apology: Especially with the help of the mechanism of money the economy builds its own values, its own goals, norms, criteria of rationality, and directions of abstraction, by means of which the behavioural choices in its domain are oriented. That these premises stand on their own is clear from the fact that they claim only a system-specific validity and thus do not need to be answerable to all of society...Thanks to these forms of differentiation society can...limit itself to giving the economy as a system the necessary protection.35 On that model, Australian civil society, identity, and its (always plural) cultures are quite explicitly defined in theory - and in the practice of our Canberra economists - as the malleable and consumable environment of a global economy which finds the necessary protection from 'its' society through internally and externally sponsored reductions of democratic citizenship to elite (business/finance) formal democracy. At this same level of abstraction the opposing viewpoint of Jiirgen Habermas, Alain Touraine, Claus Offe, Nancy Fraser, Maria Markus and others, sees in these developments a new kind of social and psychic 'colonisation' that may well be 'busy fabricating the shell of bondage which men will perhaps be forced to inhabit some day, as powerless as the fellahs of ancient Egypt'.36 From the perspective of this opposing view which informs the practice of the new social

18

INTRODUCTION

movements and of social democrats everywhere, the 'crisis of the state' has, with the benefit of hindsight, turned out to be a 'crisis of society'. Societies are threatened by their own coordinative structures and, most notably now, by an economic steering mechanism which violates the adaptive capacities of ordinary social life and threatens the social reproduction of culture and individual identity.

RATIONALISATION Economic rationalism and the reforms and 'rationalisations' of this Australian federal state apparatus pose an obvious question. What counts as a rationalisation and how do we know it's good for us? It is in the revealing answers to this question, or perhaps more frequently in the stratagems used to avoid it, that ideologies are dressed up as science, reform, public policy, development, structural adjustment, and modernisation. With respect to the rationalisation of the state apparatus and 'the machinery of government', it is once again a matter of reading what is done at one level in terms of clarifications that are only available at another. With a contemporary relevance that seems not to have dated by a day, and in terms once again common to both the Left and the Right, the classics of sociology provide the link with that larger world-historical process of rationalisation which has defined modernisation in these 'developed' and western nations: Marx and Weber agree that the strategic rationality of capital accounting and the uncoupling of labour from all immediate household and use-value criteria, from the rhythm of hunger and satisfaction, is the main driving force behind the formal rationalisation of capitalist societies. The immediate processes of labour and production are organised and regulated according to the dictates of this rationality, whose functionaries are the bureaucratic staff of capital.37 What is interesting here is this link between formal and strategic rationality. It may be assumed that basic industrialisation, with all that it involves such as the construction of infrastructure, urbanisation, universal education and so forth, amounts to only a long drawn-out middle stage in the modernisation process. Furthermore, it seems clear that with that stage passed, the meaning and justification of rationalisation becomes more and more dependent on ideas that are less and less simply justified by the task of building the economic apparatus of production.

19

ECONOMIC RATIONALISM IN CANBERRA

That was already the situation at the end of the so-called 'long post-war boom' when criticisms of 'directionless consensus' and 'pluralistic stagnation' began to assail state bureaucracies and those with the responsibility for public policy, continuing economic develops ment, and the 'rationalisation' of the state apparatus- The accumulating uncertainties within the state apparatus were perplexing and painful. The task of reason is not easy: to say no to the system is intellectually easy even if, on occasions, it takes some heroism. But how are we to say simultaneously both yes and no? How does one invent a strategy without making a game of strategies? How are we to reconcile spontaneity and organisation? How can we want efficiency and renounce technocracy? And, further, how do we steer a course between a rationalism which identifies rationality with rationalisation and an irrationalism which leaves us without resources?38 By definition, there are no ready made or ultimate solutions. How then, in the 1960s and through the 1970s to the threshold of our own period, did the best political administrators live and work with these uncertainties? Although there never was a golden age, elsewhere as in the Australian case, it was done at its best with a kind of 'practical rationality' that was much more closely tied to the goals and nature of the task at hand, whether that was community development, industry assistance, public education, urban development, transport and communications, or resource planning. Public policy and state action across a broad array of discrete functions was of course still subject to the pressure of coordination, and so to a formal rationality of consistency and coherence, both over time and laterally across different tasks and departments. The point is rather, as we shall see, that there were limits that prevented coordination from becoming a law unto itself and from distorting, or even destroying, the very functions it was supposed to rationalise. Moreover these bulwarks against managerialism were social in nature. Goal-directed and instrumental action (Zweckrationalitdt) was, to a significant degree, permeated with a Sittlichkeit, with some sort of public morality and, through the norms of a career service, with an 'ethic of vocation' that set problems of coordination within a cultural field that had some real normative force. This more balanced model of the modernisation process with its underlying priority of reconciling coordination with identity and culture is now under challenge both from the practice of an invading economic rationalism, and from the post-modernist high theory within some of our social science disciplines. Both equate rationalisation with

20

INTRODUCTION

coordination. Both assume, somewhat prematurely and even 'ideology ically\ that culture and identity no longer have any practical relevance. Accordingly, the first assumption of this economic rationalism is that the 'economy...obeys not an immanent logic of needs, but instead the need for an immanent logic*.39 Post-modernisation (if I may coin a term) no longer depends on a process of rationalisation that reaches for whatever interpretations of social realities may lie beyond the coordinating economic logic of 'the system'. On the contrary it offers itself instead as a saving response to the 'universal' emergency of unmanageable diversity and thus to a crisis produced by the failure of every other attempt at rational deliberation and agreement. According to the high theory of the doctrine of economic rationalism, epistemology has followed ontology (and philosophy) into oblivion. Supposedly, in this 'brave new world' in which the applied form of that doctrine did take hold in Australia somewhere around 1984, 'reality assumptions are structures of the system that uses them'.40 Culture and identity dissolve into arbitrary individual choices and, moreover, institutional arbitrariness is no longer a sign of failure but is instead put forward with deadly seriousness as a necessary condition, at the steering level, for the smooth and rational operation of a self-referential system. Opposition to this new anti-intellectualism is dismissed by apologists for the New Right only as a terrible 'rancour against (post)-modernity'41 of a few inconsolable 'value-intellectuals' who were, in any case, never properly equipped for life outside the womb in the twentieth century.42 There are at least two fundamental defects in the self-justification of economic rationalism and both point, albeit in a global and abstract fashion, to the opposing and better criteria for the evaluation of state action and public policy. The first defect is obvious. From its basis in a philosophically unreformed empiricism, neoclassical economics projects a Darwinist relation between system and environment that is then contradicted with an almost absolute refusal to adapt demands to the increasingly finite resources of the (physical) environment: in its constructions of time and in its incapacity to read or 'obey' the external environment, economic rationalism as a model for action is the very opposite of an adaptive system. This blinding 'objectivation' of the external environment, together with the distances that have been produced by such a violent rupture between nature and culture, resemble instead a model of the self-destroying system. In the context of this enquiry the second and more fundamental problem is that economic rationalism treats its inner environment of civil society in much the same way as the malleable object of development and rationalisation (and of 'politics' as well). Even in

21

ECONOMIC RATIONALISM IN CANBERRA

nation-societies where the residues of older social structures (such as church, remembered inheritance, extended family, and neighbourhood) have all been burned up in the engine of development in the space of a little more than a generation, the premise of the systems logic remains the same. This process of modernisation is dogmatically read as a confirmation of the assumption that the resources and conditions for social stability (accepting participation, motivated work, the rearing of children, and even the sustenance of ordinary individual identity) will go on finding their own Nationalisations' in individual calculations of utility coordinated ever more 'efficiently and effectively' through a market. In setting itself into this relation between the economic system and the social environment, the state apparatus takes on a form of rationalisation which looks more like aggressive nihilism than reason and which seems to endanger the reproduction of society itself. At the level of public policy, the rationalisations may have brought needed gains in efficiency in many areas of state action and this may indeed continue - there can be no quarrel with the notion of efficiency as such. The inherent problem lies instead at another level - with the criteria that define what count as costs and benefits; with the loss of social intelligence; and with the number and range of potentially constructive discourses that have been suppressed. At that level the fateful problems in the metalogic of rationalisation point to their own limits and correctives. In these last decades of the twentieth century it may be that an autarchic system that treats society as an idealised opponent is an even greater threat to the well-being of the species (and of its Australian genus) than nuclear warfare. What is needed then, at the level of the state, is a mode of rationalisation that will honour the normative promises of 'modernisation', 'development', and 'rationalisation' with a systems logic (if we need one) that obeys first the logic of immanent needs and in second place, the need for an immanent logic. How, at the level of public policy, can social needs find a rational articulation and achieve structure-forming effects in a process of modernisation and a world order in which there are no longer any metaphysical guarantees? The success of those small and middle-sized nations of Western Europe that have better protected themselves from the political technologies of 'freedom' and 'business democracy' point clearly enough to the restoration of social democracy in an economically friendly relationship with the environment. The new social movements, the Greens and especially the Womens' Movement, have shown that 'social life does not reduce to development'43 and that, as Habermas would have it, a potential for reason is always protected in the very forms of language and ordinary

22

INTRODUCTION

social interaction that we all share. From out of these social movements we see demonstrated at least the possibility of 'bringing about social relations in which mutuality predominates and satisfaction does not mean triumph of one over the repressed needs of the other'.44 We see also that cultural specificity and identity, and the Vast symbolic resources of society'45 can, in the West as in Eastern Europe, survive extremely unfavourable circumstances and spring to life in new forms of social action that very quickly strip away the un'necessary illusions'46 that have made populations the slaves of coordinating structures that try to define social life only 'from the outside in'. No one says that this will be achievable or easy in what was once the Lucky Country.

METHOD AND PURPOSE The method47 of the enquiry has followed the larger aim of setting a substantial empirical study of a modern state apparatus within the horizon of a social theoretical perspective - so that both might be the stronger. Today that task is made more difficult by the general recognition of a growing distance between social theory and its increasingly unsteady objects of social enquiry: unsteady because every 'method' defines its own objects according to criteria that are ridden with the new philosophical uncertainties of our own (post-modern) age in which as some will say, polemically but sometimes with good cause, that only 'soft' minds make 'hard' (ideological, methodologically blinded, and scientising) studies. Another 'given' is that in this area of political sociology one is from the outset dealing with problems that are strongly contested and refracted. To give what may well have been an immodest project any chance of succeeding, there was need to give a priority to clarity, economy, and accessibility. To achieve this the whole enquiry was built on a core of material gathered from a large body of structured interviews with top senior public servants. In this respect I followed in the footsteps of others. In the introduction to a fine and rather perfectly titled book called the The Private Government and Public Money: community and policy inside British politics, Hugh Heclo and Aaron Wildavsky noted a long time ago that 'in short, the expenditure review process is an immense window into the reality of British political administration'.48 The seven nation Aberbach studies proceeded from similar methodological assumptions that need not be confined either to the study of elites nor to empiricist methodologies. At a crucial period in Australia's history (and at the perfect moment for enquiry) the aim of this book has been to open just such a window both into the reality

23

ECONOMIC RATIONALISM IN CANBERRA

and future of political administration in Canberra, and into the social world to which it belongs - and apart from which it has no social meaning. This does not quite mean that the formal structures of a 'state apparatus' are treated as shadows or equated with the verbal utterances of top public servants. It means, rather, that we rely on the structure of the sample, and of the interviews, to do the work of defining, and even, in a non-empiricist sense of 'representing', what is happening. So, for example, what the central agency economists say about economic policy and Australian society should, when it is set against what the program and service department people say, adequately generate its own outer parameters and 'discursive structures' in a way that will satisfy our single overriding requirement of opening political administration to the social theory, and vice versa. In this way the interview material, and what is done with it, has to stand in for what others will almost inevitably see as more important matters. For example, it is clear enough that the problem of gender and inequality goes far beyond the gross inequality in the representation of women at this top end of a civil service - prima facie the indication was, in any case, that the outlook of the 6 per cent of women was not markedly different from that of the men. From the point of view of someone whose first interest is gender studies, the problem is that the whole system is male-dominated and that women as a social category fall into the social environment of a system that casts them, in a sense, as a just another 'externality'. Does this means that, in joining the interview material with the later evaluations and interpretation in Part Two, one must explicitly launch a discussion about patriarchal theories of the state? This could not be done, it seems to me, without at the same time addressing corporatist, pluralist, and public choice, Marxist, and even social democratic (my own position) theories of the state and of social reproduction. And so none of them is addressed explicitly. To do so would trivialise them all and destroy the structure of an already ambitious project. The intention is not to peremptorily define the questions, or indeed the answers, that arise from these several theories and paradigms but rather to lay out some material (I will later say 'data') and to set it in a discourse that should be useful to others who want to look through the lenses of these other perspectives into what a couple of hundred extremely intelligent power-brokers say and otherwise reveal about a social world that defines them as much as they define it. The core of concrete material presented in Part One of the book was based on some 240 ninety-minute interviews that were conducted from May 1985 to October 1986 - a time when the Canberra federal

24

INTRODUCTION

state apparatus was in the throes of momentous changes. The sample covered about one-seventh of the whole Australian government Senior Executive Service and nearly one half of the SES in the key government departments chosen for study. The intention of those choices is to give a body of material that catches the various reflections and refractions of this relationship between a state apparatus and its social context, both structural and 'cultural'. To that end, the interviewing was done in three groups of departments. Here and throughout, to avoid confusion, I shall refer to the departments as they were before the name changes that came with the restructuring and super-department amalgamations of July 1987. One parcel covered the three 'central agencies' or coordinating departments of Prime Minister and Cabinet, Treasury, and Finance, which interface with all other departments as well as with all of Australia's organised power groupings. The second parcel covered the 'market-oriented' departments of Primary Industry, Resources and Energy, Trade, and Industry, Technology and Commerce, which interface principally with the business and industry sector. The third group comprised the 'program and service' departments of Health, Education and Youth Affairs, Aboriginal Affairs, Social Security, Veterans' Affairs, and Community Services, which interface with community groups, agencies, professionals, and clients in the social service area. Since the object of the enquiry was always the broader relationship between a state apparatus and its social and economic context (rather than the Senior Executive Service per se), some departments, including a few large and otherwise important ones, were excluded from this selection for methodological reasons. Some were of minor importance (Administrative Services, and Sport Recreation and Tourism); others were not so relevant to the aims of the enquiry (like Foreign Affairs and Defence), and still others (like the then Department of Employment and Industrial Relations) had mixed functions that did not fit the criteria on which the three categories of departments were selected. Moreover, without further expanding a very large 'sample', it would not have been possible to cover more departments without at the same time thinning the numbers of interviewees in any single department to the point of compromising our chances of grasping their distinctive character and their contributions to the events in our period. Since the interviews covered about half of the SES population in our three categories of departments, they most certainly contain a representative sample of that population. With respect to the total SES population of approximately 1,600 officers, the only claim is that approximately one-seventh of them were interviewed and, although it can be safely assumed that they would in

25

ECONOMIC RATIONALISM IN CANBERRA

many respects fit the profiles that emerge from our data here, this is of no special importance for the aims and results of this enquiry. As I have suggested the book is arranged in layers so that it can better reach a range of readers with different interests. The first two chapters stay very close to the ground and do not yet deal with differences and similarities across different arms of the structure. Chapter 1 begins the task of setting out the prevailing images of contemporary Australia that inform and define orientations to policy and management of this executive and policy making echelon. Chapter 2 deals entirely with system-wide characteristics of the Service, within the limits of this sample: social selection, biographical information and key answers given to policy orientation questions. This material is then used, as a backdrop in Chapter 3, for a differentiation between the three categories of departments and of differing relationships both with the centre (the central agencies and the Cabinet) and with their respective environments. In Chapter 4 all this is carried one step further with more material that looks at some broader patterns in the construction and deployment of intellectual resources, and so at the politics of knowledge, that are driving the restructuring and rationalisation of the state apparatus. With the basic material set out 'systematically' and in a way that is as accessible as possible to the widest possible range of positions, the discussion moves in Part Two and the key Chapter 5, to some assessment of the 'immanent logic' of the material and of 'the system' and its environment. In that discussion, an examination is made of the significance of public ideas, metatechnologies, social power and of various means of defining the field of action. In the light still of the material presented in Part One, these problems are related to ideas that come from Habermas and Luhmann and from other people who have sought to understand modernisation and post-modernity. In the last chapter, the discussion is set more explicitly into the context of problems that arise from Australia's historical legacy and from its changing relation to the world economy.

26

PART ONE

CANBERRA: A STATE APPARATUS CHANGES ITS MIND

CHAPTER 1

IMAGES OF CONTEMPORARY AUSTRALIA

A

fter a few orienting comments about the larger context of the empirical enquiry (which are offered mainly for the reader who is not familiar with the Australian situation) this chapter begins the task of representing some general images and perspectives of contemporary Australia that prevailed in 1985 and early 1986 among one-half of the top bureaucrats in the key departments of the Canberra state apparatus. Since no one is especially interested in ephemeral impressions that are here today and gone tomorrow, we are looking for the more basic enduring outlines of an interpretative and explanatory perspective that these public servants bring to their work of steering and shaping a nation. Progressively, in the succeeding chapters, an increasingly differentiated picture will emerge from these first orienting outlines. This picture points both back and forwards in time to later changes and to a trend line of 'development' that is the object of the enquiry as a whole. From the top of Canberra's Black Mountain tower one can look to the east over the Brindabella and the Tidbinbilla Ranges and south towards the Snowy Mountains. To the west one looks over an equally breathtaking landscape into the vast distances of an island continent. It is not without some relevance that the city below is an island of another kind. It is remote from the the rest of Australia because, in order to ensure that federal government would not become the pawn of the two largest states of Victoria and New South Wales, the Australian Constitution of 1901 decreed that the capital must be at least 100 miles (160 kilometres) from Sydney. The Australian Capital Territory with its current population of some 240,000 people was designed (by an American architect) before World War I. It is very new, and indeed most of it has been built since the mid-1960s. The visitor will see no used car dumps and scarcely a single dilapidated house in a beautiful setting that is, naturally enough, dominated by the large complexes of government offices.

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The Canberra federal state apparatus emerged from World War II with a monopoly of income tax powers that it never relinquished to the (now) eight states and territories (New South Wales, Victoria, Queensland, South Australia, Western Australia, Tasmania, the Australian Capital Territory, and the Northern Territory) that depend on it for more than half their revenues. It holds constitutionally prescribed powers over foreign trade and external relations, customs and immigration, banking and currency, corporations, industrial arbitration, and communications. In the post-war period, and especially from the late 1960s, Canberra has greatly augmented and, in some instances, directed or appropriated developments in areas such as arterial roads and railways, education, health, and social services, which are constitutionally the responsibility of the states. It is partly for these reasons that, especially by comparison with the United States or even Canada, since World War II the Canberra federal state apparatus has enjoyed a considerable authority and prestige which has in many respects overshadowed the other two tiers of government the states and local government respectively. This points to two other related political cum constitutional aspects of the Canberra state apparatus that are important here. Like other federations, the Australian federal state apparatus is built on such familiar principles of liberal thought as the division of powers, the provision of constitutionally secured 'checks and balances', the primacy of 'free' or private enterprise, and the division and limitation of state power - all within a Westminster/Whitehall framework. This has led to predictable tensions, competition, and conflict between the states and the federal (or commonwealth - the two terms are synonymous) government. These conflicts are refracted into the competing political ideologies of the two principal political parties: on the right the Liberals, in coalition with the rurally based Country/National Party, have traditionally been the party of business interests; on the other side is the long-established and traditionally 'progressive' Australian Labor Party. The result is that Labor has traditionally been centralist, a centralism which has been: inspired by its desire to intervene actively in the economy to promote growth, foster rising living standards and full employment, equality of opportunity, and, on occasion, a more equitable distribution of income and wealth, combined with the belief that these objectives can only be effectively achieved from the centre because this eliminates the opposition which would otherwise come from conservative state governments.1

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Not surprisingly the non-Labor parties have traditionally preferred to stress 'states' rights' and 'freedom of choice' in an attempt to thwart social reforms and to oppose the redistribution of either profits or state revenues to wage and salary earners. And so, predictably enough, the conservative preferences have traditionally been backed with appeals to the liberal principles embodied in the federation: The defence of state rights and federalism by conservative governments, although cloaked by the ideology that federalism is essential for the preservation of individual liberty and freedom of choice, is largely designed to put a brake on...excessive government intervention and thereby safeguard what it calls the rights of free private enterprise...Continuing conservative support for the institutions of federalism is also inspired by the fact that in Australia at least, they constitute real barriers against socialism, imagined or otherwise.2 However, since the early 1980s, and in the light of the eight years of Hawke Labor governments, these 'traditional' features of the Australian federal apparatus may have changed for good. They need, at the very least, to be reviewed in a wider context. One notes, first, that in Canberra in the course of the 90 years since federation, it is the conservatives (and from the 1950s, the Liberals) who have governed most of the time. Labor governments have held office for only 28 of those 90 years in generally short and precarious terms of office in which they were either blocked by hostile senates or were governing in the shadow of war. Second, at the time of writing, the Australian Labor Party was governing, both federally and, albeit sometimes with the thinnest of majorities, in five out of the eight states. Yet all these Labor governments in 1990 were typically and to a varying extent business-oriented and strongly economistic in their policy orientations - to a degree that has sometimes occasioned publicly damaging corruption allegations and such telling epithets as 'Western Australia Incorporated'. And, third, the evidence gathered in another study of approximately one hundred business regulatory agencies showed that Australian business regulatory agencies, do not at all fit the image of a sternly interventionist or of an 'anti-private enterprise' federal government. Indeed, this image (common to both sides of the traditionally opposed 'centrist' versus 'state rights' positions) is denied by evidence demonstrating that the enforcement strategies of Australian business regulatory agencies have typically been very permissive and applied 'with manners gentle'.3 Other considerations point in the same direction. Throughout the

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1980s there has been a laissez-faire attitude towards notoriously loose corporate accounting practices; virtually no control over foreign investment; a feeble capital gains tax (introduced in September 1985); no death duties; and no broad-based taxes on services. All this raises new doubts about the authority of this very new federal apparatus, which does not have the ballast of long-established tradition, and also doubts about the longer term prestige of a structure that relies on leitmotiv of post-war reconstruction, on images of huge infrastructural engineering, energy, and resource projects of the Snowy Mountains Authority, and, more problematically, on the centrally driven social reforms and interventions of the early 1970s. Prestige of this kind is bound up with ideas of modernity and modernisation that are increasingly problematic. The Australian economy and the federal government's responsibilities for economic management are conditioned by some more or less unchanging conditions. With a population of only 16 million people, Australia's domestic manufacturing industries have a comparatively small home market which allows only limited economies of scale. For this and other reasons Australia has traditionally relied for its export income on agricultural commodities and raw materials exports; as the value of these traditional exports has been falling, Australia has since 1973 faced an adverse trend in its terms of trade.4 Moreover, in the later 1980s Australia's exports accounted for only about 15 per cent of Gross Domestic Product (in the same period the figure was about 30 per cent for Sweden, Norway, and Denmark - and about 25 per cent for Canada). Consequently the growing current account deficit cannot be reversed through trade without establishing new export industries in appropriately specialised 'niches' in a rapidly changing global economy. But development of this kind faces all the inherent comparative disadvantages of geographical and cultural isolation from potential markets in the industrialised nations of the northern hemisphere. And so, in the limitations and interplay of these and other factors there is considerable scope for special pleading and blackmailing pressures that are exerted on the federal government by the business community to maintain or enhance endangered profitability with tariff protection or subsidies, with reduced taxation, and most characteristically, with reductions of wages and salaries that are determined in Australia through a unique centralised wage fixing system. When the Hawke Labor government came to power in Canberra in March 1983, the Australian economy was in serious trouble. For at least a decade, and over the eight preceding years of the conservative Fraser Liberal National Party governments, Australia was second only to the United Kingdom among the leading OECD member countries on the so-called 'misery index' (the sum of annual unemployment

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rates and the annual average increases in consumer prices).5 Growth in real per capita income had declined to zero in 1980 and recovered a little before falling again to just over 1 per cent when the Fraser government was voted out of office. Largely as a result of the durable and effective Accord between the Australian Council of Trade Unions and the Australian Labor Party, over the eight year period of the Hawke governments to 1990 there was consistent and disciplined wage restraint; a series of budget surpluses from 1987; continuing reductions in taxation to pre-1973 levels; greatly increased profit shares; a recovery of investment; a virtual elimination of public debt; a sustained fall in the rate of inflation; and considerable increases in employment - see Appendix B (pp. 258-9). Yet, on the other hand, the current account deficit has worsened and the net total of accumulated external debt has increased from 10.5 per cent of GDP in 1982 to 45.2 per cent of GDP in 1989;6 there has been a continuing fall in the real income of most Australians; and, perhaps most pertinently here, these years saw unremitting constrictions of a public sector that was already small in comparison with other leading OECD countries.

PROBLEMS AND OBSTACLES It is against this background that our study began in 1985 and 1986, with 215 ninety-minute interviews with approximately half of the Senior Executive Service staff of what were (before the Bastille Day amalgamations of July 1987) 13 key departments of the Canberra state apparatus. The initial purpose was to see how these people, who would clearly have a decisive role in charting the nation's future, understood the problems and obstacles facing contemporary Australia. In order to draw from them the general context for their responses to the more specific questions (these are dealt with in the next chapter) we asked them the following questions: - Before we turn to some more specific questions may we begin by asking you what you see as the two main problems facing Australia today? Please indicate which you think is the more important of the two. (Q-20) - What do you see as the main obstacles to the solution of these problems? (Q.21) What we wanted was their identification and listing of problems and obstacles per se and, equally, some initial insight into the intellectual framework that they would use to define and explain what they saw. It was partly for this reason that these two questions7 were linked in this way. The same frames were used (with checks to eliminate tautologies) to code answers to both questions.8

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What then did our top Canberra bureaucrats see as the main problems facing Australia today? Table 1 • 1 Perceptions of two most important problems facing Australia today as seen by SES officers. Most important problem (in rank order) 1. 2. 3. 45. 6. 7. 8. 9.

Per cent of SES mentioning problem

Economic problems (general) Attitudes and values Uncompetitive industries Lack of consensus Unemployment Education system Wage and salary levels too high Social inequalities Public sector spending

26.1 25.6 16.3 15.3 14-8 8.9 7.4 7.4 6.4

Notes 1. SES N = 215. Total number of responses = 430. 2. Totals do not add up to 100% because of availability of multiple response. 3. SES interview Question 20.

General worries about the structure and performance of the Australian economy were at the forefront of their concerns and were mentioned by 26 per cent of our respondents. Others, who were also troubled about economic problems, pointed to the uncompetitiveness of Australia's industries and more specifically of its manufacturing industries (the primary industries are among the most efficient and competitive in the world). Excessive wage and salary levels and the level of government spending were also mentioned as economic problems. If we simply add up these responses and include the sprinkling of mentions that go to other clear-cut economic problems such as the taxation system, the economic costs of unemployment,9 inflation, interest rates and the like, we find that a little over a third of the responses are pointing to what are unambiguously seen as economic problems. This is not uninteresting as far as it goes, but it greatly underrates the significance that our respondents gave to 'the economy'. The significance of the economy becomes clear when we look at what the respondents understood by 'attitudes and values', the next most frequently mentioned problem after generic economic problems.

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AUSTRALIA

Our respondents were clear and forthright about what they meant. They talked insistently about the 'failing work-ethic' of Australians and about what they saw as 'free-loading', and an attitude of indifference to work and to 'the economic situation', and they parodied and summarised these attitudes with such phrases as Tm all right Jack' and 'she'll be right mate'. So, with very few exceptions, attitudes and values were defined from an economic, and strongly normative perspective, as a lack of commitment to what our interviewees saw as 'productive work'. The same is true of the mentions that were coded as 'lack of consensus' because this was defined, again mainly in economic terms, as uncertainty and conflict over the goals, directions and structural problems of the national economy. They were pointing here largely to what they see as the broader context of industrial relations problems. The dominant image in their minds was of the economic costs of noisy bickering between government, employers and unions over national economic goals and the restructuring of the economy. Their identification of the education system as 'a problem' followed exactly the same logic. The education system was a problem because it did not appear to be sufficiently attuned to the specific demands of the labour market. It was not 'relevant' to the needs of business and industry and insufficiently attentive to research, development, and skill-formation in 'high tech' and other industrial fields with export or import replacement potential. Many references to the education system slid off into comments that blamed it for the 'Lucky Country' mentality10 and thus, again, for a complacent indifference to Australia's (economic) situation in the world. In short, the education system was defined by those people who saw it as a problem principally, or solely, as a means of producing human capital and, certainly, only in terms of its relation to the economic system. So, of these nine most frequently mentioned problems all were defined from an economic perspective, except for unemployment and social inequality. When we add the other economic problems that do not appear in Table 1.1, we find that something in the order of twothirds of the perceived problems facing Australia today were defined in economic terms. What did the respondents see as the main obstacles to the solution of these problems facing Australia today? If we treat the obstacles in the same way we get a rank ordered list as in Table 1.2. The main obstacle to the solution of Australia's problems was the selfish indifference of an undermotivated population to economically productive work. And this impediment to the nation's prosperity was manifest in Australia's chronic industrial relations conflicts - that is what they said and meant. Once again we see a certain kind of

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economic logic in the definition and weighting of these obstacles. Our respondents defined industrial relations problems first of all in economic terms as an impairment to productive capacity.11 It is significant here that industrial relations were not mentioned in relation to the successful and durable Accord that was made between the trade unions and the Australian Labor Party in 1981-8212 and thus in terms of the different problems - of social justice and equity - that might arise in determining what might count as a fair and socially desirable context for and solution of industrial relations problems. Industrial relations matters were not raised as a problems of assigning (fair) shares, and still less as matters of exchange and agreement between two constituencies of equal legitimacy, but, rather, as economic problems and as an impairment to the productive capacity of the national economy. Table 1,2 Perceptions of most important obstacles to the solution of problems facing Australia today. Obstacles (in rank order)

Per cent of of SES mentioning obstacle

1. Attitudes and values 2. Industrial relations 3. Vested interests (= trade unions) 4. Institutional inertia 5. Failing leadership 6. Uncompetitive industries 7. Education system 8. Lack of consensus 9. Wage and salary levels too high 10. Declining markets

80.2 63.9 55.9 48.5 41.2 31.0 29.9 28.2 23.7 20.9

Notes 1. SES N = 215. Total number of responses = 645. 2. Totals do not add up to 100% because of availability of multiple response. 3. SES interview Question 21.

References to Vested interests' had the same kind of thrust. There were some references to the powerful medical associations and to the farmers' union which had been quite ruthless in the pursuit of their own interests in the mid-1980s. However, for the most part it was the large trade unions, in both the private and public sectors, who were seen as vested interests (even though they represent a very substantial proportion of workers in this strongly unionised nation). 1 3 Denunciation and blame were a constant feature of these references

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to trade unions. They were blamed again and again for their 'selfishness'; for hurting the economy with excessive pay claims; and for unnecessary and damaging disputations that impeded the restructuring of the Australian economy and vitiated Australia's export industries and its competitiveness in the world economy. Many of the respondents who identified what is summarised here as 'institutional inertia' were pointing, at least implicitly, to both industrial relations and the education system. However, in these responses there was a broader concern with what the late Alan Davies called Australia's 'talent for bureaucracy'14 and with a certain general sluggishness of Australia's institutional structures in the face of what our respondents saw as an increasingly urgent need to modernise and meet the 'challenges' of increasing exposure to a rapidly changing world. In these references there was certainly still some emphasis on the economic consequences of what were seen as the rigidities of Australia's centralised wage-setting system. And, similarly, there was often an implied or voiced criticism of what was, ostensibly, the education system's lack of dynamism in facing up to the problem of Australia's under-skilled industrial workforce. Many, perhaps most, of these responses may have been prompted by concerns about economic matters, however they are distinguished by the fact that institutional structures were taken more seriously as more complex historical and social artifacts, rather than simply as appendages to the national economy or, worse, as 'grit in the gearbox'. The references to failing leadership were, for the most part, again imbued with more than a tinge of conservative and moralising anger at what these respondents saw as the lack of statesmanship among Australia's politicians. More often than not our respondents were complaining here of the cowardice or the self-regarding caution of politicians who were 'soft on the unions' and 'soft' on the issue of tariff protection for Australian industries. In most of these complaints there was an inward smile of approval towards the policies of Mrs Thatcher or Mr Reagan in the early 1980s and an underlying assumption that the standard for testing the worth of a politician ought to be the vigour with which they cleared the way for economic change.

WINDOWS AND IMAGES In the rank ordered frequencies with which these problems and obstacles were cited we can already discern, beyond the objects and particulars, some of the outlines of the 'mindset' and of the constructs that our respondents were using both to identify and even more importantly to explain Australia's problems. There were clearly

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some 'elective affinities' among what our top public servants saw as the related elements of both the problems and the obstacles to their solution. To get a better hold on these patterns of association and explanation, a factor analysis was made first of the cited obstacles, and then of the problems and the obstacles together. Table 1.3 outlines the two principal factors (or, in other words, the patterns of association) that showed up in the factor analysis of the cited obstacles to the solution of Australia's problems. We see that the underlying economic rationalism which first appeared in the frequencies showed up again in the pattern of associations among the responses. Table 1.3 Associations among obstacles to the solution of Australia's problems.

Obstacle

Factor 1 Per cent of SES mentioning obstacle loading

Factor 2 loading

Factor I

Taxation system Public sector spending Wage and salary levels too high

11.3 11.9 23.7

.62 .56 .53

-

31.0 28.2 63.9 20.9

— .33 -

.72 .65 .58 .43

Factor 2

Uncompetitive industries Lack of social consensus Industrial relations Declining markets

Notes 1. SES N = 215. Total number of responses = 645. 2. Totals do not add up to 100% because of availability of multiple response. 3. Only factor loadings of > 0.3 are included. 4. SES interview Question 21.

When the cited two 'most important problems' facing Australia today and the 'obstacles to their solution' were treated as separate variables and factored together we got a reconfirmation and an elaboration of these patterns in the responses. Specifically, in Table 1.4 we find three separate patterns of association (factors) among these identified problems and the obstacles cited for their solution. Each of the three factors points in its own way to an underlying economic rationalism that is still more visible in what are obviously mutually supporting aspects of a larger picture.

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Table 1A Relationships between problems facing Australia today and obstacles to their solution.

Problems and Obstacles

Factor 1 loading

Factor 2 loading

Factor 3 loading

Factor 1

Economic problems (unspecified) Obstacle - Uncompetitive industries Obstacle - Industrial relations Obstacle - Lack of social consensus

.69 .68 .48 .46

— -

— -

-

.66 .59 .59

.42

-

-

-

.61 .60

Factor 2

Uncompetitive Industries problem Obstacle - Wages and salaries too high Obstacle - Declining markets Obstacle - Taxation system Factor 3

Industrial relations problem Obstacle - Vested interests Notes 1. N = 215. 2. Only factor loadings of > 0.3 are included. 3. SES interview Questions 20 and 21.

Furthermore, at the base of this framework or outlook, there are two webs of deeply sedimented assumptions that are more or less unvarying - which is why they show up strongly in the frequencies and not in the factor analysis. IMAGES OF SOCIETY First, we find the contours of a certain negative image of society in the 'mind' of our SES personnel and more specifically here, in their view of other peoples' attitudes and values. We know what content they give to these categories; namely 'selfishness', indifference and several other facets of what was seen as a failing work-ethic. These same moralising attitudes are quite common among elites everywhere and are therefore not so very revealing. Our top bureaucrats are strongly motivated high-achievers. For the most part they came from privileged social backgrounds that gave them relatively little direct experience of ordinary working people even before they moved to

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Canberra when they lost the opportunity of ever getting any more. Here, as with their counterparts in other countries, they belong to a tiny upper-middle class fraction of the population.15 They have secure careers that involve them deeply in 'challenging', interesting, meaningful and rewarding work and so they were, presumably, projecting their own work-ethic and their own sense of involvement in what they do, onto the vast majority of the working population who have boring, dead-end jobs. But there is more to it than that. This moralising about 'selfishness' and indifference to work points, among other things, to a strongly utilitarian image of the individual and society. Australians spend too much time baking their brains out on the beach or, worse, boozing in front of the television. And they expect a weekend to consist of two whole days without work. They get four weeks vacation a year, and long-service leave after ten years of work, and overtime loadings for work done out of normal hours. The individual ought to want to work more, and harder. The insistent attribution of selfishness and freeloading is a kind of curse and sentence that falls back on the individual (and on trade unions) because it has no stable social object and so, in this respect, we are in the intellectually interesting position of trying to explain the structure of a vacuum from the inside. In these moralising images the underlying assumption was that the strength and vitality of Australian society - whatever that may mean - resided in the strength and vitality of its economy. And this in turn depends, then as now, on the entrepreneurial flair of the few and on the striving, discipline, industriousness, and productive work of the many. The common good was somehow cast, vicariously, as the total of exchanged economic values, as the gross domestic product, and in a way that defined all withheld effort and unpaid activity as selfish, reprehensible and 'antisocial'. That was the dominant viewpoint. There were other 'minority images' of society. One of these shows up in the identification, in fifth and seventh place respectively, of unemployment and social inequality as main problems facing Australia today. These problems were raised as social problems and within a social context. For many respondents the focal point of these references is the pain and despair of poverty and of unemployment, especially youth unemployment. In a few cases there were similar and specific references to other socially disadvantaged groups such as the aged and non-English speaking immigrants. Although there was no statistically systematic relation here between problems and causes, it is worth noting that, as we shall see later and rather as one would expect, those who nominated unemployment and social inequality as problems put themselves on the centre-left of the political spectrum

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and held on to this residual but still classical image of class-bound structural social inequality. Thereafter the social images point in varying directions. Sometimes they alluded to the longer term social costs of these present-day problems of inequality and unemployment and hence to the 'grapes of wrath': to the seeds of crime, social division, hatred and intolerance to which they would give rise in the future. Sometimes the social image was expressed more indirectly through references that focussed not so much on the social structure or on relations of social cause and effect, but rather on normative structures and on what were seen as declining ethics of social reciprocity and social responsibility. Finally, there was another image that centred not on inequality, but rather on the breakdown of the Australian family and a lost sense of community, of belonging, and of Aussie mateship and solidarity in the face of adversity. A manual check of the 50 or so mentions that were coded in this way suggests that something like a half of these respondents came from Roman Catholic backgrounds and that many of these interviews were tinged with critical attitudes towards trade unions and with generally conservative views, and with implicit or explicit criticisms of what they often saw as 'social materialism'. However these 'images of society' are, as we have said and in contrast to what our respondents had to say about economic problems and obstacles, by no means systematic. There are some blurred patterns and a few visible outlines here and there which can be seen almost as distractions from the equally, or perhaps more important discovery that most references to 'the social are weakly defined. The sense of confidence with which the majority describe economic phenomena contrasts markedly with the uncertainty with which the minority search for appropriate social constructs. Indeed, for the most part such social constructs were eschewed and social considerations were raised in a different form - not as coherently framed constructs but rather as 'issues' such as unemployment, inequality, poverty, the family, women, Aborigines, and migrants, in something like that order. It is clear that our respondents sometimes thought and worried about issues, but hardly ever about 'society' as such. IMAGES OF POLITICS AND THE POLITY These were, for the most part, similarly manifest only as transposed residues and reflections of economic factors of production and exchange. Most importantly, we find in this context some certainties about

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interests in general and Vested interests' in particular. Our respondents had clear-cut criteria for deciding what counts as an 'interest'. Wants, needs, goals and the like (the important differences between these notions do not matter here) were reckoned to be 'political', and perhaps even 'social', phenomena up to the very moment that they are expressed as actions, or as 'things' that are intentionally proffered for exchange in the marketplace. In that moment political and social actors and actions are redeemed and naturalised into 'the economy'. It is for just this reason that banks, developers, and huge corporations were seen predominantly as economic factors rather than as 'political' and 'social' interests. It is only when the framework is reconstructed in this way that one can make sense of this apparently obsessive preoccupation that our respondents had with 'vested interests' and with the trade union movement to which this term is most typically applied. A 'vested interest' was defined in these images as almost any kind of human institution or group of actors that obstinately stood outside 'the economy'; that constrained the outer boundaries of its operations, or, worse, that sought to interfere, 'internally', with its free operation. It is clear now why trade unions were defined so strongly as 'vested interests'. They, or rather their leaders, behave in such a perverse and selfish fashion because they keep one foot outside the labour market and seek to use 'political' means to alter the fair value that it might otherwise set on the 'freely' proffered work of the membership. A clear comparison can be made here with the activities of billionaire corporate takeover barons who exploited Australia's loose accounting practices, made fortunes at their shareholders' expense, and put a whole nation into debt with massive overseas borrowings (much of which was used to finance the asset-stripping of productive Australian industries). Even if we allow for some coding errors, and for what may have been the implicit intentions of some references to undifferentiated economic problems, there is still no possibility that corporate fraud and shady business practices, or takeovers and the overseas borrowing that have been used to finance them, could have scored more than 1 or 2 per cent of mentions - either as problems or as obstacles to their solution. More to the point, it is plain now why such people were not defined as 'vested interests'; namely because their actions count as 'economic activity' and were thus seen as economic facts rather than as political interests. However the condemnations of trade unions also had a second and entirely different root in the unhappy experience many of these top bureaucrats (especially those in the large social service departments) had had with their own public sector unions. It is this second

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and further aspect of the problem that gives these references to vested interests a broader meaning that has coloured and conditioned the respondents' images of politics in much the same way as the moralising comments on attitudes and values have conditioned their images of the social order.16 These two dominant political preoccupations - Vested interests' and industrial relations - together accounted for half of all the mentions that were coded as political problems. And here we have some further evidence of the derivative status that was given to political matters in Australia: these political difficulties are twice as likely to be mentioned, not as political problems in their own right, but rather as obstacles to the solutions of problems that were defined directly or indirectly as economic problems. In the other few direct allusions to political problems and obstacles our respondents pointed to what they saw as failing political leadership, to constitutional problems inherent in a federal system of government, and to the harmful effects of political polarisation and of small single-issue political parties.

CONCLUSION In the view of our respondents from the top policy making echelon of the Canberra public service, the main problems facing Australia were deemed to be economic problems. Some of the obstacles to the solution of these problems were of a strictly economic nature. Australia was, then as later, faced with declining markets for its major exports; its manufacturing industries were uncompetitive; and, from the point of view of our respondents, wage and salary levels were too high and the taxation system discouraged 'incentive' and enterprise. But these problems were defined in the terms of an economic rationalism that reached out to explain a broad sweep of social and political phenomena as obstacles to their resolution. And of course these explanations pointed, along the same lines, towards the preferred solutions that were clearly mooted in the insistent references to a failing work-ethic, to the complacency of the Lucky Country mentality, to the education system, to industrial relations and vested interests, and to failing political leadership. They felt that Australians have had it too easy and it was time they were more exposed to the international economy and the discipline of the market in the 'real world'. Strong and courageous leaders were needed to quell the noisy bickering. It was time to take on the Vested interests' and to deregulate the labour market with the abolition of the centralised wage-fixing system and thus, once and for all, to kill off the unions and to restructure the economy.

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Judgments about the appropriateness of the diagnosis or the therapy would be distracting. It is more important, instead, to make a few comments on what has been learned about the disposition of this part of the Canberra state apparatus to society and politics. A key point is that the economic framework was 'systematic' and that the references to social and political phenomena were not. Social factors were seen first of all as impairments to economic performance, and then as specific issues and problems. There was no evidence of any coherent view of society per se and as a whole. 'The economy' was certainly hardly ever seen as a subordinate part of Australian society conceived in some coherent way as a society. Indeed this way of looking at things borders on heresy and the idea that 'the economy' should be subordinated to anything was a luxury that 'we' could not afford. And yet once again indignation at the hubris of such a notion is a distraction: the important point is rather that when the 'real world' is seen in this way it follows, in Hamlet's words 'as night follows day' that traditions, cultures, norms, institutions, social needs and communities will be routinely assumed to have no independent value-setting command over the economy. Accordingly, 'politics' was reductively defined in much the same fashion as forceful economic management. And this says something about how our top bureaucrats expect to both judge and serve their ministers. These windows and images give a context for the more specific orientations to policy and management that are covered in the Chapter 2.

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CHAPTER 2

PROFILES OF CANBERRA'S POLITICAL ADMINISTRATORS'

T

he grand truism of sociology is true also of Canberra: the Australian federal state apparatus is 'socially constructed'. Every part of it, including its legal, economic, and formal organisational structure, is a product of the society that gives it money and legitimacy. It is by deploying (and reproducing) these resources of money and legitimacy, among others, that the federal state interacts with markets and with other aspects of its environment, and functions as a coordinating medium for the whole social system. These rather bland generalisations remind us again that sociological research must begin with a basic presumption that is an axiom of the discipline itself. It has to be assumed that the total experiential and educational baggage of the individuals who work in this 'social location 1 (for our purposes the top Canberra bureaucracy) is the product of a continuing process of socialisation - of what used to be called, in an older language, their 'primary and secondary socialisation'. And this includes all later educational experience and, most importantly in the case of people who have spent decades of their lives in the workplace, all later and ongoing occupational socialisation as well. Just as the economist begins with the assumption that 'the economy' is the measure of resources known and unknown, so we must begin with the assumption that the perceptions and actions of our top public servants have a systematic relationship to the society of which they are such obviously important members. It is the task of the empirical enquiry to uncover and to describe the many aspects of this two-way relationship - a relationship that is never narrowly determined and that is always mediated by many different social factors, but one that must, nonetheless, be shown to have a demonstrably systematic pattern. To embark on an empirical search for the pattern of this relationship is obviously to beg essential theoretical questions about the very

45

ECONOMIC RATIONALISM IN CANBERRA

nature of that relationship, questions that also ask for methodological justifications. Important as they assuredly are, these problems have to be dealt with elsewhere. The modest task of this chapter is to present a substratum of basic data. Later, in subsequent chapters, the data will be amplified with other material and then used to support a series of arguments and assertions that many readers will find overly daring and perhaps unacceptable. So, the ground must be prepared carefully with this presentation of a large parcel of data that are intentionally drawn almost exclusively from direct responses to the fixed choice or 'closed' questions (and thus from the most closely structured part) of these long interviews with our 215 Senior Executive Service officers nearly half of all the SES staff in the 13 key departments.2 These questions were keyed to the other open-ended questions that will be presented with the more extensive discussion that follows in the next two chapters. For the moment the overriding purpose is to stay very close to that part of the basic data that most easily speaks for itself, so that the properly sceptical reader may not escape a necessary engagement with the 'hard' (empirical but not empiricist) evidence for the more contentious arguments that will follow later, especially in Part Two of this book. The first section of this chapter deals with some basic social characteristics of the respondents: essential demographic and biographical information about birthplace, age, gender, socio-economic status of family background, and schooling. With these bearings we shall be able to locate our political administrators in the larger Australian social structure, and we shall see what broad processes of selection have been applied at different points along the road to Canberra and to their present location. Of course, this information is of quite a different kind to the other data presented in the following sections of this chapter, which aim at building up a coherent picture of the judgments, assessments, and perceptions of the respondents on a whole range of matters concerning administration and government. What then is the connection between the two? The fairly obvious answer is that social actors view the social world through windows that are part of its structure - their actions are premised on what they see and, of course, what they see depends very much on how they and others have designed the building and on which way the windows are facing. In some respects we will find that all our political administrators are looking out of the same windows. Sometimes they will be looking from different windows with variously overlapping perspectives; and sometimes they will see very little in common. Often we shall succeed in our aim of following the corridors between the windows and of relating the whole thing to a

46

PROFILES OF CANBERRA'S POLITICAL ADMINISTRATORS

social ground map of the Canberra state apparatus and, by implication at least, of Australian society - the larger task of the whole enquiry. The second section looks at the political orientations of these top bureaucrats and this is followed in the third section by a first 'quick fix1 on the economic rationalists who from about 1984 began to spring from the wings on to the centre stage. The fourth section presents a broad picture of the Senior Executive Service officers' working relationship with the whole system of government of which they are part and more specifically with the second Hawke Labor government. This is followed, finally, in the fifth section, with a first appraisal of some the evidence that will be needed in considering some fascinating and important questions about 'technocracy': the role of intellectuals and experts, and the different types of imperatives - economic, social and 'political' - which shape the process of government and the instrumentation of state power.

SOCIAL BACKGROUNDS AGE AND GENDER The international comparative study of higher public servants conducted by Aberbach and his colleagues in the early 1970s showed that the average age of senior public servants was 53 years (the same as the average age of our top Australian bureaucrats in 1976) and that they had spent an average of 25 years of service as bureaucrats.3 In Australia, in 1986, we find that these senior bureaucrats, at a comparable top 1 per cent level of the Canberra public service, are considerably younger. Their average age is 47 and they have spent an average period of 20 years as public servants. But, as we shall see later, there are differences in the age distribution across the three different categories of departments that were chosen for study. The seven-nation study also documented what everyone knew to be the case: selection into the ranks of the top 1 per cent of civil servants was governed by what Aberbach and his colleagues called the 'iron law of andrarchy':4 in short they found that less than 1 per cent of these top jobs were occupied by females. In Australia a decade and a half later, and after a strenuously applied program of affirmative action, the picture is changing. And yet the Senior Executive Service is still an andrarchy, though certainly a much less exclusive one. A paper presented by Prime Minister Hawke goes to the heart of the matter and explains that more affirmative action is necessary because, even after due allowance is made for the fact that the average

47

ECONOMIC RATIONALISM IN CANBERRA

length of service for women is considerably shorter than for men (a factor that obviously reduces chances for promotion), there was still an element of social discrimination that was unexplained by this and other factors. In an Australian Public Service of which about half of all the employees are women, Differences in levels of men and women are not explained by differences in length of service; nor by differences in qualifications; nor by concentration of women in states with lower promotion rates.5 We see from Figure 2.1 that the proportion of women drops steadily as the count proceeds up the levels of what was, in the old Canberra nomenclature, the 'third division' of university educated clerical and administrative staff. Although the proportion of women has been rising from a floor of 1 per cent in 1976, women SES officers were still a small minority of only 6.1 per cent of SES officers in June 1986. Fig* 2 A Proportion (per cent) of staff in SES who are women and are in classes of the 'third' (clerical/administrative) division.

Class 8-9

Class 10-11

SES

Source: Australian Public Service EEO Survey 1986.

In the material presented below and in subsequent chapters, some will notice that there is, regrettably, and for reasons that are purely methodological, 6 no separate breakdown of male and female responses. More regrettably still, women have been excluded from the sample altogether in the next section on ethnic and national origins the reasons for this will soon be plain. For the moment it is perhaps enough to explain that the Senior Executive Service population has such a small number of women - the number of SES women officers in the departments in our sample usually comprised one, two, or three individuals - that comparisons between male and female responses

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PROFILES OF CANBERRA'S POLITICAL ADMINISTRATORS

would not only be statistically meaningless but, more alarmingly, would be a sure way of betraying a sacred trust and identifying our interviewees. ETHNIC AND NATIONAL ORIGINS Most people are now aware that Australia is no longer a British enclave in the Pacific Ocean; not, at any rate, in anything more than a purely ceremonial sense. A quick walk through the central business district of Sydney is enough to remind an Anglo-Saxon visitor that one of the most successful programs of migration in the world has produced a multicultural population of which about one-third are of nonBritish origin. However, although this great variety of ethnic origins is already a feature of the larger population of Canberra public servants, it is not yet reflected in the composition of the SES (see Figure 2.2). Fig* 2*2 Birthplace of SES officers compared with Australian population males aged 30 to 64. M

Total Australian males SES males

Born Australia & New Zealand

Born UK Ireland

Other birthplace

Notes 1. The figures are for males aged 30-64 years, from 1986 Census, Australian Bureau of Statistics, Table CX0001. 2. SES N = 197. Separate figures for women SES are not entered because numbers are too small for valid comparison - of the 19 women in the sample, 18 are Australian born. 3 SES interview Question 4.

49

ECONOMIC RATIONALISM IN CANBERRA

An effort has been made to rectify the imbalance in the proportion of staff who come from non-English speaking backgrounds. It appears that in the mid-1980s approximately 17 per cent of the larger population of Canberra public servants came from non-English speaking backgrounds7 as compared with a slightly larger proportion for the whole Australian population.8 With respect to these top public sector executives we find that the proportion of the SES born in the United Kingdom is, indeed, about the same as for the population as a whole. However there is clearly a somewhat dramatic under-representation (by a factor of 5) of senior staff from non-English speaking backgrounds9 and this situation has not changed between 1985 and 1990. FAMILY AND SCHOOLING The evidence suggests that these top Canberra public servants do indeed tend to come from high-status social backgrounds, but not in quite the same measure as their counterparts overseas. Aberbach and his colleagues emphasised that in six10 nations in the early 1970s a massive proportion (some 74 per cent) of the top bureaucrats in the USA, France, Britain, the Netherlands, Italy and West Germany, had fathers in managerial or professional jobs. Although cross-national comparisons of this kind are fraught with all kinds of technical difficulties,11 the broader outlines of the picture are still quite clear. In terms of social origins, the top echelon of the Canberra bureaucracy is highly 'unrepresentative' of the wider Australian population but still more egalitarian12 than it was on average in these six other countries where not very much has changed France is still ruled by TEnarchie' 13 of top functionaries from the 'grandes ecoles', and from l'Ecole Nationale d'Administration in particular, and they are still socially selected in the same way today as they were a decade or two ago, and the same is true of those those in Whitehall. We see in Table 2.1 that 27 per cent of these members of the Canberra Senior Executive Service came from families with a father in the managerial and professional stratum - that is from an aggregated top social group comprising bands one and two. Scales of occupational prestige remain one of the most direct means of measuring 'socio-economic status' and they are one of the best practical indicators of social class. The information given to us by our SES officers was classified on the Ann Daniel scale, however, since scales are normed differently Table 2.1 includes the Broom and Jones ANU2 scale and so compares our SES sample on two scales that are both

50

PROFILES OF CANBERRA'S POLITICAL ADMINISTRATORS

based on 1981 Australian workforce occupational prestige distributions.14 The differences across the two scales disappear when the top two bands are lumped together and the result then shows, fairly unambiguously, that top Canberra bureaucrats are between four and five times more likely than the rest of the Australian population to have come from a small elite of 5 or 6 per cent of Australians with fathers in these higher professional and managerial occupations. Table 2.1 Prestige of father s occupation for male SES officers.15 Prestige of father's occupation

Senior Executive Australian Australian males (scale A) 2 males (scale B)2 Service males1 (%) (%) (%)

Band one) managerial & Band two) professional

5.77 21.63 27.40

0.69 4^2 4.91

3.26 125 6.51

Band three) middle-class Band four )

23.56 -25.48 49.04

14.89 30.24 45.13

17.16 18.09 35.25

10.10 433 14.43

32.17 17.78 49.95

46.51 1L23 58.24

Band five) lower social Band six ) background

Notes 1. N = 208 valid entries less 19 women (subtracted because no statistically valid comparison is possible) = 189 of SES selected sample of 215. Again the women are excluded here because the numbers are too small to be statistically meaningful and yet it is interesting to note that the proportion of women from the top two bands is exactly the same as for the men. 2. Scale A is the Ann Daniel scale; Scale B is the Broom and Jones' ANU2 scale. 3. SES interview Question 3.

Since there is in Australia as elsewhere a ubiquitous relationship between socio-economic status of family background and educational attainment, one should not be surprised to find that much the same kind of pattern applies to the data concerning the secondary schooling of our top bureaucrats. They are at least four times more likely to have attended an elite private school than their age-mates in the larger Australian population. If we assume that our top bureaucrats left school at 18, then the youngest of them will have left school in 1972 and the eldest in about

51

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1939. However the point is that the great majority of them left school between 1945 and 1965 when school retention rates were quite different from those applying today. Moreover we find that these retention rates differed across the three sectors of Government, Catholic and GPS Private. More specifically, we discover that pupils in the expensive elite 'Greater Public Schools' (which are all private!) were much more likely than those in the rest of the school population to stay on to finish school in the senior secondary and matriculation grades. In 1965, the first year for which national figures are available, we see that these elite GPS students comprise only 5 per cent of all school leavers.16 When we look at our Senior Executive Service population we discover that nearly 15 per cent of them come from these elite schools. Indeed the earlier studies of Cass and his associates, based on the data from the 1976 report of the Royal Commission on Australian Government Administration (the 'Coombs Commission'), sets the number of SES officers from GPS schools at what they flag as a conservative, understated, estimate of 18.5 per cent.17 In short ex-GPS school students are greatly over-represented among our SES officers: SES officers are, by comparison with the larger population, three or four times more likely to have come from elite GPS schools. Table 2*2 Secondary schooling of Australian public service Senior Executive Service officers. Government Catholic GPS (elite secondary secondary private secondary)

Australian Population, 1965 All school leavers1 Secondary Senior secondary Senior Executive Sample2

76.0 73.6 63.8

19.0 17.7 19.9

5.0 8.7 16.3

39.1

27.9

14.9

Notes 1. This series of figures is taken from Boreham, Cass and McCallum18 whereas the figures for secondary and senior secondary were supplied by the Australian Commonwealth Government Schools Commission. 2.N = 176. 3. SES interview Question 2.

Again it is interesting to note that Aberbach's six nation study showed that 'in advanced industrial nations virtually the only significant path

52

PROFILES OF CANBERRA'S POLITICAL ADMINISTRATORS

to the top of the polity passes through the university*.19 In Australia there are virtually no differences in the social prestige of different universities20 of the kind that mark off the 'Ivy League* from other American universities, or 'Oxbridge* from what used to be called the British 'Red Brick* universities - and, more sharply still, the 'grandes ecoles' from the rump of the French university system. Although, in later discussions below, we shall be much more interested in the disciplinary field and type of degree(s) held by our top officials, it is still worth noting that the six nation finding is, of course, also true of Australia today, and that 98 per cent of our SES officers hold one or more university degrees. And yet, before this fact is taken completely for granted, it is as well to remember that only a decade or so ago there were still complaints in the academic literature21 and elsewhere that the top public service was 'unrepresentative' and 'elitist' because even then it contained such an enormous proportion of people with university degrees. That complaint is not heard today because the once contentious debates about 'meritocracy' have been buried under what has become the completely normal expectation that higher administration must be done, exclusively, by people with one or more university degrees. Of course, the point that really matters here is not the sad fact that some would-be contenders for entry into Canberra's top civil service have been the victims of witting or, more probably, of unwitting and institutionalised forms of discrimination. Our concern in this study is not with specific social inequalities, but rather with the effects upon society itself of a pattern of differentiation and selection through which people with certain characteristics come to acquire positions of enormous power within it. It is a study, among other things, of the structure of power in Australia. Even though there is an overlapping interest, it is not a study of inequalities of employment opportunity in the Canberra public service. Table 2.3 gives an impression22 of the selection effects of the several factors covered above on Canberra and the way it is structured. So what is the relevance of these selection effects? In Britain and France those who press that question with the obvious and repeatedly demonstrated findings that an overwhelmingly large proportion of top civil servants in Britain and France come from privileged social backgrounds, from Oxbridge or 'les grandes ecoles',23 are met with what has become a standard defence. One is told that the top Whitehall bureaucrats have passed through Oxbridge only because that is where the 'best people' go and that beyond this simple fact any relationship between selection and social background is purely coincidental and has no relevance to what these people think and do at their office

53

ECONOMIC RATIONALISM IN CANBERRA

desks. Sometimes attempts are made to bolster that standard defence with the slightly more sociologically plausible argument t h a t any residual effects of social backgrounds will, in any case, pale into insignificance as they are buried under 20 years of experience on the job; and that this will be especially true of talented high-achievers who are, for that very reason, extremely involved in intense and ereative intellectual work which opens them all the more strongly to the formative influences of the workplace. Table 23 Chances of entry to the Senior Executive Service of a person born from (approximately) 1920 to 1940.

Characteristic

Selection Effect

Father did not have a senior Four times fewer chances of entry managerial or professional occupation? Not born in Australia, New Zealand or the United Kingdom?

Four times fewer chances of entry

Not male?

Fourteen times fewer chances of entry

Did not enter a Greater Public School? Four times fewer chances of staying on to senior secondary (matriculation) level Did not graduatefroma university?

Virtually excludedfromentry to SES.

These two arguments are plausible but mistaken. Among our sample of top Canberra bureaucrats we find that, even after an average of 20 years of work experience, there is still a clear and strong relationship between socio-economic status measured by the prestige of father's occupation and the general political orientation of our Senior Executive Service officers. We find that those who belong to the already disproportionately large group which comes from top managerial and professional family backgrounds are three times more likely to say that their politics are centre right or conservative than are their less privileged counterparts from lower social backgrounds (bands 5 and 6).24 Although it is not as strong, there is still evidence to suggest that images of society and 'theories' of social stratification are related to the type of secondary school attended some 20 years earlier. The respondents were asked whether:

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-

In a developed and fairly affluent society like ours relations between capital and labour are: a. more complementary and equal than they are unequal and exploitative b. more unequal and exploitative than they are complementary and equal c. these categories are no longer particularly relevant — why not? (Q. 27)

Fig, 23

Images of society related to secondary education.

60

more complementary and equal

50 -I

more unequal and exploitive

40 %

not relevant 30

20

10 State Secondary

Catholic Secondary

Independent

GPS

Notes

1. N = 215; X2 test

2. SES

p <0.05.

Certainly the similarities that appear in Figure 2.3 above are as notable as the differences. And yet the differences have some importance when due regard is paid to the reasons our respondents gave for the 'not relevant' answers. These explanations had one factor in common: they all denied that relations between capital and labour were exploitative25 and so were tantamount to saying that relations were equal and complementary. When this is taken into account it indicates that the Catholics are nearly twice as likely as their counterparts from state or GPS schools to hold the view that relations between capital and labour are, on balance, unequal and exploitative. More notably, SES officers from Independent GPS backgrounds are more than twice as likely as those from state and Catholic schools to say that these relations are more equal and complementary. 55

ECONOMIC RATIONALISM IN CANBERRA

One more observation will suffice to show that the effects of social background, and here of secondary schooling, are strong enough to carry through into the first assumptions of national economic policy. Fig, 2 A Favoured role of government in national economy: responses related to type of last secondary school attended. 50 45 40 35 30 % 25 20 15 10 5 0

State Secondary

Catholic Secondary Independent GPS

Notes 1. N = 215; x 2 test p<0.05. 2. SES interview Question 24.

Figure 2.4 shows that just under a half of our top bureaucrats who attended state or Catholic secondary schools want the government to control the national economy more or less firmly.26 The Catholics are slightly more determined to preserve the authority of the state. But again the salient comparison is with those who passed through the GPS schools some 20 and more years ago: they are three times more likely to favour the laissez-faire position of no controls than are those from state or Catholic secondary schools.

POLITICAL ORIENTATIONS The two questions to which the next few pages are addressed are: what are the political orientations of these top Canberra bureaucrats; and how are they manifest in their dispositions? Our Senior Executive Service officers were asked to designate

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their general political orientation on a five point scale. At first sight the answers look banal in the extreme. Table 2 A Political orientations of Senior Executive Service officers.

Orientation

Per cent

radical centre-left dead-centre centre-right conservative decline to answer

0.0 37.2 20.9 28.4 7.9 5.6

Notes 1. N = 215. 2. SES interview Question 30. The distribution is faintly bi-modal but still, on the face of it, these proportions are entirely consistent with Aberbach's finding of over a decade ago that senior public servants in the six nations covered in the core of that study were, on the whole, Committed centrists'. However, this is an illusion that will soon disappear. In order to gauge the content and significance of these political orientations it seemed like a good idea to make a straightforward comparison of responses, to several other questions, of the two groups who put themselves unambiguously either on the centre-left or the right.27 This leads to two interesting findings. In the first place, we see that the differences in the political orientation of our respondents are mirrored in the positions that they will take for or against a prevailing economic rationalism and, similarly, to their views about state involvement in the economic and social spheres of the nation's life. More specifically, we find that in comparison with those on the left, our top bureaucrats with a conservative cum rightist orientation are:28 • more than twice as likely to say that Gross National Product is distributed with a bias to wage and salary earners; • nearly three times as likely to say that there should be more individual initiative and less state involvement in the economic and social spheres; • more than three times as likely to opt for no state controls on the national economy; • more than twice as likely to agree that 'doubts and fears expressed about the growing intervention of the state in economic and social spheres are fully justified';

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•

more likely (by 23 percentage points) to favour the deregulation of the labour market; and, • four times more likely to say that trade unions have more power than business interests. These relationships are more than enough to answer the common claim of public servants who say 'my politics are purely personal and do not affect what I do\ As we have seen, the research literature is unanimous in the judgment that civil servants at this level are deeply involved in the 'political process'. We see here that this demonstrated relationship between the general political orientation of our respondents and the more specific assumptions that they bring to the articulation and management of national policy is close enough to undermine the claim that the two are separable or independent of each other. A closer look at those who designate themselves as leaning to the left leads to a second and equally interesting finding. Senior Executive Service officers in this category answer some of our other questions as follows: • 46% of them say that the distribution of GNP is either balanced or biased to wage and salary earners; • 42% of them say that there should be 'more individual initiative' (and less state provision); • 46% of them agree that 'doubts and fears expressed about the growing intervention of the state in economic and social spheres are fully justified'; • 52% of them approve of the deregulation of the labour market; • 50% say that power between trade unions and business interests is balanced (a further 14% say that trade unions have more power). The point is, of course, that nearly half of our group of self-designated left-leaning respondents answer many of these questions in a way that would do credit to committed members of Australia's (conservative) Liberal and National parties. Moreover, this impression is reinforced by the fact that these answers are quite closely interrelated.29 Clearly our respondents are much more conservative than they know or say. They are not 'committed centrists'. Although the same people do not always line up in the same way on all questions, it is reasonable to suggest that no more than one in ten of our Senior Executive Service officers would fit even a fairly elastic profile of the contemporary Australian centre-left - and many of those would certainly stand out like sore thumbs in any left faction branch meetings of the now very moderate Australian Labor Party that is in government. Conservative they most surely are: but what makes them conservative? So far we have only established that social backgrounds have

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PROFILES OF CANBERRA'S POLITICAL ADMINISTRATORS

a direct and important effect in shaping their social, political, and economic outlook- But this leaves room for many other plausible guesses as to what other mediating experiences have set them into this mould. Is it perhaps age and experience? Or, even more specifically, is it experience 'at the coalface' in the regional offices outside Canberra which makes them cynical and gradually undermines their confidence in what governments can achieve? The data give a clear answer. There is no direct relation between political orientation and age, nor is there any relation with years of service, or with location in the regions, or with seniority within the Senior Executive Service. So what is it that reinforces or complements the conservative predisposition that is laid by privileged social backgrounds and elite schooling? The answer is to be found in the subjects that they study at university.

ENTER THE ECONOMIC RATIONALISTS One of the startling findings is that, of the sample of 215 Senior Executive Service officers in our key departments, 44 per cent of them either held degrees in economics or commerce, or designated themselves as economists. The number with economics and business-oriented training rises to 54 per cent when one counts the additional 10 per cent who have qualifications in business administration and accountancy. It is true that in the larger SES population a much smaller proportion of 25 per cent hold degrees in economics and/or accountancy. Yet even when this is taken into account and when further allowances are made also for some over-representation of the so-called 'economic departments' in our sample, there is still a bias towards economics and business-oriented training that contrasts strongly with the picture in many other comparable OECD countries where the normal requirement for high civil service positions is still a superior liberal education (as in Britain), or an education in the law (as in most of the countries of continental Europe with a Roman law tradition).30 Comparisons with other countries are endlessly complicated by the differences in classifications that arise from widely differing educational traditions and institutional structures. There is, here, the further difficulty that information from the only broadly-based international comparative study (of Aberbach and his colleagues) is now very dated. Yet there is still something to be learned by using this data as a context for some observations about the educational backgrounds of our Canberra sample of SES officers and of the larger SES population of which they are part. We find that in the early 1970s,

59

ECONOMIC RATIONALISM IN CANBERRA

across five nations (Britain, Germany, Italy, the Netherlands, and the USA), an average of 24 per cent of senior civil servants designated 'social sciences' as their major field of study; this presumably included many graduates in many different fields such as administration, anthropology, economics, commerce and accountancy, geography, politics and sociology.31 Certainly in Britain, France and Italy, senior staff profiles of their respective treasuries and other central policy departments show that national economic policy is regarded in these countries as something that is too important to leave to specialist economists.32 When we compare this with the situation in Canberra in 1986 we find that 25 per cent of the whole Canberra SES population have degrees in economics and/or commerce. In our sample of SES officers in 13 key departments the proportion jumps to 46 per cent (we included those with an Arts degree in economics as well as those who designate economics as their major field or discipline). Add those with degrees in business administration and it moves up to 54 per cent. The framework for the comparison is so unsteady that we have nothing more than an impression, but it is one that points to what may be understated as the very conspicuous part that people with an economics and commerce training have in Canberra and most especially in the key departments in our sample. The conservative, neoclassical, 'dry',33 and technical-econometric orientation of the economics profession in Australia,34 and of some faculties in particular (Canberra's Australian National University most of all), is so well known that one can easily guess at how our SES officers will line up on some fundamental social and political questions. Figures 2.5, 2.6, 2.7 and 2.8 illustrate the effects that economics and business-oriented training has in shaping the policy positions of our SES officers. The frequencies for 'all respondents' are given as a context for the comparison between two categories of respondents: the first comprises all graduates with a degree or major specialisation in economics, commerce, accountancy or business administration (labelled in the figures only as 'economics and commerce'); the second category all graduates in other social sciences, including law and the humanities (labelled generically as 'social sciences'). What we see here is that Senior Executive Service officers with an economics cum business-oriented training are consistently more conservative on these key variables than their counterparts with degrees in the other social sciences and humanities (including law!).

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PROFILES OF CANBERRA'S POLITICAL ADMINISTRATORS

Fig* 2,5 Deregulation of labour market. All respondents Economics/ Commerce Social Sciences

Approve

Disapprove

Notes 1. For comparison between educational categories N = 166 and %2 test p <0.05. 2. SES interview Question 26.

Fig. 2*6 Distribution of Australian Gross Domestic Product.

H All ^™ respondents UH Economics/ ™» Commerce

•

Social Sciences

% 30

Biased to wages

Balanced

Biased to capital

Notes 1. For comparison between educational categories N = 154 and %z test p <0.05. 2. SES interview Question 22.

61

ECONOMIC RATIONALISM IN CANBERRA

Fig* 2 . 7 Relations between capital and labour.

All respondents

10 60

Economics/ Commerce

50

Social Sciences

30 20 10 0 More More complementary exploitive & & equal equal

Not relevant

Notes. 1. For comparison between educational categories N = 159 and % test p <0.05 2. The meaning of the not relevant category discussed (in footnote 25) may be read as tantamount to 'more complementary and equal'. 3. SES interview Question 27.

The differences are greater than they appear in the graphs since the 'all respondents' category already contains this large proportion (54 per cent) with these qualifications. The real difference is more apparent when we note in Figure 2.5 that, among the 66 per cent of the sample who favour the deregulation of the labour market, those with an economics/business oriented education outnumber their counterparts with other social sciences degrees by three to one. Again, with respect to the distribution of Gross Domestic Product shown in Figure 2.6, there is an identical pattern. The economists and their cousins are more opposed to a more equal sharing of the nation's earnings than anyone else; they are also nearly four times as likely to say that the distribution of GDP is biased to wage and salary earners than are the respondents with social science degrees. In the same vein we see in Figures 2.7 and 2.8 that, from the point of view of the economists, the power of business interests pales into insignificance in the face of the power of trade unions: they are four times more likely to say that trade unions have more power than business interests than are those with other social science degrees.

62

PROFILES OF CANBERRA'S POLITICAL ADMINISTRATORS

Fig, 2,8 Comparison of power of trade unions and business interests.

_ ^1 mm Hi

50 •,

45 ACS 4U •

35 30 • 25 •

5 • 0

•

_ 1 Social | 1 Sciences

r m HI -•IJ m\ •m• _ H Lml JHLJ

20 • 15 10 •

•• •••

All respondents Economics/ Commerce

TU more power

Balanced

TU less power

Notes 1. For comparison between educational categories N = 170 and y} test p <0.05. 2. SES interview Question 28.

A few more observations will suffice to make the point that much has changed since Canberra's policies were guided by post-war Keynesian re-constructionists with their own distinctively Australian vision of a nation-building state - by a generation of people with a much broader social and educational experience that certainly included vivid memories of the Great Depression. Clearly the strong preference now is for an economically rationalist orientation to policy and government. Over 90 per cent of all the respondents approved of the deregulation of the Australian dollar that took place on 9 December 1983 and, similarly, in the following weeks, of the deregulation of the Australian capital and financial markets. Moreover, the data show that these judgments are closely related to judgments about the distribution of GDP and to the wish of two-thirds of our SES officers to 'bust the unions' and to deregulate the labour market and so, presumably, to do away with Australia's distinctive wage-setting and arbitration structures. When these five variables are treated (without any weighting of the values) as a first rough scale of'economic rationality' we see that all these judgments are indeed closely related (the 'alpha' reliability coefficient is 0.72) and that those SES officers with economics cum commerce and business training were eight times more likely to score 'high' on that scale than were their counterparts with other social science degrees.35

63

ECONOMIC RATIONALISM IN CANBERRA

Finally, and not without some irony, we see from their attitudes to state involvement in economic and social matters that these senior bureaucrats see the world in much the same way as those on the 'New Right1 who roundly harangued them as the captains of a self-serving 'new class' hell-bent on thwarting individual initiative and enterprise and on the bureaucratic corruption of free markets. Two-thirds of our SES officers believe that there should be more individual initiative and less state provision; this result is also consistent with the responses we get to the other questions dealing with the role of the state. Although Australia today has one of the lowest levels of social service provision among the OECD countries,36 we find that only 16 per cent of top public servants would favour moves to increase it. Two-thirds or more of the SES officers interviewed wanted smaller government, less state involvement, more individual incentives, and less government control of the economy. Not many defenders of the public sector here.

GOVERNMENT AND ADMINISTRATION UNDER HAWKE Top public servants are dedicated and hard working high-achievers with a bad public image. The former conservative Liberal/National Party Fraser government (1975-83) made no secret of its scorn for these people whom Liberal deputy leader and minister Phil Lynch called 'pigs with their snouts in the trough'. The first Hawke Labor government (March 1983 - December 1984) saw some increase in government spending and a modest expansion of the SES; yet, on the whole for these senior public servants, Labor meant more cuts and economies, forced changes in conditions of work, and the much tougher accountability requirements that came with increasing public recourse to Freedom of Information legislation, with Equality of Employment Opportunity provisions, and with the close scrutiny of parliamentary committees. Senior public servants faced tough ministers of a Party which laid much of the blame for the 1975 Whitlam Labor government's demise on the Public Service; tough ministers grimly determined that there should be no Yes, Minister games in Canberra.37 If one sets all this against a literature about 'overloaded bureaucracies' and of the predicted 'crisis of the state' that was supposed to issue from the impossible complexities and contradictions of governing modern developed democracies, one could surely be forgiven for expecting that we should find among these top public servants a good measure of hate,

64

PROFILES OF CANBERRA'S POLITICAL ADMINISTRATORS

resentment or despair, and some dire predictions of doom for this system of government. But no, for most of these people this was not the reality, not yet at any rate. There are obvious difficulties38 in deciding how and at what point a group of people such as the Senior Executive Service are to be judged demoralised (or moralised). Nonetheless, although morale was clearly falling quickly in the late 1980s,39 and especially after the bruising that came with the Bastille Day reforms of July 1987,40 in 1985-86 it was still generally high inasmuch as no more than one-quarter of the respondents said that they were demoralised by constant conflicts or by what this minority often see as the meaninglessness of much of their efforts. Although a much larger number, nearly half of them, worry about the effects of long work hours41 on their families, it is worth noting that the myths about Canberra 'workaholics' exaggerate the 'risks' of divorce for top public servants. The facts are that 81 per cent of SES officers are married and that about 13 per cent are either remarried, divorced or separated. In the absence of marriage breakdown figures for other managerial or uppermiddle class groups, one must conclude that marriage breakdown among our top Canberra bureaucrats is lower than in the population as a whole in which the breakdown rate for first marriages was about 33 per cent on 1986 census figures.42 On these and other measures it is clear that only just over a quarter of our sample admit to any kind of anomic demoralisation.43 In response to a question asking our interviewees to sum up the 'psychological and emotional costs' of their work, 70 per cent said that the 'rewards and satisfactions definitely outweigh the costs' and 27 per cent said 'it's a pretty close thing'. On the whole they have confidence in the system in which they are such key actors. In response to a question asking them for their assessment of the fragility or otherwise of our system of government, 96 per cent thought that, in the light of their experience as higher public servants, our system was sturdy - only seven individuals in a sample population of 215 ventured the judgment that it was fragile, and none thought it was threatened with collapse. When the lens is brought closer to the development and management of policy we find that they are evenly divided as to whether this state apparatus has seen an increase or a loss of coherence over the last decade and a half. But when asked more specifically for an assessment of policy coordination across different areas and sections of government, those offering the positive judgment (that there is increasing rationalisation, consistency and coherence), outnumber by two to one those who see only increasingly inconsistent, ad hoc and reactive policies. As we shall see it is differences across different locations within

65

ECONOMIC RATIONALISM IN CANBERRA

this state apparatus that really matter and yet, insofar as generalisations across the whole sample mean anything, it seems here that, on the whole, our SES officers take a positive view of the Hawke government's push for greater rationalisation and efficiency. Answers to the more open questions showed that a considerable majority of them have great respect for the competence of the Hawke government. Indeed, the SES officers in the 13 departments covered in this study voiced some strong criticisms of many of the Hawke government's policies but they left no room for doubt that all 13 ministers were seen to have strong and effective control of their departments. It is clear from other supporting evidence that in some instances (Industry Technology and Commerce, Primary Industry, and Health are the notable cases) ministers have had to fight long and hard to bend the departments to their will but, despite the casualties and the walking wounded among them, SES officers usually attributed those difficulties to the legacy of the outgoing Fraser government in a way that seems, for the most part, to enhance rather than diminish the standing of the Labor ministers among the senior staff. These judgments are based on increasingly close working relationships with ministers who, without exception, go 'down the line' to assistant secretary level, and even sometimes to action officers in the third division, for additional advice on particular matters. In contrast with the Whitlam years we see that the personal and advisory staff of the Hawke government's ministers now take an often prominent and usually effective part in articulating the relationship between the minister and the SES staff. Moreover, most SES officers meet their ministers frequently (more than once a fortnight) and they send something like half their submissions directly to the minister's office. Although 'drop copies' of all communications with the minister are routinely sent to secretaries and deputy secretaries, it is only especially important matters that go in the first instance up the line to these seniors (and this, incidentally, completely puts to rest the long-outdated but still prevalent stereotype of a rigid top hierarchy dominated by a permanent secretary who jealously controls every contact with the minister). One of the more interesting findings to emerge is that although senior public servants often resent the 'politicisation' of particular issues and problems, especially when this leads to what they call 'knee-jerk reactions' from ministers, they nonetheless welcome strong ministerial leadership. Strong ministers and an effective, strongly led and united cabinet are seen as the indispensable first conditions of good government and the majority of SES personnel take this to be very much the present state of affairs in Canberra. A majority of them

66

PROFILES OF CANBERRA'S POLITICAL ADMINISTRATORS

are sure that the minister will get his or her way when there is a conflict between the minister's political preferences and the department's preferred policy - less than one in 20 would predict with confidence that the department's view could win against its minister's opposition. Nearly half of them say that political considerations prevail over other economic, social and legal-administrative pressures in setting policy. Poor leadership is seen as the factor that most threatens the consistency and coherence of policy and management and strong control is judged the best defence against such problems. They do not deny that there is a tendency towards empire-building among top cliques of public servants, but they see this as an an undesirable consequence of weak or absent cabinet control. What this means, among other things, is that there is not a grain of evidence for the widespread view that top public servants would like to be 'left alone to get on with the job', 'without interference from those damned politicians'. At the top level there is an intimate and symbiotic relation of cooperation between ministers and the SES: one which is now, it seems, quite firmly directed by ministers.

TECHNOCRATS? Senior public sector policy-makers and managers are constantly involved in making choices between competing definitions of situations and problems. Choices have to be made in contexts that are for the most part complicated, unstable, and indeterminate - the more routine work is done at lower levels in the hierarchy. And, of course, at this Senior Executive Service level there is a burden of justification and responsibility that is never far from the thoughts of those who must manage programs and advise the minister as to what he/she should or should not do in this or that situation. In these high echelons of the Service, officers are routinely involved in 'the political process' through a number of tasks such as drafting letters to constituents and interest groups to justify policies and decisions. Similarly they are obliged to defend their ministers vis-a-vis other members of parliament, the ministers of often hostile state governments, state parliamentarians, and an increasing array of parliamentary and caucus committees. Senior Executive Service officers are again routinely required to give their ministers the best ammunition to fire off at the Opposition while at the same time striving to run programs in a way that remains 'neutral' and 'keeps the minister out of trouble'. The inherent political tensions of these jobs are omnipresent and inescapable. These considerations remind us that, especially at this senior executive level, there is a particularly complicated traffic between actions

67

ECONOMIC RATIONALISM IN CANBERRA

and structures. Policy-making, top management, and higher administration are labels that we apply to a form of work in which the individuals' total consciousness (and unconsciousness) - knowledge, 'ideas', values, and attitudes - are turned into what these actors themselves recognise as another more impersonal and objectified universe of policies, formal structures and organisational processes. In terms of an older theory-language, people at this level are in a situation where 'roles' and 'role boundaries' melt away; a situation in which organisation is shaped by persons and vice versa. It has been 20 years since the noisy debates about the epistemological status of 'positive science' and positivism erupted in most of the social sciences (significantly, in some more than others). Indeed, until very recently it has been almost normal to refer to top administrators and policy makers as 'technocrats'. This faintly pejorative description announced to the unaware that these people take 'is' for 'ought', that they make illicit distinctions between fact and value, and that they mistakenly assume that their choices and decisions are decided on technical criteria and are, in this sense, 'value-free' or neutral. This mixture of slander and attribution raises important empirical questions as to how the policy makers themselves understand the relation between action and structure. Do they believe there are 'objective' and even scientific answers and solutions to problems of public policy? Their answers to these questions will surely tell us a good deal about how state action (and inaction) is justified and legitimated. Indeed we cannot begin to understand how responsibility is understood and experienced without taking stock of what SES officers say about these aspects of their universe. Several questions in the interview were aimed at these problems and the results, in many respects, were quite unexpected. Two questions44 which were aimed specifically at the problem of value neutrality elicited nearly identical answers. They show that nearly three-quarters of the population are comfortable with what is, in effect, a thoroughly 'positivist' view of administration; one that assumes, as Herbert Simon45 did more than forty years ago, that decision-making and administrative behaviour can and should obey a separation of fact and value premises. Figure 2.9 shows the responses to a statement proffering this view: the classical view of public administration is still basically correct: the politicians select the values and objectives of public policy and we the knowledge and means for its implementation.

68

PROFILES OF CANBERRA'S POLITICAL ADMINISTRATORS

Fig* 2 . 9 Agreement with 'classical' view of public administration.

Agree

Agree with reservations

Disagree with reservations

Disagree

No answer

Note: SES interview Question 45.

And Figure 2.10 shows a similar, and highly correlated (r = 0.62), response to a second statement: In practice it is possible for senior administrators to maintain a neutral position in relation to basic value orientations. Figure 2.10 Acceptance of value neutrality.

Agree

Agree with reservations

Disagree with reservations

Note: SES interview Question 48.

69

Disagree

No answer

ECONOMIC RATIONALISM IN CANBERRA

Almost 70 per cent of our interviewees again assented to this classically 'technocratic' and positivist view of their world. Clearly our respondents were saying that they live in a world in which other people - politicians - set the key value objectives. We find that this view carries over into their assessment of what actually happens when there is a clash between the minister and his/her department. The responses of our SES officers are shown in Figure 2.11 to the statement, In cases where there is a clash between the minister's political preferences and what the department sees as rational policy... Fig* 2.11 Perceived outcome of clash between minister and department. 60

T

50 • ' 4030 • 20 • 10 •

Minister prevails

Either way

Department prevails

Note: SES interview Question 44.

However, if we then confront them with what we might take to be their own admission, namely that they are, by this reckoning, higher 'technocrats' whose work 'mainly involves the application of higher expert = technical = value-free knowledge to particular problems', only just under a quarter of them will agree, and the others will say that this is not an appropriate description. On that question, there are no differences across the different categories of departments: for example the people in Resources and Energy, who are for the most part engaged in highly technical assessments of matters such as Australia's water and energy resources, answer in the same way as

70

PROFILES OF CANBERRA'S POLITICAL ADMINISTRATORS

the quick-as-a-flash political policy analysts in Prime Minister and Cabinet and as the 'generalist managers' in some of the service departments. One interpretation may simply be that they are affronted by the pejorative ring of the term and indeed this is certainly consistent with the very interesting reasons they give for disowning the tag. Of the 82 per cent who will not accept it, three-quarters of them say, significantly, that it is their intellectual breadth and their broader analytic skills which distinguish them from the technocrats', whoever they may be. So, here, as in several other different contexts, the SES want to stress the intellectual character of their work. But what kind of knowledge is, in their view, most influential in deciding what happens? A couple of items in the interview were aimed directly at this question. The following statement was put to them: In situations where technical and administrative considerations clash with social values, at the end of the day it is usually the technical and administrative considerations that prevail. The responses are shown in Figure 2.12. Fig* 2A2

Perceived outcome of clash between technical and social considerations.

Agree

Agree with reservations

Disagree with reservations

Note: SES interview Question 41.

71

Disagree

ECONOMIC RATIONALISM IN CANBERRA

This direct assessment of the place that technical and administrative considerations have in Canberra will be corroborated, as we shall see in a moment, from another direction. But what about other considerations, and most importantly economic considerations? Figure 2.13 gives their responses to the statement: In the final reckoning it is people with expertise in applied economics and financial management who have the strongest role in shaping public policy. Fig. 2 A3

Agree

Perceived strength of economic and financial experts.

Agree with reservations

Disagree with reservations

Disagree

Note: SES interview Question 43.

Just under 60 per cent agree that the new breed of top public servants with the economics and business-oriented expertise will get their way in shaping public policy. So far we have a series of responses which tells us that, in the view of these SES officers, it is the politicians who take the strongest role in fixing the values and objectives of policy. What is interesting and unexpected is that these responses should correlate so closely with their views on the different weight that is given, at this top level, to different elements of the context of management and policy. A factor analysis of the data from all the closed or fixed answer questions showed that these top bureaucrats are of one mind about these matters. These responses were very closely correlated and when

72

PROFILES OF CANBERRA'S POLITICAL ADMINISTRATORS

treated as an index (see Table 2.5) they give an extremely high reliability coefficient (of alpha .92). Table 2.5 Knowledge, values, and expertise in top level policy and management: correlations among six variables

Variable L II. III. IV. V.

VI.

Classical view of public administration. Economics and financial management Technocrats Minister/politics prevails Technical and administrative over social value Value neutrality

Loading on principal factor

I

II

III

IV

V

VI

-

.61

.63

.62

.49

.62

.80

.61 .63

.50

.50 -

.47 .59

.58 .50

.50 .54

.70 .74

.63 .48

.47 .58

.59 .50

.54

.54 -

.51 .42

.76 .68

.61

.50

.54

.51

.42

-

.72

Note: SES interview Questions (respectively) 45, 43, 56, 44, 41, 48.

As we shall see later, these highly consistent and strongly patterned responses have their own contribution to make to a debate that is sometimes suggestively called 'the politics of bureaucracy versus the bureaucratisation of politics'.46 Leaving this discussion to one side for the moment, it is enough to observe here that these responses perfectly encapsulate the acute ambiguity of their situation - subjectively for the Senior Executive Service officers themselves, and objectively for us. On the one hand they agree with all that is written about them in the sociological literature, namely that they are 'intellectuals'47 (or sometimes Value intellectuals' and 'ideologists' to those who do not like them). They are 'intellectuals' albeit of a rather special kind because they constantly use abstract models to turn 'ideas' into structures. The work is complex and not routinisable and, for that reason too, intellectually creative and demanding in a way that involves them very deeply in what they do - in this sense they say themselves that they are 'engages'. And yet, on the other hand, they are at great pains to say that it is not they but the politicians who decide. This clearly raises some basic questions about the structure and experience of responsibility at this point of confluence between politics and administration.

73

ECONOMIC RATIONALISM IN CANBERRA

CONCLUSION The data on the social backgrounds and social characteristics of our SES sample confirmed what anyone would have expected; namely that a disproportionate number of our top bureaucrats come from privileged social backgrounds and that the social composition of Canberra's Senior Executive Service is the result of an elaborate process of social differentiation and selection. The more surprising and significant finding is that influences of school and family background have survived 20 years of experience in the workplace and still have a direct impact on the basic social and political dispositions that our top public servants bring to the development and management of national policy. Moreover, inasmuch as these dispositions do carry over into the attitudes and policies that are applied to those who are less fortunate than they, we see that, in the 1980s at least, noblesse n'oblige pas. Those who come from the most privileged backgrounds are likely to be the most ungenerous, individualistic, tough, and 'antisocial'. Our top public servants are far more conservative than they say or believe. In terms of Australian political traditions they are not, by any stretch of the imagination, 'committed centrists'. We see that a conspicuously large proportion of them have a training in economics and commerce. This, more than any other factor, seems to confirm or augment whatever measure of conservatism is acquired from family and school and, further, to directly influence their views about the role of the state. In their attitude to the state and to the roles of governments there is a vehement economic rationalism that is so clearly articulated and so sharply related to the central issues of national economic and social policy as to cast some doubt on what is certainly the sincere claim that they can, in practice, keep their own political preferences clear of what they do at their desks. These top bureaucrats who occupy the most powerful positions in the public sector view their own domain in much the same way as their strongest assailants in the private sector. Differences in social backgrounds and political dispositions are, on the other hand, apparently not related to the way in which our Senior Executive Service officers think about experts, knowledge, and administration. Inasmuch as they are indeed 'technocrats' then, in that measure, they are all technocrats. There is considerable consensus in their perceptions as to how policy is structured. What is perhaps more interesting here is that there is a common link between these findings and their orientations to government in general and to the Hawke government in particular. The connecting

74

PROFILES OF CANBERRA'S POLITICAL ADMINISTRATORS

thread is to be found in the SES officers' assessments of the relative strength that political, economic, legal-administrative and social pressures have in deciding what is done. As we have seen they are ranked in just this order. They are very sure that, on the criteria that they use to make these demarcations, it is polities', cabinet, and ministers, that now hold sway over what was once regarded as a semiautonomous world of grey-flannelled planner-experts who did most of the steering most of the time. When Aberbach and his colleagues asked comparable groups of top civil servants in Britain, Germany, Italy and the Netherlands in the early 1970s to respond to the statement that, In contemporary social and economic affairs it is essential that technical considerations be given more weight than political factors they found that, on a four-nation average, 46 per cent, or nearly half, agreed in effect that they, the bureaucrat/planners, should be left alone to get on with the job of running their respective states.48 In Australia in 1986 in answer to nearly the same question,49 we found that only a little over a third of our respondents would agree - and this was replicated in responses to another of Aberbach's questions on the same point. This would mean little if it were not so obviously related to a larger pattern. So, the point is that when our top bureaucrats say that the classical view of administration does prevail; that Values' can be separated from 'facts and means'; and that political factors win out over all other social, legal-administrative, and even economic factors, they are telling us, in effect, that they have been very well brought to heel by the Hawke Labor Cabinet and that illusions about the autonomy and neutrality of experts and planners have taken a tremendous beating. They are also telling us that they have been thrust much more deeply into what is sometimes rather too anaemically called 'the political process'. This means, as we shall see, that there is some scope to read the evidence the other way and thus as an indication of the measure in which the economic rationalists have brought their ministers to heel.

75

CHAPTER 3

THE INNER TRIANGLE

T

he preceding chapter outlined some of the basic and common characteristics and dispositions of our 'political administrators'. We established some broad profiles of our whole population of top bureaucrats, without attempting to differentiate between different sectors of Canberra's federal state apparatus. With this material as a base we now approach a larger body of data with a different purpose and strategy. The aim here is to look again at our top bureaucrats to see how their dispositions relate to their location in the structure. Were they all much the same and did they all see things in much the same way? Or are there patterned differences in their characteristics and viewpoints? Different departments within this Canberra state apparatus obviously interface with the larger social, economic and political environment in different ways. Since everyone must agree that a welfare agency and a department of trade face different clients and constituencies and have different functions, there is a need to see how these differences show up in the dispositions of our top bureaucrats. In addressing these questions we attempt to map the structure of the central part of the Canberra state apparatus that falls within the scope of our enquiry as it was before the departmental amalgamations of Bastille Day, July 1987. This mapping is done from the inside out, in terms of the patterned differences and similarities among our SES officers in three different categories of departments, each of which interface with different sectors of the larger social environment. Our first category of departments consists of the three most powerful 'central agencies' (or coordinating departments) of Prime Minister and Cabinet (PM&C), Treasury, and Finance. Our second category consists of what we shall call the 'market-oriented departments' which interface in different ways with Australia's principal industries. This category comprised the four departments of Industry, Technology and

76

THE INNER TRIANGLE

Commerce, Primary Industry, Trade, and Resources and Energy. Our third category assembles what we have called the 'program and service departments* because they interface with the broad spectrum of social service and welfare recipients and organisations. This category comprised a raft of six departments: Social Security, Health, Community Services, Education, Aboriginal Affairs, and Veterans' Affairs. It is an approach that is driven by an idea: inasmuch as the state is the product of much broader social process of 'differentiation and selection1, then this chapter is the first part of a search for the visible pattern, and for the correlates and products, of that process. It is a search that does not embody any secretly dogmatic assumptions about the relation between structure and action. Indeed, it puts that relationship out in the open as a central object of the enquiry. For example, instead of dogmatically assuming that actions, policies, 'dispositions', 'ideas', 'perceptions' and so on, are always already accounted for and prefigured in the structure, we put that as a question and ask whether, and in what respects, the dispositions of our top bureaucrats do indeed match the structure. Moreover, it is a question that we are always free to put the other way about: one can and should ask how the dispositions of these very powerful people reinforce, change, maintain, and variously elaborate the structure? We shall deal in exactly the same way with functionalist assumptions: they too are treated as objects of empirical enquiry. So, instead of assuming that a location, a job, and a specific relation to the environment can somehow define the goals, tasks, and functions of our top bureaucrats, we ask instead whether and how they fit, constitute, or indeed construct their own functions. Since the task of this chapter is primarily descriptive, it is useful to begin with a quick look at how some of the more basic social characteristics covered in Chapter 2 are distributed and patterned across our three categories of departments. The basic pattern (Table 3.1) is very clear. The central agency staff are the youngest and are twice as likely to have attended a prestigious expensive private school - and we already know that this makes them lean to the Right. We also see that they are the most likely to have a business oriented education in economics, accountancy or business administration - and we know that this make them more conservative still. Conversely it is clear that the staff in the program and service departments are (by comparison with their counterparts in the central agencies) twice as likely to have a university education in the social sciences, humanities or the law. They are also the oldest group. The staff in the market-oriented departments are in the middle. Like their counterparts in the central agencies, roughly 70 per cent of them have

77

ECONOMIC RATIONALISM IN CANBERRA

an economics/business degree, and quite a few more have backgrounds in the 'hard' sciences, but they are older than the central agency people and they are more likely to have come from state or Catholic schools. Table 3.1 Differences in social characteristics of SES officers on three variables: type of last secondary school attended; type of university education; and age in 1985/86. Social Characteristic

1. Type of last secondary school1 State secondary Catholic secondary Prestigious/private/GPS

2. Type of university education Econ/commerce/bus admin. Soc sciences, humanities & law Natural sciences/maths

3. Age in 1985-86 Under 40 years old Forties Over 50 years old Median age

Central Agencies %

Market Program/Service Departments Departments % %

53 16 31

41 43 15

49 39 12

(N=49)

(N=53)

(N=74)

72 20 6

71 10 19

35

(N=64)

(N=59)

(N=79)

48 38 14 40

26 46 28 45

21 48 30 46

(N=65)

(N=62)

(N=88)

44 20

Notes 1. All comparison are significant at %2 test p = <0.05. Entries are percentages. 2. For this purpose 39 cases were excluded from the analysis because their secondary schooling was had overseas or because they gave no answer. 3. SES interview Questions 1, 2 and 16.

These characteristics carry through into strongly patterned differences in basic orientation to public policy. In Table 3.2 we see that the vehement economic rationalism of our market and central agency people is very visible. Three-quarters of them wanted to deregulate the labour market and let employers reduce the price of labour - that is fairly obviously what they had in mind since only one in ten of

78

THE INNER TRIANGLE

them believed that market relations were clearly exploitative, and nearly half of them said that the wages share of Australia's income was already too large. By and large the same1 three-quarters of them are opposed to most forms of state intervention and involvement, at least in principle. On these baselines there is not much difference between the central agencies and the market departments: both were very conservative which, as we know, is very closely tied to their common characteristic: a business-oriented university education. The contrast is with the still conservative (but noticeably less conservative) people in the program and service departments. Here, at least half of them would say that the distribution of Australia's income was biased towards business interests; a third of them - only a third - would agree that, on balance, relations across the market were exploitative and that, in this sense, social justice is a genuine problem. Many more of these program and service people wanted greater state involvement and provision but this was still, very surprisingly, a minority view among them. With this material as background, it is time now to deploy a new and larger body of data to present a more systematic and detailed outline of this 'inner triangle' of our state apparatus. For the most part the comparisons will rely on data that come from structured but openended interview questions that were put to our 215 Senior Executive Service officers. As we have explained elsewhere2 these were for the most part keyed (sometimes very directly as 'please explain' questions) to the fixed answer or 'closed' interview items that were partly covered in the preceding chapter. From the discussion in Chapter 2, it is clear that, beyond our first level of social-demographic characteristics, two basic variables explain most of the differences in our SES population. The first of these is the field in which our top bureaucrats studied at university and here it is the difference between those with a business-oriented education as compared with an education in the social sciences, humanities or the law that really stands out. The second key variable is their own self-nominated political orientation. As we know, these two variables were related (r = .30): but that does not mean they are the same thing. Some people (notably Catholics) tended in many respects to be politically to the Right without an economics degree. So, in order to keep these key dimensions firmly in sight, the tables that we shall use to present the basic comparisons among our top bureaucrats in these three different locations will contain a few additional columns to show also how the responses compare against these two background variables of field (university studies and political orientation).3 This additional information is there simply to fill out the

79

ECONOMIC RATIONALISM IN CANBERRA

Table 3*2 Comparisons of responses to five policy orientation questions.4

Central Agencies 1. In Australia today would you say that the distribution of Gross National Product is: - biased to wage & salary earners - balanced - biased to capital 2- With respect to the deregulation of the labour market do you, - approve - disapprove 3, In general what is your preferred degree of state involvement in the social and economic spheres? - more state provision - favour the present balance - more individual initiative 4- Many of the doubts and fears expressed about the growing intervention of the State in economic and social spheres are fully justified. Do you - disagree -agree 5. In a developed and fairly affluent society like ours, the relations between capital and labour are - more complementary and equal than they are unequal and exploitative - more unequal and exploitative than complementary and equal - these categories are no longer particularly relevant (why not?)5

Market Program/Service Departments Departments

43 36 21

53 22 24

33 14 53

74 25

75 25

47

11

10 79

8 18 74

24 19 57

26 74

23 77

47 53

53

66

58

41

(89)

(83)

(66)

11

17

33

23

25

26

Notes l . N = 215. 2. Entries are percentages. All comparisons significant at at %2 test p <0.05. 3. SES interview Questions 22, 26, 23, 25 and 27.

80

THE INNER TRIANGLE

picture, to give it a third dimension so to speak; those readers who find it distracting should simply let it pass and concentrate on what matters most which is, of course, the comparisons across categories of departments as they were before the Bastille Day amalgamations of July 1987. Each of the sections on the three categories of departments begins with a necessary minimum of concrete information about their formal structure, functions and budget appropriations.

THE CENTRAL AGENCIES The Department of the Prime Minister and Cabinet (PM&C), the Treasury, and the Department of Finance are the three 'central agencies' or, in other words, the central coordinating departments of the Canberra federal bureaucracy. In comparison with both the market departments and the program and service departments, these central agencies spend very little public money in their own right and they have relatively small staff establishments. But of course that is no measure of their real importance in the larger structure. The Department of Prime Minister and Cabinet advises and 'supports the Prime Minister in his various responsibilities as head of government'. 6 Accordingly, the internal structure of the department includes the Cabinet Office, an Economic and Social Policy Division, an Industries Trade and Resources Division, the Parliamentary and Government Division, and the Justice Division. Merely from their names one can see that in many respects these divisions are structured so that each faces towards or 'stands over' its own raft of line departments. For example, the Industries, Trade and Resources Division coordinates and oversees what I have called the 'market-oriented' departments, including the Department of Trade, and the Department of Resources and Energy. In a similar way the Justice Division faces towards the Attorney-General's Department, and so on. The major functions of the Treasury are, according to the admirably concise words of its own annual report, 'to advise the Treasurer, and through him the government, in the discharge of their collective responsibilities for the management of the Australian economy'.7 It has seven divisions including the Financial Institutions Division, the Foreign Investment Division, the General Financial and Economic Policy Division, the Incomes, Industries and Development Division, the Overseas Economic Relations Division, the Revenue, Loans and Investment Division, and, finally, the Taxation Policy Division. The Treasury faces outwards towards a number of peak business and international economic organisations and certainly

81

ECONOMIC RATIONALISM IN CANBERRA

has very little day-to-day contact with the rest of the public service, far less than any of the other central agencies. The remoteness of the Treasury and the exclusive specialisation of its policy functions are in part the product of recent history. In 1976, under Prime Minister Fraser, Treasury's dual responsibilities for both economic and financial matters were formally separated. One half (the responsibility for economic policy) remained to form the Treasury;8 the other half, that formerly involved the Treasury more closely with other departments, became a new ministry with the creation of the Department of Finance and was vested with the financial and expenditure control function. The Secretary of the Department of Finance tells us (on the very first line of his annual report for the year 1985-86) that the department has 'a principal coordinating role in the development, management, and review of Commonwealth expenditure and other related economic and financial policies'. A few lines down, we learn that it has a 'corporate mission' that is identified, with passion and italics, as being 'to promote the efficient and effective use of resources in the Commonwealth Government Sector in accordance with Government policies and priorities \9 It has among its eight divisions: the Defence and Government Division, the Education and Employment Division, the Financial and Accounting Policy Division, the General Expenditure Division, the Social Security Division, the Transport and Industry Division. As with PM&C, and in contrast to Treasury, we see that the divisions are structured so that most of them have a clear responsibility for the financial oversight and supervision of specific line departments. These three central agencies are headed by senior Cabinet ministers, all from the top third in the official rank order of the second Hawke Ministry. The Prime Minister and the Treasurer, who both belonged to the official right wing faction of the ruling Labor Party, worked very closely with the Minster for Finance who belonged, nominally, to the 'Centre Left' faction. The Secretaries of the three departments all held degrees in economics. When our top bureaucrats in the program and market departments spoke about the central agencies, they often pointed to some marked differences in the character and temper of these three departments. One person in Finance pointed to some of these differences when he said, 'we [in Finance] stand between the dogmatism of the Treasury and the political pliancy of P M & C Other differences are reflected in varying descriptions of the work that is done in these departments. One officer in PM&C made the telling comment that,

82

THE INNER TRIANGLE

'here [PM&C] is where technical advice meets political reality*. Others stressed with him that PM&C must take 'the broader view'. They nearly all talked about the department's responsibility to 'keep the PM advised on all important matters affecting the government'. Most of them explained that the department's role is to resolve conflicts before they get to Cabinet and, also, to 'hose down' politically dangerous conflicts or incidents: 'we stop bushfires', 'a lot of what we do is just damage control and crisis management'. In this sense the work and the functions of PM&C are more reactive than in the other departments. Treasury staff are easier to characterise because without exception they talked, sometimes rather too perfunctorily, 'about getting the best advice to the Treasurer and the Government'. They are preoccupied with their own part, and the part that their division takes, in discharging this economic policy and advisory function. The Department of Finance was in every way coloured by its coordinating function. Its officers talked constantly about gathering and disseminating information that will 'promote greater efficiency'. They are more 'technocratic' and preoccupied with accounting technologies with Program Budgeting and and their Financial Management Improvement Plan, with 'performance auditing', and other reporting, evaluation and review procedures. The majority of them were closely involved with the line departments and, in contrast to PM&C and Treasury, they talked a great deal about the importance of maintaining relations of trust with the staff of these departments. In both Finance and Treasury there was a close sense of solidarity among colleagues that was missing in PM&C in which the more mobile character of the senior staff and the intense pressure of the work seem to leave no space for any esprit de corps. With one glance at the basic 'first level' of our data, we can see that the social characteristics and basic policy orientations of Senior Executive Service officers in these three central agency departments were different from those of their counterparts in the market departments, and clearly the contrasts are greater still when they are compared with the senior staff of the program and service departments. In the first place they are young, nearly half of them were under 40 years of age - younger by some five years than SES officers interviewed in the other departments. They were also about six to eight times more likely than the rest of their age-mates in the larger Australian population to have passed through one of Australia's expensive prestigious private schools. Twice as many of them have passed through those schools as have their peers in the other departments.

83

ECONOMIC RATIONALISM IN CANBERRA

One obvious corollary is that there were only about one-third as many Catholics in these three coordinating departments as in the others. More than 70 per cent of the senior central agency staff held business-oriented first degree specialisations in economics, commerce or business administration.10 The effects of these several characteristics showed up in the conservatism of their political allegiances and their basic policy orientations.11 As we saw (Table 3.2), they were strongly committed to an economically rationalist view of society and politics. In this respect they were similar to their peers in the market departments of Industry, Technology and Commerce, Trade, Primary Industry, and Resources and Energy, (which contained the same proportion of people with economics degrees), but they were much more conservative than the senior staff in the program and service departments. Only one-third of the central agency staff could agree that Australia's wage and salary earners should get a larger share of the national cake; three-quarters of them wanted to deregulate the labour market; only one in ten of them wanted the state to augment basic social services, and only this same tiny minority of them would agree that market relations were, on balance, socially exploitative and unequal. These policy attitudes are also coupled with strong misgivings about state involvement in the economic and social spheres. The inner structure and the expression in action of this 'world view' of central agency officers will be examined in greater depth as we move further into the study. For the moment it is enough to note that this first level of data is telling us that this group of people were leaning strongly to the right. Some of the important and structurally conditioned differences between officers in our three categories of departments quickly appear when we look at what they said about each other. When officers in the market and program departments were asked to consider the differences between themselves and their counterparts in the central agencies we see (Table 3.3) that central agency officers were most frequently perceived to be abstracted from the real world, more 'intellectual', and more powerful. Some of the respondents (whose departments are in brackets after the quote) explained what they meant about central agency officers in these terms: They play they don't they know (Resources

devil's advocate: that's their role. The trouble is know what the devil's going on. Except Finance, what's going on. But Treasury live in Disneyland. and Energy)

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Table 33 Characteristics of central agency SES staff as perceived by officers in market-oriented departments and program departments. Per cent of respondents mentioning characteristic SES

Characteristic (in rank order)

Department

(IS1=215) Market Program

1. Removed/abstracted from real world 2. More intellectual/ theoretical 3. More political clout and political nous 4- Real power holders in public service 5. Elite status/high fliers

Education Soc.

Bus.

Political Left Right

44

55

61

44

41

48

37

30

48

35

26

31

34

31

30

31

44

37

25

36

27

27

29

41

28

20

26

31

31

14

20

41

18

19

27

(n=62)

(n=88)

(n=54) (n=116)(n=80) (n-78)

Notes 1. Total number of responses = 645. 2. Totals do not add to 100% because of availability of multiple response. 3. SES interview Question 59.

They don't have the practical experience. There's nothing more sobering than having to implement your own advice...[and]...they are not sober. (Social Security) They are self-righteous and uncaring... They perceive themselves as the sole repository of wisdom in the public service...They socialise among themselves in a phony town called Canberra. They have it too easy and they are isolated...and...they see spenders as wanton vandals. (Aboriginal Affairs) Central agencies tend to produce and rely on whiz kids. They are highly intelligent and they tend to have a good appreciation of the overall situation. They are adept at being a pack of bastards - they need to be - they are very efficient at it. (Health)

85

ECONOMIC RATIONALISM IN CANBERRA

They are whiz kids. Constantly in transit - seagulls. Especially the blokes from Finance. They fly in, shit all over you, and fly off again. They have 96 ways of saying no. (Health) You need to have at least two of these departments behind you to succeed even with the minister's support. (Health) They are intellectually self-satisfied and have convinced themselves that power derives from their arguments but in fact it's derived from the power of their minister in Cabinet. They are isolated by choice and they are intellectual cowards; they rely on political power. (Trade) Treasury and Finance are the purists. PM&C are a sanity check on the purists. They are the most powerful, intelligent, and ambitious and ruthless of them all. (Social Security) Although these are some of the more highly coloured fragments from the interviews, they do give a feeling for the complexity, the tone, and for the various and sometimes contradictory flow of the responses. They cast some light on what is showing up in the comparisons in Table 3.3. The people in the program departments, especially those without economics degrees, were most conscious of the power and the 'political clout' of the central agency staff. On the other hand, the people in the market-oriented departments were more likely to say that the central agency staff are more intellectual and removed from the real world - and again we see that this is a judgment that was more common among those officers with a businessoriented educational background. These perceptions that others have of the central agency staff are nicely corroborated and summarised in the response of one exquisitely conceited but very articulate young Finance man who said: We are more vigorous in examining their own affairs [ie., the affairs of the program and market departments] than they are themselves. They are biased. We are more highly qualified; we work harder, we are more intelligent. From Treasury came another response: We are remote and sometimes elitist macroeconomists. We are not interested in Equality of Employment Opportunity or industrial democracy. The central agency officers did not seek to hide the enjoyment of their power. Indeed, when all the SES officers were asked to spell out

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what they meant in agreeing that 'the rewards and satisfactions of their work definitely outweigh the costs/ the answers of the central agency people stood out and are, in this respect, quite different from those of senior staff in other departments (see Table 3.4). Table 3 A Comparisons of reasons given for satisfaction with job. Per cent of respondents mentioning reasons for satisfaction with job Values (in rank order)

SES

Department

Education

Political

(N = 215) CA Market Program Soc. Bus. Left Right

1. Intellectual satisfactions of creating order consistency and coherence 70 (formal rationality) 70 2. Personal/private/ 'inner' satisfactions 3. Value of outcomes for 62 clients/public etc. 4. Political influence 46

63

71

77

64

34 74

52

64

75 68

70

68

61

55

73

61 77

76

83 20

74 37

56 54

71 51 45 50

(n=65)(n =62)(n =88) (n=54) (n=116)(n =80)(n=78) Notes 1. Total number of responses = 645. 2. Totals do not add up to 100% because of availability of multiple response. 3. SES interview Question 36.

Despite inherent difficulties in coding these responses we find a clear pattern. The central agency people were nearly four times more likely to mention the satisfactions of political influence than were their counterparts in the program departments. Moreover we see that those differences were also strongly associated with their educational backgrounds and political leanings. To put it more baldly, those conservative and 'Centre Right' economists and business-oriented people in the central agencies enjoyed their power more than the 'lefties'12 (albeit an orientation that is by European and international standards barely noticeably to the left) with educational backgrounds in social sciences, humanities, and the law. These young 'econocrats'13 are the self-assured 'high-fliers'. They are at the top of the top end of Canberra, and they know it. The central agency people were more inclined to stress the purely private ego-satisfactions of personal achievement. Over and over again the interviews were suddenly charged with a certain intensity as

87

ECONOMIC RATIONALISM IN CANBERRA

the respondents warmed to their own phrases about 'the challenge* of the work and to their own feelings of 'success' and personal achieve* ment. These feelings and experiences were, for the most part, defined wholly without reference to anything external - they were described purely in terms of the private ego-satisfactions of 'meeting the challenge' of work and situations that they saw as intrinsically difficult, usually by virtue of their intellectual complexity. In this respect they present a strong contrast with the program department staff who, as we might expect, found their satisfactions more in program outcomes for clients. In these responses (Table 3.4), intellectual satisfactions were spread across at least two dimensions and so did not stand out as strongly as they should in the light of several other dimensions of the study. In particular it is interesting to look at what they said about their own jobs when they were asked to specify the criteria they would use in choosing someone to replace them. After the management skills essential for survival in all these SES jobs, analytic and intellectual skills were most commonly stressed by all our respondents and, as one would expect, most of all by the central agency people. The 'intellectual' aspect of work in the central agencies is highlighted again, as we shall see later, when they talked about formative influences in their own careers and stressed the importance of their own formal (university) education and overseas work experience. For these central agency people, this overseas experience is accepted as a normal aspect of staff development and nearly always involves further university work or a research assignment in some international research agency such as the International Monetary Fund or the OECD. The stress that central agency people set on power, political nous and intellectual acumen tells us a good deal about the nature of their work and their place within the state apparatus. For the most part they are not 'client-oriented*. It is true that in their role as brokers between their ministers and a great variety of powerful outside interests groupings, they do indeed have relationships with a variety of enormously influential 'outside* organisations. But they are not primarily oriented to delivering services to these outsiders. We have sometimes referred to these central agencies as 'coordinating departments' because that is what most of them do most of the time. A central function of the department of Prime Minister and Cabinet is to resolve conflicts before they get to Cabinet and in this sense to create consistency and coherence where there might otherwise be a war of incommensurate claims and counterclaims. From the point of view of its senior officials, all the Treasury's economic

THE INNER TRIANGLE

forecasting and modelling, its inputs to the forward estimates and then to the budget and the expenditure review committees were also aimed at the 'rational' coordination of government action. The Finance officers who are charged with the system-wide implementation of the Financial Management Improvement Plan and of the changeover to Program Budgeting share this same basic function of coordinating what is in fact a cyclical process that begins with the Treasury's forward estimates and proceeds through the stages of budgeting, appropriation, expenditure, financial management, and review. Table 3.5 Responses, compared by department categories, to question "What criteria would you use to choose someone to replace you? What strengths and qualities are really decisive?"

Per cent of respondents citing criteria for choosing replacement Criteria (in rank order) 1. Management skills 2. Analytical ability/ intellectual skills 3. Political nous 4. Attuned to clients

SES (N = 215)

Department Central Agency Market Program

79

75

74

84

60 51 32

75 57 9

69 55 32

42 43 49

(n=65)

(n=62)

(n=88)

Notes 1. Total number of responses = 645. 2. Totals do not add up to 100% because of availability of multiple response. 3. SES interview Question 18.

In short, they were all happy to see rationalisation and the rational coordination of government as the central function of their own central agency roles. For the Finance people especially this was accomplished through increasingly stringent reporting and performance assessment, as well as auditing requirements that were set increasingly within a managerialist framework. The justification for the power of life or death that they often hold over programs and services in other departments is that public monies must be distributed and audited rationally. It was not surprising that these still young high-achievers should be so confident of the value of what they do. They had no doubts about the validity of their mission and, as we shall see later, about half of them would say forthrightly that their rationalisations had been successful in producing more consistency and coherence. 89

ECONOMIC RATIONALISM IN CANBERRA

Significantly, however, the people in the market and program departments on the receiving end of these 'rationalisations' are far less sanguine about their effects. Senior staff in the program and service departments were about three times more likely than their counterparts in the central agencies to say, in effect, that the rationalisations produced less consistency.14 But these differences point to the relationship between the central agencies and the market and program departments and so to other sides of our inner triangle.

THE MARKET-ORIENTED DEPARTMENTS This category consisted for our purposes of the four departments of Trade, Resources and Energy, Primary Industry, and Industry, Technology and Commerce.15 Primary Industry was the largest of these market-oriented departments in terms of its budget allocation for the year 1985-86 of around $A800 million16 that spread over its several functions and programs. These included, roughly in the order of magnitude of their funding allocations: industry marketing, promotion and stabilisation of such commodities as wool, dairy products, cattle sheep and meat, and wheat and so on (about 62 per cent of the budget); other functions and programs such as industry assistance and research schemes; and inspection and quarantine services. The Department of Industry, Technology and Commerce was second with a smaller allocation of a little over $A400 million - about three-quarters of this went to industry development mainly in the form of bounties and subsidies to a broad range of manufacturing industries (of which textiles, phosphate fertilisers, ships, steel, books, and computers were among the largest beneficiaries in roughly that order). In this part of the program there was also an action package of assistance to heavy engineering industry and another for the communications equipment industries. Other divisions of the department were concerned with technology and business efficiency, with industrial and technological research, and with guiding changes in industry infrastructure. In the same year Trade spent from appropriations about $ A3 00m of which just under half was assigned to export incentive schemes. Another fifth went to trade promotion schemes and the remainder to supporting the department's large overseas presence and representation, among other things. The Department of Resources and Energy was responsible for policy development and program administration in relation to exploration, development and pricing of the nation's minerals, energy, and water resources. In 1985-86 its total outlays from annual appropriations amounted to some A$326 million.

90

THE INNER TRIANGLE

Each of these departments had, as its head and top public servant, a secretary with a training in economics and all were led by energetic, able, and extremely competent ministers who were judged to be firmly in charge of their portfolios (two of the ministers had economics degrees and the other two were lawyers). The variety and complexity of the interfacing between these four departments with their respective business and market environments defies easy description in a few lines- In all these departments a good deal of the interfacing was done quite directly through the membership of SES officers on a broad array of committees, councils or commissions with joint private and public sector membership - and, under the Hawke government, with trade union representation as well. A laundry list of these bodies would fill whole pages and so all that one can do here is to list a few of them more or less at random, to give some sense of their complexity and variety. So, among those listed in the Australian Commonwealth Government Directory under the the Department of Primary Industry, were the Australian Agricultural Council, the Australian Fisheries Council, the Australian Canned Fruits Corporation, the Australian Dairy Corporation, the Australian Forestry Council, the Australian Chicken Meat Research Committee, and the Australian Meat and Livestock[Corporation. The Department of Industry, Technology and Commerce has an analogous list which includes large and very important bodies such as the Australian Manufacturing Council, the Industries Assistance Commission and the Australian Industry Development Corporation. Industry, Technology and Commerce is also the umbrella for a great array of discrete industry advisory councils for different groups of industries producing such goods and commodities as automobiles, chemicals, plastics, forest products, machinery fabrication, electrical and electronics products. The Department of Trade had a full array of marketing and trade promotion offices both in Australia and overseas. And the Department of Resources and Energy had its own similar interface with industries that are based on coal, petroleum, water, minerals, and so on. Moreover, in this odd thing that is a federation (with a new architecturally planned and government-owned city as its capital) all these departments except for Resources and Energy had some Senior Executive Service officers outside Canberra in their regional Sydney and Melbourne offices. A glance at some of the data presented above shows that, in a great many respects, the SES staff in these departments were similar to the central agency staff. More than 70 per cent of them have economics degrees. However, in these market departments (especially in Resources and Energy), there were many more people with degrees in

91

ECONOMIC RATIONALISM IN CANBERRA

the natural sciences than in the central agency departments. Market department senior staff were older - these departments have roughly the same age profiles as the program and service departments. Only a quarter of the officers are under 40. They are also three times more likely than their central agency counterparts to have come from Catholic schools and thus from comparatively less privileged social backgrounds. What these senior staff in the market-oriented departments had in common with so many of the central agency staff is that they were, of course, strongly oriented to economic matters. But their knowledge, expertise and experience oriented them to 'the economy' in a very different way as 'hands on' economists. As one of the respondents put it, the central agency economists are 'purists'. By contrast the economic expertise of these senior staffers in the market departments was acquired earlier, in a different intellectual climate. More importantly, it was developed and tempered through a practical experience of 'doing* microeconomics at the industry level and, for the most part, in close contact with people who were 'at the coalface', 'in the marketplace', or on the top floor offices of industry headquarters in Melbourne or Sydney. This partly explains the conflicts and the mistrust that were a common aspect of their relationships with the central agency people. It explains their perceptions of the Treasury, Finance, and especially PM&C staff as 'whiz kids in Disneyland' - as young and undoubtedly intelligent people who were, in their view, too wedded to abstract economic model-building and who were for this among other reasons, too far from 'the real world' to understand the consequences of their own preferences and decisions. As some of them put it: Compared with Treasury we are more willing to compromise with reality to achieve our ends. We are generalists in the real world. (Industry, Technology and Commerce) Over there [in the central agencies] there is too much concentration on policy and not enough on boot-leather salesmanship. (Primary Industry) This proximity to the business world showed up in many ways. Of all three categories of departments, it is the market department staff who were most resentful of what they saw as lower public sector salaries and rewards, a matter that over 40 per cent of them mention in comparing executive-level work in the private and public sectors. Indeed many people did take the more attractive jobs offered to them in the private sector and they obviously did so at a rate that already posed real problems for some departments like Resources and Energy that

92

THE INNER TRIANGLE

are, as many of them complained, losing their best people all the time' to the private sector- The proximity to the private sector is enhanced by some traffic in the other direction: a trickle of some 2 or 3 per cent of SES officers17 were recruited directly into the Service from the private sector. It would be a mistake to stereotype these market-oriented people as unsophisticated hacks and as people who were merely Canberra's 'boot-leather salesmen' and arm-twisters in the corporate world. The top policy researcher/experts who work on energy policy, for instance, are very highly qualified technocrats. Some of them are resource economists with research experience in natural science fields such as geology, materials and metallurgy; they remain, by any standard, quite 'high-powered' people who probably know as much and sometimes more about Australia's resources than the giant multinational companies which own them. These and several other distinguishing characteristics of the market department officers come into view when we compare their formative experience with that of officers in other categories of departments. Table 3.6 compares the responses to the question: -

In looking back over your career what aspects of your training and/or experience have had the most lasting importance in shaping your approach to your work? (Q. 19)

We see that SES staff in the market departments stressed the importance of both work experience outside the public service and of overseas work experience in shaping their orientation to their work more than their counterparts in the other two categories of departments. This is not at all surprising when we remember that some of these people came direct from industry; that most enjoyed close working relationships with the business world; and that many of them trained in universities overseas and have either represented Australia in the Department of Trade's offices overseas or served in other capacities as members of various government-sponsored industry research or trade promotion missions abroad. On this reckoning they were more cosmopolitan and more oriented to the wider private sector corporate environment than either the central agency staff or those in the program and service departments. On the other side of the coin we also see that they set a lower value on public service training. We already know that these people were very conservative as a consequence, more or less directly, of the fact that 70 per cent of them had an economics/business education. However, the other

93

ECONOMIC RATIONALISM IN CANBERRA

Table 3*6 Formative experience as seen by SES officers across three categories of departments and in terms of university education and political orientation.

Per cent of respondents mentioning formative experience Formative Experience (in rank order)

SES

Department

Education

(N = 215) CA Market Program

1. The department(s) and its exemplary people (positive and negative role models in public service experience) 2. Formal (university) education. 3. Overseas experience 4. Family/religion/ private experience 5. Public service training 6. Work experience outside PS

Soc. Bus.

Political Left Right

82

89

79

79

84

87

83

74

49 24

54 26

45 37

48 12

50 9

50 25

49 24

51 29

24

17

16

34

33

20

30

23

21

17

8

32

39

15

23

16

9

24

17

25

75

10

18

17

(n=65)(n=62)(n=88)

(n=54)(n=116)(n= 80)(n=78)

Notes 1. Total number of responses = 645. 2. Totals do not add up to 100% because of availability of multiple response. 3. SES interview Question 19.

cross-tabulated comparisons in Table 3.6 cast some light, more specifically, on other aspects of their experience which reinforced this pattern. What we see, in short, is that overseas experience and the 'increasing openness to the private sector' that has been so loudly touted in Canberra over recent years, are both commensurate with an economics/business background and with a political orientation that is right of centre. Some further distinguishing characteristics of the market-oriented staff showed up in the different values they set on their own work. When our respondents were asked first to describe the nature of their work and then in a few words to tell us what was 'worthwhile and important about it' the pattern presented in Table 3.7 emerged. These results are very revealing. In comparison with the central agencies, the more 'hands on', 'real world' and 'practical' character of these

94

THE INNER TRIANGLE

Table 3*7 Values18 set on present work by SES officers, compared over three categories of departments and by type of education and political orientation

Per cent of respondents setting values on present work Values (in rank order)

SES

Department

(N == 215)CA Market Program

1. Private/ego/inner value (= sense of achievement/challenge rather than outcomes 49 etc.) 2. Economic management 42 3. Welfare/care/ equity/meeting social needs 4. Service to minister/ government 5. Giving leadership to staff 6. Saving money/ efficiency

Education

Political

Soc.

Bus.

Left Right

63

48

38

50

50

41

61

38

90

11

16

56

37

42

12

3

69

44

23

44

29

32 43

32

23

35

32

35

25

30 20

27

41

35

29

25

23

26 38

13

25

28

28

19

37

33

(n=65) (n=62) (n=88)

(n=54)(n=116) (n=80) (n=78)

Notes 1. Total number of responses = 645. 2. Totals do not add up to 100% because of availability of multiple response. 3. SES interview Question 17.

market-oriented officers is immediately visible. They set less value on inner 'private' satisfactions and they were a little more apt to stress the value of the leadership they give to their staff. Far more revealing is the emphasis they set on economic management, a value they mention more than twice as frequently as the central agency staff. And, just as significantly, we see that they set a much lower value on efficiency when this is construed explicitly as saving the taxpayer's dollar. These differences are mirrored rather perfectly in what other SES officers (in the central agencies and especially in the program departments) said about their peers in the market departments. The most common view of them, especially among the central agency staff, is that they are the 'captives of their clients' - an accusation that is made over and over, in just that form, and filled out with such other

95

ECONOMIC RATIONALISM IN CANBERRA

constantly recurring phrases as 'too close to business interests'. This view is, as we shall see, an expression both of the new economic rationalism that pervades the central agencies and, equally, of humiliating memories of an earlier era that prowl like ghosts in so many descriptions of these market departments. In these fragments from the interviews we find some of these different and sometimes sharply conflicting perceptions. They get bottled up by their clients. They don't take the broader view. (Finance) Too close to their clients - however, I think in some cases this has got better. The Industry Assistance Commission is still too close and has a tendency instead of adjudicating to become the advocate. This has not happened to the National Companies and Securities Commission but it has to the Department of Trade and Industry Technology and Commerce. (Finance) Industry, Technology and Commerce, and Primary Industry, have been a bit the captives of their clients, but have broken out of it now. (an 'old-guard' Trade officer) We are much more commercial: social values have nothing to do with our work. For example, on uranium we fight to preserve the commercial interest. (Trade) One can get too close to clients. This is not true now but we were in the 1960s and 1970s. Some individuals are still influenced by what the company tells them. (Resources and Energy) We have conflicts with Primary Industry; they are for the tobacco lobby, we are against it. (Health) Other people are supposed to look after the public interest; it's not this department's responsibility. (Resources and Energy) Trade is changing away from 'rorts'19 but they [Trade and Primary Industry] are still Country Party oriented .... subsidies for farmers.... Under Black Jack McEwen they always [used to] 'capitalise the gains and socialise the losses'. (Aboriginal Affairs) We are prepared to confront industry, that is to tax them. (Resources and Energy) In conclusion it is appropriate to note here that these conflicting

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perceptions also contain an archaeology: a buried history that is being layered over with the new economic rationalism of the younger staff in the market departments (many of whom came from the central agencies). It is a history that was, for our respondents, deeply humiliating, particularly for some senior staff in Trade - a department that used to identify itself with elite establishment images of the British Treasury, especially in the days when Trade officials enjoyed a much larger path-breaking foreign policy role in their relations with Japan in the late 1950s and with China in the 1950s and 1960s. These market department officials, who were older than the central agency staff, still live with the stigma that was earned through flagrant pandering to strong commercial and industry interests under the Liberal/Country Party governments of Menzies, Holt, McMahon, and Fraser. Beyond the simple experience of humiliation we see that the buried history points to something even more interesting. We shall see later that the changes, ambiguities and vulnerabilities - and the humiliations - pointed to changing terms of legitimacy and so to new structure-forming norms which altered previously taken-for-granted assumptions about the proper relation and boundary between state and economy.

THE PROGRAM AND SERVICE DEPARTMENTS For our purposes, and again according to the pre-July 1987 structure, this category of departments includes the commonwealth departments of Social Security, Community Services, Health, Education (including the Schools Commission), Veterans' Affairs (including the Repatriation Commission), and Aboriginal Affairs. Again a few details must suffice to give the reader some feeling for the size and complexity of these sometimes huge organisations. Social Security was the largest of them. In 1985-86 it spent from its own appropriation under the Social Security Act about $A16,744 million on age and invalid pensions, unemployment, sickness benefits and other payments. It employed legions of staff in well over 200 regional offices in all Australia's states and territories. Health, spent some $A4,965 million of which about half was paid out in medical benefits, another quarter in hospital services and benefits, and the rest on pharmaceutical and other services, benefits, and programs. In 1985-86, the Department of Education spent about $A1,977 million principally as funding for both government and non-government schools throughout Australia. Since most of this money is administered by state and territory governments, the federal department of

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Education does not have a large administrative staff in the regions. Aboriginal Affairs is a smaller department with an appropriation in 1985-86 of $A295m that was spent, in order of magnitude, on housing, health, education, social support, and other expenditures. The two other departments in this category (Community Services and Veterans' Affairs) both had a substantial presence in the states and regions. Five of the six ministers of these departments belonged to the 'Left faction' of the governing Labor Party20 and at least two, the Minister for Social Security and the Minister for Community Services, were regarded (even by their critics in opposing factions) as persons of great ability and energy. Of the six departments, only three had ministers who were members of the Cabinet in the second Hawke government (Community Services, Education, and Social Security); two of the ministers for (Veterans' Affairs and Aboriginal Affairs) were at the bottom of the official ministerial hierarchy.21 Of the six secretaries, two had a university education in economics; the others had mostly liberal arts educations. As we saw in Table 3.1, our sample of 88 SES officers in these service and program departments were older than their counterparts in the other departments: only one in every five of them was under 40 and there were twice as many who were over 50 than in the central agencies. Of all our respondents, program and service department officers were the least likely to have come from elite 'public' (= private) GPS schools. About one-third of them had a university major field background in economics, commerce, accountancy, or business administration. One cannot begin to see these program and service departments in a proper perspective without taking account of two obvious but very important considerations. The first is that, unlike the central agencies, these program and service departments run programs and deliver services. This usually means that these departments must coordinate and manage programs across six states and two territories and, further, that a varying and sometimes large proportion of their staff is deployed outside Canberra at the service-delivery end of the department. For this reason the study included interviews with 23 SES officers in state head offices in four capital cities. Secondly, Australia is a federation of seven states each with its own sometimes very large, and in most cases, much older servicedelivery bureaucracies with whom the Canberra federal government's program and service departments are usually enmeshed in an inherently problematic relationship. In this difficult relationship with state

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THE INNER TRIANGLE

bureaucracies, Canberra variously complements, supplements, and sometimes controls what the states do in the domains of education, health, social security and Aboriginal affairs. The 'partnership' is often fraught with competitive strains and with political and sometimes constitutional problems (especially when the governments in Canberra and the states are of a different colour). In these relationships it is usually Canberra that has the power of the purse strings and, at least in its own perception, the superior expertise.22 In the fairly typical cases of education and Aboriginal affairs, it is again usually the Canberra department that is with varying success and according to the political and financial climate, struggling to drag, cajole, push and blackmail the corresponding state agencies and departments towards more innovative and 'modern' program policies - for better or worse. Accordingly, the program and service department staff tend to think of themselves as the 'meat in the sandwich' in fights between Canberra and the states. They also view themselves as 'the sharp end', the 'antennae', the eyes and ears, (and when things go wrong, the nose) 'out there' in the states of an otherwise 'out of touch' Canberra bureaucracy in a remote capital city. As we have seen in some of the previous data, the distinctive character of policy and management work in the program and service departments shows up in many ways. And beneath the surface there is another more deeply buried archaeology. Table 3.6 shows that program and service department officers were twice as likely as the central agency and market department senior staff to mention the importance of personal and family experience in shaping their approach to their work. One glance at the interview transcripts is enough to show that what they were usually alluding to here was an experience as children and young people (in the war years, the 1940s, and the 1950s) of family life 'out there', in 'the bush' or the cities, of an island continent. Since four in every five of them are over 40, that experience was gained long before the head offices of these departments were moved, mostly in the 1960s, from Melbourne and Sydney to a brand new Canberra that was only then having its artificial lake filled with inadequately treated sewage from neighbouring New South Wales, the largest of the jealous and mistrustful state governments. Moreover, our data tell us that these people were more likely to have come from lower socio-economic backgrounds and to have, either directly or through their families, a more vivid historical memory of the Great Depression and a much closer experience of hard times and of the daily life of ordinary working people. This longer

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and more extensive experience of work in the public service, in the regions and far from Canberra, led them to set a higher value on their own broader training in the public service: they mentioned the importance of training twice as often as their counterparts in the other two categories of departments. Significantly, on the other side of the coin, they were much less likely to mention overseas experience of which they had very little- We see in Table 3.7, as we would expect, that they were far more 'client-oriented' (even though at this top level of the bureaucracy few of them would have recent experience of any actual contact with clients at the counter level) than their peers and that they had a somewhat keener sense of social justice. This value commitment was consonant, as were so many of their characteristics, first with an educational background that started anywhere other than in an elite private school and ended at university somewhere in arts, social sciences or law - but not in the economics faculty - and, second, with a self-nominated political orientation that is 'Centre Left' (albeit, as we shall see later, a very conservative Centre Left). Although a majority of the senior staff in these program and service departments still say that the rewards and satisfactions of the job outweigh the psychological and emotional costs, it is obviously a 'pretty close thing' for the program people - 40 per cent of them said so - and they were more than twice as likely to give that response than their central agency counterparts. And no, it is not because they are older: there was no relation between age and anomie or job dissatisfaction. The lower job satisfaction is unambiguously explained by two factors. In the first place it was the location and nature of their work in the program and service departments that was 'hurting' them. Secondly, it was closely associated with the fact that they commonly had a non-business-oriented tertiary education background in the social sciences, law and humanities. Of those who said that 'the satisfactions definitely outweigh the costs', over two thirds came from a business-oriented background, and those with a social sciences/humanities/law background were twice as likely to say that it is 'a pretty close thing' than their business-oriented counterparts.23 The picture is even more clear with the data from the 'please explain' question. When all respondents were asked to spell out the negative factors (the stresses, frustrations, and the psychological and emotional costs), we get the pattern shown in Table 3.8.

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Table 3*8 Comparisons of reasons given for dissatisfaction with job.

Per cent of respondents giving reasons for dissatisfaction Values (in rank order)

SES

Department

(N == 215) CA Market Program

95 41 1. Effects on home life 2. Not enough resources 67 29 3. Accountability pressures 54 9 4- Frustrating management and organisational structures

49

9

Education

Political

Soc.

Bus.

Left Right

39

50

39

47

46

42

18

42

41

28

35

32

21

40

26

18

29

20

19

35

24

23

18

25

(n=65) (n=62) (n = 88) (n=54)(n=116)(n=80)(n=78) Notes 1 Total number of responses = 645. 2. Totals do not add up to 100% because of availability of multiple response. 3. SES interview Question 36.

The effects of stress and long working hours was something that worried the program and service department staff more than the others: certainly they were many times more likely to be divorced or separated and to have a serious health problem.24 With the next three most frequently mentioned problems there was a classic pattern (Table 3.8). The insufficiency of resources was voiced in just these terms and included also mentions of the ceaseless pressure of having to do too much with too little in a situation where real achievements take such a long time to show. When they talked about accountability pressures, they were complaining of having to justify everything to the central agencies (often on criteria that they saw as alien to the real interests of their clients) and also of the ceaseless pressure to justify decisions in the face of other constant challenges from clients, from members of state and federal parliaments, from officials in the states, and from community associations. The frustrations with management and organisational structures were related to a number of problems including conflicts with colleagues, the inability to hire and fire staff, and problems with the top management structure. Moreover, these responses were broadly related with educational backgrounds and political orientation. The frustrations were demonstrably strongest for these people who work in program and service departments and for

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those who put themselves to the left of centre politically and who had a non-business oriented educationThese frustrations were reflected again in the very different appraisals that program and service department people made of differences between themselves and senior executives at comparable levels in the private sector. They were less envious of what they saw as better rewards and conditions in the private sector than were their counterparts in the market departments. What was it then that they would most like to have for breakfast, lunch and dinner and for Christmas too? In a word, more freedom! And this meant some relief from the increasing burden of justification and of 'rationalisation' that grows in inverse proportion to the shrinking organisational and financial resources that would be needed to meet it. They saw themselves as the victims of a situation in which they were held more and more responsible for functions over which they had less and less control. Their work, they said, was oriented to the public good in a way that made it less amenable to managerialist and private sector-oriented accounting practices. And they insisted that they did not have the freedom they needed to properly discharge their responsibilities Their situation is even easier to understand if we look at what the staff of the other two categories of departments said about them in Table 3.9. It is the responses of the central agency staff that were the most relevant because, of course, they are the ones (rather than the market departments) who are in ongoing contact with the program departments.25 The central agency staff were quite often willing to concede that the program and service people were 'good managers' - though it is doubtful whether even a majority do indeed take that view. For the rest, their comments are almost entirely negative. The following fragments give a sense of what they say. They are not capable of thinking through the issues. They don't understand economics or how the real world works. They are too close to their clients - too soft and idealistic. (Finance) They have a tendency to advise the Minister in terms of what they think he wants to hear whilst we in this department advise him in terms of what is right. And sometimes there is an identity crisis - officers representing clients to the government and not government to the clients, which is their proper role. (Finance)

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A haven for bleeding hearts. Traditionally they have had stable staffing: little new blood has been injected and they have tended to operate in a world of their own and have little con^ tact with other departments with common interests- They [speaking now of regional SES in program departments] are ripe for mobility: they are of very poor quality and there is much evidence of stagnation. (PM&C) They are managers, deliverers of programs and services with a tendency to act as lobbyists in disguise and in this sense they are very political. (Treasury) They are achievers in the sense of managers - people who get practical jobs done. They don't have to be super-charged. [But] sometimes I despair at the attitudes emanating from these departments - they don't want the facts; they don't or won't see the whole picture. They say these are the facts and the decisions must be based on these facts. They see only half the facts. (Finance) Table 3*9 Perceptions of senior executives in program and service departments as perceived by SES in market departments and central agency departments. Per cent of respondents offering perceptions

SES

Perceptions (in rank order)

CA

Market

27

35

17 17 10

(N = 215)

1. No policy role='just administration' 2. Captives of welfare lobby 3. Not hard nosed = lesser ability 4- Client oriented

Department

Education

Political

Soc.

Bus.

Left Right

34

18

29

22

26

29

16

15

22

12

23

28 11

18 5

13

22 10

16 10

18 10

7

(n=65)' (n=62) (n-54) ( n=116)

(n=80) (n-78)

Notes 1. Total number of responses = 645. 2. Totals do not add up to 100% because of availability of multiple response. 3. SES interview Question 59.

By contrast it is interesting to note that these perceptions of the program department staff as 'just managers' without a 'real' policy function were explicitly contradicted by what the program department people said about their own roles and functions. In Health, Education,

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Aboriginal Affairs and Community Services, the SES staff almost unanimously say that their departments are 'policy departments'. Indeed, in these functional areas a very great deal (often the larger part) of the actual program delivery work is done by state rather than federal departments. So these senior Canberra bureaucrats in the program departments were certainly correct in the assertion that, along side whatever specific service-delivery functions they may have, there was, perforce, a substantial coordinating and policy development role. Moreover, even at the regional level there is a strong coordinating role because it is there that so much of the day-to-day division of responsibility and negotiation with counterparts in the state bureaucracies is done. Our interviewees were adamant about this. A lot of the coordinating work could be done by the line departments - just like Social Security does in the regions. The central agencies just keep moving the hurdles around. Finance and Treasury could be abolished. There is a lot of coordination that goes on laterally, at the state level between program departments: coordination from above is just power...Coordination nation-wide is entirely unproblematic. (Three Social Security officers) We are a policy department. We have little interface with the public. (Health) Aboriginal Affairs is mainly a coordinating department with those second-guessing idiots up there getting in the way of coordination when they get a chance...But we are a very autonomous department really because they don't understand enough to stuff us around properly and because they are too scared to hit us hard. (Two Aboriginal Affairs respondents) The program departments share some essential characteristics that all arise, in one way or another, from their functions as departments that do indeed run and manage programs. We found that life in these departments is fraught with tensions - there was no esprit de corps of the kind that was the rule among officers in Treasury and Finance. The reason is not so hard to find. The program and service departments are often very large and complex organisations with heterogeneous functions and personnel. Moreover, changes of government and shifts of policy direction force discontinuities on program departments that are then manifest within the top structure as sudden changes in the relative prestige, influence, and resource allocations of different divisions, sections, and of individuals as well. So, for example, when a Liberal/National Party government is in power, the doctors

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and 'the medics' have greater influence in the Department of Health and 'medifraud' goes off the agenda, whereas under a Labor government some strenuous (but usually unsuccessful) attempts are made to orient the health system towards the health-care needs of the wider community and away from Australia's notoriously self-serving private medical establishment. There were analogous tensions within all the program departments and it was this, rather than any innate conservatism, that makes the program departments pray for 'stability' and 'strong Cabinet leadership', and which also leads to suspicions of 'empire-building' and faction fighting at the top levels of their departments. Above all they do not want the government to vacillate or suddenly to give into an interest group in some way that will produce what they call 'kneejerk reactions' - sudden shifts or reversals of policy directions. It was largely for these reasons that intradepartmental conflicts among divisions and sections within the program and service departments were, as they so often said, not only 'political' but also frequent, demoralising, and sometimes intense. Strains of this kind were felt to a much lesser degree in some of the market departments (for example in the Department of Trade), but they were not part of the experience of the smaller central agencies with a more homogeneous staff from similar backgrounds. For these and other reasons, the staff of the program and service departments were, in response to other questions in the study,26 more than twice as likely to mention the deleterious effects of political polarisation and excessive contestation than officers in the other two categories of departments. The Department of Health did, I think, get too close to their clientele a few years ago; we now see things from a national perspective much better. (Health) This is an area [i.e. the Department of Health] of political turmoil, a sink or swim environment. There is a split allegiance to medics and to the public in parts of this department, especially in the National Health and Medical Research Council... We have two masters but a lot of people in this division feel loyalty to medics. (Three Health officers) Everything in this bloody department is political. This department is incapable of disposing of problems. Problems go around and around in circles. Clear solutions are ignored - all departmental officers want to do is worry and worry in an uncreative way....[We worry about] the ambitious personalities of colleagues who spend all their time on self-satisfactions, not on solutions to the problems. (Two Aboriginal Affairs officers)

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Some of the detail covered in these last few pages was purposely set in its own perspective and against some of the broader background characteristics of our program and service department officers. They were: older; more likely to have come from less privileged backgrounds; more mindful of their own experience of ordinary life outside Canberra; more aware of poverty, unemployment and hardship both past and present; more left-leaning in their political preferences and policy orientations; more attuned to their clients; and more aware of social needs and social problems. However, this orientation to the world was, as the larger body of data shows, heavily 'infiltrated' and overlaid by conservatising 'rationalisations' of one kind or another. Executives in these program and service departments may have mentioned social inequalities and social needs more frequently than their counterparts in the other departments. Yet we see from their responses to our questions that nearly a third of them have economics degrees; that onehalf of them wanted to deregulate the labour market; that less than one-quarter of them favoured more state provision as against 'more individual incentive'; and that a third of them still said that GNP was distributed with a bias to wage and salary earners. And that is not all. More than half of them shared the New Right's fears about state involvement in the economic and social spheres, and most surprisingly, even here only one-third of them would say that market relations are on balance more exploitative and unequal than otherwise. Inasmuch as they had a commitment to social democracy and to the welfare state, it was very definitely a residual commitment; one that sat awkwardly with their newer dispositions to public policy and that occasioned considerable ambivalence and vulnerability.

CONCLUSION It will be the task of Chapter 4 to dig deeper and to look more closely at process. This chapter has been concerned instead with morphology. The aim was always to trace the structural configurations from the living experience and biographies of the respondents through the orienting normative structures and world views that they brought to their descriptions of their own work. The most obvious discovery is one that has been alluded to already. We found not one but three 'states' that are layered one over the other in an order that is unmistakably a structure of legitimacy and, in that sense, of power. This hierarchy of 'states within a state' obviously mirrored the place of the respective ministers and of their factions in the ministry of the second Hawke Government. It prefigures the form and the effects of the later restructuring that would take

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place in July 1987. Two out of the three ministers of the central agency departments belonged to the 'Right faction' of the Labor Party and had places in the top end of the ministerial hierarchy. All three were members of the Cabinet and, as we shall see, of its Expenditure Review Committee as well. On the other hand three of our four market department ministers were in the middle third of the ministerial order. Two belonged to the Centre Left faction of the party and three (the ministers for Industry, Technology, and Commerce, Trade, and Resources and Energy) were members of the Cabinet. The program and service departments were with one exception headed by ministers who belonged to the 'Left faction' of the Party. Two of these ministers (for Social Security, and Community Services) had seats in the Cabi' net room but the other three (ministers for Health, Aboriginal Affairs and Veterans' Affairs) were in the bottom third of the ministerial hierarchy. The aggressive economic rationalism of the central agencies is clearly the vocabulary of a new laissez-faire minimalist state. It has no historical memory and it is either asocial or anti-social. It is quickly burying the interventionist state of the market-oriented departments. The only thing it has in common with them is its orientation to the economic order and to a common first purpose of 'getting the economy working' on 'sound economic principles'. The sometimes bitter and omnipresent generational differences between the new young men and the 'old guard' (in Trade and Primary Industry especially and, to a lesser degree, in the other departments as well) were rooted in fundamentally different accounts of what those 'sound economic principles' should be. The pragmatic Keynesian liberalism of the older and mainly post-war interventionist state - a state that shared a longestablished partnership with capital at the operating level of industry - was clearly losing all the arguments and battles with the conquering young rationalists from the central agencies. At the next level down the archaeologists find the social democratic welfare state. And it is not in very good shape! At this level there was still a residual norm-setting historical memory of the 1950s, and of earlier pre-war days, when wealth in Australia was distributed more equally than anywhere else in the then 'developed' world. For the older generation here, at least according to the charter myth, the proper role of a strong state, with a well articulated redistributive function, was to ensure that both the wealth and the hardships of drought, unemployment, and economic recession were shared. Social justice was a 'value-rational' (wertrational) goal with an intrinsic importance, and not merely a concession, a palliative, or a cunning defense of privilege.

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For the program and service department people the relation between economic and social forces was still partially visible and, to some limited extent, relations with the central agencies were experienced not as a clash between two different sets of economic norms but rather as a clash between economic power and social needs. The welfare state was clearly under tremendous pressure, uncertain about its own role, and very much on the defensive. A large proportion of its staff are demoralised and its legitimacy has crumbled away to a degree that would have been unimaginable only half a decade ago. Indeed, the moral and historical warrant for the welfare state was so undermined that, in the eyes of the 'rationalists', its senior officials had credit only as managers - the function per se had only a negative value and was seen merely as a hole in the taxpayer's purse. If there was some latent 'crisis of the state' in the state, and more specifically at the senior management and coordinating level, then it was lurking here. But of course the central purpose of the whole presentation was to carry our understanding beyond such simplistic notions as a 'hierarchy of power'. And here there is already, perhaps, some modest progress inasmuch as we have been able to use the data to outline the structure and content of the legitimations that were such key constituents of this structure of domination. In this respect a few comments will suffice to draw some of the threads together and to open the way for the further discussion that will follow in the next chapter. We see that the central agencies were omnipresent in the calculations of people in the other line departments, both market and program. The central agency departments set the agenda and terms of argument because they posed the questions that others must answer. They are perceived by others to have tremendous power and they accepted this perception with some satisfaction. More pertinently we see that this rationalising and coordinating function had its own well articulated language. The basic assumptions of a neoclassical economic rationalism at one level provided a rationale for the new management and accounting technologies at another. And both together produced an obligatory and changed context for the application of an ever broader and more intrusive array of controls. In addition it is clear that the three central agencies have complementary functions: PM&C has to resolve as many of the Cabinet's conflicts as possible before they get to the table; Finance is there to save the taxpayer's dollar; and Treasury has to set all that the government does within a properly charted course for 'the Economy'. However, it is clear that the legitimacy of these agencies derives not only from the necessity of their functions but also from the panoply of norms and prerogatives that are invoked with phrases such

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THE INNER TRIANGLE

as 'taking the broader view', 'seeing the facts', and 'the whole picture'. The central agency people were able to move over what might otherwise be other people's territory and to use these passports, visas, and search warrants because they embody a claim to 'higher' intellectual abilities. In short their superior 'intellectual' and more 'hard nosed', analytic skills offered, in the view of those who demurred to them, a capacity to resolve contradictions and to uncover flaws in the design and justifications of other people's programs. These 'higher intellect tuaF skills were perceived to be formal, abstract, and, in this sense, opposed to the 'hands-on' pragmatism of slowly acquired experience and practice. What was prevailing so triumphantly here was not practical rationality, but formal rationality of a very concentrated kind. Moreover, these skills were also systematically related to the several other characteristics of those who possessed them: to a modern type of economics education; a narrowly reductive view of economy, politics and society; overseas work experience; a taste for power, and more private work satisfactions of the kind that are usually described with phrases such as the 'achievement ethic' and the satisfaction of 'a personal challenge'. Finally, in the interaction between senior staff in these three categories of departments, we saw how new norms are changing old structures. This was most visible at the interfaces between the departments (for our purposes the formal structures of the state apparatus) and their respective social, political, and economic environments. The accusations that the market and program department people were the 'captives of their clients' and that they were 'one-eyed' and partial in what they saw, had nothing to do with idle talk. They are accusations with a terrible sting. Insofar as they can be made to stick, they would inexorably bring changes in the relative status and resource allocations of particular programs and whole departments; they would make or break the careers of ambitious and dedicated people. What we saw is that this norm-setting language was undoing old legitimations and replacing them with new ones which would regulate and justify relations across the boundary in a very different way. For the market-oriented people, the hard-won acceptance as persona grata (as trusted expert, guest and negotiator) in the boardrooms of established private sector industries would have been judged as the sure evidence of superior talent and hence of further promotability on the older boundary-setting norms of only a very short time ago. Now, in terms of the new norms that have pressed in from the central agencies, this 'achievement' was perilously likely to be seen as damning evidence of compromised or inappropriate policy objectives. This was simply a reflection within the state apparatus of changing terms of

109

ECONOMIC RATIONALISM IN CANBERRA

exchange between the state and the people, organisations, and power centres that constitute important parts of its environment. The relations between the program and service department people and their respective environments were changing in an analogous fashion. Social insight and an explicitly value-oriented understanding of social service recipients and of their social situation was precisely the foremost thing that any department secretary or minister would look for in sponsoring people for top jobs in the program and service departments not so long ago in the Whitlam days. The value set on this slowly acquired feeling for the particularities of social situations in the 'real world' beyond Canberra was obviously derived from the older normative structures of the welfare state, from norms that were premised on a very different view of society as we shall see in the following chapters. From the mid 1980s, these norms were taken instead as evidence of 'soft idealism', ignorance of the 'real world', 'stagnation', and inferior ability. Indeed, the new norms of the minimalist laissez-faire, state had penetrated the program departments to such an extent that a great many of their top staff had internalised these new perceptions of themselves in a way that accounts in some measure for the demoralisation of those who were being pushed aside by the colonising influx of younger economists.

110

CHAPTER 4

THE INSTRUMENTATION OF STATE POWER Intellectual knowledge offers models which are applicable in different contexts; their validity transcends the individual situat ion.. .Intellectuals then are the monopolistic proprietors of knowledge which society accepts as having cross-contextual validity and which it uses to orient its members.1

I

t is one thing to show how a group of people who obviously occupy positions of great influence come to see the world in a particular way. It is quite another to show how this affects what they and others do. Studies of elites are so often of disappointing and limited sociological interest because strong descriptions of elite cultures normally lapse into weak or vicarious explanations of their social effects and structural corollaries. Exactly the same problem hangs over the more interesting modern literature about the role of intellectuals in contemporary industrial societies. It is one thing to describe how various groups of highly trained people define this or that social phenomenon but, if the account goes no further, it amounts to little more than idealist fantasy. There is no escape from these fundamental questions concerning the relation between 'ideas', structures, and actions. We do empirical research not to escape from these questions but, on the contrary, to give us some concrete particulars with which to address them anew, and with greater stability of reference than would otherwise be possible. In starting to draw the threads of the preceding chapters together, we must ask how these 'images of society1, 'political dispositions' and, in short, the orientations to action of our Canberra top public servants are in fact patterned into the state apparatus. Chapter 3 covered some of that ground by laying out the differences

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ECONOMIC RATIONALISM IN CANBERRA

among officers in our three categories of departments - the central agencies, the market-oriented departments, and the program and service departments. We have so far deliberately not said much about process: yet in the contrasts and counterpointing of the various perceptions and assessments that each group applies to the others, we were already looking (to some extent vicariously) at power relations and at their arrangement and instrumentation in the larger structure of the state. Already the picture was clear enough to show that there were really three states within a state: an economically rationalist and minimalist state; an interventionist and nationbuilding state; and a social democratic welfare state - each layered over the other in what is obviously a hierarchy of legitimacy and power. The task here is to see how that order has been institutionalised. The task now is to look in a preliminary way at processes of differentiation and selection within this state apparatus. These are processes that have some clear empirical correlates in two waves of reforms to the formal structure of the Australian Public Service in 1984 and 1987 that will provide a focus for the first and fourth sections of this chapter. We shall not get lost in abstractions because the process has equally clear correlates in what our respondents have been telling us, insistently, about their own role as intellectuals and about the importance of taking 'a broader view' in their task of 'rationalising' existing structures and processes. At lower levels in the hierarchy, the work is supposedly more routinisable and for that reason less dependent on the distinctively intellectual work of developing and applying abstract categories and technologies to disparate cases and many kinds of problems. In this sense higher public servants are 'intellectuals' in the modern usage of that term because their work so obviously involves them in applying abstract knowledge and principles to particular situations. The second and third sections look respectively at two vertical and lateral dimensions of this 'intellectual' work of coordination and rationalisation. In the second section we look at the vertical dimension; in the third section, this is complemented with some observations and examples on the role that the politics of knowledge has in producing lateral structural integration - the 'sideways' pressures that come principally from the central agencies and their ministers. As we move through these two sections, the Cabinet and the ubiquitous pressure of government per se will come more clearly into view and the intricate and fascinating relationship between a government and its top bureaucracy will give up some of its secrets.

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THE INSTRUMENTATION OF STATE POWER

THE STATE CHANGING ITS MIND, OR REFORMING THE TOP OF THE PUBLIC SERVICE On 9 May 1984, the Hawke Labor government brought into law a first wave of reforms to the Australian Public Service with the introduction of three bills including, principally, the Public Service Reform Bill 1984.2 The abolition of what used to be called the 'second division' and its replacement with a Senior Executive Service is just one of the formal changes that came about in a climate of change that the Hawke Labor government brought with it to office in 1983. From the records of the Public Accounts Committee in that year3 and from the proceedings of conferences that were addressed by ministers and prominent members of the Liberal/National Party opposition, it is clear that there was broad bipartisan support for the several reforms that the legislation brought into being. The establishment of the Senior Executive Service, modelled in part along the lines of the American Carter administration reforms, gave Australia a top public service that was in some respects, 'betwixt and between' Westminster (the old model) and Washington (the new model). The Labor government's quest for public service reform was led by Dr Peter Wilenski, a former personal secretary to Prime Minister Whitlam, who became the Chairman of the Public Service Board in 1984- Some five years before the Hawke government came to power, in an address given in February 1979 to an OECD symposium in Madrid on 'Managing Change in Public Administration', Dr Wilenski began with some observations that set the reforms in the larger perspective. The 'hidden agenda' of most reforms is to ensure that different decisions are taken and different outcomes in the community result...Proposed changes in organisational design, changes in the groups of people recruited into the bureaucracy and changes in mobility, promotion or reward systems cannot be considered purely on technical or managerial grounds. Such changes result in different decisions being taken about the allocation of public resources. They result in shifts in power within the bureaucracy and in gains and losses among different groups, both within the bureaucracy and in the community at large - in short, in the reallocation of public resources and benefits. This is not to say that there are no managerial or technical reforms that are needed in public administration or

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ECONOMIC RATIONALISM IN CANBERRA

that a great deal of reform of this nature has not taken place. My aim is to stress, however, that many of the really important reforms of administration are basically political in character and that this political aspect is often hidden because the political nature of administration is hidden. This results in confusion about the true nature of reform and often leads to its defeat.4 In retrospect, it seems that both the Liberal/National opposition and, more pertinently, the dominant Right-wing faction of Dr Wilenski's own Labor Party understood these lessons with the same crystal clarity with which he expresses them here. The establishment of the Senior Executive Service and the other public sector reforms were ostensibly oriented to the two general goals of greater efficiency and social justice. Among the other more insistent and general justifications given for the reforms to the senior public service was 'the government's right' to a more 'responsive* higher public service. To this end the powers of the minister over his or her public servants were strengthened and clarified. In much the same way as similar reforms in Washington, in Ottawa and to some extent in Whitehall5, the several new provisions were aimed at producing a 'greater openness' between the public and private sectors by opening SES jobs to outside applicants; at producing a greater 'corporate identity among senior managers and advisers in the service';6 at producing 'greater mobility of senior managers in accordance with Service needs'; and in giving more flexibility to Department Heads in the allocation of staff resources.7 These changes together redefined, and in some cases abolished, some basic principles of public administration - merit, impartiality, and security of tenure - that had up until that time seemed beyond serious challenge or revision. One such fundamental change that passed almost unnoticed was the abolition of the de facto right of individuals to define their own careers; instead career paths would be defined in terms of the needs and priorities of corporate management.8 Other aspects of the reforms involved changes to the promotion system along with renewed, (and this time successful9) efforts to provide ministers with a small personal staff of political advisers and 'minders' of their own choosing.10 We asked our respondents for their assessment of these changes to what has become the Senior Executive Service. From their answers we get a general impression in Table 4.1. With a few cross-tabulations and a closer look at the reasons that were given in response to the 'please explain' question, we can

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THE INSTRUMENTATION OF STATE POWER

ascertain who was in favour of the reforms and for what reasons. In the first place the people from high socio-economic family backgrounds were twice as likely to favour the reforms as were those from less privileged backgrounds. Clearly the people from a professional and managerial milieu liked the sound of these reforms and were drawn by the changing images of the state and of the public service implicitly embodied in them. They were more likely to enjoy the vicarious identification with private sector executives and they were drawn to the big business managerialist culture and to the mobility, urbanity, money and power that goes with it. Table 4*1 Senior Executive Service officers' assessments of the reforms Assessment

Per cent

1. Fundamental and timely 2. Probably worthwhile 3. Mainly cosmetic 4. Just a nuisance 5. Largely injurious 6. No answer

11.2 36.7 37.7 3.7 7.0 3.7

Notes 1. N = 215, entries are percentages. 2. SES interview Question 57.

The differences in assessments across different categories of departments were rather less surprising but equally significant. The central agency staff and the market departments were, as one might guess, more likely to favour the reforms. It is the program and service departments who were more wary of the greater infusion of business culture and practice into the top end of the public sector. When we asked them for their reasons we got the picture shown in Table 4.2. Over a third of our respondents thought that the reforms were desirable inasmuch as they would generate more mobility and movement within the public service. This would produce more flexibility of mind and give people a wider experience, develop the 'corporate identity' of the SES, and so encourage a 'broader view' of policy and management problems than might otherwise be seen from the more insular perspectives of particular departments and divisions. The central agency people were most likely to take this line. They were even more likely to stress the benefits the reforms would provide for the

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coordination of policy and management. What they stressed here is the greater scope that the reforms give to ministers, department secretaries, and senior Senior Executive Officers to choose their own staff. So, this provides some tentative evidence for supposing that it is the central agency staff who were most alive to what they saw as the political benefits of the reforms. On the other hand, the market and program department staff were most likely to say that the reforms would have the undesirable consequence of fostering politicisation, patronage, and manipulation by allowing ministers and secretaries to pull in the wrong people for the wrong reasons. In this they were joined by a good sprinkling of other critics who said that the reforms compromised the merit principle and who also pointed out that it had always been possible to bring in outsiders before the reforms and that, in any case, too much mobility was disruptive. Table 4*2 Reasons given in evaluating the reforms. Principal reasons given

Proportions of SES (N = 215) %

Factor loading Factor 1 Factor 2

Positive reasons

1. Facilitates coordination of policy and management Factor 1 2. Lateral mobility desirable 3. Beneficial to bring in people from outside the public service with needed skills 4- Improves our image

39 40

.70

37 30

.74 .66

Negative reasons

Factor 2 4. Fosters politicisation and patronage 38 5. Devalues knowledge 16

.80 .78

Notes 1. Total number of responses = 645. 2. Totals do not add up to 100% because of availability of multiple response. 3. SES interview Question 58.

In the intentions of the reforms and the preoccupations of our respon^ dents there are two thrusts that deserve some closer examination in the light of the data. One has to do with the mobility of our Senior

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Executive Service and the second with the increasing openness to the private sector and its significance. MOBILITY Movements and systems of classification at this top end of the public service are the empirically Visible hand' of just those social processes of differentiation and selection that are of most interest. In other words, mobility and classification patterns are the most visible way in which structures and practices are transformed by selectively enhance ing the norm-setting capacity of particular groups of people with certain social characteristics. How does it show up? Mobility is a rather slippery object of analysis because taken broadly it would cover initial appointments together with transfers and promotions both within and between departments - and these methodological problems are compounded by other questions about destination and origins of all these different types of movements. Moreover mobility is not a simple function of elective decisions because it is intertwined with structural aspects of the grading system which was changing precisely in order to meet criticisms of an in-built, and largely structural, pattern of inequality that shows up so clearly in the data that follows. Still another aspect of the problem is that the numbers of SES people in particular departments are always fairly small: if one begins to particularise about people who rose one or two levels from this to that department, one inevitably runs the risk of revealing the identity of the respondents. Both problems can be solved by switching to a different and much larger database that includes the movements of all senior staff (not just our 215 interviewees) to and from the departments in our study over the years 1982-86 inclusive.11 This provides an important historical dimension and gives us an ample base of 944 movements over four years. With this larger database we can simplify the analysis by looking specifically at promotions both within and between departments. To this end the larger database includes movements from the top two classes (class 10 and class 11) of what was then the Administrative and Clerical Officers division from which most SES appointments are made. This means that we are in effect counting, locating and describing the characteristics of promotions through eight levels in the hierarchy. At the ground floor are the class 10 and class 11 people in the top of the 'third division' recruiting pool for SES promotions. Next we have level 1 and level 2 of the SES, typically the assistant secretary levels. On the next two floors, the doors open on the level 3

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and level 4 officers who are usually first assistant secretaries. The top floors, level 5 and level 6, are typically the deputy secretaries.12 (The department secretaries, the 'lean cats' who occupy the sparsely furnished penthouses, are not formally part of the SES and are of no special interest to us here.) As mentioned above it is important to note that our numbers reveal the hidden structural effects of a changing promotion system in which some departments, and most notably the central agencies, promoted their officers in a ladder that was already raised one level above that used in most other departments. Piecemeal adjustments were gradually made to correct these disparities throughout the 1980s prior to the establishment of a uniform system in July and December 1989. First, with a preliminary look at the age profile of the SES in 1988,13 there is an immediate and resounding answer to the important question of whether the top of the Canberra public service is, as the popular stereotypes would have it, still a rather rigid hierarchy in which seniority is more or less a function of age. No, it is not. The top people at level 6 were older than their 'juniors' in level 1 - but on average, only three years and six months older.14 That is proof enough that age does not cut much ice in the competition for advancement. This is confirmed when one observes that across the SES as a whole, the level 2 officers were in fact slightly younger than their 'juniors' in level 1 by about one and a half years; the same is true of the age comparison between the level 4 people and their 'juniors' in level 3 - those in level 4 are again more than two and half years younger. This means, in short, that the promotions system has been vigorously favouring younger applicants for promotion for quite some time. The second question is whether there are any differences across our three different department categories of central agencies, marketoriented departments and program and service departments. The numbers represented in Figure 4.1 represent the aggregated effects of these largely structural inequalities, first at the point of entry to the SES and, second, at points of movement by promotion between the departments covered in this study. For example at the point of entry, new recruits to the central agencies will commonly move from class 10 or class 11 of the third division to the assistant secretary level 2 mark (in our terms a two, or even a three level 'jump') whereas someone entering a program department is more likely to move from class 11 to the assistant secretary level 1 mark (in our terms a one level 'jump'). Promotions between departments and typically from the central agencies to the more lowly esteemed program and service departments produce similar discrepancies or 'jumps'. Has the structure and

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THE INSTRUMENTATION OF STATE POWER

operation of the system endowed officers in one category of departments with more of what we shall roughly call 'norm-setting clout' than their peers in the other categories of departments? Again the answer is clear. The central agency staff have moved up faster than their peers in the other departments through a promotions system that has allowed more of them to 'jump' two or more levels in the one promotion.15 By contrast we see in Figure 4-1 below that the market department staff were three times more likely to climb the stairs one step at a time. Fig. 4 . I Entry promotion to and across selected departments of the SES inclusive, compared by department categories.

^m ^*

1982-86

one level 'jumps'

HH 'J u m P s ' of two H or more levels

80 70

Central Market Program/ Agencies Departments Service Departments Note: Central agencies, N = 152; market departments N = 66; program and service departments, N = 126.

The jigsaw puzzle of the mobility pattern is already largely resolved as we put the third question: what kinds of people were most likely to have been fast, upwardly mobile 'high-jumpers'? With its invisible hand the promotions system has bestowed norm-setting 'clout' differentially on the people with a business-oriented educational background. They are at least 20 per cent more likely to climb the stairs two or three at a time than all other graduates. Naturally the effects on the structure have been cumulative in a pattern that has strengthened over time as business-oriented people have used the power that the promotions systems has given them to choose more of their own

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kind. Indeed, the consequences are increasingly visible in 1990 in the near monopoly that these ex-central agency (especially PM&C) business-oriented people have over top appointments to the Secretary level. Fig* 4*2 Entry promotions to and across selected departments of the SES 1982-86 inclusive: economics/business graduates compared with all other educational backgrounds. one level 'jumps' 'jumps' of two or more levels

Eco/l u inc education

All other

Note: Economics/business N = 124; all other N = 268.

It is groups rather than individuals that change structures by applying norms with 'structure forming effects'.16 And groups do this most effectively when they are cohesive and have what used to be called a strong esprit de corps (and, in the case of moralising elites, a strong sense of 'mission'). This leads to a fourth and already partially answered question that is in need of more secure evidence. Does the promotions system differentially give some types of department a greater measure of exclusiveness that will favour the development of just this kind of 'norm-setting clout'? To some extent it does, but the picture is complicated by the variety of different reasons for the varying degree of openness. However, for the SES as a whole from 1982-86 inclusive we found that internal promotion within departments was the rule and that only about one in five (or 20 per cent) of all promotions in the service involved a movement between departments.17 On the one hand, in Treasury, nine out of every ten promotions

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THE INSTRUMENTATION OF STATE POWER

go to insiders and this higher measure of exclusiveness seems to fit the image of the Treasury as a closed power-elite.18 On the other hand we find that Health, one of the program and service departments, has the highest rate of promotions going to outsiders from other departments - 55 per cent. This is partly for reasons that are particular to the department, namely that relatively more outsiders came in because there were few promotion opportunities within for medically-trained people, presumably for the reason that Health does not want to fur' ther reduce its already small margin of independence from the outside pressures of the medical lobby. Two very different departments, Resources and Energy, and Aboriginal Affairs, had a higher than average level of internal promotion for the similar reason that the expertise of their SES officers is likely to depend on highly valued specialised knowledge of outside groups and organisations; increased lateral mobility would increase costs to both the individual and the system. OPENING TO THE PRIVATE SECTOR This is one of those climate-setting themes that owes much of its to importance to the lack of specificity with which it is announced. It prompts one to look more specifically at the boundary between the private and public sectors and at whatever may be passing across it. In the light of the preceding section on mobility, there is the obvious question about outsiders who were appointed into the SES. In fact very few private sector executives come into the SES. From January 1987 to May 1988, only 12 outsiders were appointed to the group of departments studied here and at least three-quarters of these came either from state governments or from academia. The number was negligible and so this is not the place to look for the real thrust of this increasing openness to the private sector. A much more important 'site' for this commerce across the boundary is to be found in the great effect that peak business organisations and Right-wing 'think-tanks', organised lobbyists and research centres have had on both ministers and officials, but this topic will be dealt with later. However, in looking beyond these considerations into another more ideological dimension, it is useful to look at how top bureaucrats relate to this increasing opening to the private sector. In terms of the managerialism that now dominates the business world in Australia and elsewhere, 'management is management is management'. It is usually defined, abstractly and generically, as a body of problem-solving and organisational skills that are equally applicable to anything and everything that is normally done in large

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formal organisations employing great numbers of people. Management skills are context-free and value-free and, indeed, 'management' is really a rubric for what are touted as 'universal' skills- On that sanguine view, 'generalist managers'19 can be found (by those who are earnestly 'in search of excellence') among the builders of the pyramids, at the right hand of all the Popes, under Bismarck, certainly in Disneyland, and arranged along an evolutionary line that points towards the 'mission of our species'. From this splendid (ideological) perspective, the distinctive social and value characteristics of public sector work recede from view and, of course, management and senior executive work in the private and public sectors looks increasingly similar. As we have seen, the top of the Canberra public service contains such large numbers of people with a business-oriented economics background and their view of the world has influenced so many of their other colleagues, so it is not surprising that this should show up again in the evidence (Table 4-3) in the assessments that our SES officers made about the similarity of work in the two sectors. Table 4*3 SES officers1 assessments of similarity or differences in the work of senior executives in the public and private sectors.

View of the differences in the work of senior executives in the public and private sectors 1. Too much is made of the differences: higher administration is fundamentally the same kind of work irrespective of location and task. 2. There are appreciable differences but the similarities are still more important. 3. The differences are more important than the similarities. 4. Higher administration in the public sector is fundamentally different from what business executives do.

Frequencies %

18.9 47.8 17.2

16.1

Notes 1. N = 180. 2. The smaller number of valid answers (N = 180) simply reflects the fact that this question was added to the interview late, after some 35 of the interviews were already done. 3. SES interview Question 55a.

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THE INSTRUMENTATION OF STATE POWER

Over two-thirds of our respondents preferred to stress the similarities over the differences, and only one in six of them said that these differences are fundamental. The majority, who took this positivist/managerialist view, also take an equally positivist view of public administration. They said that the politicians choose the values of public policy and that they (the bureaucrats and top policy makers) only marshal the neutral means for their implementation. They are, in that sense, thoroughgoing technocrats.20 Moreover, this suggests that the managerialist perspective did indeed already dominate the comparisons that they would make between themselves and their counterparts in the private sector. We are peering at the relatively featureless surface of a site that our archaeologists will not bother to excavate because they already know how the strata are arranged and what they will find at the bottom of the trench namely, social democracy, the welfare state and the value commitments that go with it. Our one in six minority are merely waiting for the grave-diggers to put them in their place. However with this in mind it is still useful to ask our respondents, more explicitly, for their assessments of the differences between themselves and senior executives in the private sector. The comparisons are presented in Table 4-4. Beyond the unfavourable comparisons made about rewards and working conditions, our respondents pointed to other differences between public and private sectors in the following terms. They have immediate and definable objectives and a simpler environment. We have long-term objectives and a more complex environment. (Trade) The private sector rewards success, the public sector penalises failure: in the Commonwealth Public Service one's successes are forgotten and one's failures are forever remembered. (Education) I could hold down many jobs in the private sector but people in the private sector could not hold down my job or many other jobs in the public sector. (Resources and Energy) Public sector executives have less control over wider and bigger issues that have to do with the common good. Private sector executives deal with smaller problems but they know them in great detail. (Industry, Technology and Commerce) I work twice as hard as any private sector executive and I get paid less for it. (Finance)

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Table 4A Differences between senior executives in the public and private sectors as perceived by SES officers in three categories of departments. Per cent of respondents mentioning differences Perceived characteristics (in rank order)

A. Private sector senior executives attributions ('them') 1. Better conditions and rewards 2. More freedom and scope for achievement 3. Oriented to profit; dollars 'the bottom line' 4. Clearer, simpler, more measurable goals B. SES self-identifications ('us') 1. Breadth, complexity, variety of demands/intellectual sophistication of our work 2. Political control and accountability 3. Oriented to public good 4- Poorer rewards and conditions 5. Less freedom/more pressures

SES Central Market Program (N = 215) Agencies departments departments

140

60

11

60

101

43

34

60

99

48

40

49

96

58

45

34

112

58

54

45

90 84

43 38

39 29

43 47

74

32

43

29

70

27 28 (n = 65) (n-62)

40 (n = 88)

Notes 1. Total number of responses for each of A and B = 645. 2. Totals do not add up to 100% because of availability of multiple response. 3. SES interview Question 55.

Some differences between categories of departments stand out. Significantly, it was once again the people in the program and service departments who were most conscious of their lack of freedom in serving the public good. And this is something that respondents who put themselves 'Centre Left' on the political spectrum felt more keenly. In effect, they were saying, again,21 that it is the servicedelivery and redistributive functions of the state that set the work of

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THE INSTRUMENTATION OF STATE POWER

senior public servants apart from the world of business executives. And they were stressing that it is in just these areas that they felt especially constrained and frustrated. The central agency people stressed the complexity and the intellectual sophistication of the public sector executive's workSo what? Is it not possible that this greater openness to the private sector might, as its advocates would have it, make the state more 'efficient' ? Both the question, and the advocates for deregulation, privatisation, and corporatisation, are usually resisted because of an underlying suspicion or conviction that this positivist-managerialist view of public administration is not, as it claims, value-neutral and that it will instead bring with it unwitting biases that may shift the value priorities and benefits of state action further towards the right, the market, and the privileged. We suspect that those who stress the similarities between the private and public sectors are more socially and politically to the right: but are they? And is there any evidence for these fears? Yes, there is, and it has two foci in particular. In the first place, the positivism which neutralises the differences between the nature of senior executive work in the public and private sectors also neutralises some of the key value-orientations of the social democratic 'people-serving' state. Those of our top bureaucrats who stressed the similarities of work in the private and public sectors were also likely to say that the 'strength and efficiency of a government are more important than its particular programs', and also more likely to say that in contemporary affairs 'it is desirable that technical considerations be given more weight than political factors'. In the coincidence of these three preferences22 we can see that our respondents are not just saying that coherent government is such a complex matter that it needs some buffering from the knee-jerk reactions of politicians: they are also bolting the door against the sort of value commitments - to social justice and to participatory democracy that underpin the welfare state and pluralist-progressive, socialdemocratic politics. In the second place, the evidence is more direct. The 'managerialists' who stressed the similarities between the two sectors tend23 more frequently to put themselves on the Centre Right or conservative end of the political spectrum.24 They were also about three times more likely to rank social factors lower than economic, political, and legal-administrative factors in the effects they have on public policy.25 They were more likely to say that Australia's GDP is distributed with a bias to wage and salary earners and, perhaps most tellingly, they were about twice as likely to prefer the benign view that market

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ECONOMIC RATIONALISM IN CANBERRA

relations are more complementary and equal than they are socially exploitative.26 Inasmuch as managers are managers are managers, they are likely to be technocrats and economic rationalists as well - and the increasing openness to the private sector gives them more penetration and greater legitimacy in the public sector. Increasing openness to the private sector weakens the normative basis of public administration.

INTELLECTUALS AND VERTICAL STRUCTURAL INTEGRATION What part do 'ideas' and intellectuals have within the state apparatus? And how do some people, those who are seen to be 'more intellectual', come to acquire 'power'? In putting the question thus almost any definition of 'power' will do, but norm-setting and structure-forming 'clout' is what we have in mind. That question was hovering over the material in the preceding section and now it will be addressed more explicitly. A backward glance over the evidence presented here and in the preceding chapters already provides some sort of an answer; it is clearest in what the market and program department people said about the central agency staff in PM&C, Finance, and Treasury (see Table 3.3, p. 85). These 'whiz kids' are caught up in their own abstractions and removed from the 'real world' and yet, paradoxically perhaps, they were still seen as the elite high-fliers, the real power-holders in the public service. Intellectual skills and analytic abilities are second only to general management skills among the criteria that our respondents would use in selecting someone to replace them (see Table 3.5, p. 89). The majority of them say that it was the intellectual nature of their work that distinguished them from the 'technocrats' (whoever they may be). And it was again the intellectual challenges of the work that were most frequently cited as the main source of job satisfaction. In short then it is the intellectual content of the work that most clearly distinguishes 'higher' policy-oriented work from 'lower' management work within and beyond the Senior Executive Service level. It is just this order of values that seemed to confer legitimacy and 'clout' on the central agency staff in the eyes of the very people in the market and program departments who were most likely to resent them. 'Intellectual' values clearly have a part in integrating the larger structure of formal and informal relationships between our different categories of departments.

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THE INSTRUMENTATION OF STATE POWER

But what part do they have in authority relationships within the top coordinating structure of the particular departments? Some answers are to be found in the responses we got to questions asked with the larger purpose of establishing how policy and management are vertically integrated through relationships between higher and lower SES officers. We already know that among senior professionals a strong commitment to both the work and colleagues is assumed and that power relations are suffused into norms of loyalty to colleagues, shared responsibility and mutual regard. In other words, among people in this milieu, consciously given assent is of considerable importance in securing compliance and thus integrating the structure. Accordingly it will be useful to probe more deeply for the 'causes' and reasons for compliance with a model (see Table 4.5) that differentiates several dimensions of power and gives a basis for the following question27 that was put to our respondents. - May we ask you to reflect for a moment on what factors are most effective in securing your agreement with the preferences of the senior officers at higher levels of the SES and/or with those secretaries to whom you are directly accountable. Please look at this list of factors28 and rank from one to four those that you think are most important in securing your agreement. You may include and rank another factor if you think we have missed something important. Agreement is secured: a. because of the latent or manifest threat of informal or formal sanctions b. because of prospective inducements and rewards both formal and informal c. because of my regard for the superior's authority to issue directives d. because of my regard for the superior's technical knowledge and expertise in the area concerned e. because I have special regard for the personal qualities of the senior officer concerned f. because the senior officer offers arguments that I personally find convincing and persuasive g. any other reason we have missed (please specify). (Q.60)

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Table 4*5 SES officers' reasons for compliance in relation to forms of power.29 FORMS OF POWER

FORMS OF AUTHORITY 2 3 4

1 5 6 COERCIVE INDUCED LEGITIMATE COMPETENT PERSONAL PERSUASION Limit of relative relative submission insufficiency insufficiency to power of sanction of rewards Motive for fear of compliance sanctions

Rank order

desire for rewards

limit of esteem

discredited jurisdiction

margin of knowledge

acceptance of source of directives

valuation of valuation knowledge of of personal power holder qualities of power'holder

unconvincing justification

power subject agrees in light of own values, deas, attitudes

%

%

%

%

%

First

-

-

37

11

7

35

Second

-

-

17

25

17

21

-

17

12

17

13

6

13

7

10

-

Third Fourth

-

Notes 1. N = 215. 2. Dashes signify values of <5%. 3. SES interview Question 60.

Even though top Canberra public servants no longer have security of tenure and are now subject to the very real sanctions of compulsory transfer and forced resignation if they do not measure up, negative sanctions are not really important motivating factors. And the same is true of inducements. Australia has not yet adopted the policy of rewarding certain categories of public servants with 'merit pay' but, in any case, utilitarian and psychological 'carrot and stick' theories of motivation have little relevance to an understanding of people whose work is so obviously socially constructed through symbolic interaction and negotiation. Nine in every ten of our respondents said that major disagreements and uncertainties were normally resolved through discussion. This means that at this level power and authority are expressed, created, renewed, negotiated and applied through face-toface interaction.30 Accordingly, and as one might expect, our respondents explained

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THE INSTRUMENTATION OF STATE POWER

their own assent in three different but complementary ways. In the first place we see that behind all the pleasant euphemisms about colleagueship, assent was still attributed to 'legitimate authority' and hence to their own acceptance of the power-holder's legitimate prerogative to issue directives and determine in other ways what shall be done (category 3). This is not surprising since public servants generally share fairly strict norms of legality and hierarchy.31 However, this form of assent cannot summon what Habermas among others would call 'action-motivating meanings'; nor does it preempt evaluative questions as to whether or not legitimately issued 'directives' are intellectually and morally deserving of the very sort of committed acceptance that will usually be needed to achieve their objectives and thus gather norm-setting force in the larger structure. The integrity of the top structure therefore depends on an assent to authority which is in turn conditional upon the power-subject's assenting evaluation of the power-holder's assertions, knowledge and expertise - or, more crudely, on what we might call 'intellectual' leadership (category 4)- In the same way the integrity of this top structure also depends on the equally 'intellectual' resource of assent secured by force of argument, inasmuch as the power-subject agrees in the light of his or her own intellectual and value presumptions (category 6). This is, of course, only a heuristic model but it does cast some light on what we shall for the moment call 'the rationalisation process'. When we add together categories 4 and 6 (authority relations based on both knowledge and persuasion), we have at least a more informed impression of how the constant emphasis that the respondents themselves gave to 'intellectual' strengths is transposed into 'norm-setting clout' in this top echelon of the structure - and, to allow a play on words, this means 'that part of the structure that structures the rest of the structure'. To make the picture clearer still, our senior executives were asked to look at these same vertical relationships from the 'top down' and to identify and weight what they believe to be the criteria that their seniors would use to assess their work. The following question was put to our the respondents: - We should like to have your perceptions of the criteria on which your senior second division and or first division heads assess and respond to the work of people at your level. Please look at the list, add an extra criterion if you would like, and rank them in the order in which you think they are applied. (Q-61) The results are in Table 4-6.

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Table 4*6 Perceived criteria of evaluation of SES officers.

Criteria First

1. Economy and efficiency 2. Style and presentation 3. Immediate political pay-off for government the day. 4. Intellectual cogency 5. Departmental, divisional, or sectional interests 6. Real benefit to the public 7. Consistency with past practice 8. Potential effectiveness 9. Other

Rank order Second Third

Fourth

12 6

17 18

17 17

12 8

7 29

8 17

8 11

8 9

5 6 20 -

9 8 14 8

6 10 17 -

9 7 6 7 -

Notes 1. N = 215; all entries are percentages; dashes indicate values of <5%. 2. The differences between column totals and 100 represent the number of incomplete or 'no answers' to this difficult question at the end of a long interview. 3. SES interview Question 61.

Our respondents are mostly young and energetic high-achievers who are both led (and assessed) by seniors of much the same kind. They were not much concerned with past practice and they obviously did not think that the particular interests of their divisions and departments were of too much importance either. In other words, they saw themselves principally as reformers, more often than not as crusading reformers, who were led by reformers. Intellectual cogency is what counted most - even more than effectiveness or efficiency. These top people in the policy-making echelon know they are 'intellectuals' who turn * ideas' into structures. Moreover, one should note that the people in the central agencies stress intellectual cogency even more strongly than do the market and program department staff.32 All the particular 'mini-missions' of departments and sections are part of a generic, system-wide, 'maxi-mission' which is to rationalise indeterminate situations and to 'reduce complexity'. What distinguishes the higher ranking SES officers from the lower? In some of the follow-up interviews, this question was put to a few of the more senior officers. The answer was nearly always the same. Those at level 1 and level 2 (the assistant secretary and sometimes the

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first assistant secretaries at the next level up) the respondents typically said were 'closer to the operational level and still sometimes caught up in the details of running programs'. By contrast, the 'Dep Sees1 and the more senior officers would 'take a broader view1 - this is one of those key phrases that contains a score of texts, subtexts, and 'discourses'. Sometimes this explanation would slide into talk about giving the minister 'the best possible advice'. This means advice that is finely tuned to the ebbs and flows of the prevailing political currents at the top end of other departments, in Cabinet, among key interest groups, in the media, and to the contingent hazards and opportunities that these hold for the minister, the department and the government. It is precisely this confluence of 'political' and 'intellectual' skills and functions that our respondents refer to when they talk about 'political nous'; they also use this criterion for identifying the 'intellectual' strengths that distinguish the 'real power-holders' in the SES. Indeed, these differences between officers at different levels are in fact so marked that one can usually guess the level of the officer concerned very quickly from the way they talk, without other clues or foreknowledge of their position. The senior officers are indeed prodigiously intelligent people who can 'think on their feet' and catch and define problems with extraordinary economy, speed and agility. The aspects to which they are most finely attuned seldom touch the concrete particulars of the problem, and still less its intellectual content in any bookish or academic sense: they go instead straight to the more abstract 'political' implications of its definition and contextualisation. At these higher levels especially, what counts most is a special kind of analytic skill that raises fluency in the 'applied politics of knowledge' to an extraordinary level of refinement. We have been explaining how this control room of the state works with the perceptions of those who operate it. Yet explanations that are 'adequate at the level of meaning' sometimes ask for explanations that are 'adequate at the level of cause'. Is there some way of supporting the interview data with independent evidence of the place that intellectuals have in this system? Part of the answer is already given in the age profiles of the Senior Executive Service. The most powerful of them, the staff of the central agencies, were the youngest and in this simple sense they were those with the shortest memory and the least experience of life beyond Canberra. Turn the coin over and we find that they were also the most highly qualified.

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Table 4.7 Qualifications and age ofSES officers.33

Proportion with higher degrees

Proportion with Median eco/bus degrees age

1. SES Respondents (N = 215) Central agencies Market departments Program/service departments

36 27 17

72 71 35

40 45 46

2. Senior Executive Service as a whole (approx. N = 1639)

14

25

47

Those who were under 40 years of age were more than twice as likely to hold higher degrees than the 'over-fifties'; moreover, the staff of the central agencies were more than twice as likely to hold higher degrees than the people in the program departments. Even the detail confirms that the distribution of power and 'political clout' matches the location of what some people might see as the state's 'reflective capacity'-34 The department at the top of the ministerial pecking order (the Department of the Prime Minister and Cabinet) had the highest proportion of 'higher' intellectuals with 46 per cent of its staff holding post-graduate qualifications, whereas the departments at the bottom of the second Hawke ministry (Veterans' Affairs and Aboriginal Affairs) had 8 per cent and 11 per cent of higher-degreed staff respectively. It is not hard to see how the other pieces of this picture come together. The largest single discipline-group of higher degree holders were the economists. This of course means that the norm-setting capacity of the economists is largely secured through a hierarchy of credentials in which those with the highest credentials, namely those in the top jobs in the top departments, can give 'leadership' and legitimacy to the promising apprentices and juniors whom they may choose to sponsor - we were frequently told that movement was slower without sponsors higher in the SES. These senior economists are also the gate-keepers and the recruitment pool for appointments to the top level of department secretary. One also finds, across the whole of the federal public service in the 35-64 age-range in 1987, that the male economists were more highly paid than other male graduates and that the gap widened at the top.35 In relation to the top SES economists, one respondent commented 'they all know each other: they are all members of the Canberra Economics Society'. Moreover this potential for socially cohesive organisation was greatly

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increased by two new factors in 1987 that have been mentioned earlier: first, Treasury's decision to choose its own economists on its own criteria and, second, the new reform provisions that give the corporate needs of the service primacy over what used to be the unilateral right of the individuals to shape their own careers in accordance only with their own wishes and abilities. Clearly the 'economic-managerialists' have a near monopoly over what can count as 'cross-contextual' knowledge and they are using it to define the state's intellectuals in their own image. That is clearly what has happened in a shift that has devalued the humanities and social science graduates as well as other public service professionals with degrees in medicine, education, the natural sciences, engineering and even public administration. For the economists, the SES hierarchy and their own 'academic' hierarchy mutually reinforce each other and these links are reinforced again by two different kinds of other relationships. In the first place the economists have close relations with economists in peak business groups, the private sector economists in the finance sector, and with the staff of the economic 'think-tanks' and the 'research' centres that have been set up by New Right private sector interest groups to feed ready made economic 'advice' into the top end of Canberra. The second set of relations appear when we asked our respondents to tell us 'what aspects of their training and experience have had the most lasting importance in shaping your approach to your work'.36 The economists were most likely to stress overseas experience. From successive Treasury reports and from other sources we find that these overseas assignments are typically made to bodies such as the International Monetary Fund, the Organisation for Economic Cooperation and Development, the World Bank, the General Agreement on Tariffs and Trade, and to economics departments of American universities. The Treasury's Annual Report for 1985-86 shows that in that year more than a quarter of the Treasury SES staff travelled to overseas conferences or organisations.37 The economists spread the international language of 'the market' and sell themselves as cosmopolitan intellectuals; in this way they socially define officers at the other end of the spectrum, with a social science degree in, say, Aboriginal Affairs as 'locals', as people who 'do not really do policy work' and so are not really 'intellectuals' at all. In short, we see that four factors (age, higher degrees, location, and an economics cum business-oriented training) converge in the social definition of the state's intellectuals and further, as we shall see, in the deployment of their norm-forming and structure-setting resources.

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RATIONALISATION AND LATERAL STRUCTURAL INTEGRATION Integration is vertically organised but it has a lateral dimension as well. For the moment it will be useful to put aside the spatial imagery of a pyramid (bureaucracies are habitually visualised as hierarchicallyorganised pyramids' with their ministers all too precariously impaled on the apex) in favour of the more accurate spatial imagery of a grid with a vertical and a horizontal axis. Indeed, at this top level of the bureaucracy, and taken on its own, the one-dimensional pyramid image of departments that are vertically organised in parallel and run by their ministers only from the top down, is completely inappropriate. The image is misleading for the obvious reason that so much of the policy making is, of necessity, moving upwards from the SES to the minister. As two respondents put it, 'much of what counts as policy work is really educating your minister', and, 'after all they [the ministers] come to the job with little experience and they usually don't stay long, so we have to educate them fast for them to succeed'. The pyramid image is also misleading for the more interesting reason that our top bureaucrats are constantly moving in a lateral force-field of various pressures that are coming at them 'sideways' from other departments and, in the case of the market and program departments, most especially from the central agencies. The elemental structural reality here is common to all nations and, in its simplest form, it can be summed up in two words - Treasuries and Budgets. As others have noted it is enormously difficult for any minister to change the premises of the budgetary framework within which all important matters of policy are cast.38 The budgetary framework does indeed, 'control the direction in which the government's attention moves'.39 In the present Australian context the situation is sharpened by two factors. In the first place, as we have noted, Treasury was split in two by Prime Minister Fraser in 197640 and the expenditure review function was vested in a separate Department of Finance. The two departments work extremely closely together under ministers who share the same economic rationalism - indeed, we have the Prime Minister's word that he is in, 'the extremely fortunate position where there is an extremely effective working relationship between the ministers concerned'.41 Although it is sometimes said that the earlier separation was aimed at reducing the power of Treasury, the more likely result is that, now, after a long period of adjustment and under the strong leadership of the Hawke government, both departments together probably have

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OF STATE POWER

much more power over the whole state structure than Treasury ever had in its own right. The second, and perhaps more important change is that the budget process has been prolonged, tightened and intense fied, to an extraordinary degree and to a point where it has become in effect a continuous year-round process. It is geared not only to an annual budget handed down by the Treasurer in August but also to the processes of an Expenditure Review Committee of Cabinet (the 'Razor Gangs') and to what have subsequently turned out to be almost regular mini-budgets in May Economic Statements. Fig* 4*3 Direction of rationalisation process.

Cabinet

Ministers

SES

Operating levels

LEFT Program and Service Departments

Market Departments

RIGHT Central Agencies

We know that the Treasury and Finance people are economic rationalists who put themselves on the right of the political spectrum and press for a more deregulated economy, privatisation, smaller government, and less welfare spending. So, with this two-dimensional structural force-field as a context, it is now more appropriate to depict integration metaphorically as a process of formal rationalisation

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which moves along a diagonal line from the top right-hand corner of our grid (from Treasury and Finance and a Right-dominated Cabinet) to the bottom left of the grid which is where we find those welfare state program departments that are also lowest in the ministerial pecking order, namely Aboriginal Affairs and Veterans* Affairs. This provides one way of reading the results of two questions we put to our respondents. They were asked: - First of all, and with respect to the consistency and coherence of policy over time..An the areas in which you have had some experience would you say that, over the last decade and a half, the development and management of policy has: a. become more ad hoc, more reactive, and less consistent, b. it has remained about the same, c. it has become more consistent, and less ad hoc and reactive. (Q. 49) - May we turn now to your assessment of the consistency and coherence of policy and management across different departments and sections of government. On the basis of your experience here would you say that: a. there is increasing inconsistency and contradiction, b. it's about the same as it always has been, c. there is increasing rationalisation, consistency and coherence across areas and sections of government action. (Q. 50) The results are shown in Figures 4.4 and 4.5. What we see is that only a tiny fraction of the central agency people said that there is less consistency. They answer principally to ministers who are in the dominant Right-wing faction of the Labor government and they belong to what are sometimes called its 'coordinating departments'. They do not run programs or deliver services in the usual sense at all. Rationalisation per se is their principal function and, as we see, they believe in what they do. A larger proportion of the people in the market-oriented departments made the negative judgment that there is less rather than more consistency. At the bottom end of our diagonal, for those lower' service departments in the bottom left of our grid, rationalisation is something that is most often done to you on criteria that are often seen as alien to the real interests of your clients, and so it is not surprising that they are the ones who most frequently said that there is less consistency. Indeed, only a third or less of them said, unequivocally, that there is more consistency across areas of policy and management and over time.

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Fig* 4*4 Consistency of development and management of policy over time: compared perceptions of SES in central agencies, market departments and program departments. less consistent

more consistent

Central Agencies

Market Program Departments Departments

Notes l . N = 215 2. Chi square %2 test p <0.05.

Fig* 4*5 Consistency of development and management of policy across departments and sections: compared perceptions of SES in central agencies, market departments and program departments. less consistent same more consistent

Central Agencies

Market Program Departments Departments

Notes l . N = 215 2. Chi square %2 test p <0.05.

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What are the dynamics of this rationalisation process? How do ideas achieve structure-forming and norm-setting 'clout' along this diagonal line? Some concrete material (based mainly on the example of the Department of Social Security) will help give the outlines of an answerIn the Department of Social Security all existing programs had to be reviewed in September 1985 in order for the department to present its initial submission of forward estimates for the years 1986-87 and 1987-88. In the following couple of months there was room for the various divisions and state offices to propose initiatives and off-setting savings and to move these up the line in an increasingly coherent form as Cabinet was deciding on the timetable and processes for the preparation of the 1986-87 budget. All this was done with continual informal consultations - 'upwards and sideways' - occasionally with officials in Treasury and, much more frequently, with the SES staff of Finance. The purpose was to make better informed guesses as to what funds might be available to Social Security within the narrow margin of movement that is not structurally 'locked-in' by irreducible existing commitments42 and, at the same time, to have some reckoning of what 'economic' contingencies might suddenly push all these 'guesstimates' and forecasts into a changed context that could, almost overnight, make them appear as the ridiculous fantasies of people who are completely 'unrealistic' and 'out of touch with the government's priorities'. In December and January, the forward estimates were finally prepared and submitted to the Department of Finance. At about the same time the Prime Minister pressured all the welfare ministers to cut their spending. The PM's hand was strengthened as Finance presented Cabinet with its 'hit list' of possible cuts to Social Security in a context that was then set by Treasury's submission of its estimates of national revenues. At every stage of this process, Social Security's top Senior Executive Service staff had to make sure that their minister was as well prepared as possible - there is the rub! - for whatever coup the central agency staff and their ministers might spring on him. As one Social Security official put it, 'you have to be constantly on your guard because they [the central agency staff] will try to run a paper down on you through their minister'. The Cabinet's Expenditure Review Committee then looked at the particulars that remained contested between Social Security and Finance. As it turned out, the Minister of Social Security then took charge of the whole process and got his staff together, in committee, to systematically prepare a new schedule for considerable additional savings that might in the worst case, as it seemed then, involve the abolition

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of entire programs. In the end Social Security was able to specify its own large cuts that were announced by the Treasurer in the 1987 mini-budget or 'May Economic Statement'. In the preparation of these papers, the Social Security staff had to stay in constant touch with their counterparts in Finance to ensure that the revised savings proposals were set within acceptable parameters that would not give Finance an opening to make unilateral cuts on its own criteria. Some of this consultation was done semi-formally, by SES staff, as the Minister pursued bilateral discussions with the Department of Finance who wanted among other things to make savings by greatly increasing the waiting period for unemployment benefits and by lowering the indexation thresholds for the age pension. However, while the Expenditure Review Committee continued its deliberations, from March through to May, the Finance officials were busy preparing new estimates of possible savings that would be submitted after the May Statement for further consideration first by the Expenditure Review Committee and also by Cabinet in the light of Treasury's revised estimates of revenue. In this short period there was a scramble to get priority initiatives into whatever crevices might open in the budget during June and July, before the deadline for its finalisation for the Treasurer's August budget speech. In this particular example there was a happy ending in that Social Security's new Family Assistance Scheme was, at the last moment, incorporated into the budget and so brought into being. We were told this would never have happened if an extremely able Minister for Social Security had not (initially against the misgivings of his staff) cooperated in the first round of cuts and made all the right moves with just the right information to assuage Finance and to head off attempts to kill the scheme in the early stages. What is to be learned from this example? There are five points. In the first place the Minister of Social Security was the only Leftfaction minister represented on the Right-dominated Cabinet Expenditure Review Committee. This of course gave his department a considerable advantage relative to the other, unrepresented, welfare departments led by the other Left ministers. Those other departments were constantly disadvantaged, as the Minister for Veterans' Affairs pointed out,43 by the secrecy of the ERC proceedings which meant they were faced with a need to respond to the Finance 'hit list' without prior warning and at a later stage after the hit list had firmed in the ERC's proceedings. Yet, second, this advantage would have been of little value were it not for the fact that over the past few years Social Security had developed a strong policy research team of sophisticated people who

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were able to deal with the econometrics and the calculations and projections of Finance and Treasury. Respondents (in another department) told us that one of the most senior people here had a PhD in economics, had recently spent a year or more in the Social Justice Research Project at the Australian National University, and had prior and recent experience of high-level policy research work under Hawke in PM&C. The Minister had also been able to strengthen the research arm of the department by setting up a Committee of Review (led by a leading independent academic) to legitimate the department's claims with 'hard* sociological and demographic research. Third, the 'anti-social* bias of Finance and Treasury is so deeply institutionalised that, as we were told, the part of the Department of Finance which reviews social expenditures was the section with the lowest status in the whole department and for this reason had difficulty attracting 'good staff. More importantly this shows, somewhat ironically, that the very narrowness of the econometricians in Treasury and Finance made them dependent on others, in this case on experts in Social Security, for 'hard' demographic and sociological research upon which to base their own economic modelling of factors such as age profiles of the population and changes in family structure. Social Security, we were told, is a 'budget-sensitive department' in the sense that macro-economic policy and budgetary planning are inextricably related, fundamentally and systematically, to such factors as shifts in the consumer price index and changes in the unemployment rate. Over the years this has created contacts and some mutual obligations between the Social Security's officials and those in Treasury and Finance. A measure of trust and reciprocity developed and this meant, as one Social Security man put it, that in return for the help we give them [Finance] they have to warn us what Walsh [the then Minister of Finance] is likely to pull on our minister. Then we can prepare him and that is everything. Fourth, it is clear that Social Security had enthusiastically cooperated in the Finance Department-led Financial Management Improvement Plan and with the system-wide move to program budgeting. As one senior person told me in the follow-up interviews, this 'completely restructured our approach to management'. He went on to say, 'we opened our doors to them [Finance] and they helped us do it'. This gave Finance what our respondent called 'more information control' but, on the other side of the ledger, it both legitimated a useful devolution of financial responsibility to the program managers and, more

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importantly, it pre-empted unexpected demands from Finance in the ERC for administrative cuts and savings to the Social Security budget. Fifth, we should be clear that this partial cooperation of Treasury and Finance with Social Security was driven by something more than accumulating familiarity and mutual trust among colleagues. As the chairman of all the Cabinet subcommittees, the Prime Minister was present during most of the extended and gruelling Expenditure Review Committee hearings that dragged on into the early hours of the morning (the workloads of Cabinet ministers are staggering). And we were told, 'he gets bloody annoyed if the figures don't agree'. The information that is used to back claims and counterclaims for what the ministers call 'disagreed bids', is mostly highly technical and complicated, but it must be formally reconcilable - it is part of the formal rules of Cabinet proceedings that this should be so.44 The formal rationality of this referential and fact-making process is the sine qua non for effective 'political' compromise among the ministers. Social Security was and probably remains the strongest of the program departments and, as we shall see in a moment, it came through 1986 and 1987 very well. At the other end of the spectrum, the then Minister of Education who (with great courage) 'stonewalled' the bids for cuts that were pressed by Finance in the Expenditure Review Committee, lost her portfolio soon after. More pertinently perhaps, and according to one central agency respondent, some of her officials were, 'not in any case adequate to the task of defending the department with speed, bastardry, clear priorities and hard numbers' - we may be forgiven for taking this as a euphemistic way of saying that the number of 'rationalist' econometricians was not sufficient to the task! Veterans' Affairs was caught by a surprise move hatched between Finance and Westpac (a major Australian bank) to sell-off and partially 'privatise' government-owned veterans' housing. This did not happen (not at this first attempt) but, as one official said, 'once something gets on the Finance hit list it keeps coming up and you can never get it off again'. The relative successes of Social Security point beyond the details of budgetary politics and the size of 'the cuts' to a related but larger stake. One respondent with many painful memories told us that over a period of ten years to the early 1980s, 'the Department of Health just about lost "policy control"' to the central agencies.45 This is just what every department seeks to avoid, yet this 'politics of rationalisation' that is going on all the time with the central agencies is driven, from the other side, by a constant desire to preserve or maximise the relative autonomy of the department concerned to cast its own policies in the light of what it sees as its own value priorities.

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In this respect we see that in relations between the central agencies and the market departments, the pressures often had a rather different focus. From the perspective of the central agencies, both the various industry-support schemes of the market-oriented departments (the arms and legs of a badly wounded interventionist, nation-building state) and the spending programs of the social service departments (the arms and legs of an expiring welfare state) are both equally seen as instruments of macro-economic policy. However, in the case of the market departments, the different character of their tasks and of their boundary relations with the private sector, account for several important differences. In contrast with the program and service departments, the market departments do not run programs and deliver services to individual clients, and so the various industry assistance, trade and marketing support schemes have fundamentally different characteristics. The market-oriented departments have a different institutional structure in that most of the schemes, plans, and industry support programs are normally vested in some council, board, commission or similar body which is formally constituted with its own legal jurisdiction. And, perhaps more importantly still, these bodies normally have a representative membership of leading industry groups and usually some trade union membership as well. In short, they are usually organised in part around statutory organisations and sometimes even in the form of quasi-autonomous non-government organisations (Quangos). These bodies are sometimes very powerful and account for large slices of the federal government's budget outlays - the Industries Assistance Commission is a good example. For this reason they are 'budget-sensitive' and 'market-sensitive' to the point where every mooted shift in policy by the government is constantly monitored, reported, and contested by a broad range of market-watchers in the financial and business press and by peak business organisations, lobbyists and pressure groups. Consequently, the government does not have the same flexibility in manipulating these market and industry schemes as objects of macro-economic policy as it does with schemes at the opposite end of the spectrum, for example youth-support programs or the recent Home and Community Care services for the elderly. Programs of this latter kind are staffed at the grassroots level by legions of dedicated, underpaid and often part-time or semi-volunteer female employees who for the most part work in untenured jobs, are not unionised, and have no strong political organisation at the federal level.46 With these programs the budget spending taps can be turned on or off, half a turn here or a full-turn there, for reasons that are extrinsic to the

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objectives of the program themselves, without notice and at sixmonthly intervals - according to whether the government wants to stimulate or dampen 'the economy1. One cannot treat industry representatives like that. And, moreover, industry and market schemes have to be rationalised with reasons that are intrinsic to the schemes and programs. That is why the 'politics of rationalisation' are centred much more on the legitimation of claims and counterclaims of the economists - usually micro versus macro - at the boundary between the state and the private sector and, more precisely, in the various councils, boards, and commissions that run these market and industry schemes. Some glimpses into the case material must suffice to show how this was reflected and refracted in the relations between our top bureaucrats in the market-oriented departments and their counterparts in the central agencies. To begin with, it must be remembered that these industry and market councils and boards have institutional ties with peak business organisations and an interlinking network of Right-wing 'thinktanks'. Significantly the Left-wing and union-based research centres are very small and more or less semi-voluntary organisations that run on shoe-string budgets, sometimes with scarcely any relative independence from their sponsorship.47 Together with the ubiquitous pressure of the business and financial press, this is enough to ensure in advance that there will be a structured inequality in interest group representation48 in Canberra and hence a ready-made 'mobilisation of bias' in the context within which any particular scheme or initiative is raised. For example, in 1987 a large and well-funded National Priorities Project sponsored by some 25 business organisations produced a minutely researched and impeccably biased report49 that, predictably enough, laid the blame for the paucity of investment in the Australian industrial sector on what were alleged to be Australia's excessive corporate taxation rates. (The report sedulously ignored all the comparative evidence and did not say that Australia is a low-tax, small public sector, low welfare-spending nation; or that Sweden, a directly comparable country of similar size, has higher taxes, higher welfare spending and much higher levels of investment). However, as one of our respondents explained to us, at about the same time a senior economic adviser to the Nissan corporation, gave his boss on the Trade Development Council a submission saying that investment was low because of excessive taxation rates...That would have gone to the Minister as the last word on the subject if X [a senior bureaucrat] had not intercepted it. The appearance of the submission at around the time the Report was

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ringing in the government's ear was very probably a coincidence in both senses of the word: certainly there was no suggestion of any direct 'collusion'. The point here is only that the relations between the private sector and the state's market-oriented departments are enmeshed at the boundary in a larger and expertly 'media-mediated' structure of well organised, selective, business-sponsored research that is written and canvassed with the explicit aim of writing budgetary policy for the government which is in the interest of business. Fortunately, as we shall see later, business is often quite strongly divided. Our top bureaucrats understand this situation very well. Yet sometimes they try to turn divisions within the business community to their advantage and, to move, for example, against the prevailing anti-protectionist tide of the economic rationalists. Typically they do this by floating a proposal for a committee to gather submissions and evidence on the feasibility of supporting some section of industry that may be judged especially deserving of assistance. However every interdepartmental committee must have Cabinet approval and, for this reason, attracts some assessment or comment from the central agency staff. We were told that the central agencies always try to block interdepartmental committees and, further, that only a strong minister with strong external support and the PM's backing can launch any sort of enquiry that has the potential to generate 'research leverage' on the government. We note in passing that in 1986 and 1987 the central agencies and their ministers, especially the Treasurer, were successful in again blocking moves from the Left and Centre of the party for the establishment of a long mooted study of wealth in Australia.50 The Trade Development Council is typical of these industry and market councils in that it has a tripartite membership comprising industry representatives, union representatives, and senior government officials. If this or any similar body wants a $50m subsidy for an industry with export or import-replacement potential, it will probably attract a good bit of attention in the business press (some of it officially based, and some of it driven by strategically calculated leaks and counterleaks of information) before it is eventually put forward by the relevant council or authority as a recommendation to the minister. It is here that the relations between the market-oriented department staff and the central agency officers are important. At that stage the minister asks his senior staff for their advice and this is where our senior public servants take up their cudgels for or against the proposal. As one respondent from one of the market departments put it, with all the Australian accents in the right place,

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'If the industry representatives have maimed the proposal we can usually kill it when it comes back to us through the minister and the buggers know it.' Clearly, a very great deal depends on the perspective that the Senior Executive Service officers on the secretariat, and in the department, bring to this task. And here there are many ifs. If our senior officials are intellectually sympathetic to the 'mission' of the nation-building state; if this is vigorously backed with some first-hand contextual knowledge and experience of the particular opportunities of the industry in question; and, further, if these officials are imbued with a respect for a consultative and decision-making process that aims for a consensus between industry and union representatives, then some kind of favourable outcome is more likely. And if the proposal does 'get up' it then has to contend again with the central agencies and their 'coordination comments' on its way to the Cabinet. At this point we were told by one respondent, You have to muster everything you've got. If your department has some ex-Treasury or Finance people you use them for all you're worth. And if you know any of them [central agency officials] you ring them up...and then you have to use every means to sell it to them in their own terms. We use moral suasion, we blackmail them [speaking metaphorically] and we bribe them - for example, when they have two of our submission at the one time you trade a good report on one for a bad one on the other. But from our point of view the best thing you can ever get from them is a 'no comment'. But what sort of perspectives are our market department staff most likely to apply to all these submissions and findings that are coming from their various councils, boards, and commissions? The earlier data gives a clear answer. The officers have been intellectually colonised by the economic rationalists and, like colonised people everywhere, they have all the same feelings of envy, resentment and exaggerated respect for the 'intellectual' superiority of their betters. There are some differences between them and the central agency staff: as we have seen, one such difference is that these market department people were even more anti-union than the central agency people. They were even more likely to blame the failures of Australian industry on the 'failing work-ethic' of the workers and the 'selfishness' of their union leaders. But what of the minority of them who may have thought differently? In a new climate of forced staff mobility and constant restructuring, if our still young market and program department officers had any interest in their own careers and, to boot, even a modicum of the 'political nous' that they so readily

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recognised as a principal characteristic of the central agency staff, then they are bound to know that it is better to lean towards the central agency rationalists in making recommendations.

FROM THE INVISIBLE TO THE VISIBLE HAND: THE FORMAL RESTRUCTURING OF BASTILLE DAY 1987 Two hundred years after the first major revolution in the modern history of the northern hemisphere, Australia had a minor revolution. On 14 July 1987, Canberra's gates were burst open from the inside and the rightists rushed out and embraced at least one column of the encircling 'nobles du Prive\ Prime Minister Hawke's Bastille Day announcement of sweeping structural changes to the administration of government came only three days after his Australian Labor Party was re-elected to govern for a third term.51 The radical new structure that was announced without warning (and quite without the foreknowledge of even senior backbenchers) evoked from the press such epithets as 'historic', 'revolutionary' and the like. The restructuring reduced the number of departments from 27 (in Hawke's preceding second government) to 13 super-departments. In some of these new ministries, it created a two-tiered hierarchy of senior cabinet ministers with enlarged portfolios and responsibilities over junior assisting ministers and, also in these cases, of a secretary over one or more associate secretaries (the former secretaries of the departments that had been swallowed in the amalgamations). With the benefit of hindsight these changes were in so many respects the almost predictable structural concretisation of what our Senior Executive Service officers said about their own dispositions and actions. The restructuring was presented and justified by the Prime Minister in strongly managerialist terms that stressed the opportunities that the reforms would provide 'for improved budgetary and corporate management processes' and the like.52 Much more importantly they expanded the power and responsibilities of each of the central agencies - of PM&C, Treasury and Finance - while at the same time leaving them more or less undisturbed by the impact of the reorganisations. In other words the brunt of the rationalisations fell most heavily on the spending departments and especially on the more vulnerable and politically weaker program and service departments - those in the bottom left corner of our schema (Figure 4 3 above). As our respondents so frequently told us, in these departments a life that was 'never meant to be easy'53 became hellish.54 In

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this context one is reminded of the remarks of Sir Charles Clarke who said in 1972 that it takes about two years to get a merged department into working shape, and probably twice that long to begin to secure the real benefits the merger is designed to achieve.55 Is it too cynical to suppose that some very able people have seen that the best way of weakening the 'spending' departments, across the board, and in the most 'efficient and effective' manner possible, is to turn them upside-down and inside-out and then make them responsible for sorting out the tangle with fewer resources than they had before? Someone surely must have overheard one of our respondents from a service department who said, referring to the central agencies nearly a year before these changes occurred, 'All that the buggers have to do is to keep moving the hurdles around'. Three rather more specific illustrations will demonstrate the broader significance of these changes. First, among the many structural changes to the program and service departments, perhaps the most revealing were those that were wrought upon what was the Department of Education before the amalgamations - the site of earlier reforms in the 1970s that former Labor Prime Minister Gough Whitlam singled out as the 'most enduring single achievement of his government'. 56 The most obvious change was that the amalgamation took the education portfolio from Senator Susan Ryan, a member of the 'Left' faction of the Party, and put it into a new super-department of Employment, Education and Training under the then minister John Dawkins (an economics graduate), together with all 'responsibility for labour market programs'. In this regard it is perhaps equally significant that the other half, the employment and training function, was taken from Minister Ralph Willis, who is a neo-Keynesian. Susan Ryan and her former departmental secretary, Helen Williams, were both educated in the humanities and both graduated with Master of Arts degrees: the new super-department was headed by a new minister and a new secretary who both have economics degrees. This shift symbolically mirrors the essence of the changes in the intellectual context of what was to emerge as their education policy. The earlier triumphant reforms of Whitlam's Australian Schools Commission of 1973-75 were cast in a framework that, despite its shortcomings, was largely sociological; the reforms were targeted principally at social inequalities and the new policy theorised classroom education explicitly as a social process,57 and the schools as aspects of 'complex social systems'. By contrast the culminating point and the

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referents for the new framework in 1987, were made very clear by the Prime Minister in the following terms: In the period ahead of us...it will be important to address ourselves as effectively as we can to a number of micro-economic issues and in a sense there is none more important than the whole area of education and training and it is my judgment that the most logical combination of function is to have education, training and employment together...Therefore the shifting of employment and training to be associated with education is a positive decision based upon those considerations. It will be a total misrepresentation for anyone to believe or to write that that decision has been made on any grounds other than that. We must as a nation ensure that our whole approach to education, training and employment is done as effectively as it possibly can be and I believe that that structure will maximise that opportunity.58 Clearly the whole education function had been colonised by the central agency economic rationalists and their ministers. The appearance of Minister Dawkin's Green Paper59 in late 1987 brought a mounting pressure60 for a Thatcher-like commodification of the tertiary education system. And, in May 1988, it led (in direct contradiction of the Australian Labor Party's official policy) to firm proposals for a 'user-pays' scheme that would tax students for their own education from the time their income rose above average weekly earnings. The broader meaning of the reforms and their likely significance for this and all other education policy initiatives is to be seen also in the abolition of the statutory authorities - the Schools Commission and the Tertiary Education Commission - that formerly coordinated and defined the federal government's role in the secondary and tertiary sectors respectively. Through the membership of these statutory bodies Canberra federal governments, for two decades, had drawn on the best advice of a cross-section of experts and organisations with interests in education; with these resources, they had augmented the capacity of their own staff to make informed decisions about education policy. The consequence of the reorganisation was, as a long-since retired chairman of one of these commissions said without rancour, 'the whole system has lost its corporate memory'. Another person inside the system looking up at the new young overlords commented, 'they wouldn't have the faintest clue about anything relating to education'. What 'they' did, predictably, was to retreat a little, draw in a few of the old hands so that the glaring discontinuities would not be so

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alarmingly visible, and then hire outside consultants who spoke the same abstracted 'economese' language in which the Dawkins Green Paper was written.61 If that Green Paper is any guide, the intellectual' and structural dimensions of the 'revolution' will come together to seal off any possibility of learning anything from past experience in an area that is, among the program and service departments, very probably the least amenable to a socially decontextualised economic calculus. But these references to education were just an example of what happened at what the cliche properly identifies as 'the cutting edge' of the reforms. At the other end of the spectrum, and for reasons that are clear from what has been said already, Social Security was left alone, whereas Community Services, Aboriginal Affairs and Veterans' Affairs were amalgamated with Health. The second illustration of Bastille Day reforms shows that they were certainly not without consequences for the market departments. Since Primary Industry was run on rationalist economic principles by a strong, highly competent, Right-faction minister, it was allowed to acquire Resources and Energy. And here one is reminded that one of our respondents said a year before that, Treasury has few difficulties in relating to Primary Industry because agricultural markets behave more like the perfect textbook model markets than others do'. Trade was perhaps sensibly amalgamated into Foreign Affairs so that trade policy would be more directly related to Australia's international relations. However the new statutory body Austrade was given to the new super-department of Industry, Technology and Commerce along with the former Department of Science - because Australia's research and development was judged to be too remote from industry needs. But this time the real 'cutting edge' is to be found in the dispute over the shift of a key body, the Industries Assistance Commission, from the portfolio of Centre Left Minister John Button's Department of Industry, Technology and Commerce into the clutches of the Treasury. The outlines of the public dispute that went on for many months after Bastille Day 1987 were already recognisable from what our respondents told us a year before. A financial journalist correctly reported the Treasury side of the argument: The Treasury believes that despite all its new jargon and new appointees DITAC is still inclined to featherbed its 'client' industries...On the Treasury side it was seen as a rescue job. The hardline economic rationalists at Treasury are keen to save their allies in the IAC from a department which had made it clear it did not appreciate the IAC's 'blunt instrument approach to cutting protection'.62

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On the other side Senator Button and his secretary Dr Charles sought to muster support for the retention of the IAC. They pointed to their department's vigorous program of weaning sluggish industries from unnecessary protection. They emphasised the many successes of their department's interventionist policy of selectively applying to each industry according to its merits and potential, a 'carrot and stick' approach (tariff protection, and subsidies or other assistance). The public statements pointed concretely, among the many successes, to the restructuring and improved competitiveness of heavy engineering, steel manufacturing and, among others, the automotive industry - in respect of which one of our respondent had told us, 'we got the car manufacturers and the unions talking to each other' and then added by inference that Treasury policies would have... 'closed it down and created considerable unemployment'. Dr Charles defended his department and his minister in terms that were reported in late September 1987 as follows: Dr Charles, head of the newly-expanded Department of Industry, Technology and Commerce, said yesterday that many critics of his department had ignored the huge changes it had undergone under Senator Button's reign, with the influx of highly-trained 'dry' economists'63 Senator Button had said on the same day that the most recent report of the Organisation for Economic Cooperation and Development (OECD) had been damaging in one-sidedly stressing the need to reduce tariff protection to Australian industries. He contrasted that report with a favourable OECD assessment of the Dutch government's interventionist industry restructuring policy that was, Senator Button said, more or less identical to what Australia was doing. These OECD reports are enormously influential in shaping the financial sector's responses to the federal government's policies and, consequently, in triggering shifts in the (floating) exchange rate and in the domestic interest rates (set by a financial sector that the Hawke government deregulated soon after coming to power). These movements in the exchange rate are treated by the media as holy writ and as the daily measure of the government's competence. The OECD statistics are supplied by Treasury which is in daily contact with Australia's financial leaders both directly and indirectly through the Canberra peak-business organisations64 and through the work of a whole 'army'65 of financial journalists who were former Treasury economists. (Here one notes, incidentally, that ex-Treasury economists have gone out to take senior jobs in the top financial houses;66 that the immediate former Secretary of the Treasury set the

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Opposition's taxation policies from his position as shadow Minister of Finance for a couple of years; and that an ex-Treasury official defected for a while (until 1989) to the Liberal Party and a niche as a highlypaid tutor to the then shadow Treasurer.67) In short, the example, points again to the way that political outcomes, and structural changes, turn on 'information controP. More sharply still it points to the triumph of an abstract technology that is purely formal and based, for example, on extrapolations from the Treasury and IAC's 'Orani' computer-simulated model of the Australian economy. 68 It also points, through this formal rationality, to the abstracted simplicities of what Senator Button calls the Treasury's level playing-field policy' of across-the-board tariff reduction, and to the conquest of that formal rationality over a differently theorised practical experience - one that is stored in what would quickly be the wasting 'corporate memory' of key market departments. Much later, in June 1990, the Prime Minister threatened to sack DITAC's courageous Secretary for a gentle public suggestion that high interest rate monetary policies were hurting industry investment. The contest that seemed to have been temporarily resolved with a compromise that favoured the Treasury points us back to the politics of rationalisation. For a third handle on the Bastille Day restructuring, one should look to the central agencies, to the Department of the Prime Minister and Cabinet, and more specifically within that portfolio to perhaps the most venerable and sacrosanct of all the federal government's statutory authorities - the Public Service Board. It was abolished. Like similar bodies in other countries, the Public Service Board was the symbolic and structural embodiment of the very notion of public administration and of a career service based on the 'merit principle'. (Unfortunately it was also hidebound and friendless, and its powers were widely resented by the ministers and secretaries of other departments). The Public Service Board was originally established every aspect of the Board seemed very 'established' - by the Public Service Act of 1922, with a statutorily guaranteed independence from vested interests, so that it could better discharge its function of regulating staffing establishment levels, promotion, and working conditions, and thus protect the impartiality of Australia's federal public administration as a whole. Under Dr Wilenski's chairmanship from 1984, some of these functions were already being decentralised but the Board took a prominent role in further promoting several mainly internal public service reforms, including the provisions for industrial democracy, Equality of Employment Opportunity and the Freedom of Information.

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With the abolition of the Board on Bastille Day, all but 120 of its 662 staff positions were removed and dispersed to Finance (which had already captured most of the Board's salary-setting powers in the first wave of 1984 reforms); to Employment and Industrial Relations; and to PM&C itself. The remaining 120 positions were vested in the suecessor body, the new Public Service Commission, that was charged with the residual functions, namely, of the Senior Executive Staffing Unit, the policy aspects of recruitment, promotion, dismissal, mobility and retirement, and a training capacity within the Commission.69 This reduction of real power over these functions to a merely residual, and one might even say, token or cosmetic responsibility for the 'policy aspects' has left the venerable tiger with only bleeding gums and with a clear signal that if it should show too many more signs of life, it would have its 120 claws 'rationalised' away just as smartly. Once again the illustration points beyond the unimportant details to the shifts in the normative and intellectual context in which changes like this are legitimated. This time the review of the very body that was supposed to guard the impartiality of the public sector was vested by the Prime Minister and his staff in an Efficiency Scrutiny Unit, set up for that purpose and headed by a leading company director and financial consultant (of Lloyds International and, subsequently, of the huge CSR corporation).70 But it is the norms and the context that matter, and here we see that the Report of the Efficiency Scrutiny Unit heads its general objectives with a preamble that said, among other things: The unit advised that reducing and removing unnecessary controls and intervention would generally enhance the competitiveness of the economy. It recommended that this problem needed to be addressed in a fundamental way after the election and that the public sector, as one of the major areas of the economy which was generally sheltered from external pressures, must play its part in the adjustment process.71 The report then goes on to explain that both its guiding principles and 'essential principles' are that: the concepts and principles employed by successful private sector companies in becoming more competitive by becoming leaner, reducing excessive layers of management and decentralising decision making should be applied to the public sector.72 The ensuing Recommendations of the Report began, concisely, with

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a promise that those recommendations would be consistent with 'the best private sector practice'.73 The drift to the right for which the Efficiency Scrutiny Unit was, ironically, an early weathervane, quickly moved to a point were it was roundly criticised for its many inadequacies and even as a 'shabby exercise' in a subsequent Report on its operations delivered in April 1989 by the Senate Standing Committee on Finance and Public Administration.74

CONCLUSION What, at the end of the day, was the real 'political' significance of this influx of business-oriented culture into a reformed and more manage rialist Senior Executive Service? Over a third of our top bureaucrats initially thought, as the first wave of reforms were working through the system, that it was all 'mainly cosmetic'. Other observers of these changes asked, both then and later, whether the reforms were an extremely clever tokenism 75 that would coopt or assuage the most powerful players in the private sector (the finance 'fraction' in the 'big end of town'76) into some measure of acceptance of the Hawke Labor government's already very conservative policies? The question turns, in part, on other considerations that will be taken up later, and yet we already have a partial answer. Those SES officers who thought that the changes were mainly cosmetic in 1985 were no longer of that view in the wake of Bastille Day 1987. As the language of public administration changed, there followed (as we have seen) some fundamental shifts in the normative and structural foundations of public administration. The very meaning of a career service was overturned or, at the very least, heavily eroded, by new provisions that allowed public servants, from the very top level of department secretary77 down, to be routinely transferred and, in some cases, assigned to 'the unattached list' and subsequently declared redundant and retrenched. The extrinsic criteria for such decisions were set over the heads of the individual officer according to 'corporate priorities' and rearrangements of the machinery of government. These changes gave the lie to the older norms of public administration that were once defined in terms of an impartiality of decision and judgment and constitutionally protected through the agency of the Public Service Board and other bodies78 that have been disempowered and eclipsed. We have not argued that the process of rationalisation must necessarily set 'efficiency and effectiveness' over social justice or that it must function as a means of killing it off. This is a vexed question to which we must return later. But, necessary or not, that clearly is what has been happening. Formal rationality is by no means a 'value-free'

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and innocent means of creating greater coherence, consistency, accountability and commensurability of reference. In the central agencies or coordinating departments this process of rationalisation has been invested with a transcending and universalistic moral significance that accusingly defines those against whom it is applied as having more particular, 'narrower', and more pointedly still, 'vested' interests. Those who drive this process of rationalisation believe in it and deploy it very powerfully as an evaluative framework that throws a difficult onus of justification on anyone who seeks to oppose them with defences premised on social needs or on values such as equity, compassion, common sense, wisdom, courage, and integrity.79 And further the 'efficiency and effectiveness' of the process draws a great deal of added norm-setting force from the fact that there were so many believers among those to whom it was applied, principally among the SES staff of the program and service departments. Nor is this any coincidence. As we have seen these departments have been colonised by the economists who hold the high-ground in the central agencies and who have monopolistically defined what counts as crosscontextual or 'intellectual' knowledge within the narrow compass of their economic rationalism. This is by no means the expression of some ephemeral intellectual fashion that is here today and gone tomorrow. The narrowness of the state's intellectuals and the 'organised forgetting' that we saw in the selective loss of the state's 'corporate memory' have clear structural correlates that are to be found in the social organisation of economics and business-oriented expertise. Age-profiles, post-graduate research training, selective access to outside experience, and, most especially, the results of mobility and promotion, have all combined to enhance and secure the norm-setting strength of the economic rationalist reforms. The ministers of these three Hawke Labor governments have shown themselves to be tremendously competent, disciplined, and energetic managers of their departments and their work is strongly coordinated through a Cabinet that also does its work with conspicuous 'efficiency and effectiveness'. This does not mean that there have been no tensions and conflicts among the three semi-official factions of the Labor Party or, for that matter, between the parliamentary wing of the Party and the Caucus: there has been constant and continuing conflict and tension. What we see manifest at every point in our study of the top bureaucracy was not the absence of conflict among ministers, but rather the reflections and refractions, within the state apparatus, of compromise forced by strong Cabinet and budgetary coordination. This force has come mainly from the Right faction (the

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surrogate of the new minimalist state) upon the numerically weaker Centre Left and Left factions (the surrogates, respectively, of the nation-building interventionist state and of the social democratic welfare state). The 1987 Bastille Day reforms were simply the most outwardly visible results of tensions that were manifest in relations between the central agencies and the market and program departments- The dominance of the Right faction was both reflected and driven, within the bureaucracy, by the central agencies who are, as we have seen, the perfect servants of the Right faction since their own political preferences (for a smaller, 'leaner', business-oriented, privatised, and a more 'anti-social' state) lean so strongly in that direction. And this is full of consequences for the Centre Left and Left ministers and their respective departments who must for the most part struggle to maintain 'policy control' over their own departments from a position of relative inferiority. Their SES staff have been partly colonised by the central agencies. With varying degrees of success they have been forced into a defensive position of protecting the integrity of their tasks and functions with legitimating strategies that rely, internally, on economic cum managerialist calculations which are often at odds with the real interests of the clients and constituencies whom they are supposed to serve. Externally, they must rely on whatever added legitimation they can muster from outside interest groups and other sources. However, as we shall see in the next chapters, these legitimations are for a variety of reasons less secure than those that are assembled against them.

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PART TWO

STATE & SOCIETY: REFLECTIONS, REFRACTIONS, REDUCTIONS

CHAPTER 5

'RATIONALISATION' & MODERNITY WHAT HAS HAPPENED TO THE STATE'S DELIBERATIVE CAPACITY?

From the mere fact that system integration and social integration become largely decoupled, we cannot yet infer linear dependencies in one or the other direction. Both are conceivable... In one case they would function as the institutional framework that subordinated system maintenance to the normative restrictions of the lifeworld, in the other case as the basis that subordinated the lifeworld to the systemic constraints of material reproduction.1

T

he larger purpose of this study was always to look at our higher public servants to understand more clearly their part in the relation between state and society. In this respect the body of information presented in the preceding chapters resembles a collection of still photographs of social phenomena that are moving and so 'in process'. They ask for some kind of 'reconstruction' of a process that is manifest in the elemental fact that the age, and thus also the historical experience and professional formation, of our respondents are so closely related to their location and their 'life chances' in the Canberra state apparatus. To this end, and with an intention that is more sociological than historical, we look back in the first section of this chapter to an earlier period of 'reform' that began with the Whitlam government and ended with the Report of the Royal Commission into the Australian Public Service (RCAGA) in 1976.2 We look at the operating culture of higher public administration in the Whitlam period only to grasp some points of orientation and some coordinates that can help to establish the trend line of the changes that pass through our case material of the late 1980s and which point towards the destiny of the nation in the decades ahead. In the second section we look at the evolution and form of the new economic rationalism to see how it is

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socially constructed and how it 'works' as the medium for the reorganisation of the state's deliberative capacity. With a rather more specific focus, the third section looks at some of the reorienting moral and evaluative norms that have come with the new reforms. In a similar fashion the fourth section examines some of the 'political' aspects of the reforms as they affect the norms and culture of an apolitical 'career service' that is suddenly charged with a demand for greater political responsiveness. The final section examines the context that must unavoidably inform any evaluation of these reforms and of the intellectual or deliberative capacity of our state apparatus. We consider whether the reforms should be judged as a response to a 'crisis of the state' or of society per se, and from this perspective we ask whether the reforms have made our state apparatus more or less 'intelligent'.

CANBERRA IN THE WHITLAM YEARS: THE EARLIER NORMATIVE CONTEXT OF REFORM Although we have some fine studies of various aspects of the Australian Public Service in the early post-war years3 there is, sadly, nothing that approximates even a piecemeal history of its development to the present. Nor do we have any systematic comparative studies that might enable us to see how Australian senior bureaucrats compare with their counterparts in other nations4 And so all that can be offered here are some bald generalisations and a 'quick fix' on the very different and contrasting characteristics of an earlier period of intense activity and change in the Canberra public service - from the election of the short-lived Whitlam Labor government in December 1972 to the constitutional crisis and 'the coup' that brought it down in November 1975. In the very uneven and perhaps somewhat confused reforms of the Whitlam era one finds, as we saw, an image of the senior bureaucrat that accords fairly well with what has become the standard view of senior public servants and of their relationship with ministers, parliaments, and the legislature in that period in Australia and in other western democracies. The landmark Aberbach international studies of senior bureaucrats and politicians in seven western democracies found that, across all the national differences, the bureaucrats were on the whole 'committed centrists'.5 In the Australian context this is a view that draws some further support from what is known about the tiny but very influential elite of top bureaucrats inherited from Ben Chifley's Department of Post-War Reconstruction by Liberal Prime Minister Menzies, and later Liberal governments. They stood, in the main, to the left of Menzies in his long 17 years of government from

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1949 to 1966.6 The more distinguished among them were still very influential in the Whitlam period and beyond. Although the Canberra bureaucracy of the Whitlam period was so new by comparison with those studied by Aberbach and his colleagues, the image of 'committed centrist' does seem (even on Aberbach's rather conventional and restrictive definition of political ideology7) to accord fairly well with the rhetoric and with the profile of the more visibly reformist bureaucrats of the early 1970s. As far as we can judge, those who had come from comparatively humble social origins brought with them a certain empathy for the expectations of ordinary people (for what Russell Ward called 'the Australian dream'8 and, above all, for redistributive justice and a 'fair go'). The majority who came (as did the vast majority of Aberbach's seven nation sample population) from upper middle-class backgrounds seem to have been similarly imbued, however weakly, with some Australian strain of 'noblesse oblige'. Even those who were closer to Menzies would plausibly fit Heclo's profile9 of an earlier generation of generously reformist British and Swedish bureaucrats and perhaps also Rohr's description of American federal career service senior public servants who: through their discretionary power... can at times soften the harshness of a social order based on self-interest and thereby provide a healing function for the moral deficiencies in the public order.10 These few pages profile the culture of this earlier generation of bureaucrats in the Whitlam years with some rough outlines and images that will have to suffice as the points of orientation for an enquiry that is, in any case, more sociological than historical. What we want from this profile is some vicarious sense of the cultural and normative field of administrative politics in this earlier and contrasting period of reform. Stated in another way, the purpose is to describe some of the contours of a discourse which very unevenly and incompletely shaped the actions and professional character of this earlier generation of bureaucrats. INTELLECTUALISM The Report of the Coombs Royal Commission into the Australian Public Service talks of the 'complexity'11 of the state's functions in defining the problems to which its own enquiries are addressed. The terms of this discussion have an unmistakable affinity with assessments of the purportedly common problems in a rather alarmist report to an

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international Trilateral Commission on key questions concerning the 'Governability of Modern Democracies'.12 Crozier and his co-authors found that, in all the trilateral areas (of Western Europe, North America and Japan), national government and state bureaucracy were faced with changing environments which presented not simple but complex problems that seemed to exceed the problem-solving resources of the planners, the policy makers, the service-deliverers and, indeed, of the system as such. In the Australian situation at about this same time, a somewhat similar perception produced a different and still generous and optimistic response inasmuch as the voluminous Coombs report of over 300 recommendations aimed not at closing off the system, but rather at increasing its intellectual and organisational capacity vis a vis its environment. Indeed, Prime Minister Whitlam, a parliamentarianist, a constitutionalist, and more importantly, a rationalist with much admiration for the public service,13 said with pride that, 'my government appointed a very great many inquiries' and, further, that in so far as 'most [of their] reports are published and acted upon, not shelved and forgotten, a very real contribution is made to public administration and to the development of policies acceptable to the community'.14 This is a discourse that defines senior public servants very much as intellectuals. In so doing it marks them off from the older generation of 'gifted clerks' and old 'redoubtables' who rose to high office on their reputations as tough and wily 'fixers' before university degrees became a de facto prerequisite for promotion into the senior ranks. Moreover, despite the many complaints of Labor politicians about 'bureaucratic obstruction' (and notwithstanding the climate of cultural radicalism of the Whitlam reforms), there was still a fairly untroubled sense of working accommodation with the more dynamic and intellectually expansive of the 'small 1' liberal bureaucrats who were, it seems, the only gently creative force in what came to be known as the 'welfare liberalism' of the otherwise stagnant 17 years of Menzies governments. Their valued and very 'modernist' characteristic is a certain restless intellectual commitment, a will not to be bound by old structures and constraining traditions, and a determination instead to put emancipated minds and 'generalist' analytical skills to the task of clearing the way for progressive reforms. Clearly this is not a discourse that favours the technicians or what others have dubbed a 'new technical intelligentsia'.15 Indeed, the anti-technocratic cast of Whitlam's reforms and of the Coombs Royal Commission is evident in their attempts to reduce the distance between line managers and policy staff. In this respect it is worth noting, first, that the Royal Commission was chaired by H.C. 'Nugget'

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Coombs,16 an economist, a former Governor of the Reserve Bank, and perhaps Australia's most highly respected post-war liberal (social democrat) reformer. And it is significant, second, that this very report should so eloquently follow its chastening criticisms of the Treasury's doctrinal attitudes, isolation and insensitivity to the priorities of government,17 with the comment that the 'inadequacies' of Australian economic policy have, over 'the preceding decades', been 'important and at times critical'. The several recommendations were aimed at a 'decentralisation' of economic research and policy development and were quite explicitly designed to both assimilate and subordinate technical economic matters within a larger intellectual context. This is an intelligentsia that is defined above all by its synthetic accomplishments, whether they be actual or potential. A 'NEW UNIVERSAL CLASS'18 The argumentation of the Coombs Royal Commission is completely consistent with the rhetoric of the Whitlam government in setting the public service above sectional and 'vested' interests.19 In the Report there is a driving preoccupation with achieving a more 'representative' public service. This preoccupation is manifest in explicit criticisms of the inequality of interest group representation, of the undue influence of powerful business interests on government policy, and of the unrepresentativeness of a public service in which there are disproportionately large numbers of private school boys and too few women, migrants, and Aborigines. The criticisms are carried into a host of practical recommendations in which perceptive observers20 see little more than a litter of Lindbolmian incrementalist attempts at 'muddling through'. It is true that the Report and its recommendations and even the most exultant reforms of the Whitlam period are seldom charged with classical ideals and do not overtly invest the state or its personnel with any strong legitimating metaphysic - that is not the Australian way. However in the temper and intention of these proposed and actual reforms there are several other features that are important. First, there is a manifest distrust of powerful elites and a renunciation of any compromising identification with an 'establishment' of the kind that we commonly associate with the Whitehall civil service and the 'Oxbridge' milieu in which it is set. In this sense 'social representativeness' is the means for a greater collective integrity of the public service that would lift it clear of any imputation of particularism or 'vested interests'. Second, we find a distinctly utilitarian and Benthamite21 insistence on the responsibility of the

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state and its personnel to manage the aggregation of interests in terms of a public interest that is set very much in the deliberative processes of the bureaucracy itself. The largely unstated political philosophy is progressive-liberal, utilitarian and pluralist. It is also characteristically Australian in that it is gently dirigiste in temper and has, well beneath the perfunctorily anti-collectivist surface, many latent affinities with some very unBritish notions of a general will vested in a nation-building state.22 Third, we find that these 300 plus recommendations aim at a unification and an integration of the still new and rapidly growing Australian public service. The familiar means (greater mobility across departments, a closer intermingling of managerial and policy roles, changed promotion and recruitment practices, and more cooperation and coordination of policy across departments) all evoke and affirm the distinctive identity of the public servant as new professionals stamped with an augmented, generalised, and shared public mission. ORIENTED TO THE SOCIAL ORDER It is clear in retrospect that the great surge of new federal programs in health, education, community development, decentralisation and regional development, and many other areas - that were so expansively launched in the first year of the Whitlam government were driven by a strongly interventionist preoccupation with social needs. This emphasis carried over into the ethos of the bureaucracy and, in a more mooted form, in the thrust of the Coombs Commission Report. These developments were set in a normative context in which the distance from Vested interests' is matched by a proximity and responsiveness to social needs that are very significantly construed in a double-sided way. On the one hand there is the compensatory construction of needs as the entitlements of needy and disadvantaged groups to social service and welfare provisions.23 But written into the policy discourses of the Whitlam years we also find a much more 'constructivist' understanding of social needs as demands set upon the state, the economy, and indeed upon 'polities', by the reproduction of society per se. The discourse is predicated in forms of civil society and of a 'public sphere' that have a certain autonomy, and even some primacy, vis a vis the economy and the formal structures of the state. It is a discourse that allows social needs to be read as indices to social problems arising from changes in the institutional and cultural structures of society (work, family, community, education, popular culture and the arts, etc.). Common references are made to 'the social system', to 'social change', and to 'structural inequality'. Clearly these notions of society

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provide the warrant for practices and policies that assume well articulated patterns of social causation and give some systematic recourse to presumptions of latent (but still real) interests and needs. The social theory is groping and unclear, but the social ontology is still strong enough to allow policy makers and managers to construct some sort of stable scaffolding around policies that address repressed social needs. Moreover, we see that this defining orientation to the social order is legitimated, sometimes confidently but more often with a nervous caution, in the vocabulary of a modernising pluralism that defines citizenship in strongly social terms as participation in state-supported processes of social amelioration and development. And yet, as we shall see, there is none of the coldness and distance of social engineering or planning ideologies. The Labor parliamentarians and the senior bureaucrats who developed the Australian Assistance Plan were driven by just these purposes. So too were the various initiatives of the Department of Urban and Regional Development that sought to generate completely new regional government structures in what were seen as the socially deprived areas of western Sydney and western Melbourne. These initiatives were driven and justified with what Nancy Fraser and Liz Fulop24 have skilfully analysed as 'needs talk1 and yet it is a discourse that relies, equally, on liberal social values such as 'openness' and 'responsiveness' which find a characteristic expression in variously successful attempts to elicit better articulated statements of social needs from weakly organised and under-represented social groups.25 PARTICIPATION, ACTION, AND OPENNESS Peter Self accurately says of this Coombs Royal Commission that it: believed in the slogan that 'the process is the product', received much of its evidence from the bureaucracy, and viewed reporting and implementation as a smooth continuum.26 What is shown in this new administrative culture is a pervading commitment to participative democracy and participative management. It strains for a reduction of the distance between the bureaucracy and its interlocutors across a huge range of client groups in an elaborated public sphere that it had itself enthusiastically spawned and supported. Some of the orienting norms are well expressed in the charter of the first Australian Schools Commission which makes the criticism that:

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traditional processes of change in Australian education are seen by the Committee to have been characterised by the imposition of new policies from above on the schools across the board. Pupils, parents, teachers, employers, and the community at large - those with major interests in schooling have played generally minor roles in the process. Emphasis has been placed on the substance of the change and on the conditioning of participants to accept its consequences rather than on the enhancing and exploiting of the capacities of committed people to generate their own improvements...the people most affected have been made to feel that they are merely reacting to a particular policy or procedure instead of being actively engaged in formulating it...the effectiveness of innovation no matter at what level it is initiated...is dependent on the extent to which the people concerned perceive a problem and hence realise the existence of a need, are knowledgeable about a range of alternative solutions, and feel themselves to be in a congenial organisational climate.27 In this normative field that stamped virtually all the Whitlam programs, we find several immediately recognisable constituents of what is now (some 15 years later) a buried discourse. Psychodynamic and popularised existentialist theories of human development were picked up through the 'human relations' school of organisations theory28 and played some part in shaping the new administrative climate. In a similar vein it was steeped in the preoccupation with 'alienation and anomie' that formed a sort of common language of many of the social service professions of the time and fuelled passionate attempts to decentralise, humanise, and 'dereify' administration and to recast management and service-delivery as socially interactive processes in areas such as education, health and community development. Moreover, the crisis of traditional empiricism had, by the early 1970s, passed from the high culture of academic science into the selfunderstanding of some applied scientists. Many politicians and administrators approached widely canvassed problems about 'science and society', and the social and public 'mission' of science with a new sensitivity. These uncertainties found many resonances in the active legacy of one of the early symptoms of post-modernity that was manifest in anxieties over the break-up of the intellectual universe that C.P. Snow and others saw in the 'tragic' schism between the 'two cultures' of the humanities and the sciences.29 These were just some of the influences that turned philosophical introspections into searches for new ways of 'breaking down the barriers' between the state and

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society. These efforts were most visible in restless attempts to draw policies, goals, structures, and procedures of all kinds into the ambit of ordinary language, to give them greater phenomenological transparency and thus, as far as possible, to make them continuous with the common understanding and lived experience of all those involved. Amid all the confusions and contradictions of the actual practice we find an orienting attitude to the state's community and client groups that is well captured by Karl Otto Apel: In most cases, the human objects of science and social technology show that they are not mere natural objects in their relations to science. If they are able to understand the very theories by which their behaviour is objectified and explained, they are able to join, at least, in principle, the communication community of the scientists and social engineers and thus may emancipate themselves from the status of mere objects of science.30 In that sense there was a normative expectation that bureaucrats and planners (and politicians) must share with community and client groups in the co-authorship of state policy and action and, further, that policies should (as we might say now) be 'discursively redeemed'. The process and the discourse are set in the assumption that this sort of practical social action is not only capable of resolving conflicts with mutually acceptable compromises but, perhaps even more importantly, that 'facts' and values can find a rational and stable synthesis in practical action. CAREER AND VOCATION Some of the ethical and Value' problems implicit in the reform of the public service are implied in the statement that: The Commission believes: (a) that the administration should serve a government dedicated to...reform as competently and devotedly as one which aims to preserve the status quo or to achieve a more gradual rate of adaptation; (b) that men and women who favour and work for change and reform should be as welcome within it and have as good prospects as those of more conservative disposition.31 At the senior 'career service' levels especially, as the report implies, it is this special combination of 'devotion' and impartiality, of passion and dispassion, that is so problematic.32 At these senior levels

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the work is not routinised and does indeed ask for a devotion, and thus for a measure of personal involvement that is both driven and laden with all of one's own Values'. Yet the individual's political, social, and personal Values' must not be allowed to colour his or her own commitments, or to diminish or affect one's devotion; and the senior public servant must at all costs have the strength and 'integrity' to make important decisions and to advise his or her minister 'without fear or favour'. To some extent these are inherent tensions of public service which are magnified for our Canberra bureaucrats by a formal adherence to norms and conventions of Westminster and Whitehall government. The reformers do not say that they want the political disposition of the public service to move a few degrees away from the Liberal/National Parties and closer to the Centre Left. This would create division and militate against the declared aim of creating a more unified public service. The problem is, significantly, addressed in quite a different way. In these and other criticisms of the conservatism and unrepresentative social composition of the public service, the report and the reformers criticise the partiality and biases of existing practices that are unresponsive to social needs and deaf to the reformist agenda. The point is, then, that these criticisms and the whole cast of the reform program place enormous reliance on universalistic principles. Reforming changes to the socio-political disposition of the public service could not be made abruptly or overtly; rather they had to be legitimated and implemented as adjustments and corrections to a polyvalent discourse firmly anchored in universalistic norms. We see that the constant preoccupation with Value conflicts', and with ethics, probity, and integrity defines the senior public service very much as a moral establishment with its ethical norms condensed in an ethic of vocation. This is something that goes far beyond the simple negative requirement that top public servants should refrain from behaving corruptly and should not accept bribes or do favours for prospective benefactors in the private sector, or expose themselves to charges of having unwisely exposed themselves to a 'conflict of interests'. The meaning of the vocational ethic here is rather that much of what they do as public servants depends for its coherence and consistency not only on 'intellectual' skills and formal knowledge but also on some active 'institutionalised conscience' or, in other words, on a moral culture that is internalised in the course of a long period of professional socialisation. Certainly the official discourse inscribes this sort of moral culture into the identity of the public service as a Sittlichkeit and treats it as a constituent of just those universalistic norms upon which principled public action depends.

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The ethic of public responsibility has some strong structural foundations that signal an importance that goes beyond the mere window dressings of what some may see only as a self-regarding elite ideologyHere we note that through the Whitlam years to the publication of the Coombs Commission Report the merit principle was still affirmed as an unassailable basis for promotion and thus as a protecting institutional barrier to 'political' involvement in the promotion and recruitment of public servants. In this respect universalistic principles are firmly cast into the system itself as functionally indispensable constituents of the identity and organisation of the public service. Similarly, we see that the vocational element is institutionalised in the semi-official right of the individual to define his or her own career according to personal choice. In this sense biography and function are still one, inasmuch as the system does not yet assume the right to unilaterally transfer, promote, or retire its personnel in terms of extrinsic systems requirements. In other words it is built on a de facto acknowledgment that public service is impossible without virtues that are by their nature inherent in character, and biography; that is to say without virtues that are defined and shared in social practices that do not reduce either to skills or to the imperatives of prudence.33

WHAT HAS HAPPENED TO THE STATE'S DELIBERATIVE CAPACITIES? With these several observations as a background and with the help of the model in Figure 5.1, we can more easily locate changes in the character of the Canberra political-administrative discourse over the 15 year period from Whitlam to the end of the 1980s. For all its imperfections and abuses 'discourse' is still a useful term.34 As an explanatory tool it has three great advantages. It does not reduce either to 'culture' or to 'structure', or to the nostrums of a now outdated structural-functionalism. Second, it carries no presumption that one is ultimately reducible to the other. Third, and more positively, it directs attention to the ways in which 'meanings' convert into system structures (and vice versa) as well as to the manner in which they are sometimes held apart in different orders of reality. It enables one to talk about these processes with a somewhat greater degree of precision. In our context it provides a useful means of probing a mediating level of social organisation that consists, as we have seen, of status hierarchies, of informal and formal organisational processes and structures, of knowledge resources, and of occupational and professional norms and expectations, which all combine to give a

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clearer picture of what goes on at the boundary between state and civil society and of the relation between the two. Fig* 5.1 Changes in the character of political administrative discourse in Australia from Whitlam in the early 1970s to Hawke and the late 1980s.

The discourse of economic rationalism of late 1980s

Systematically coordinated behaviour

Socio'cultural ^ order "™ (normative structures)

Economic order — (markets)

The discourse of civil society and the 'public sphere' of early 1970s

Communicatively coordinated action With the help of the model in Figure 5.1, we can begin to ask how processes of rationalisation are discursively formed. We can also propose some explanations and interpretations of changes in their discursive structure. And, finally, we can see how they point to larger changes in the organisation and reproduction of society. In the terms of the model, one notes that the prevailing discourse of the Whitlam years clearly presupposes, and in some measure creates, a public sphere in which public opinion achieves an authoritative expression and acquires some 'structure-forming effects'. It goes almost without saying that the discourse is built on a consensus that is for the most part more apparent than real - it clearly privileges the intellectualised and ideal interests of a reforming middle class.

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The more important point is that, no matter how imperfectly, the discourse proffers several criteria and principles for its own validation that are clearly at odds with the new economic rationalism. Firstly the discourse posits and presupposes some measure of congruence between public policy and the historically formed social identity of a national population. This is a way of saying, in Habermasian terms, that the discourse is set, for better or worse, in an immanent connection between public policy and the 'generalisable interests' (rather than particular and partial power interests) of a community of people who share, however precariously, a culturally secured identity. Second, the discourse is conterminous or at least reconcilable with ordinary processes of linguistically mediated interaction through which 'we' (as acting subjects) construct 'our' world. In other words this political administrative discourse is located in the lower half of our diagram because it ties social action to the accomplishments and functions of ordinary language communication in civil society.35 How then shall we describe and interpret the social changes that come about with the shift from this older reformist discourse to the new economic rationalism of the late 1980s? The remainder of this chapter will try to show how economic rationalism creates and itself depends upon a hyper-objectification of the market and market processes and, second, how this goes hand in hand with an uncoupling of the economic and socio-cultural contexts and premises of state action. A third strand of the enquiry follows changes in the discourse, and thus also in the forms of rationalisation, into a certain kind of systematising abstraction that 'tries' to convert action into system coordinated behaviour,36

There is a generational difference between the Whitlam reformist discourse and the economic rationalism of the late 1980s. The Coombs generation typically had some historical memory of the Great Depression, of unemployment, of war and of ordinary life in Australia beyond and before Canberra. Moreover those with a hard won pre-war university education: had to learn other things besides economics. If they studied the social sciences, those sciences were typically presented as means to improve the world. Improving the world required equal attention to ends and means, and the ends as well as the means of social reform got generous attention in the curriculum.37 By about 1947 the situation was very different: After that date, economics became much more technical and specialised - one might say, summarily, Americanised and

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much more attuned to rational maximising behaviour. Increasingly this training seemed to prefer efficiency to equity and humanity. In this new and tougher guise, some 50,000 graduates emerged between 1947 and 1986.38 Commenting on this generation that followed, a distinguished academic and former president of the Australian Economics Society proffers the view that: Economists in Australia haven't been as introspective as elsewhere...Economics in Australia has been dominated by logical positivism, not always for its own good.39 It is a view that is exactly confirmed by even a casual glance at the undergraduate curriculum that most of our top bureaucrats, with a median age of about 46 in 1986,40 followed in the early and mid 1960s. It would seem that by then the very notion of a broad and philosophically unified liberal education was already buried by a curriculum structure that forced prospective economics graduates into a narrowing professionally oriented specialisation that almost invariably excluded any broadening study of philosophy, sociology, or the history of ideas. Certainly their orienting first principles were taken from standard introductory textbooks such as Samuelson's Economics: an introductory analysis*1 and Lipsey's An Introduction to Positive Economics,41 which were quite set in a positivist theoretical and methodological framework.43 Our data show that family, schooling, and especially university educational backgrounds still have an enduring effect in shaping the social and political dispositions of our top public servants more than 20 years later. There is then every reason to suppose that this positivist inheritance forms the hardened core of instinctive reflexes, of orienting taken-for-granted assumptions, and of the shared, pre-conscious foundation for what we so blandly call 'policy'. When we dig into its discursive structure we see that economic rationalist discourse is given its anti-social valences not by anything intrinsic to economic reasoning per se, but rather, as Stretton puts it, by this 'deadly combination of positivism and specialisation'.44 The complaint is rather that the economics profession in Australia has, with this particular generation of graduates at least, served as the medium through which an unreflecting empiricism has locked the terms of public policy into an anti-social attitude. Three rather general comments will show, in a preliminary way, how this frozen empiricism is ingrained into the new discourse and how it recasts the relation between state and civil society.

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First, given the tremendous emphasis that is given to 'intellectual' and analytic skills, it is not surprising to find that the discourse contains its own criteria of what can count as valid knowledge. Here the positivist underlay is visible as a pervading 'scientism' or, in other words: science's belief in itself: that is the conviction that we can no longer understand science as one form of possible knowledge but rather must identify...[all] knowledge with science.45 In our context it is this scientistic attitude that blocks off just the kind of epistemological self-understanding that might help to heal the fatal rift between science and culture. Without such self-understanding, our new intellectuals are cast in an attitude that always makes reality seem to come upon them 'from the outside in' with an ontological fixedness that attributes 'facticity', externality, autonomy, impersonality, and objectivity46 to a whole panoply of social and economic phenomena that the earlier reformist discourse sought to reappropriate with precisely the kind of 'practical' reflection that is now presumed to have an a priori invalidity. For the new reformers the 'realities' that stand behind economic policy are given or discovered with the appropriate scientific procedures. They are not seen as socially constructed, nor in any way continuous or commensurate with a philosophically informed social self-understanding through which social needs, structures, and identities might be actively reappropriated in shared understandings of historical and social situations. This gives a status to applied economics that is akin to those branches of astrophysics that study gravitational forces, cosmic radiation, and meteorites (or any other class of objects that seem to knock on the closed doors of the mind from the outside). Second, the meaning of our data is clearer when we see that with the positivist inheritance has come a prejudice against social norms as such. Our economists have no coherent concept of society (except as both protoplasm and shell for the market). Instead, along with other allied empiricists from analytic philosophy, political science, and psychology, they have been raised on the orienting certainty that 'morals and criticism regard only our tastes and sentiments'47 - David Hume would not be pleased with what his disciples have done to him! Put more baldly they have been brought up with the belief that all morals are arbitrary. Since morals (and criticisms?) derive from passions, conventions, or habits, the very idea of rationally binding norms is a nonsense - and therefore so too is rational social action. It is for this reason among others that they are so convinced that our earlier reformers had soft minds of inferior intellectual calibre - 'O look thou

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not in the mirror'! But the more important point is that because of this they are confined within a discourse that recognises only Values' which are assumed to be a matter of 'subjective choice' (and thus to be exactly on a par with the motives of economic actors as defined in classical economics' subjective theory of value). All this rules out the possibility that Values' might have any obligatory, binding, rational or rationally motivating force. Third, with this epistemological break between 'science' and culture, the norms of participation and openness that were constitutive of the earlier reformist discourse - and of the public sphere on which it depended - are redefined not as a way of redeeming democratic politics from the vitiating complexities of making policy in modern industrialised society, but rather as distracting noise. Or, if some residual validity is granted, they are defined as an 'overloading' surfeit of contradictory demands that might just have some validity in an 'ideal world' in which there was less scarcity of resources. This attributes to 'politics' and to politicians (as we shall see in a moment in the fourth section of this chapter) the opposite tasks of screening out the noise and of reducing the overloading, and thus of 'reducing complexity'. And so, of course, the state's capacity for intelligent reflection about the meaning and consequences of public policy has been narrowed by this positivist inheritance. It is a narrowness that has become 'ideological' as it has lost all philosophical understanding of its own origins and limitations. However to press these criticisms further would be a distraction that would miss the wood for the trees and only sentence us to raking the coals of 'the positivist dispute' that erupted in the social sciences in the early 1970s. It would be a distraction because we would not see that modern systems theory (and with it many other developments and applications of the 'behavioural' sciences) have given a changed and much more immediate and aggressive form to this 'hardened empiricism', as C. Wright Mills once called it, that we should now examine more closely. There are surely moments in every study when an interviewee says something that goes, like a flash of lightning, from a detail to something in the inner core of the enquiry. Just such a response came in one of the follow-up interviews from a very senior (and battle-weary) person in one of the service departments in answer to a question about his view of the economic rationalists in the central agencies. The unexpurgated fragment is as follows: Fucking locusts: the moment they smell something green it's gone in an instant.

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It is a 'moment' that seems to capture exactly what Habermas explains, in his difficult vocabulary, as the 'mediatisation of the lifeworld' - by which he means the uncoupling and conversion of culturally secured meanings, and of social action, into system structures. As we have seen, this is accomplished through various processes of rationalisation. But what is the inner logic of the process and how is it structured as a discourse? The former Secretary of the Department of Finance has cast some light on the question in using the following lines to defend the 'scientific objectivity' of his own economic rationalism. Modern economic doctrine shows surprisingly few traces of the social convictions of its creators. As in paradise the lamb plays with the lion...With good economists you do not have to worry about their value judgments and convictions because their science will transcend ideology...The economic doctrines taught in Nairobi, Sao Paulo, New Delhi, Geneva, Harvard and Bowling Green State - and perhaps even in a Bulgarian planning academy - have a common core. This common core has been named 'neoclassical economies'. This is misleading inasmuch as it would seem to indicate that there are other, alternative variants of modern economics. In fact, there are none. Neoclassical economics, for better or worse, is the only one we got. It is not a special variety of economics, but...simply a name for whatever intellectual water happens to flow in the stream of economic science at the time. It constantly eliminates, rejects elements that no longer seem worth teaching; it constantly assimilates, in bewildering variety, new elements of any colour or description that seem promising.48 It is this scientism that provides most of the discursive resources that are so potently loaded into the claims that the central agencies make for their own intellectual sophistication and for their custody over what is always the 'broader view'. The last few lines, especially, give the key to the way in which the scientism translates into a formal rationality that does indeed assimilate an otherwise 'bewildering variety' of substantive goals, programs, services, and structures, 'of any colour or description', into a totalising abstract economic reductionism. This economic rationalism is something rather close to what Simmel saw, in his Philosophy of Money, as a process whereby: the interconnections of phenomena are removed from the level of their historical concretion...[and] money becomes the fate of all culture.49

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As others have noticed, this is an insight which, pursued a little further, soon reveals that once money is 'conceived of as extending beyond its economic concretion' it tends to become 'the symbol or index for a much more fundamental...process', namely to a warping 'objectification of the subjective, the quantification of the qualitative, the equalisation of what is not equal'.50 It is a discourse that, ironically, draws its energy and conviction not from anything that is socially given in the human condition, but rather from its method - that is from a systems logic that turns everything into sets of equations. As with any and every form of positivism, reality is stood on its head as the method determines what can count as substance. And here our data has shown pretty clearly how it works. The criterion that these exceptionally intelligent people use to judge the intellectual abilities of their peers is the agility and speed with which they can conjure up abstract models of a very particular kind. What counts is a kind of 'dephenomenalising' abstraction that neutralises the social contexts of program goals in any area whatsoever, from trade promotion to industry assistance to social welfare or community support. It is this which distinguishes these intellectuals from the technocrats and social reformers of earlier times for whom intellectual virtuosity was measured against the more narrowly instrumental capacity of professionals of all kinds - educationists, medical experts, engineers, and town planners - to find goals and means appropriate to needs and to contexts of action - in schools and education systems, in water resource management or whatever. Instead what counts in the new order is the elegance, speed, and agility with which one can create a formal, transcontextual commensurability of reference across goals that are turned into objects of decisions that will be made on extrinsic criteria. It is here that we begin to see how culture and communicative action is 'mediatised' into system structures. As we saw in Chapter 4, the conversion is effected through a process of formal rationalisation. On a Marxist explanation we should have commodification tout court but this abridgment would quickly commit the enquiry to a worn-out immanent logic of interests and leave out what is now the very problem that stands in need of further unravelling. We need to understand how the system is constructed as a system. How do we account for the cybernetic aspects of these rationalisation processes and the importance they will obviously have for the question of legitimation? There is an important sense in which models and model building are the coin of this process of mediatisation. At one end of the spectrum, 'models' mean the very formal mathematical models such as the Orani and NIF forecasting and impact models that are extensively

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used in Treasury and Finance. At the other end of the spectrum, 'models' mean the kind of everyday schematising improvisations that have become second nature to the new generation of computer literate bureaucrats. Models and model building are now the fully institutionalised form of a development which 'reflects a downturn in the philosophical and practical content of economics'51 and which caused a former editor of the Economic Record in Australia to quote one of his respondents thus: The age of quantification is now full upon us. We are now armed with a bulging arsenal of techniques of quantitative analysis, and of a power - as compared to untrained common sense - comparable to the displacement of archers by cannon... It is a scientific revolution of the very first magnitude indeed I consider the so-called theoretical revolutions of a Ricardo, a Jevons, or a Keynes to have been minor revisions compared to the vast implications of the growing insistence upon quantification.52 Butlin goes on to observe that a growing flow of articles in the Economic Record:

formally deal with practical problems and conclude with policy prescriptions...[and leave the reader] with the feeling that the author has cast about for a subject on which to demonstrate his technical analytic skill, without ever becoming interested in the subject or feeling any personal commitment to the prescriptions.53 Clearly models and model building are one of the essential crafts of this new technical intelligentsia.54 But how, more precisely, does this lead to an overkilling 'mediatisation' that forces its way beyond the 'uncoupling' of system structures from culture into a 'colonisation' of culture? In the first place these models seem to offer an ideal way of articulating an immanent systems logic because they join quantification with a habitual nominalism that substitutes imputed relations (between quantified inputs, outputs, and equations representing mediating processes and states) for social action-in-context. As real social actors (individuals and groups) are bracketed out in the formative moment of the model, so also is the 'historical concretion' in which 'values', or more accurately norms and identities, might otherwise preserve their relation with means and techniques and, in short, with science. A second part of the answer is found in the way models are then typically used. And here we find that reflection about the all-important

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first assumptions of the models is in practice quickly closed off as communication both between and within departments centres on the 'what if?' statements that are generated by the systemic relation between the initial nominal and arbitrary inputs. The forms are familiar. The central agencies constantly and relentlessly force the program and market departments to say what they would do if their budget for this or that time period or program was reduced by $X, or increased by $Y, with a modification of functions that would amalgamate or shed an array of tasks according to projected program options a, b, or c and so on. The Finance Department mentality is so computerised that these are publicly and unselfconsciously proclaimed as 'iterative processes'!55 Although the answers have an obvious strategic importance, one suspects that it is overshadowed by the importance of the process itself as a kind of invisible and forced on-the-job re-socialisation that dissolves identification of the program and service department personnel with their clients and with the real social situations that give meaning and normative force to program goals. The actuality of the real social situation is relativised away by the compulsion to think of it exclusively as a contingent possibility. In Luhmann's terms this process produces the endless 'stream of contingencies'56 that the system requires for it to create its own reality. It is the motor for the uncoupling process because it endlessly forces the policy makers in the program and service departments to represent their clients as quantifiable objects and as determinate 'possibilities' in a narrative that is now abstractly generated from the model that hypostatises these very processes. \ It is indeed a process of 'dephenomenalising abstraction' because it makes phenomenology impossible and it sentences all hermeneutic interpretation to bang helplessly against the walls of the structure. With the eye of an anthropologist one can see that these models have a function that is very close to that of ritual and dance in preliterate societies inasmuch as they build screens against ordinary linguistically mediated processes of meaning and interpretation. The screens hide the systems structures through which actions are 'coordinated behind our backs'57 and then press back upon us with the dull force of necessity. In this way we see that models and model building are really the microtechnologies that rationalising managerialism uses to turn arbitrariness into 'givenness' and actuality. They disempower reflection, they sterilise whatever is left of actionorienting traditions, and they irreversibly change the politics of reform by making system structures opaque. In short they uncouple culture from system, make the former contingent on the latter, and redraw the boundary between the two.

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These comments cast some light on how it is that the 'the market' and 'the economy' acquire a 'facticity, impersonality, autonomy, and externality'58 that sets it as a system over culture and civil society. But before we turn to some other aspects of this process, and especially to the manner in which it redefines such fundamental notions as interest, responsibility and time, there is need to look for a moment at another condition of the process that has, in the construction of these realities, something like the same status and function as model building and is closely intertwined with it; namely to distance and distancing or, as Luhmann might want to say, to the logic of differentiation. The clearest pointer in our data here is the seeming paradox of two perceptions of the economic rationalists in the central agencies, and most especially Treasury and Finance, as a high-powered intellectual elite that is seen at the same time as a clutch of whiz kids who are 'removed and abstracted from the real world'.59 The deference here to these intellectuals who are also removed from the real world is testimony to the strength of the new iconography of 'the economy' and to the success that the economists have had in defining its functional requirements as the ultimate ground of appeal for policy questions. The 'political' function of PM&C as 'a sanity check on the purists' is something to which we shall return later. The penetration of money as a steering medium depends considerably on the fact that Treasury is a part of the state only in the minimal sense that its staff are employed by the state and paid from the public purse in the same way as other public servants. In character and in terms of its functions, it is really part of the web of great financial institutions of the private sector. Its remoteness is the very resource for its accomplishments as a mechanism for what Habermas would call the 'the colonisation of lifeworld'; for what Luhmann calls 'differentiation and selection'; for what some modern Marxists call 'commodification'; and for what, at this point, one might express a little more simply as the production of system structures. Perhaps that is what John Langmore, a neoKeynesian economist and member of the Labor government Caucus, intimates with his perceptive criticism of Treasury: 'It's pure theory; they are not empirical; they are counter-factual'.60 Langmore's neo-Keynesian economics preserves some threads of continuity between money values, in the formal system of exchange that we call 'the market', on the one hand, and social needs in civil society on the other. Interestingly enough, that connection is homologous with the relation between an older, 'small 1\ liberal pluralism and the older reformist language of public administration, ameliorist organisation theory, and participative management. While those threads of continuity remain, the criteria for the rationalisation of

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both economic and bureaucratic structures respectively are not entirely severed from the criteria (progressive-liberal and modernist) for the rationalisation of culture. Moreover, the residual connections between the two leave some ground on which to construct a reformist discourse asking for a rationalisation in both spheres together. By contrast this provides the clue to the significance of distance in the new economic rationalist cum managerialist discourse. It is another means of 'delinguistifying' the residues of the older discourse. In serving that purpose we see very clearly the breakpoint or 'seam' on either side of which 'reflection' (and with it, universalism and intellectuality) take on entirely different, and indeed, functionally opposite meanings. As we saw in Chapter 1, images of contemporary Australian society are constructed in an obviously positivist way that gives an 'ontological' (if we can grace it with such a term) primacy to the functional imperatives of the economic system qua system. Society is defined as the environment of the system and as a kind of stubbornly resisting but amorphous sludge through which it must chart its course. The functional requirements of 'the economy' are the new universals, or the 'generalisable interests',61 in terms of which other interests are defined as particular, and therefore, 'vested' interests. They are also the new categories which convert the referents for explanations of cause and effect from the social world into the increasingly self-referential logic of the economic system and which, of course, in a similar way positivistically redefine basic ethical categories such as 'responsibility' as the obligation to increase productivity and to facilitate 'structural efficiency' (by unilaterally agreeing to let the market rather than the unions and the Arbitration Commission set the value of one's labour). The new 'intellectuals' are deliberately remote and they use all the possibilities of distance to redefine intellectualism into a cognitive pattern that must, above all, be counter-factual and counter-intuitive and that must, furthermore, deploy just these resources to open a gap, an insulating space, between the system structures and whatever communicatively secured understandings might still threaten it with interpretation as a social and historical construction. The purity of 'the purists' is simply a word that is used, with whatever insight is left, to point to the self-referential quality of the systems logic. That is what differentiation means. It is among other things a way of systematically disempowering insight and with it those intellectual accomplishments that might aspire to recognition as wisdom born of historical experience and reflection. It is a process that takes effect not only through the medium of model-building and the arrangement of distance, but also through something else that is implicit in both:

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the appropriation of time and so the detemporalisation of experience or, at best, the temporal transformation of experience. This points to the broader social significance of the intensification of the budgetary process, the speeding up of lateral job mobility between different departments and sections, and the terrible work pressures of these higher executive jobs which are selectively experienced by some, but not by others. We know that traditions rely on a certain temporal organisation and that appeal is often made to them (before and after Edmund Burke) to secure the Values' of the past in the present against revolutions in the future. It is equally clear that one of the defining characteristics of all so-called 'modern* societies is that traditions everywhere are losing their power to structure expectations as reliable predicates for public policy.62 The often noted intellectualism and rationalism of the older reformist discourse was an attempt to deal with 'Vembarras du choix* and with the problem of choosing among multiplying expectations,63 with just the sort of 'open' communication that would quieten time, make good for the lost traditions, and settle expectations more consciously within a horizon of interpretation.64 What we find now is that the increasing work pressures and the cost-cutting 'rationalisations' ('restructuring' and 'streamlining', and the like) that have been unleashed on everyone (except the central agencies that are driving the process) militate against reflection in just the way we might expect. There is, simply, 'no time' to think 'more deeply' about what should be done. It is no coincidence that this should go hand in hand with a forced lateral mobility65 of personnel which devalues identifications with client groups and the slowly acquired experience of particular cultural contexts. The effect is to replace one modality of time with another. The form of time that is part of all processes of 'historical concretion', and of linguistically mediated interpretations of need, is supplanted by a technological or 'systems time'. This new time robs the future of its natural quality as a web of projections from lived human experience and transposes it instead into the flattened present of an economic systems logic in which what were once 'our' futures are now arbitrarily weighed and substituted, one with another, according only to the criteria of functional equivalence in the models that are used to figure them.66 The 'reflective' basis for this systems logic is of course 'the market' - on some days, after a good bottle of wine and a plate of oysters, it is 'quietly confident'; and on others 'nervous' or 'uncertain' - which means that the planning future is, say, three months long on the first day and perhaps only a few weeks away on the other day.

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THE 'DEMORALISATION' OF THE CAREER SERVICE The preceding section focussed on the break between the culture and administration from the more cognitive aspect- In the pages that follow we shall look at the moral-evaluative or normative aspects of the same separation between culture and organisation. We are here digging for some of the principles of selection' that are written into what one might call the higher administrative processing of culture and in particular of moral culture. In terms of the shift from the Whitlam reformist discourse to that of the new economic rationalism we are asking, from our own 'historical' perspective, what happens to the moral culture(s) of civil society when the new discourse takes charge of its selection, translation, and conversion into the structures and policies of state action. Data of two different kinds provide part of the answer. There are some obvious connections to be made among changes of a structural nature. The high rate of lateral job mobility and the rapid promotion of relatively young persons to high positions are clearly connected to the new structural changes (forced mobility and redundancy, and contract appointments) that favour system-directed careers over vocationally self-directed careers. The pattern is set in its proper context when we recall, first, that it is the youngest of our senior executives (the socalled 'whiz kids' in the central agencies) who are the most academically highly qualified and have the least experience of the 'real world' outside Canberra. They are at the same time the most powerful officers, and nearly three-quarters of them are positivist economists. The pattern is set also within the context of the abolition of the Public Service Board and other structural changes which formerly protected the civil service from market forces and 'vested interests'.67 These structural factors combine in several ways to disestablish the splintered remains of moral culture. In the first place the ethic of vocation and commitment in the service of the public interest loses the force of an end in itself as those among the new elite who have risen quickly to the highest possible positions in the state (namely as the head and secretary of a whole department) publicly demonstrate that even these achievements can be construed simply as stepping stones and career paths to new, and extremely highly remunerated 'challenges' in the private sector. An example is one young 'econocrat', Dr Vince FitzGerald, who on Bastille Day 1987 was made head of the new megadepartment of Employment, Education and Training. He is reported to have left, in August 1989, at the age of only 44, to become a board member of a new consultancy business, Geoff Allen

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and Associates, that was offering Strategic advisory services for senior corporate management*.68 In discussing his new appointment, Dr FitzGerald was quoted as saying that he had been: thinking long and hard about whether I wanted to continue in the business of being a departmental secretary for another 10, 15, or 20 years. I got to this level several years ago and there was nowhere else to go...I let it be known I was receptive to suggestions and they were not slow in coming...We have a much younger senior service these days. The pressures and challenges make sure that only the competitive get to the top. A number must decide that leaving relatively early is for them.69 Dr FitzGerald is one among many who might just as easily make the same move, including the Secretary of Prime Minister and Cabinet, Mr Mike Codd who was then 49; the Secretary of Industry, Technology and Commerce, Dr David Charles who was 45; the Secretary of the Treasury, Mr Bernie Fraser, who was 47; and the Head of Finance, Dr Mike Keating, who was 49.70 The symbolism of this phenomenon is unmistakable. It represents an instrumentalisation and dissolution of a public vocation into a personal career. It is also a demoralisation of the 'career service' inasmuch as service in its highest posts is no longer condensed into an ethically charged elite culture of 'statesmen' (and 'stateswomen') entrusted for life with high responsibility for the public and collective interest. Instead careers are redefined (symbolically if not always personally for the individuals concerned) as means to ends that are set by an external market and valued in dollars by private and particular interests. At a deeper level the appropriation of the promotions system by the central agency economists has, with these other structural changes, and especially the high rate of lateral job mobility, contributed to a demoralisation of the service in a number of other obvious ways. In the first place it has cumulatively and selectively enhanced the power of people who, as we have seen, have no coherent view of society and therefore little understanding either of culture or of creativity. Reform of the bureaucracy is therefore conceived almost always in terms that are economic and structural and seldom social. It is from this underlying perspective that staff mobility has been appropriated, with the help of various economically oriented accounting technologies,71 as an arm of strategic power. Staff mobility has been redefined as 'human resource management': an application that is, of course, simply a micro-technological extension of the same economic rationalism. The movement and assignment of staff is then

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driven by the assumption that each public servant is no more than an individual bag of skills in a freely moveable bag of skin. This may, for many individuals, work vicariously as a freeing and even a renewing deliverance from frozen practices and unproductive projects - no one should deny that some shaking out can be freeing and useful. However, on the other side of the coin, the larger problem is the assumption on which the technology operates: that human resources are reducible to skills and jobs that are, in turn, defined only in terms of system goals and measurable performance criteria. Skills are not then understood as cultural artifacts but rather as 'things' that can be moved on a strategically driven 'techno-logic' that completely denies the 'socio-logic' of their constitution and reproduction. Plainly this is another face on which the system differentiates itself from a public sphere that, in the Whitlam era, was a liminal 'preconscious' boundary zone from which much of the system's creativity was drawn. With this institutionalisation of systemdirected mobility patterns, the system sterilises spontaneous or unwanted micro-cultures that do not fit in with its strategic aims. And, similarly, it selectively speeds up time in those dangerous sites in which longer time horizons and different patterns of communication might allow for some socially intelligent reflection. This is one key to the coding of that deadly accusation made against the service and market departments by the reforming rationalists who are dominating and colonising them: that they are 'too close to their clients', and therefore 'ripe for mobility'. On one level system-directed mobility breaks up actual or potential norm-creating solidarities by adjusting time and mobility so that people are moved slowly enough to acquire portable problem-solving skills and fully optionalised 'values', but too fast to allow any rationally motivating will to form in a way that might once again rehabilitate skills, values, and ideas within the normative horizon of a social and philosophical understanding. At the higher 'reflective' system level, the pattern simply institutionalises an upward or spiralling mobility pattern which selects people who then say that there is, to use Mrs Thatcher's favourite phrase, 'no other way' of selecting the selectors and so on. Indeed, this techno-logic of selection is visible even in the fine-grain of the structure. In this respect one notes that strong solidarities are the rule in those sites, (for example in Treasury and Finance) which are already immune to social intelligence and where a specialised solidarity is needed as a resource for the production of certainty at the 'reflective' model-building and structure-forming level of the system. In the Department of the Prime Minister and Cabinet, the dizzying time pressures combine with a high rate of mobility among very young, fast

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upwardly mobile high-fliers from a greater variety of backgrounds to provide the structural conditions for the specialised task of keeping a sanity check on the purists' and so of both containing and steering the strategic adjustments within the tolerances of whatever legitimations are possible. Finally, as we have noted before, in the service and program departments in which social intelligence is still residually protected by a stronger and older view of the differences between the public and the private sectors,72 mobility is more often experienced as something that is pressed upon you. For the young salmon in the central agencies, it is the stream that will (if the instinct is willing) lead them up to their own headwaters.73 Indeed, the evidence indicates that these structural aspects of system formation have become institutionalised into the consciousness of the Senior Executive Service in a self-reproducing fashion. More than two-thirds of the respondents (most frequently of all the central agency economic rationalists) stress the private and personal innerego satisfactions of the job in terms that presuppose the Tall of Public Man'74 as a fait accompli. In the same vein we recall that the staff of the central agencies in the so-called coordinating departments are three times less likely than the service department people to mention the end-value of outcomes for the public as a reason for their own career satisfaction.75 With a dash of anger and bitterness, one excentral agency respondent rendered the meaning of the data here with the comment, 'what they really mean is "any outcome will do provided we influence it.'" This is one visible effect of what Habermas and others call the 'privatisation' of motivation;76 of what Rieff77 and others call the dissolution of moral culture; and of what de Toqueville expresses more elegantly than either of them: Each person, withdrawn into himself, behaves as though he is a stranger to the destiny of all the others. His children and his good friends constitute for him the whole of the human species. As for his transactions with his fellow citizens, he may mix among them, but feels them not; he touches them, but does not feel them; he exists only in himself and for himself alone. And if on these terms there remains in his mind a sense of family, there no longer remains a sense of society.78 Just this phenomenon is well reflected in the fact that less than a third of the respondents thought that ideals were necessary conditions for a meaningful life.79 It is more strongly and pervasively expressed in the constant references made to the one idea that always seems to stir

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the blood, namely to the 'challenge' and to the 'challenges of the job'. In this notion we see the same psychological positivism that is implicit in the economic rationalism (as it is, equally, in other empiricist theories of society as well). It understands motivation as some sort of surge of cultureless energy which signals the organism's response to a certain type of (complex) environment. Insofar as motivation is conceptualised at all, references are made to such notions as 'achievement motivation'80 or to notions of 'personality' which assume that motivation is simply a function of the interaction between each individual's own bundle of psychological traits, drives, and other endowments and an environment that provides appropriate 'rewards'. When these two things are properly aligned the individual gets some kind of mighty 'buzz' from the work which is the experience of the 'challenge'. The grim irony is that these enormously hard-working and intelligent people understand their own natures, and their own dedication, in completely amoral terms as 'high performance plastic' materials that can be moulded to any task whatsoever. Since it is these senior people who control promotion and recruitment, assumptions of this kind are having their 'structure-forming effects' throughout the system. Indeed this seems to be reflected in what our respondents had to say about the reasons for their satisfaction or dissatisfaction with their work. The main body of our interview data was gathered before the the major restructuring reforms of 1987 had taken effect. At that time only a smallish proportion of between 10 and 25 per cent of the population admitted to any identity-destroying sense of endemic conflict, pressure, and meaninglessness in the experience of their present work situations81 and this minority was spread fairly evenly across the system. However, even then it was the people in the program and service departments who were more than twice as likely as their counterparts in the central agencies to doubt whether the rewards and satisfactions compensated for the emotional and psychological costs of the work.82 Interpreted in the light of other evidence in the original83 and later interviews it seems clear that what 'hurts' is not the deadline pressures or the volume of the work per se84 but rather the demoralising anxiety85 that comes from the ascription of inferiority to work that is geared to the social order and set in an evaluative framework, and in a moral and cultural universe that is still resisting disintegration and absorption into system structures. If the 'challenge' represents the bright side of the moon then the same logic applies equally to its dark side - the young economists and accountants usually theorise motivational problems in terms of the standard stock of business school psychotherapeutic notions about

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personal and stress management, psychological hygiene, personal 'growth' and development, mid-life crises, relaxation techniques, and the like- Motivational problems are assumed a priori to consist in the individual's inability to adjust to the system; of course it is the individual who must carry the burden of adjustment and make the appropriate decisions. (I must quickly 'grow' so that I can be 'responsible' for my own decisions and make a 'free' choice between hemlock or the sword!) For those of our Australian public sector executives who may have that same sickness 'in the soul of the administrator'86 that others have observed among their demoralised American counterparts, it is assumed that the restoration of good health depends only on a 'realistic' discovery or re-acceptance of terms of participation that are unilaterally set by the system's new generation of corporate managers, in terms of its own functional requirements. With disturbed motivation redefined as a certifiable disease, cures will be defined by the managerial psychotherapeutic in terms of variously solipsistic technologies for fixing mood states so that this part of the troubled soul can feel more 'energised' and 'in touch' with some other part. Is this not what Philip Rieff87 on the right and Herbert Marcuse88 on the left identically perceive as 'the self-mutilation of bourgeois culture'? Finally, one should for a moment ponder what one young economist from one of the market departments (Resources and Energy) had to say about value-committed people: 'Greenies, for example...they are inflexible and totally useless public servants. You've got to be flexible.' Another, with experience in both service departments and central agencies, reflected: 'If you burn when your pet projects are killed off you don't survive, you just have to adapt and take the broader view'. Neither statement sounds too unreasonable and yet the fundamental question remains: what is left of commitment and responsibility after flexibility and adaptability have run their course? These questions are addressed a little later and for the moment it is appropriate to press, implicitly, some strands of the argument as far as they will go in order to thoroughly embarrass anyone who may still want to seek shelter in the empiricist theory of ethics that once sustained the so-called 'reforming' economic rationalism, before it became autarchic. So here we simply observe that these not unreasonable comments on the need for the new breed to be 'flexible' and 'adaptable' are, among the central agency people, quite often joined with comments on the need for a 'healthy scepticism' and for a 'realism' that asks, in turn, for some cynicism about the claims of the market-oriented departments and more especially the service departments.

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Not far beneath the surface of this discourse there is more than a suggestion that the high-fliers in the central agencies, who think 'systemically' and 'strategically' about everything, believe that 'demoralisation' (selectively applied) is but another resource for good administration. At this highest level of strategic management, at which instrumentalism becomes absolute for the 'strategic visionaries', as some of them are pleased to call themselves, it is assumed (albeit in the language of this or that rationalisation of the system) that moral culture and system structures stand in a mutually exclusive, 'zero sum' relationship to each other. That, at least, is where the logic leads. If it is 'good' to use cynicism as a magic solvent for the liquefaction of culture, we must then ponder what is then left of responsibility and commitment.

THE DEPOLITICISATION OF THE POLITICISATION OF AN APOLITICAL CAREER SERVICE Canberra top public servants are 'committed centrists' no longer. Clearly there has been a change: but is this change adequately explained only in terms of political attitudes and of a drift towards the right? The question already gives an answer that shows up at one level as a drift in political attitudes and that may, at another level from a sociological point of view, point to a modal change in the relationship between bureaucrats and their ministers - a change that can be read from the evidence as another aspect of a broader modal change in the relation of state to society that has altered the meaning of citizenship, participation, and polity. At a meeting of the Royal Australian Institute of Public Administration in January 1984, Minister John Dawkins, the strongman who had from the beginning taken the leading part in planning and implementing the Hawke Labor government's reforms of the Australian public service, explained fairly unequivocally what his fellow ministers wanted from the reforms. He said that his British Commonwealth counterparts in Canada and Britain shared the same misgivings about the Whitehall/Westminster model. There were 'three areas' of concern: - the failure of ministers and officials to address strategic as distinct from tactical issues; - the pressures of Parliament and the media, and the type of experience and training typical for ministers and their top officials had led them to be less interested and less skilled in

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management than they should, with a costly impact on the community and economy - and, further that, if ministerial control is to be reasserted, there is need for larger numbers of politically committed people to have a closer involvement in the development and implementation of policies.89 After correctly claiming bipartisan support for these concerns he went on to explain that: what we are saying is that the system as a whole currently encourages a concentration on the very short run and provides insufficient support to ministers on matters of key political priority.90 He then reiterated, with an almost palpable sense of angry frustration, that what the government of the day must, and will have, come hell or high water, is more 'efficiency', 'responsiveness' and 'flexibility'.

All the reforms need to be seen against this background and so as a shift towards what many of our respondents, and other observers, have called the 'Washminster mutation'.91 From the other side of the relation we see the mirror image of this pressure for 'responsiveness' in the answers our respondents gave to questions asking them, only two years later, to tell us what sort of pressures (political, economic, legal-administrative, and social) weighed most heavily on the development and management of public policy. The ranking came out in just that order, with nearly half saying that political pressures were foremost, ahead of economic pressures which were seen as paramount by a smaller proportion of just over a third of the respondents. Significantly, we see that a much smaller number (just under 10 per cent) put legal-administrative pressures first and only 7 per cent of them gave first ranking to social pressures. But this might tell us only that the bureaucrats felt their ministers pushing very hard for some politically sensitive attention to what they together perceived to be Australia's all-important economic problems.92 It is only in the light of the cumulative effects of the first and then the second Bastille Day wave of reforms that we can read the deeper significance of the changes. What that broader reading of the evidence as a whole suggests is that there is a new intimacy of mutual understanding and purpose in the relation between senior public servants and ministers. It is partly because positivist economics has, so quickly and without precedent, become the most commonly shared educational experience of both ministers and top bureaucrats, an experience that probably transcends differences in social class

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backgrounds. The point is rather that the shared economics background has led to compatible assessments of Australia's economic position. Further, it has also allowed ministers and bureaucrats to transcend still other endemic strains that arise from the different structures of office and from the jealous resentment that Cabinet ministers have felt for the higher salaries and tenured job security of their senior public servants (the very people whose intractability they often blamed for the demise of the Whitlam government and now blame for their own continuing and ever-present electoral vulnerability). Accordingly, it has given them both common ground on which to share, over and above all these differences, a similar understanding of their common mission as system managers and 'strategic visionaries'. Again it is not strictly the focal concern with economics per se that so changes the political meaning of the new symbiosis but rather an atrophy and a warping hyper*objectification of civil society, community, and citizenship. The stakes are high. As Paul Ricoeur puts it: From here on the fate of practical reason is played out at the level of processes of objectivation and reification in the course of which institutional mediations become estranged from the satisfactions of individuals. Practical reason, I would say, is the ensemble of measures taken by individuals and institutions to preserve or restore the reciprocal dialectic of liberty and of institutions without which there is no meaningful action.93 The same problem can be evoked at the concrete level with a few piecemeal observations from different corners of the larger canvas. In the uninhibited jubilation that followed the Hawke Labor government's third and narrow victory in the election of 11 July 1987, Rod Cameron (the chief ALP pollster who had fine-tuned the election campaign) was extravagantly praised as the 'architect ofvictory'. A few days later an editorial in the Times on Sunday cleverly titled 'Water Glimpses', made the point that Labor 'had won because of its superior marketing skills' and because of the 'sheer professionalism of the triumph of the machine over the electorate'. In the same editorial, John Elliott (the then Chairman of the huge Elders-Carl ton United Breweries conglomerate, and aspiring President-to-be of the defeated Liberal Party) was reported to have said (correctly) that with, 'the marginal seats and candidates...the Labor Party did a much better job...We have to shift our attention to political marketing and research'.94 Perhaps the more surprising observation is that these assumptions about the plasticity of public opinion accord with just over half of our top public servants (53 per cent) who agree with the

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proposition that Vith sufficient determination and skill a government can command public support for just about any kind of policy or decision*. A related part of this larger picture emerges with the recognition that the nature of lobbying in Canberra has changed - and not just because the official albeit secret registration of lobbyists has been made obligatory.95 As one perceptive observer remarks, lobbyists are now 'attuned to an increasingly complex and economically astute government', and, 'you can forget about the long lunch, just work on the numbers'.96 A fourth and much more concrete (literally) aspect of the contemporary situation can be seen from far away in the form of the vast new Parliament House opened in the bicentennial year. In the old and hopelessly overcrowded Parliament House, ministers jostled with journalists for cups of tea in the primitive canteen and for elbow room in the toilet queues. Now, as all the members of the press gallery acknowledge, the new underground and 'high-tech* Tollies' Palace* has sealed the ministers and their staff - people whose life in a small and artificial capital city has already cut them off from the rest of the nation - into poured concrete modules that bear an uncanny resemblance to the control rooms of a science fiction space station. It would of course be absurd to suggest that there is any harm in the formal study of public opinion or in the formal registration of lobbyists or, indeed, in econometric information (or in having grand and efficient buildings). At quite another level, these fragmentary observations point to a moment in history (or is it to the triumph of post-modernism and to the end of cultural history?) in which a quite different type of politician and a similarly quite different type of administrator have found a new and common basis from which to face anew all the frustrations of 'complexity* and 'decision-overload' that had, in their perception, both defeated their political and bureaucratic predecessors, and set them against each other. It is a modal shift in orientation that Luhmann has theorised in the following way: If the complexity of the system exceeds a certain threshold, power must remain reflexive. That is, it must be applicable to itself, even at the top of the system. As complexity increases, power-holders can expand their influence only if they let themselves be influenced and if this influence is consolidated into predictable structures. By themselves, they could not utilise the decision-making potential of the system or maintain the complexity of the system. In all fully developed political systems, the relative power of one position must be able to

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influence the relative power of others, if the ability of the decision-making process to make selections is going to be thoroughly strengthened. The flow of power in the system must take the form of passing on premises for making decisions. But that is possible only if the roles in the system have been differentiated from the system's environment... The reflexivity of broad power-processes underlies, in turn, a further aspect of the political system: its functional differentiation into subsystems that perform various subfunctions in issuing binding decisions. Only when the application of power to power has been stretched across a large domain and yet remains guaranteed is it possible to build subsystems within the political system which, while operating under different and incompatible conditions, are still able to issue decision-making premises for each other and can thus be integrated.97 Quite clearly for the ministers and staff of the all-powerful coordinating departments, economic rationalism is the means par excellence of 'applying power to power1 and of 'stretching it across a large domain' in a way that gives commensurability of reference to a panoply of program goals in every area of state activity. They are much more likely98 to believe that they have produced greater 'coherence and consistency', both over time and across different areas of policy and management, than the very people at the service-delivery end of the system whose practices are supposed to benefit from these rationalisations of their incrementalist muddlings - nor is it any accident that those service departments have been colonised by economists to become aware of the 'benefits'. It is interesting to note here that the central agency staff are reluctant to allow these rationalisations to be typed as 'political' in anything but the very short term because, on their perception, they are only a way of forcing a depoliticising commensurability of reference, and thus a 'rational' order, on what they see on the contrary only as disorder and a tendency towards political partiality that comes from being 'too close to your clients'. For their part the staff of the program and industry departments, the people who are the objects of the rationalisations, are rather more likely to see the process in a contrary way as a politicisation of inter and intradepartmental relations. Insofar as the rationalisations are perceived as a 'politicisation' of the career service, this is only a passing phase. It lasts for only as long as it takes for the new system managers to replace one kind of steering medium (namely the always residually politicised old mandarin bureaucracy anchored in liberal and social democratic norms) with a new steering medium that will deliver clear

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'market signals' to those areas (like education and social services) that have not yet responded adequately - and this means 'efficiently and effectively' - to the functional requirements of 'the economy'. It is this new relation between 'politics' and 'economics' that explains much of what our respondents have been telling us. More particularly it explains the reciprocal evaluations and expectations that bureaucrats and politicians apply to each other in the new relationship. What the ministers want from the new bureaucrats is a full partnership in subordinating all policy and management decisions to the strategic imperatives of macro- and micro-economic management. That is why they see attempts by the senior staff and ministers of the social service departments to shape the public agenda as retrograde and insidiously 'political'. From their own point of view, these new central agency bureaucrats depend on their ministers, and upon a 'strongly led' Cabinet, to take the active part in moulding the plastic of public opinion and 'community expectations' into whatever form best meets the short and middle term steering requirements of the economic system. What they fear most is what one respondent called 'ad hocism' or, in other words, any disaggregating and destabilising 'one-off concessions to 'vested interests' that might also compromise the system's control over its own time horizons. The essence of the conflict of new politics and new administration with old politics and old administration centres, clearly, on the changing status and institutional expression of liberalism and of liberal pluralism. In this respect there is something further to be learned from the Bastille Day reforms that charged Mr Dawkins, the Minister of the new megadepartment of Employment, Education and Training, with his new mission of putting some more 'efficiency, responsiveness, and flexibility' into Australia's universities and colleges of advanced education." The thrust is identical with the reforms to the career service. The reforms are really only 'political' for as long as it takes to remove the institutional shields against the market - by the selective abolition of tenure, by giving 'merit pay' to accountants and 'marketeers', and by systematically distorting the criteria for promotion and the assignment of research monies in their favour. This has been supplemented by a clarifying letter from our ViceChancellors. Almost overnight, they became the 'Chief Executives' of their large new corporate enterprises and they felt obliged, with unseemly haste, to write to all their new minions informing them that 800 years of history had come to an end and that the self-governing community of scholars might no longer enjoy even a residual legitimacy. Further, all were informed that they were directly responsible in the new 'corporate structure', first to the Head of Department and,

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through that person, to the Dean of the Faculty, and thereabove to the Chief Executive who presides over the structure with the help of a radically reduced, but 'leaner' and so more 'efficient' Council or Senate (one that invariably has fewer staff and student representatives and many more ministerial appointees). This rather splenetic complaint will not have been an indulgence if it is used for its proper purpose as a precise example of applied economic rationalism and of what Luhmann means by the 'passing on', or in other words the institutionalisation, of binding 'premises for decision' that will produce the 'flow of power' required by the larger strategic plan of the new Canberra department - in this case the Green and then the White Papers on the reform of tertiary education. The marketeers get the carrots and the liberals get the stick. These binding premises for decision give programmatic expression to the strategic plan. In so doing they exemplify what education means for academics and public administrators alike in the postmodernist age. The reforms are simply the vehicle for getting market signals through to a subsystem that is still mired in a normative context which leads, perforce, to 'disappointed expectations'100 and thus to frustration. Reform is, once again, 'political' only for as long as it takes for the 'structural adjustments' to realign motivations (carrots for the marketeers and sticks for the liberal arts) and thus to 'free-up' the subsystem so that 'learning' can occur. In other words, as soon as action is 'behaviourised' it is, by definition, freed from cultural sludge and turned into a stream of apolitical value-free challenges ('buzzpower'?) that obeys even the faintest messages from the steering media whether they come in the form of 'rewards' or (on the darker side) from the whispered possibility of a little mobility, some staff development, or perhaps even, with some contracted help from skilled outsiders, a 'separation'. The point here is that the system can coexist and find accommodations with almost anyone, including orthodox Marxists, except liberals. In the case of a tiny handful of influential orthodox Marxists within the bureaucracy and in a few key brokerage roles with unions, an accommodation is possible insofar as the orthodoxy reduces the power bargaining to a common economic calculus of the money values that the market will be 'allowed' to set on capital and labour. As Mrs Thatcher said of Mr Gorbachev, these are people with whom 'one can do business' - business is possible because both sides will agree that exchange has primacy over culture (and perhaps even that all social consequences are 'externalities'). In the case of the 'Old Right' some accommodation is similarly possible because the economic rationalists of the 'New Right' can live with normative

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culture providing that it still works 'for the system' by supporting some status hierarchies and some authoritative institutions (those such as gender hierarchy and the law) if they do not get in the way of the market; by suppressing the politicisation of social needs; and by administering morality to the masses in a form that orients them to the expectations of 'the economy*. The system cannot, for reasons that have a larger importance, deal with liberal intellectuals of the kind who only a decade or so ago held positions of influence in both the bureaucracy and the universities. The problem here is that such people are unwilling or unable to separate organisation from culture, and worse, they still insist with a perverse idiocy that there is an immanent relation between the two and even that organisational structures depend in some way on cultural forms for their legitimacy! Liberalism is menacingly political because too often it creates, or allows other people to create, new communication communities, to give voice to social needs, and to revivify a public sphere that will have 'structure-forming effects' on formal processes and structures of organisation. As it does so it simply foredooms an expensive surfeit of false expectations to 'disappointment' and forces resources into the negative task of 'demoralising' local infections (of trust and spontaneous solidarity) that have built up at points where the skin of the system has broken. In an order that relies on an economically driven systems logic, liberalism and liberal cultures become menacingly political because they pull in exactly the wrong direction and resist the switching of coordination 'upwards' from an inferior steering medium (social power vested in status hierarchies and old bureaucracies) to the superior one (the market) in which a far more 'adaptive', cleaner, and therefore less politicising separation between steering medium and signal is possible.

CRISIS OF THE STATE, OR CRISIS OF MODERNITY? Perhaps we are unfair to our SES respondents? In asking what has happened to the deliberative capacities of the state and its 'intellectuals', one is bound to admit that this is an evaluative question that cannot be posed and answered in vacuo. The answers cannot be read off from some privileged standpoint that is 'outside' history and society. Our question is obviously and obligatorily set within a larger social theoretical context of assumptions about social evolution and 'development'. That context and those assumptions will unavoidably set the criteria that are used to judge the intellectual achievements of the reformers both past and present. And so could it be that we are

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expecting the impossible of the 'states'-men' (or 'persons of state') and that our implicit criticisms of them are an expression only of our own 'disappointed expectations'? Whatever else the state might do, its task is always one of coords nation. An assessment of these intellectual accomplishments forces one to decide, or at least to consider, whether all these very muscular reforms are a response to a crisis of the state which does the coordinating, or to a crisis of modernity and hence of society - or of some different relation between the two? If we have been unfair to our respondents is it perhaps because a crisis of the state has been mistaken for a crisis of modernity!

In coming to terms with this question we need to look anew at assumptions about history, social reproduction, and the continuity (or otherwise) of the earlier Whitlam reforms with these new rationalisations of the mid and late 1980s. With the benefit of hindsight it seems clear enough that both the reforms of the Whitlam period and the criticisms that are made of them today rest on a now classical view of the state and society that is well summed up by Alain Touraine in the following terms: Only the state can integrate social actors who are separated by the market, opposed to each other by class relations, atomised by rational individualism.101 In the modern world the state is the great engine of integration; and integration is the implicit criterion of evaluation for processes of rationalisation - and hence for reform. These classically modernist assumptions would seem to sit very comfortably indeed with the spirit and intention of most of what was done in the Whitlam period. Moreover, it is of more than passing interest to note that at about this time, in 1974 to be precise, Habermas felt able to claim some very broad agreement on the 'structural risks' that threaten first the state, and with it, the organisation of society. There is today no disagreement concerning the structural risks built into developed capitalist economies. These have to do primarily with interruptions of the accumulation process conditioned by the business cycle, the external costs of a private production that cannot adequately deal with the problem situations it itself creates, and a pattern of privilege whose core is a structurally conditioned unequal distribution of wealth and income. The three great areas of responsibility against which the performance of the government is today measured are then: shaping a business policy that ensures

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growth, influencing the structure of production in a manner oriented to collective needs, and correcting the pattern of social inequality.102 There is no point in splitting hairs by insisting that the 'structural risks' of the Whitlam period led to 'crisis tendencies' of one particular type. From the conservative liberal viewpoint of the Report to the Trilateral Commission those reforms can be theorised as an 'overload' problem that the reformists of the time sought to address with some 330 adjustments variously designed to augment the problemsolving capacity of the Australian public service according to the rather polyvalent logic that we sought to characterise above. In a similar vein the Whitlam reforms can also be viewed from the terms of Offe's theory of 'the crisis of crisis management' as piecemeal and predictably unsuccessful attempts to deal with the inherent conflicts and contradictions of policy formation in a capitalist state. 103 Moreover, if only in the extraordinary circumstances of the constitutional coup of 1975 and the Whitlam government's dismissal, there are some signs perhaps not of a 'legitimation crisis'104 but rather of an impending 'fiscal crisis of the state'105 in which integrative performance is jeopardised, from the other end of the spectrum, by a shortfall of resources. Certainly in the several variants of Offe, O'Connor, and Habermas, the differences between the crisis theories depend mainly on the point at which the (integrative) relation between the subsystems (see Figure 5.2) breaks down.106 Figure 5*2 Modified Habermas/Offe model of systems relations

Steering Performances

Social Provision Health/Educ/Etc.—1 Socio-Cultural System (Shared traditions, expectations, norms, etc.) Mass Loyalty ' Acceptance of Authority

Political Administrative System (The State)

Economic System (Capital) Fiscal Skim-off

According to Habermas' theoretical formulations the points of origin and types of crisis are shown in Table 5.1.

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Table 5 A Origins and types of crises. Point of origin (subsystem)

System crisis

Economic

Economic crisis

Political-administrative

Rationality crisis

Socio-cultural

Identity crisis

Legitimation crisis Motivation crisis

Admittedly, we are dealing here with conflicting interpretations of historical events and yet, despite the differences, they all point via crisis theories to assumptions about modernity and modernisation that define the problems of the state apparatus either directly or indirectly as failures of integration. The question that now arises is whether the reforms and rationalisations of the Hawke period are a continuation in kind of this integrative task of modernisation and modernity. Although one is under no obligation to accept the 'theory' that the reformers proffer for what they do, their views are nonetheless important. And so we note, first, that the architects of the new reforms show great deference to Coombs. They would very much like their work to be written into the Australian history as a vigorous and resolute and more ambitious resumption of an unfinished job107 - a job that Coombs was never able to finish because Prime Minister Fraser lacked the political will to make any kind of trenchant reforms.108 Moreover, the criteria that are commonly used in the diagnosis of the problems of the public sector suggest that the new reformers believe themselves to be addressing what are perhaps still primarily failures of integration. Their insistence on unresponsiveness, inefficiency and inflexibility point in various ways, to what Rose and Beer, respectively, called 'directionless consensus' and 'pluralistic stagnation'109 and, further, to what Crozier and his co-authors saw among senior bureaucrats in several countries as an attitude of defeatist helplessness in the face of 'overloading' demands.110 In adopting this internationally popular and stereotypical view, our Canberra reformers focus on what they see as a legacy of incrementalist muddling and of obscurantist and obstructionist shortsighted, eyes-down, can't-see-the-wood-for-the-trees commitments to an inchoate array of projects and programs of any and every description. Certainly, as the evidence has shown, our reformers in the central agencies believed that they were rationalising the state apparatus and so producing greater consistency and coherence both over time and across different departments and sections of government.111

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Still in support of this argument for continuity it might seem reasonable to claim that the new synergy and strength of the coordinating departments should be seen as a development, within the state apparatus, of just the kind of deflective capacity' that is in fact required to meet the new challenges that have been rapidly accumulating in the socio-cultural sphere as our relation to the fragmenting residues of normative tradition itself becomes more reflective. The very idea of a public sphere presupposes that the ends of public policy can no longer be simply grounded in Values' that are naively read off from consensually agreed needs and priorities. Modernisation in these last decades of the twentieth century already presupposes all the crosscutting conflicts and tensions between separating Value spheres' and 'cultural orders' that Max Weber so brilliantly predicted.112 And so, the new wave of reformers might claim that it is no longer possible to have programs and projects arranged in a kind of one-to-one relation of correspondence with a plurality of interest groups and supplicants 'in the community'. 'Allocative politics'113 does not work in practice and is indeed the root of all the incrementalist muddles. Rationalisation asks for a much more vigorous capacity for review (integration) to be built-in to the state apparatus so that essentially the same problems can be dealt with more 'efficiently and effectively' by people who are explicitly equipped to take this broader view and thus to deal with the problem of integration at the higher level of abstraction and generality that modernisation (complexity?) has forced upon the modern state. That is what the new reformers might claim to have done. Rationalisation is formal rationalisation that simply eliminates 'waste and duplication' and creates a capacity for priorities to be set more clearly. The relation between state and society remains the same and democratic government in Australia is, accordingly, in much better shape. That view of the new reforms may yet turn out to be correct and, if it is correct, many of our implicit criticisms will have been misplaced. However, in this respect our claim is that the evidence points in a different direction and suggests that the new rationalising reforms are discontinuous with the Whitlam reforms and should be read instead as signs of a transformation in the relation of political administration to society. The claims of the new 'post-modernist' reformers rest on completely different assumptions about the fundamental nature of coordination, assumptions that derive in turn from an entirely new, and one might even say, a 'post-modernist' conception of 'system'. In the 'modern' regime of Whitlam and Coombs the notion of 'a system' was a fairly loose syncretic concept that nearly always meant 'the social system'. More significantly, this was an 'attitude' (rather than a coherent

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theory) that located the logic of the system and its integrative function, first, in the immanent interrelation of social actions and, second, in their common relation to social needs and cultural norms. The limited meaning of the systems logic as a tool for reforming administration was largely metaphorical and was used (mainly in the area of service provision) as a kind of clarifying shorthand for working out what administrative processes might best relate inputs and outputs with demands of a more or less tangible and 'goal-directed' (zweckrational) kind. The arbiters of both the inputs and the outputs, and ultimately of the processes as well, were still assumed to reside beyond the administration and the legislature 'in' the society. The mighty difference now in the Hawke period is that for the new reformers 'the system' is equated with a market economy that defines its own environment quite differently, in terms that relegate 'society' (if such a thing exists at all) to just another dimension of the biosphere. With this radical shift, the aggregation of interests and the other integrative tasks of listening to the claims and needs of an increasingly complex plurality of outside groups, become comparatively unimportant because the system no longer depends on accomplishments of that nature. Indeed one of the hidden criteria of the reforms is that it should make this unnecessary. This logic reduces now to the formal rationality of the market and so the system 'cares' only about 'its' own integration - 'its' survival and adaptation - in the face of a completely objectified and 'senseless' environment that is, at different times of the day, variously 'turbulent' or 'difficult' and can only have meaning, structure, and reasons given to it by the system (the economy). With this modal switchover the economic rationalist reformers have recast themselves and the state as the servants of an 'economy...[that] obeys not an immanent logic of needs, but instead the need for an immanent logic'.114 The immanent logic is purely cybernetic. And it is for this reason that the new reformers, qua systems designers, assume that its highest functions consist precisely in applying whatever formal models are available to effect what we called a 'transcontextual commensurability of reference' so that inputs, outputs, and demands (as well as processes and performance criteria for their assessment) can be moved about freely and substituted one for the other according (in principle at least) to the criteria of functional equivalence and relative efficacy in 'dealing with' the environment. In effect, the whole of society has become a generic 'externality' tout court115 The radical discontinuity between the Whitlam period and our own shows up just as clearly in the changed nature of reflection that is already fixed in this 'immanent logic'. It is here that we should look

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for part of our answer to the question of what has happened to the state's reflective capacities. Certainly the logic of the reforms seems to agree with Luhmann's view of systems which are now increasingly self-referential and closed, or 'autopoietic'. As he puts it: the recursive application of its own operations to the results of its own operations is an indispensable aspect of the system's reproduction and this defines the unity and autonomy of the system...Autopoietic systems need not be transparent to themselves...Reality assumptions are structures of the system that uses them.116 Again the underlying and changed assumptions of the new reformers is that society per se is incoherent and that it is therefore entirely dependent on an extrinsic economic logic of coherence (formal exchange through the market) that is generated and adjusted from within the system itself - by 'linking scientific self- investigation to structural selection'.117 If we wanted to be rude we could obviously point to this 'mission statement' for the more 'intellectual' form of economic rationalism as a 'technocratic consciousness'118 made perfect and sublime (with cybernetics): but this would distract us from noting, more explicitly, that on this view of 'modernity' 'scientism' is no longer an accusation of philosophical and intellectual failure but instead, on the contrary, the natural form of an 'institutionalised arbitrariness' that has become the ultimate 'intellectual' resource for reducing complexity, and with it all those perplexing and overloading demands on the state. In opposing it Habermas describes this view as follows: The accelerated growth of complexity makes it necessary for society to convert to a form of reproduction that gives up the differentiation between power and truth in favour of a naturelike development withdrawn from reflection.119 If Luhmann's side of this fateful argument is correct, then all so-called crises of the state are simply the passing shadows of a crisis of modernity that has stripped society of every possibility of rationally redeeming (through what Habermas, on another side, calls 'discursive redemption in a public sphere') any claims that might join 'subjective' culture with 'objective' culture - and thus satisfy the fundamental minimum requirement for rationality in public affairs. On that reckoning rationality is reduced to a capacity for doing exactly what has earned our central agency economic rationalists their status as higher 'intellectuals': their skills in catching, stabilising, and then reducing an ever broader array of 'material uncertainties' to the purely formal

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and self-referential logic of money, a logic that has become, as Simmel and Luhmann might see it, the highest possible form of intellectuality.120 Reflection and rationalisation take on organisational form (more 'objective culture') in the very formalism and remoteness through which the central agency 'intellectuals', especially those in Treasury, coordinate the rest of the state's intellectuals. The same shift is also visible in the parallel reduction of action to behaviour and of reflection to strategy. Moreover, here we must once again see that we can have no quarrel with economists per se - if only the problems of modernity were so simple! The criticisms of the economists come from the fact of their unquestioned leadership at the head of a family of 'intellectuals' who are all in the same race to make the self-referential logic of the system perfect. Women will say, with some reason, that it is a patriarchal and therefore a hierarchical family in which there is a finely-grained hierarchical division of labour among members who are all engaged in an intimately complementary way in doing their work of demoralising and depoliticising all those residues of social life, both within and beyond the state, that have yet to be absorbed into the system. The economic rationalists are the leaders because they have done the best job in 'capitalising' on the relativism of modernity. This is certainly what Luhmann must mean in saying that: functional primacy appears to fall to the subsystem that can be structured and differentiated from the rest of society with a higher complexity of its own.121 Yet these achievements would not have been possible without other advances in the behavioural sciences. Herbert Simon, a positivist economist and Nobel laureate, acknowledged over 40 years ago that psychologists have an indispensable part to play in behaviourising action so that it counts (like the measured IQ of our new managers and the education system that is being remodelled in their image) according only to how well it detaches from the subject on a clockwork standard of 'objectification'. With what they proudly and explicitly refer to as their own 'accounting technologies', the new consultant accountants fill the space between the behaviourised action and the performance criteria (viz carrots and sticks) that have been read off by the economists from the 'needs' of 'the economy' for higher 'productivity', micro-economic adjustment, for the repayment of 'our' foreign debt, for 'structural efficiency', and the like. All of this has, in less than ten years, generated its own unified, self-referential and artificial language, of 'eco-managerial biz-speak', that is used everywhere, even in the universities, to neutralise potentially intelligent communication

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through 'ordinary', 'raw', 'uncooked', or 'natural' language wherever it is still to be found.122 And, indeed, in case we thought that this virus was confined to books and workplaces, we find that from the Liberal Party of Australia and its advertising consultants came the inspired strategy to base the whole 1987 election campaign on the sublime notion of 'incentivation' - they lost because the Labor Party persuaded the electorate that it was the better economic manager. At the higher level of abstraction the same process is evident in the reduction of reflection to strategy that is the pride of the 'strategic visionaries'. What is the nature of the 'vision' and of the metaphysic in the pseudo-philosophical self-consciousness that is proffered at this level of reflection? With his unerring brilliance Luhmann again sends a beam of light into the nerve centre of this 'system's brain': the point is no longer ontology, since it is no longer assumed that there exist in the world (or outside the world) positions from which the world can be correctly (or perhaps falsely) described as it is...The new natural (or material, biological, sociological, or in any case empirical) epistemologies differ in principle from the traditional epistemologies by presupposing the observer's own contribution, inseparably bound up with his [sic] system structures, his [sic] autopoiesis, his [sic] instrumentation as a condition of knowledge.123 In these clothes, strategic reflection gives up the claim to critical detachment that served once as the borrowed philosophical justification of the older (and by today's standards, almost benign) positivism that was variously mediated into policy and administration through the natural and social sciences well into the 1970s. It also parts company with a morally conscientious scepticism that used to be, again not so long ago, the common inheritance both of a philosophically intelligent empiricism (as it was in the best British and American traditions) and, equally, of various main strands of European social and political philosophy.124 In both cases the scepticism opposed the dogmas of both science and tradition with a rationally driven hope for improvement that always included the ethical and social order; and it is precisely in this inheritance that we find the intellectual norms of just those older 'generalist intellectual' mandarins who, with some claim to membership of an educated elite sought (if not always successfully) to apply a 'broader view'125 of politics and public administration. This simply points to the much more predatory nature of a new scientism that reappears now in an economic reductionism of a very absolutist, cybernetically dynamic and self-referential form. From the

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moment that humans first began to think critically about the criteria that ought to be applied to the process of thinking itself, it has always been assumed that one test of a good theory is that it should understand its own limits: judged on that criterion neoclassical economic rationalism is, most certainly, not a very good theory. This 'intellectual' closure is all but guaranteed in an immaculately arrogant reduction of reflection to strategy that is perforce always directed against a recalcitrant, 'turbulent', or 'difficult' 'environment'. It is an environment that need never be understood as long as it can be outwitted, neutralised, or 'beaten'. The homology of our 'strategic visionaries' with the 'military mind' is by no means accidental. 'Strategic thinking' is constituted at its origin (in exactly the same way as economic rationalism is) with the idea that success is both constituted and measured against an idealised opponent126 - in our case, against society itself. The tail that is the market furiously wags the dog which is society construed as 'generic externality' - and 'generic market failure'. This gives us a glimpse of the Utopia that is implicit in the closed vision behind the strategic reforms. It is a vision of an idealised world in which all decisions are made by socially denatured individuals who have already in theory been 'set free' of social norms, traditions, conventions, mutual obligations and social solidarities, which might stand in the way of the behavioural orientation of all decisions to perfectly utilitarian criteria of costs and benefits - carrots and sticks or, in other words, the positive and negative 'sanctions' of the market. If that 'vision' has a reflective moment it hardly amounts to much more than an aggressive voluntarism that thinks only about how it can find more 'opportunities' for its own success. Again this is the reason that demoralisation seems like well conceived and appropriately 'strategic' reform. Social solidarities based on trust or mutual obligation, along with any kind of value-rational (wertrational) or ethically grounded commitments, are all fated to appear on the sonar screen of 'the system' as navigational hazards ('market failures') submerged in the sludge of society and awaiting the next generation of reformers equipped with more 'modern' dredging equipment. The demoralisation of the career service is simply an instance of some small progress towards achieving, at the reflective level of the system, the same fully 'incentivated' behaviour that 'the market' requires of all those individuals who were once citizens in a democratic society. Not surprisingly we find, at last, that the key to our questions about reflection and crisis is tied to assumptions about the reproduction of society. Does the reproduction of society just 'welcome' and obey any and every coordinative attempt to reduce complexity? Or is

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society constituted in such a way as to set limits to the process and, with these limits some criteria for reform and rationalisation? Clearly the Whitlam reforms were premised on Australia's own traditions of fairly conservative, but liberal, social democracy. It is, in the words of NettFs famous essay, very definitely a cultural and political history in which 'political ideas and theories of society past and present incorporate a notion of [the] state'.127 Moreover, it is a notion that gives a very important place to the coordinative, redistributive, and arbitrative function of higher administration: a place that is in some ways indeed constitutive of Australian society. It is a society that was, in more senses than one, 'born modern'128 because it expects that its state apparatus (and so, more pertinently, its intellectuals) should integrate and so reconcile and 'rationalise' a broad range of economic and social demands. If only in their intention and logic, the Whitlam reforms were in keeping with that history because they sought to reconcile economic management with social integration, and thus to remodel, 'repair', and even expand a coordinative capacity for dealing with 'rationality deficits' that might even accrue simultaneously on both 'sides' of the state apparatus at once.129 This was not just an attempt to create a purely internal and formal rationality limited only to relating the various 'arms of policy' to each other only within the state apparatus because that task itself presupposes, at the reflective level, a capacity for 'reading' whatever requirements are inherent in the task of reproducing the whole social system (of economy, state and culture) of society. In groping for an assessment of this earlier modernist view, it must be said that although it does indeed set its own very demanding criteria for judging the reforming and rationalising accomplishments of our state intellectuals, it is not (as some critics will want to have it) an impossibly grandiose and extravagant expectation. On the contrary it is in many respects a cautious, and, one might even say, a wisely conservative vision inasmuch as it keeps the mind of the state alert and open to the broad range of 'structural risks' that it faces. The intellectually demanding requirements that such a view of the state sets on its intellectuals have their anchorage in assumptions about modernity and modernisation. Those requirements do not involve either a society-centred view of the state or a state-centred view of society130 - they assume rather that one implies the other. But those requirements certainly still assume that society is coherent and, more positively, that the state administration can and should (albeit within the always problematic limits of available resources) deal with what Nancy Fraser called the 'politics of need interpretation',131 as well as with new demands that are 'released' as traditions and normative

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expectations are increasingly intellectualised and politicised. In short the assumption is that the state apparatus can develop the intellectual capacities to read, accept, and reconcile the complexity of demands that are inherent in the reproduction of society. When we look back at our data from that point of view we see in the movement from Whitlam to our own period something that looks very like a 'crisis of the state' that has yet to break upon the society. In the terms of Habermas' earlier theory it appears as a potential or actual Nationality crisis', or at least a clutch of 'crisis tendencies', that are already manifest in the destruction of its 'corporate memory', in its 'organised forgetting', and in the deliberate closure of its intellectuals to even the possibility of understanding the nature of a coordinative function that is set upon them, whether they choose to recognise it or not, by requirements that are inherent in the larger organisation of a modern society. From that evaluative point of view the new reformer intellect tuals show such a drastic reduction of learning and reasoning capacity, and hence ultimately of adaptive capacity, that there is little hope that they could even recognise or understand the charges that are likely to be set upon them in the future. One can only speculate how long it might take a higher administration to relearn what it has discarded and forgotten. One might then ask how much longer it might take to rebuild the structural means (or as we shall consider in Chapter 6, the 'relative autonomy') that would be needed to give effect to that relearning. However, from the point of view of the new reformers, ironically one which they do not have the 'intellectual' capacity to represent as such, the 'crisis' is really a crisis of modernity and the end point of a relativism that has dissolved culture into arbitrary individual choices that can never again, except through the market, have 'structureforming effects' of a rationally redeemable kind. The crisis could not signal for them the looming integrative requirements that might be set on them and on the state apparatus by a 'legitimation crisis', or an 'identity crisis', or a 'motivation crisis', or a 'rationality crisis', because these are intellectual concoctions and no such thing is possible. If the crisis even deserves representation in terms of a social theory, then it is merely another symptom of troubled bereavement that is experienced by the bereaved Herself after the death and it is therefore very much a private concern. From the perspective of that aggressive economic reductionism vested now in a systems theory there is no crisis but rather an unlimited opportunity to shift the coordinative burden from the state to the economy, from power to money-power, or in other words, from the bureaucracy to the market. The crises are illusions that can be put to one side because it can now be safely

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presumed, even without the need to understand what is at stake, that the reproduction of society does not set limits that need be reckoned as such

and, further, that problems of this kind are in any case fated to sort themselves out through changes in the market behaviours of individuals. Our evaluations turn on just these 'assumptions'; insofar as they turn out to be correct, we shall have to concede that our reformers have been unfairly maligned.

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CHAPTER 6

INTEGRITY UNDER STRESS THE LUCKY COUNTRY ENTERS THE WORLD ECONOMY

She sailed a-way on a love-ly sum-mer's day On the back of a croc-o-dile. 'You see', said she, 'He's as tame as tame can be, I'll float him down the Nile'. The croc winked his eye as the la-dy waved good-bye, Wearing a hap-py smile. At the end of the ride, the la-dy was in-side, And the smile was on the croc-o-dile. T h e Crocodile Ride'1 In this chapter we turn to the larger evaluative context of Canberra's new economic rationalism and its implications for the destiny of a nation. There is much to be learned from the experience of small to middlesized nations like Australia that are set on the semi-periphery of the world economy. More specifically we discover from both theoretical and practical points of view, that evaluations of the impact of economic rationalism are tied to rather unsteady constructions of nationhood and identity. For example it is easy to see that the impact of economic rationalism has an entirely different significance according to whether one is looking, on the one hand, at nations like those of South America that are in the grip of one type of empire or, on the other hand, at the nations of Eastern Europe that are breaking free from another empire of the older kind. In the first case the various reforms, 'structural adjustments', innovations, and other applications of economic rationalism claim primacy over civil society, identity, culture and nationhood. Conversely, in the second case of Eastern Europe, the burden of adjustment is partly reversed and one is invited to marvel instead at the extraordinary resilience and strength of civil society and, from that perspective, to redefine the

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coordinating structures of both economy and state as contingent realities and sometimes even as the objects of will and action. These enormous theoretical and practical uncertainties are intensified by the experience of the nations of Western Europe. In those nations the significance of national identity, the meaning of political and social democracy, and the increasing distances between civil society and the state,2 have all been variously thrown into question as an increasing array of coordinative functions are shifted from the nation-state to the transnational structures of the European Economic Community. This is not to deny that in the contemporary world the affairs of nations are indeed shaped by factors which are given in the structure of the world economy and which lie beyond the reach of national governments and local economic and political actors. The point is rather that even purely economic events, if indeed such a notion makes any sense, cannot be reckoned simply as the automatic effects of external economic causes that originate somewhere 'out there' in the world economy. Accordingly, in what follows, it will be wiser to proceed from the assumption that the impact of Canberra's economic rationalism, and its reception and meaning, depend very much on the particulars of the Australian situation. It is for just this reason that there is need now to take stock of some of the historical, structural, and cultural conditions and mediations of these new directions that are so firmly announced in the changing character of the Canberra bureaucracy. In each of these four sections the aim is to re-examine, from different points of this expanded context, the strains that we saw refracted in the triangular pattern of relations between Canberra's central agencies on the one hand and the market-oriented and program and service departments on the other. And so, in the first section below, the notion of 'relative autonomy' is used to explore some problems that hang over judgments about the strength and independence of the Australian federal state vis-a-vis both external and internal pressures. This leads, in the second section, to some consideration of other structural problems more particularly to some of the particular vulnerabilities that accrue to this Australian federal state apparatus from its comparatively heavy burden of coordination. In the third section we look at the cultural politics of economic rationalism and thus at some of the local conditions for its successful penetration in the Australian setting. The fourth and last section deals in a more explicitly evaluative way with the impact of economic rationalism and with its significance for our future understanding of society and identity. The various reforms that have been forcefully pursued and justified

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under such rubrics as 'freeing up the Australian economy', 'structural efficiency', public sector reform, privatisation, and deregulation of the labour market all make, as we saw in the last chapter, their own assumptions both about the behaviour of social systems and therefore about what can count as a reform of 'the system' or of relations between subsystems. Since one focus of our concern is the integrity of a nation, it will be useful to recall the theoretical schema that was used in the last chapter (see Figure 5.2 on page 197) to represent some of the inherent stresses between the 'subsystems' of economy, state, and culture that are proposed in the so-called 'crisis theories' of the state. In retrospect it is clear that this model carries some of the shortcomings of its parent theories from the 1970s inasmuch as it rests on a theoretically generalised nation-state that is conceived without reference to size and to relative position in the external world. Fig* 6*1 The economically rational system. - | p i t s ' Environment -|

- 'The' Economy (a) Access, deregulation, privatisation

r

W> Access-,

World Economic System (International finance & economic organisations) (g) Investments

(b) Instrumentalisation, ^ ^ ^ ^ ^ 'Commodification', 11 'Liquification' I

| - f l g £ £ *s _

(0 Social Provision

I

Socio-Cultural System (Traditions, expectations, (The State) norms, identity etc.) ¥j(i) Mass Loyalty I (h) Fiscal Skim-off - J I—Acceptance of —» Authority

National Economic System (Domestic enterprise)

L

, 111

Political Administrative System

(c) 'Incentivated' Economic Behaviour

This model will give better service as a means of signposting the more concrete discussions that follow if it is modified to incorporate the changed relationships that are assumed in the economic rationalist framework (Figure 6.1). At a glance it is clear that the closer integration of the domestic economy with the world economic system alters the pattern of relationships (e, f, h, i) among what were, on the older 'crisis model', assumed to function as three subsystems of the one nation-society. Integration with the world economy clearly presupposes a closer functional incorporation of the 'political administrative

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system' (the state, and with it the obligatory conditions of elected governments) into an augmented economic system. This augmented economic system treats civil society as part of an objectified environment, and as an economic 'resource', in a new set of relationships (b,c) that overshadow, or perhaps even supersede relationships (f, i), that were assumed, in the older model, to set certain irreducible limits and imperatives on state action. It is to the antecedents, corollaries, and consequences of this changed set of relations that we now turn our attention.

RELATIVE AUTONOMY OF THE STATE? In 1975, the last year of the Whitlam Labor government, Australians were thrown into a spirited debate over the pros and cons of a grand proposal by Rex Connor, the then Minister for Minerals and Energy, to 'buy back the farm', or in other words to repatriate control over the mining and export of Australia's mineral and energy resources. That plan might have achieved its objective but it quickly raised 'political' questions about the risks and benefits of the huge borrowings that would have been necessary. The ensuing fracas was one of the triggers for the constitutional 'coup' which ousted a Labor government that still held a majority in the House of Representatives. Some ten years later the Hawke Labor governments pushed through some equally bold reforms such as the deregulations first of the currency and then of the financial markets, and soon thereafter, its major reforms of the Canberra bureaucracy. The third Hawke Labor government was elected in March 1990 amid debate over the urgency of micro-economic reform of the railway and sea transport systems, and of the desirability or otherwise of proceeding with the construction, under Japanese auspices, of a futuristic 'high tech' city or 'Multi-Function Polis' (MFP). From our vantage point the question as to whether any of these innovations, reforms, or developments is 'good' or 'bad' for a nation will invariably beg the much more important question: whether, in relation to both domestic and international economic actors, the state has, keeps, or loses whatever measure of strength, independence, or 'relative autonomy' is necessary to ensure that the project and its successors will, on balance, benefit the nation. If the projected outcome is achieved at the expense of control, independence, and 'sovereignty' then, no matter how dazzling they may be, the particular benefits merely point to what is a loss to a nation and its people, on a more general and fundamental level. Whether in its Marxist or liberal form, the notion of the relative 'autonomy of the state' hangs over the destiny of Australia and raises

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problems that are both theoretical and practical. Indeed the two are interwoven: by inquiring further into what is contained in the concepts it will be possible to see more clearly some of the conditions for the reception of economic rationalism. From the perspective of Australia's national development, it would seem that this still useful notion of the relative autonomy of the state has three flaws. One flaw issues from the fact that the idea has (with so many other history making ideas) been both formed and narrowed by projections from the experience of Europe and North America; the second flaw comes from a clay foot that is stuck in Marxist debates about class and capital; and the third has to do with uncertainties or wrong presumptions about the importance that should be given to civil society and national culture. These problems are addressed but not entirely solved in several recent writings of Theda Skocpol, Stephen Krasner and others who are intent on giving useful empirical and historical specificity to these debates about the state. They want to show, among other things, that the strength and relative autonomy of states is a historically variable phenomenon in which states are not merely reflections of civil society (or of class relations) but to a varying extent collective actors and 'brokers' that actually shape 'polities', and so by extension both civil society and the 'economy' as well. In an early study that supports what was later proposed as a 'state-centred' view of society (rather than a 'society-centred' view of the state), Theda Skocpol concludes a beautifully fine-grained study of the 'New Deal' in the United States with the criticism that reveals: the basic inadequacy of those lines of neo-Marxist reasoning that treat political outcomes in advanced capitalism as the enactments of a far-sighted capitalist ruling class or as the automatically functional responses of the political system to the needs of capitalism. In making these criticisms her purpose is to endorse and, indeed, to identify herself with those theorists who, refer to the 'relative autonomy of politics' or who assign 'state managers' an independent explanatory role [and who are thus] moving towards an approach that can take seriously the state and parties as organisations of specifically political domination, organisations with their own structures, their own histories, and their own patterns of conflict and impact upon class relations and economic development.3 In looking with similar lenses at an Australian federal state that is not

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yet 100 years old, certain features quickly appear. Australia was 'born modern'4 and by the time of Federation in 1901 it had, with the first popularly elected Labor government in the world, the highest living standards and the most equal distribution of income of all the 'developed' nations. Through its control over tariffs and industrial relations, and a direct control over wages and thus over the distribution of national income, the state held and used its power both to resist private capital interests and, within that large measure of 'relative autonomy', to form or at least to protect the social structure. Consequently it was a state that, on Krasner's schema (see Table 6.1), looks rather like a very 'strong state' or even a 'dominant state'.5 Table 6.1 Power of the state vis a vis its domestic society Resist Change Change Private Pressure Private Behaviour Social Structure Yes No Nonexistent Weak Moderate Strong Dominant

Yes

X

No

Yes

X

X

X X

X

X

No

X

X

X

X

X(but slowly)

X

X

X

Four comments must suffice to sketch the prima facie case for the view that on this reckoning the Australian federal state is more like France than Britain (the 'great stateless society'6 par excellence), from which Australia was born. In the first place Federation in Australia has a political significance that is opposite to the American and even to the West German and Canadian experience where it was quite explicitly a means of dividing and limiting state power. Although in Australia Federation was created without very much noise in the heavens and largely as a matter of pragmatic convenience, it was nonetheless a consolidation and, in some respects, an aggregation of the powers of five states that had, traditionally, under what came to be known as 'colonial socialism': performed a general management role in their economies [that entailed]... direct action by governments to attract foreign (British) resources of capital and labour through public borrowing overseas and large-scale programs of publicly assisted migration, the investment of British capital in publicly owned fixed assets in Australia; the concentration of this investment in public business undertakings, primarily in transport and

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communications; and the delivery of market services by these public enterprises.7 The persistence in Australia of this phenomenon (that others prefer to call state capitalism and which Szelenyi, with only a little exaggeration called, 'the state mode of production'8) can be gauged from the fact that it was not until the 1930s that private capital investments exceeded public capital outlays - and they still accounted for just over one-third of total capital formation in the 1970s.9 Secondly, the Australian situation exemplifies Eckstein's observation that, 'if interaction among politically active groups produces policy, policy in turn creates politically active groups'.10 Indeed, the Australian situation carries this view to where Skocpol11 and others have taken it, and presents a picture of a state whose strength is affirmed in the very manner in which it has shaped and even constituted the mode of political contestation among opposing groups and (as Matthews12 shows) of business associations in particular. The central necessity of making coherent and persuasive representations to government seems to have dictated the way in which business associations have organised themselves thereby, perhaps, giving the state a considerable leverage over them which has been often used to resist private pressure. Third, it has been often noted that the power and character of a state are most often likely to change in times of crisis and especially in times of war. World War II, perhaps even more than the Great Depression, shifted the focus of attention from the governments of the six states to a federal government charged with emergency powers and the fateful responsibilities of defending a nation. The federal government emerged from the war with a monopoly of income tax powers which it never relinquished to the states, and with its prestige and authority massively enhanced. Thereafter the constant and 'increasing complexities of economic life have been a far more powerful influence on the growth of central power than the political complexion'13 of whatever government (Liberal or Labor) was in power in Canberra and they have led to what Groenewegen has dubbed a 'fiscal federalism'14 that is much more pronounced than in the United States or Canada. In comparative studies of the emergence and strength of states there is one factor that clearly had a decisive importance in the formation of Australia's nation-building state. As Lipset puts it: the nature of working class politics has been profoundly influenced by the variations in the historic conditions under which

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the proletariat first entered the political arena...[Formative experiences initiated] certain trends or institutional patterns that took on a self-perpetuating character and hence affected ideology, structure, and political outcomes in later years.15 In Australia, the Labor Party had emerged from a strong trade union movement as a powerful force well before Federation in 190116 and, more importantly, before the process of industrialisation had really got under way. Labor emerged as a political force in conditions where capital was sharply divided between the Tree Traders' (representing large overseas-owned and controlled mining, shipping, and agricultural commodity exporting enterprises that cared only about reducing wages) and, on the other hand, the 'Protectionists' (local small industrial and service industries that were willing to work with the trade unions). The bitter outrage over the maritime, coalminers', and shearers' strikes of 1890 seems, together with the ensuing industrial upheavals of the 1890s and the continuing disunity of capital, to have 'allowed the state sufficient elbow room to establish its authority in the field of industrial relations' in a way that provides a 'striking example of the relative autonomy of the state'.17 No one doubts that the enormous authority of the state in this area of industrial relations was anything less than a keystone of Australia's national development in the twentieth century and the principal means of resisting private pressure, changing private behaviour, and of quite decisively forming the social structure of the Lucky Country. These features of the Australian state are real enough: they are not figments of the imagination. However, there is something to be gained by looking a little more critically at some of the assumptions and problems that come with this view. In the first place some difficulties arise in applying notions of the 'strong' versus 'weak' state and of 'relative autonomy' to small and middle ranking nations such as Australia with a recent colonial history. The first colonial white settlements that were established at the expense of the Aboriginal people only 200 years ago on a continent that was 'unilaterally' declared a terra nullius were, of course, 'strong' states - how could brutal penal colonies under military gubernatorial rule be anything else? And so this history throws up an obvious question: at what point does the relative autonomy of 'the state' vis-a-vis contending actors18 in its own territory stop depending on its lack of autonomy vis-a-vis the foreign colonial power? Or, to put the same question in another way, is increasing or declining 'relative autonomy' merely a reflection of a nation's power and position within the world order?19

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In looking at Australian history from this rather less sanguine point of view, one could easily chart the decline of strength and relative autonomy through three points in time. The first is from 'colonial socialism' to the moment of Federation. Here there is still great strength because Australia remained a major trading partner for Britain and a necessary commodity-exporting outpost of the empire on which the sun never sets. But then, as Australia's most distinguished economic historian notes, one comes to the Great Depression (when Britain was already in decline) and to a crisis in which: The so-called 'mass market failure' of the 1930s is seen traditionally in Western countries as greatly stimulating public intervention, including public ownership of assets...[but] in Australia there was, in this particular and important area of public action, a marked withdrawal relative to private counterparts.20 And then, surely not quite fortuitously, the decline of the public sector and more broadly of the authority and relative autonomy of the state in relation to private interests fell away very rapidly in the post-war Menzies years as Britain (shorn of its empire) joined the European Economic Community and as Australia had to look for other trading partners and large-scale investments from Japan and America. The second problem concerning some of the Marxist constructions of 'relative autonomy' have been been mentioned already (pp. 211-12) Boris Frankel has rightly shown that some of the chronic difficulties of the original and excessively abstract notion of 'relative autonomy' arise also because it rests too much on a theory of class and not enough on capital.21 This image of a state apparatus whose logic can be traced from the 'condensations' and patterns of class relations within its personnel is a projection from lla vieille Europe' that is to some extent misleading in the New World. The comparative Aberbach studies empirically confirm much that is said about 'VEnarchie'22 and the caste system in the French state apparatus in which the l grands corps1 of 'hauls fonctionnaires* come, in the nation that gave us the term, not just from the bourgeoisie but, very decidedly, from the haute bourgeoisie. But this does not, in itself, tell us what economic and other policies they will favour or apply. In Australia, as our data have shown, there is a proven relationship between the high socioeconomic origins of our respondents and the aggressiveness of their policy orientations.23 While this may offer a solid consolation prize to the orthodox Marxist position, it should not distract attention from what may be the still more important function of our top economists

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as mediators of external economic pressures which are likely to have a direct impact on the integrity of a nation. The third problem that will shortly be addressed in greater detail is that the notions and attributions of 'relative autonomy' in the common empiricist prejudices of both the scientific Marxist orthodoxy and of American and British political science conspire together to blur or bury the other key variable that is culture: both positions inappropriately dismiss culture as a form of sociological idealism. The result prejudices enquiry into the usually decisive 'structure-forming effects' of culture(s) and 'ideas' in securing or weakening the authority of the state. The difficulties are compounded by the beam in the eye of European scholarship and the spill-over into assumptions about the strength and relative autonomy of our Australian federal state and of the 'historical guarantees' that may or may not be cemented into Canberra's statute books and its gleaming new buildings. And so one theory explains that Britain is the archetype of the weak state and France of the strong state because France had dominant central state institutions that were already clearly differentiated from civil society in the thirteenth century - three hundred years before they began to develop in Britain under Henry VIII.24 What difference does history make and what authority does it secretly give to state 'institutions' in a place like Australia? In what measure does the authority and autonomy of one of the world's newest 'developed' states depend on its position in the world? Not surprisingly we are not at all sure; the contest over historical legitimation gropes about in the spaces between two histories that do not meet. On the one hand there is what its opponents call a 'romantic history'25 in which the rights and aspirations of a nation of common men to a 'fair go' are anchored in a transplanted early nineteenth century British Chartist movement and a predominantly working class immigrant population - 'the outpourings of the unions and poor houses of the United Kingdom'26 - that was stamped with a horrific experience of militant Gladstonian British capitalism. The other more orthodox and, of course, empiricist history is the one of governments, legal and organisational structures, and the occasional words of great men. Since it is empiricist in temper it shares the same anticultural prejudices as contemporary economics and so, on this version of the history, political culture follows the Crown and 'the facts of Parliament' rather like a plastic dingo on a lead.27 Keeping in mind these doubts concerning both the relative autonomy of a state apparatus and the capacity of a state to secure the integrity of a nation, we should look further at some of the structural conditions of vulnerability before proceeding, in the third section, to

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the other side of the question and hence to the part that ideas, intellectuals, and ideologies have in the socio-cultural dimension of the problem.

RESPONDING TO VULNERABILITY (UP THE CREEK OR DOWN THE MURRAY?) In March 1988, the National Institute of Economic and Industry Research summed up the continuing predicament of the Lucky Country28 in the following terms: The decline in the terms of trade indicates that the considerable comparative advantage in the production of rural commodities and minerals which Australia once enjoyed is diminishing. A passive adjustment to this reality via devaluation unaccompanied by measures to promote structural change has only one end-point: a new equilibrium with Australian incomes reduced to the level of the countries which have come to share Australia's comparative advantage.29 The last sentence points to the possibility that is so well evoked in the Treasurer's apocryphal allusion, on 14 May 1986, to central America and to Australia's threatening fate as a 'banana republic'. The nature of the public debate was changed30 with that phrase which pointed to the fate that has befallen the comprador economies of South America some of which, like Argentina and Uruguay, used to enjoy high standards of living and a happy measure of social and political democracy.31 It is significant that debates that have dominated the political arena in our period of 1984 to 1988, debates about 'structural adjustment' and threats to the identity and character of a nation, should have been narrowed and set, almost exclusively, in an economic framework. These constructions of Australia's predicament may be usefully considered somewhat more broadly from three complementary points of orientation. In the first place, and even without broaching 'world systems theory', we see that very differing interpretations of Australia's undeniable economic vulnerability point in turn to fundamental questions about the role of a nation-state in the contemporary international order. Francis Castles32 makes a fascinating argument that begins by comparing Australia with Sweden in terms similar to those of the joint research 'Mission to Western Europe of the Australian Council of Trade Unions and Trade Development Council' - a government-supported mission that was sent in 1986 to Sweden, West

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Germany, and Austria and which produced a momentarily influential policy statement ('Australia Reconstructed' 33 ) presenting a more 'interventionist' variant of the economic rationalist models. The comparison with Sweden is obviously important. Both Sweden and Australia are small to middle-sized nations with high standards of living.34 Both are unprotected by such regional economic treaties as the EEC. And both have small domestic markets and hence economies that are heavily reliant on overseas trade. As Castles shows there is a conventional view which says that these economies are vulnerable for the reason 'that exogenous shocks are translated into internal economic crises with great rapidity' and so these economies 'should experience the greatest fluctuations in economic performance'. And yet, as he shows, this turns out historically not to be the case at all; on the contrary: It is the general consensus of recent writing in the field of comparative political economy that it was precisely the smaller, more corporatist, states of Western Europe which had the best record of weathering the exogenously generated problems of the 1970s and early 1980s.35 Along the way this, of course, makes the point that the relative success of capitalist economies seems to be greatest where they are less capitalist (less laissez-faire) in structure. And yet the more telling thrust of Francis Castles' argument is that: The theoretical puzzle posed by the falsification of the hypothesis that economic vulnerability should lead to economic instability cannot be resolved by purely economic analysis.36 Sweden was the 'fortress poorhouse of Europe' at a time when Australia enjoyed the highest living standards in the world and yet, since about 1975, Sweden has fared considerably better than Australia. Why is this the case? The answer seems to turn on differences in response to what are essentially similar situations or, more explicitly, on differences in the domestic institutional arrangements that govern the relation between production, on the one hand, and the redistribution of national income (and of social costs) on the other. In his comparison Castles says that Sweden has responded with a politics of 'domestic compensation' that has facilitated structural adjustment with extremely well resourced investment assistance together with large scale labour market and welfare programs. In Australia, by contrast, the response has typically followed a politics of 'domestic stabilisation' that seeks to prevent major structural economic changes from occurring. This comparison points to differences not only in the 'organisation'

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of relative autonomy but also to important symmetries between intra* national and international relations. It points, more specifically, to a coordinative burden that is much lighter in the Swedish case inasmuch as it is able to make much more effective use of what are now known as 'allocative polities' that can respond more directly to positive demands. By contrast in the Australian case the coordinative burden, the authority, and hence the threats to the integrity of the state are all much greater because (in the terms of one of Offe's early formulations) there is a greater reliance instead on 'productive politics' in a different and more difficult situation. The state does not respond to demands, but to negative events, namely, the absence or disturbance of a capital accumulation process [i.e. economic growth]. It is a more difficult situation because, by contrast: It is always easier to respond to positive demands: they can either be rejected or accepted. In a situation where one wants to avoid something, that is, where one reacts to a manifest or anticipated danger, there is no clear-cut course of action that could either be followed or rejected. Even though it is unlikely that the state as an actor is the only one who wants to avoid a certain condition, the state cannot afford to rely on the directions of action recommended or demanded by the most powerful (or politically dominant) groups in society: for to satisfy the interests of one group is one thing, and to restore the [capital] accumulation process as a whole is another thing, and it is by no means certain that the two will coincide. Consequently, the state has to devise decision rules of its own in a situation where the primary concern is to avoid disturbance of the overall accumulation process. The rules and laws that govern politics are not sufficient to solve this problem. An additional set of decision rules is required that determines policies.31 In Offe's formulation there are some shadows of a rather Luhmannesque biological metaphor of system and environment to which we shall return. For the moment it is enough simply to note that in the Australian case these 'policies' and instruments of what first Katzenstein38 and then Castles call 'domestic stabilisation', have of course been the 'three basics' of, first, immigration (to directly increase the size of the economy and sometimes to hold down labour costs); second, trade protection and currency controls which have always been bargained and balanced with the third factor: the 'fair wage' set through the centralised wage fixation and arbitration system. It is here and especially in relation to the wages system, that we see a grim irony in the fact that economic rationalism should now

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present such a threat to contemporary Australia. Why the irony? Because in Australia socialism never had the same importance as in France, Germany or England, and because, in this nation that was 'born modern' an extraordinarily equal distribution of male income was enforced through a 'historic compromise', embodied in the state wage fixing system, and through a state-enforced accord between employers and male wage-earners that already treated a man's labour as a commodity. This is perhaps still an understatement without the further point that Australian 'labourism', already a very economistic notion, set great store on the dignity of wage labour and hence on the right to work39 and the right to have the state protect a level of social equality that was guaranteed not through secondary 'compensation' but rather 'at source' and in terms of primary incomes .40 Both the irony and the threat are magnified again in the attitude of the economic rationalists to an agreement that has been crucial to the Hawke Labor government's hold on office: the five times revised 1982 'Statement of Accord between the Australian Labor Party and the Australian Council of Trade Unions Regarding Economic Policy'.41 In a nutshell, what has happened is that the strongest sections of the business community, including the media, have grudgingly lived with the Accord as long as the authority of the Arbitration Commission (now renamed the Industrial Relations Commission) and the centralised negotiating powers of the highly disciplined and 'responsible'42 Australian Council of Trade Unions have operated within three conditions. The first is that this tremendous concentration of authority should be used not to increase real wages but instead to decrease them in line with every fall in the value of the deregulated currency. The second condition is that a blind eye is turned to the enormous increase in the profit share (and in executive and professional salaries) as opposed to the wages share of national income. The third is that the state's share of income shall fall as well to allow reductions in taxation to be used to offset the fall in real wages to some degree. Three further observations will suffice to point to the historical and social significance of these policies. In the first place the redistribution of Australia's income presents a perfect example of Thurow's observation that economic policy has become a matter of 'assigning losses'43 or, in the Australian phrasing of 'socialising the losses and capitalising the gains'. But in the Australian case the fateful twist is that this 'rationalism' which has permeated the coordinating departments of the state, the dominant right faction of the governing Labor Party, and even the new generation of young economists who run the ACTU, has followed its own premises. And, in doing so it has undermined,

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perhaps fatally, those institutions that have controlled the redistribution of Australia's national income from their constitution at the beginning of this century right through to the conservative post-war years in which tariffs were linked to wages policy in tacit but faithful conformity with the Australian rule that 'no significant group's income shall fall if that of the others is rising'.44 With only a little exaggeration one might weigh the significance of these changes for the 'constitution' of a nation with an analogous situation in which, over the space of only half a decade, continental Roman law somehow fatally emasculated the United States Supreme Court. Behind the platitudinous reassurances about the benefits of 'healthy' ('lean and strong'!) competition between different departments and 'arms of policy', there is the more probable reality of a state apparatus that is splitting apart under external pressures that are internally mediated under the aegis of the new economic rationalism. The thin end of the now well implanted wedge was the deregulation first of the Australian dollar in December 1983 and then of the capital markets shortly thereafter. These initiatives were enthusiastically sponsored by the Treasurer and his department, by the economist Prime Minister, and by the combined weight of the central agencies with the approval of 92 per cent of our respondents. As a consequence the Australian dollar is now the most heavily traded currency in the world (in relation to the size of the national economy) and is known among the speculators simply as the 'Pacific Peso'. As the currency goes up and down on the markets (rather like Marx's levitating tables and chairs), so also does Australia's credit rating. This has a further consequence, as the title to an editorial in Sydney's most respected newspaper put it, 'A few words from Roger Nye' can 'press the button that blasts the Hawke Government out of office'. The editorial explains: Roger Nye is nervous. And when Roger is nervous we're all nervous. Roger Nye specialises in the Australian economy for Moody's Investor Services, the aggressive US credit rating firm that was first to cut Australia's credit rating from AAA to AA1 in 1986. Moody's was soon followed by its much larger competitor, Standard and Poor's [sic]. Some economists argue that Australia's credit rating should never have been cut; some have even accused Moody's of being a touch opportunistic. But the fact remains that under certain circumstances, Roger Nye can press the button that blasts the Hawke Government out of office.45 And what are those 'certain circumstances'? If the Industrial Relations 222

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Commission stopped discounting real wages in line with each new 'fall' in the value of the dollar (needless to say real wages do not rise when the dollar goes 'up'), the deregulated dollar and the credit rating46 would fall...and interest rates would rise...and the government would fall. In other words the government would fall if the Industrial Relations Commission stopped betraying its historic 'mission' of redistributing national income more equitably than its would-be competitor, 'the market'. It is unlikely that the Industrial Relations Commission can survive for long in its changed environment. The pragmatically modified Accord Mark Three of March/April 1987 produced a new two-tiered wages system that ties the second, major component of wage increases to increases in productivity together with agreements, negotiated between employers and individual unions within agreed guidelines.47 But even this major change is unlikely to save the wages system from a Liberal and National Party opposition and a business and media community who are pledged, from the moment the Hawke government is defeated, to abolish or emasculate the Industrial Relations Commission48 in order to set workers 'free' to auction their jobs to the lowest bidder as they did in the time of the great national strikes at the turn of the century. The wheel will then have turned full circle as Australia is moved down the Nile, and from the empire of the original 'stateless society' to that of its successor and all this without napalm or Marines. It is within this context that one must view the future of Australia's very poorly developed 'welfare state'.49 The wages system and high levels of adult male employment, guaranteed by the state, were the mainstay for a primary distribution of family income right up until this decade in which female 'participation rates' (another pleasant euphemism of modern economics) increased, perforce, to the present high levels. These are the reasons, as others have noted,50 that 'welfare' in Australia is so much more vulnerable than it is in Britain, or in other European countries, where welfare entitlements still stood, as such, even in the fire of Mrs Thatcher's breath. It is needless to add that in Australia that burden of vulnerability falls unequally on the female half of the population. Indeed, in Australia the 'welfare system' is in double jeopardy because the overlapping functions of federal and state governments allows the federal government to shunt the uncertain political obligations of welfare provision onto the states, who then either try to pass them back or else protest that the constraints of Canberra's fiscal federalism51 have made them so 'lean and strong' that they are unable to do anything much at all. The probable course of events is already prefigured at the 1990 Premiers' Conference with a 'New Federalism' that will be used to gloss another

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generation of taxation reductions that will force a shedding of the federal government's social service programs to the seven states- Since the states will be electorally, and perhaps even constitutionally, incapable of raising the revenues to meet their augmented 'responsibilities', economic 'rationalism' will inexorable follow its own trend line and lead to the further destruction of the public sector. Australia's welfare system, saddled with these historic disadvantages, has been trapped by the invading economic rationalism of the Hawke and Treasury economic policy in much the same way as the wages system and the Industrial Relations Commission. It is under the fetishism of the 'twin deficits' that the successive Expenditure Review Committees were forced to make welfare cuts to a level of provision that is (along with Japan) the lowest in the 'developed' OECD countries. Under the ever watchful eyes of the credit raters in New York, London, and Tokyo, the government had to cut its own expenditures and, in terms of what economists later acknowledged as a fallacious theory,52 avoid 'crowding out' investment by getting its own budgets out of deficit and then into a series of large surpluses. But even the cumulative 'ratchet effect'53 of these contractions still left the credit raters moody. Consequently, the tax cuts were used to cushion and delay the effects of an upward redistribution of the nation's income on ordinary wage and salary earners (and many categories of welfare recipients) in a way that has (certainly in the short to medium term) irreversibly reduced state revenues available for welfare, health, education, and other social and community services. The welfare provisions that the Left of the Labor Party has managed to save from the axe and the fire have been intelligently and very selectively targeted to especially needy groups but this too, in its own way, points to the gravity of the situation as the universality of the rights to provision have, accordingly, been completely undermined and made routinely contingent on an economic calculus of what 'our' foreign debt will allow.

VULNERABILITY, CULTURE AND IDENTITY In the last chapter we saw that the shift from the earlier reformist discourse of the early 1970s Whitlam era to the new economic rationalist discourse of the late 1980s represents a fundamental change of orientation towards civil society and culture. In the terms of the older discourse, civil society was conceived in theory (if not always in practice) as the subject of politics in relation to a political-administrative apparatus that was the object of politics. This relation provided the basis, at least, on which practical political claims were

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made. The orienting assumption here is that there was some congruence between the state apparatus on the one hand and culture(s) and identity on the other or, perhaps more accurately, that the communicative processes through which people ordinarily build their lives, have 'structure forming effects' on the state through a public sphere. However with the shift to the new reformist discourse of economic rationalism, our political administrators take up a different orienting assumption that gives the steering functions of the economic system primacy over both the state and civil society- On that changed orientation culture(s) and identity (or, better, the processes through which they are formed) assume a different meaning as a resisting 'environment' of the economic system that has to be made more economically 'rational' and 'productive'- It is a changed orientation that carries its own agenda for a reforming state apparatus that must now adapt civil society, culture, and identity to the functional requirements of the economy- That agenda gives a new significance to ideas, to intellectuals, and to constructions of social needs. In exploring what he sees as the sharply conflicting claims of economic development and cultural specificity in the contemporary world, Alain Touraine makes an interesting generalisation: If the nineteenth century was dominated by the utilitarian and materialist universalism of capitalist civilisation, the twentieth century has been dominated by the role of states mobilising projects and resources in order to modernise their countries by force or to defend an identity menaced by the penetration of the foreigner and economic rationality.54 With this in mind it will be useful now to look at some of the external correlates and conditions of this triumph, within the Canberra state apparatus, of a conquering economic rationalism. On the one hand there is need to see how the cultural politic is organised and secondly, on the other side of what is really the same coin, we need to ask what kinds of vulnerabilities have allowed it to prevail. Not ideas, but material and ideal interests, directly govern men's conduct. Yet very frequently the 'world images' that have been created by 'ideas' have, like switchmen, determined the tracks along which action has been pushed by the dynamic of interest.55 At the global level the leading 'idea' and Leitmotif of neoclassical economics and of its economic rationalism is the 'world image' of a 'world economy' reduced to a 'world market' and invested with the status of a universal 'idea' as a common denominator, for all that is

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local, particular and national. This image conjures up an idealised world of freely cooperating producers and consumers and thus of a world that transcends all 'historical', ethnic and national boundaries. If markets are not yet 'perfect', they are heading that way; given time and a certain freedom from interfering governments, the starving herdsmen of Africa and the business tycoons of New York (who might otherwise have found themselves in bitter dispute) may trust instead that the market will neutrally save them from strife and assign to each his 'comparative advantage' in the world system. At the micro level this first idealisation of the market rests, as we have seen, on a 'carrots and sticks' theory of motivation that is taken from positivist psychology into what is, for the economic paradigm, the second constitutive notion of utility. Daniel Bell, a great sociologist, and in this case also a conservative liberal one, explains with exemplary economy how this idealisation is severed from the social world (via the equation of utility with welfare) and then closed off into its own selfreferential terms. As Bell puts it, the all-important equation of utility with (human and social) welfare begs four questions: 1. that the distinction between 'needs' and 'wants' - needs that are common to all men [sic], wants that are idiosyncratic and psychological - can be erased and all demands treated as wants; 2. that the social welfare is defined only in terms of the welfare of individuals; 3. that every individual is the best judge of his [/her] own welfare; and, 4- that the welfare of individuals may not be compared.56 As we have seen in Chapter 5, the economists have brought closure to the begged questions and set the wrong answers into models that are no longer recognisable as metaphors and therefore as social constructions. They are instead 'invested' with a nature-like facticity that would raise a blush on the face of any self-respecting Azande witchdoctor. These 'ideas' and world images in Australia are promoted through families of institutions of which perhaps four deserve some brief comment. In the first place it is significant that our central agency economists were twice as likely as their peers in the program and service departments to say that an overseas experience, typically in international economic organisations such as the OECD, GATT, the World Bank and the IMF, had the most lasting importance in shaping

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their orientation to their work.57 The importance of these external influences is confirmed both in what others see thereafter as the superior intellectual standing and political 'clout' of these central agency economists and, also, in their declared satisfaction with their own political influence.58 It is clear that Treasury and Finance controls on staff mobility and the acquisition of 'intellectual property' from overseas missions 'strategically' restricts the inflow of leading policy ideas within the confines of the rationalist framework. The people who need overseas experience to learn how to run better programs more efficiently are less likely to travel than those who want to learn how to do away with the programs. Second, in the late 1980s and with the benefit of a little hindsight, no one can doubt the tremendous success that the 'New Right' American and British policy organisations and think-tanks have had first in cloning themselves in Australia, and then in reorganising the public policy agenda along Anglo-American 'free' market lines - continental European social democratic experience is excluded almost to the point of invisibility. The second largest of these so-called 'independent' centres is the Centre for Independent Studies (CIS), which runs major conferences on topics such as the 'Welfare State'. One such conference in November 1987 explicitly addressed the topic of 'indicating ways in which the well-being of the needy can be served by the removal of government provision'!59 One notes in passing Professor Hayek is a member of the Centre's Advisory Committee, along with most of Australia's best known laissez-faire economists. The largest of these centres is the Australian Institute of Public Policy, which is a member of the California-based Atlas Foundation and which models itself on the American Heritage Foundation and the British Institute of Economic Affairs.60 The Institute of Public Affairs consists of three policy units that specialise among other things in the analysis of state budgets. Two of the units are headed by former senior Treasury officials. The separate New South Wales Institute of Public Affairs (renamed the Sydney Institute) is run by another ex-public servant and economic rationalist who is also a chief architect of the Australian Liberal Party's economic policy. The 'Civic Response' think-tanks include the 'H.R. Nicholls Society' which is led by a former secretary of the Treasury turned Right-wing National Party senator and which dedicated itself in March 1986 to the destruction of the centralised wage fixing system and the Accord between the Labor Government and the trade unions.61 The two largest externally funded and university based New Right Centres are the Centre of Policy Studies (COPS) located at Monash University which is

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modelled on the Brookings Institution, and the National Institute for Labour Studies at Flinders University. Through overlapping membership and a busy commerce in both directions, the New Right organisations62 have captured the policy agenda of the chief opposition Liberal Party of Australia in which free-marketeering libertarians have reduced the remaining handful of Menzies styled liberals to an insignificant fringe in the parliamentary ranks of the party. They have also indirectly exerted a further massive pressure on the Hawke Labor Cabinet which has felt obliged to 'steal' many of the Opposition's policies. The stream of glossy pamphlets and of 'independently' sponsored foreign VIPs (including many well used senior neoconservative American academics and their British counterparts) have steadily isolated the voice of Australian manufacturing industries and 're-educated' both small and very large multinational business representation around Thatcherite anti-state, anti-union, and deregulatory 'rationalist' positions. Through strong international research links with Britain and the USA, the most important think-tank publications, such as COPS's annual 'Spending and Taxing' and to a lesser extent the AIPP's 'Mandate to Govern', have achieved their objective of exerting a line by line, item by item, influence in shaping budgetary policy from 1986 onwards. A third conduit for these pervading 'ideas' and management 'technologies' are the consulting houses, both large and small, that have thrived on contracted research assignments and policy setting commissions as Canberra and the seven state governments have hired out public business to private operators. The consulting houses are dominated by accountants and economists of approximately the same age and cast as their client economist ministers and senior bureaucrats. In the absence of studies detailing the subsequent employments of the most 'successful' early retirees from the top of the public service, it is impossible to know exactly how many top bureaucrats have moved into the senior staff of these organisations. However, the press and a report from government Public Accounts Committee 63 (but no audits) have commented on the more visible and very common phenomenon of ex-public servants who return within days to their old jobs, either as formally contracted consultants, or on contract appointments with something like double the salary. At the top end of the range are the larger and multinational consulting organisations from which this phenomenon has earned the name of the McKinsey syndrome.64 At the middle of the range are organisations based in only one Australian state capital of which a good example would be the company of Cullen Egan Dell which

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currently holds the contract for all the yearly performance appraisals of all the new Senior Executive Staff (all contracted without tenure) of the New Right state government of New South Wales which is itself led by a former Harvard Business School graduate.65 At the ground floor are the smaller owner-operated companies who take the smaller and often more specialised jobs of under $50,000 a piece. The dominating paradigm and the lingua franca is 'system' and business economics. The publicly contracted products and the cash-on-delivery 'legitimations' must fit the modern, the best, and therefore the most authoritative international cum universal meta-economic calculus. Fourth in this very schematic list of mediating institutions comes, of course, the press: the economic journalists, who dominate editorial and leader writers, comment on national policy in the leading daily newspapers, and to a lesser extent, the financial press and the weeklies. In the leading dailies that have the largest circulation, and for that reason great electoral leverage, the most influential leader writers are, perhaps predominantly, ex-Treasury economists66 many of whom have been flown 20,000 kilometres at Mrs Thatcher's expense to learn about what was quite erroneously touted as the British 'economic miracle'.67 The influence carries over into television which, along with the Press, has the most concentrated levels of media ownership of any comparable nation - a situation that Windschuttle summarises as follows: Until November 1986...the industry was dominated by four organisations - News Corporation, John Fairfax Ltd, Australian Consolidated Press and Herald and Weekly Times Ltd. Between them, they owned every capital city daily newspaper in the nation, eight of the 15 metropolitan commercial television stations, nearly all the national magazines and had substantial interests in radio. Few Western countries had such a concentrated pattern of media ownership.68 In 1987 upwards of 80 per cent of print and television in Australia was controlled by only three holdings (Packer, Murdoch, and Bond) none of whom seem especially interested in anything except their own fortunes. In 1987 Murdoch controlled about 62 per cent of the total Australian newspaper market.69 As we have seen these media have conditioned 'public opinion' to evaluate the total performance of governments and politicians in the narrowed terms of a laissez-faire macro-economic calculus that, on the negative side shifts the 'legitimation deficits' and the blame for whatever the private sector is doing (or not doing) onto government and state; simultaneously, on the positive side, it puts Canberra in a good light only to the extent that

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it surrenders its sovereignty and authority over business to business, parading always as 'the market'. Australia is vulnerable to these 'incentivating' urgings for a number of reasons that have to do with geographical and cultural distances and its intellectual and cultural traditions. Images of the international order and of how things work 'over there' have an added potency in the affairs of small and middle-sized nations like Australia. In a positive way these images can, as with Whitlam, lead incipiently rationalist Australian cultural predispositions into a morally expansive universalism that equates nationalism with internationalism.70 This potential can then be turned back to threaten the power-holders on the traditional Right who guard against this danger with skilfully abetted fear, racism, selfishness and insularity. The potency of these images and 'switchmen' is obviously intensified by a colonial inheritance, a geographical separation, and a mystifying distance from other peoples. For this simple reason alone distance lends an enormous advantage to the 'strategic visionaries' of the New Right with well-used passports and it helps them to fabricate their own 'world images' and collective representations for the great majority of the population who do not have the thousands of dollars that are necessary to travel beyond Australia to other continents and another hemisphere. The potential for manipulation in a nation of only 15 million people concentrated mainly in seven cities is compounded again by scale and distance inasmuch as these factors greatly increase the opportunity for small numbers of powerful leaders to coordinate their positions, actions, and representations in a way that would be impossible in larger nations on the scale of the United States or even the larger members of the EEC. In every major industry there is the same potential: the two domestic airlines have never really competed with each other; the five major oil companies are a cartel; the mining and mineral exporting companies operate as a club; and now, after the deregulation of the financial sector, Australia has among the most profitable and collusive banks in the world and, even when allowance is made for rates of inflation, probably the highest net interest rates of all the 'developed' OECD countries. With his famous allusions to 'world images' and 'ideal interests', Max Weber was pointing to predominantly religious 'ideas' that take hold of history as they are sublimated and secularised in the public world. Ironically we may find that this has some relevance here for the development of a nation and a culture that was, in sharp contrast to the United States, a thoroughly irreligious society from its beginnings. Australia was the last of the new nations to be formed from British

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stock and, in contrast to South Africa, Canada, and especially the United States, it was a predominantly secular society from the moment of colonial settlement. It is no accident that the secular traditions of an explicitly colonial past should join with the 'tyranny of distance'71 to condition present-day Australians (of whom some 80 per cent are still of British origin) to a positivistic understanding of politics and society in which the formative influences are instinctively assumed to come 'from the outside in', rather than as creative action inspired from within by inner cultural motives and 'ideal interests'. It is for these reasons, among others, that one sees in Australia's political ideology the distinctive characteristic of a 'Benthamite society'. The surprise is not that interests are discovered to operate in politics, but that they do so unashamedly, with little resort to ideals and ideas to clothe their naked intent. Yet what else would one expect in a Benthamite culture? The utilitarian psychology in Australia legitimises the pursuit of interest...and negates the possibility of a genuine battle of ideas.72 The several currents of this anti-intellectualism militate against a creative affirmation of specifically Australian cultures which might reduce the nation's vulnerability to 'incentivation' and market 'freedoms'. In the first place anti-intellectualism helps lock Australia's distinctive labourist traditions (its 'socialism sans doctrine'13> its trade union movement and the politics of its working class) into a cast that is cut off from the differently constituted European experience. Even more than in Britain, its labourist tradition is reduced to an increasingly sterile 'economic pragmatism allergic to ideology'74 and so also to the calculations of 'practical men who believe themselves to be quite exempt from any intellectual influences' - but who are more probably, 'the slaves of some defunct economist' in Keynes' famous words.75 In the second place, because of an impoverished public sphere, Australian culture does not easily furnish a 'moral vocabulary capable of connecting social realities with political institutions'76 in a way conducive to the re-invigoration of social democratic politics. In making a similar point Robert Parker commented more than 25 years ago that an: Australian lack of interest in ideas and principles, so regularly lamented by our more earnest European guests, certainly reduces the zeal with which we seek to influence our fellows to our own way of thinking...[and that] in Australia the relative unimportance of conflicts over non-material values has removed a whole range of motives for the exercise of power in any form.77

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Yet another side of the same reality presents a more striking irony. Australia was 'born modern*, from conviction borne of experience in the Old Country, that the 'state would be the most likely protector against private interests' and, indeed, that the 'major constraints on individual liberty were not public but private'.78 In these Australian 'charter myths' inspired more by Hobbes and Bentham than by Locke and Mill, 'metaphysical' universals are forsaken for a much tougher, and colder, reliance on the judicial and administrative arms of a utilitarian state. The irony is that, buried in this attitude there is cynical distrust, in Bentham's words, of the 'perplexity of ambiguous discourse that, while it distracts and eludes the apprehension, stimulates and inflames the passions' and thus of all 'ideas' and 'intellects alising'; a distrust, and in many ways an ascetic realism, that has inclined the nation to place its faith instead in the more modern universalism of judicial and administrative deliberation, decision, and above all, 'fair' allocation. The cruel irony is that it is the anti-intellectualism, and indeed the distance of this apparatus from the people, that now so easily allows its own very positivistic formal rationality to be stolen with the forged key of a market 'utilitarianism' that is, especially in the modern international order, everything but utilitarian. Only those who have read them seem to understand that Bentham, and certainly Adam Smith, would probably oppose today's market as the deadly enemy of the society (the 'common-wealth'!) that it was supposed to serve.79 As we have seen in the preceding chapters, the Australian universities have also played a direct part as 'switchmen' and arbiters in this 'recolonisation' of Australia. If this 'deadly combination of specialisation and positivism'80 was able to do its work without much hindrance, long before the reforms of the 1980s, it is because: The universities, which have codified and certified useful knowledge, have been mostly post-Darwinian creations: the particular scientific paradigm they have enshrined has reinforced the tendencies of utilitarianism. Empiricism has been a natural enemy of speculative thought; positivism has reigned, almost without challenge, in science, law, philosophy, history, economics, and the social sciences. The secular, 'engineering' character of Australian tertiary education is nowhere more evident than in the professional separation from the humanities and social sciences achieved by law and economics. The autonomy of law and economics faculties has been to the detriment of each and at the cost of all, since they supply the graduates who chiefly govern the nation.81

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In this Autonomy' of economics and law one sees, as though in a mirror image of the federal state apparatus, the same 'differentiation' between (in that untranslatable vocabulary) 'system' and 'lifeworld'. In the Australian universities of the late 1980s there is a very clear regrouping of the new 'manipulative sciences' of management, marketing and accountancy under the protective umbrella of the disciplines of economics and psychology in which each does its part in redefining scholarly excellence into the terms of a promiscuous82 instrumentalism that is permanently at odds with culture, tradition, critical reflection, and dare one say, with most intellectual representations of the identity and collective interests of the Australian people. The best young intellectuals, a great many of them young women, with a commitment to Australia, are chased away,83 or if that fails and they succeed against all odds, like Manning Clark, Donald Home, Hugh Stretton, Charles Birch, Ted Wheelwright and Sol Encel, they are treated as maverick cranks for as long as possible by the gatekeepers of the disciplines. It is partly for this reason that Australian elites are so singularly uncreative in those very social and political arenas alone that can nourish the will to secure for Australia the benefits of achievements made in many other areas of science and the creative arts in which Australians regularly excel. For want of clearly articulated 'ideas' of national identity and purpose, geographical isolation and distance have combined to perpetuate the mentality of the 'colonial cringe' that now takes a different form in the slavish (or opportunistic?) borrowing of an economic rationalism from two 'great stateless societies' who have everything to gain and nothing to lose from the successful sponsorship and marketing of their product. Here again there is a fatal conjunction with a history in which, from the time of the squatters and the wool kings, 'the wealthy classes have never provided leaders or shown the community any guidance in political matters'.84 In the time of Australian settlement in the nineteenth century, there was none of the (completely untransplantable) civic republicanism of those old American New Englanders who were driven to public duty, and to learning, by the fear of God.85 The 'poor quality of leading Australians'86 on the contrary is the continuing moral and cultural failure of an elite that is not very interested in Australian identity and which has always sent its sons and daughters abroad only so that they could return with some advantage over their compatriots whom they for the most part despise. That is certainly still the way in which expectations, careers and orientations to university are formed in the 'best' Australian private schools from which such a disproportionate number of our top public servants have come. It is no doubt for these reasons too that Australian managers have

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such a poor international rating87 and are best known for their confrontationist attitudes towards employees and insensitivity to the different cultures of prospective clients.

JITTERING INTO THE FUTURE: EVALUATIONS AND CHOICES From some future vantage point it will be clear that the changing dispositions of Canberra's state apparatus in the late 1980s will have been decisive in shaping the destiny of the nation. In retrospect these developments will be seen clearly to have both forced and pre-empted a range of fateful choices and yet, more interestingly, the future is extremely hard to read even within short time-horizons of a year or less. Uncertain futures are of course a token of increasing dependency and lost autonomy: one has increasing difficulty in reading one's own future because it depends increasingly on the plans of others over which one has decreasing influence and knowledge. In that sense the time-horizons of nations are relationally defined and point once again, in Australia's case, to new contrasts between metropolitan and imperial time versus 'colonial time'. Yet this is only one aspect of the problem. The unpredictability of even the short future, and hence the increasing difficulty of making plans and 'practical' choices, is also a function of fundamental uncertainties in the implicit theories, concepts, and models, that are used to evaluate the 'facts'. In his magisterial 1986 inaugural address to the Economic History Society of Australia and New Zealand, on the 'Bicentennial Perspective of Australian Economic Growth', Noel Butlin put his view that Australia still 'had four long-run options' paraphrased as follows:88 1. We can become part of Asia, integrated with one of the most rapidly growing areas of the world that is almost certain to be the focus of the world economy in the next century. 2. We can stay as Europeans and follow a path of natural resource developers and exporters. 3. We can attempt to do what we have never done and increase the quality of our human capital and so compete in world markets by living on sophisticated manufacturing and service wits. 4- We can revert to pre-1960 ambitions, to become as now seems possible, a substantial population nucleus, driven for a long time into the twenty-first century by large-scale immigration.

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In his important concluding paragraph Professor Butlin does what many other great economists and historians have done before him: he tosses his bundle into the arms of the 'residual' sociologist. We can make various combinations of these options. We have only begun to experiment with European presence in Australia. Each path has its own costs and a different distribution of costs and benefits. But until we choose a compass bearing and cease to be mesmerised by movements from one threemonthly period to the next, we are almost certain to remain lost and the antipodean plaything of the world. We have, for too long, placed our faith in serendipity and short-term 'forecasting', particularly since World War II and most importantly as manufacturing prospects waned during the 1960s. A compass is alien to short-term horizons. Its effective use depends, above all, on the recovery of a national identity and some reasonable consensus that is currently lacking in our society. That is certainly the problem, but the answer begs questions at quite a different level. How and with what resources do nations 'choose'? Who is the subject and the 'we' that chooses? (and, incidentally, am I the subject or the object of 'our' foreign debt?) In taking up these questions from a sociological point of view, it is clear that Australia's future turns on competing models of social organisation and, more specifically, over which of the two competing coordinating structures - market or state - will be favoured and of how it will be applied. One clear answer is presented, in both 'theory and practice', by the libertarian New Right. The subject of the choice is that part of 'the market' and of 'your' Australian economy that is geared, integrated, and subordinated to 'our' international economy - in the Australian case this means a numerically small 'elite' of economists, corporate accountants, merchant bankers, and businessmen. Australia is probably already well along this fork of a road that was taken both by default and with some help from Trojan horses who were moved into place at least a decade ago and amid a population that was fast asleep, as the Minister of Science insists.89 On this model of Australia's future the market is the 'independent variable' and both democracy and culture (the processes and internal referents of identity formation and social action) , are the dependent variables. This is the anti-utopian universalism of the post-modern 'society without culture' in which liberty is reduced to increasing consumption with decreasing income.90 The 'intervening variable' is a withering state premised on American elite democracy in which politics comes down at the national level, as Gore Vidal puts it, to a choice of 'one political party with two right wings'.91

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One can so obviously only vote for the millionaire nominees of business who promise the same thing (in symmetrical contradistinction in Australia, the residues of political citizenship and dignity remain at the local rather than the federal and national level). This road gives its own answers to the question of relative autonomy that Professor Butlin begs with his declarations of choice. In terms of international relations, part of the answer is recorded in Australia's Bicentennial year92 and was given as early as 1975 when, only two years after the demise of Salvador Allende and democratic Chile, 'the CIA approached the Australian Security and Intelligence Organisation, to see what they could do about' a very moderate social democratic Australian Prime Minister Whitlam.93 Consequently, with the protective shield of the British Empire gone, Australia's 'relative autonomy' is measured on one side by 'the myth of innocence'94 that protects an extraordinarily insular and narcissistic American population from any consciousness of what they do to make their 'friends' and their markets 'free'.95 As one distinguished Harvard historian so eloquently explained: Nothing betrays more vividly the interior psychic life of the American fragment...[of English-speaking civilisation] than the Wilsonian demand that other cultures instantly behave along American lines. The American cannot grasp the relativity of the form in which his historical substance has been cast.96 In a way that speaks quite directly to the present situation, the same question is begged again (from the other side of that relationship), by the excellent study of the National Institute of Economic and Industry Research into 'Australia's labour market options'. In respect of these 'options' that are so quintessential^ important for the relative autonomy of a nation-building state, that study concludes: In short, Australia's inherited political traditions make it virtually impossible for a radical shift to an American-style labour market to survive in the long term. Neither can it be claimed that any other overseas model of the wage-determination process, whether corporatist or not, can be successfully transplanted to Australia without modification.97 The probable outcome is that Australia will 'choose' an American styled labour market for much the same reason that officials in British equatorial Africa (somewhere near the headwaters of the Nile) 'chose' to dress in three-piece woollen worsted suits. Since one may still hopefully speak of possibilities in a world order that is never determined, there may yet be a way back to the other

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fork in the road that leads (along what were always assumed to be the 'natural' trend lines of Australia's development) to social democracy of the kind enjoyed today by non-English-speaking nations - the Netherlands, Sweden, Finland, Denmark, and, in the next league, France, Austria, and perhaps Germany - among them nations for which Australia once used to be a distant lighthouse. On this model, 'the state emerges as the true independent variable, industrialisation being only an intervening variable in countries that are all capitalistic in structure'98. On that course the ultimate resource for development is culture. And here one speaks of culture not 'just' as scientific, technological, or educational knowledge, nor even as tradition, but rather as the social processes of identity formation on which the acquisition and application of all these things always depend - in Habermas' terms, 'communicative action', and, in that jargon, alas, 'communicative rationality'. Indeed, one could well say (with just a little exaggeration to taunt the economic 'rationalist') that, on this more 'substantively' rational model, the ultimate productive resource (the wealth of nations) along with 'the relative autonomy' of a democratic state (freedom) is measured against that part of the social fabric that has not yet been 'commodified', 'freed up', 'privatised' (in both senses of the term), 'structurally adjusted', 'incentivated', or 'rationalised'. A nation like Australia that was already 'born modern' has the tremendous and perhaps unique advantage of not having to waste its substance in that part of the modernisation process that has had to overcome the particularistic traditionalism of the Old World in almost every other setting. There is a potential for rationality already inherent in the culture to be released and to do its work in further 'domesticating'99 its once friendly political and administrative structures in the service of its own national population and its social and economic needs. That is not really so difficult because, as we know, at the reasonably high levels that are possible, in Australia as in many other countries: commodities, and the income to purchase them, are only weakly related to the things that make people happy...[namely] autonomy, self-esteem, family felicity, tension-free leisure, and friendship.100 Along that course there could be adequate and sustainable economic development (the resources are there in abundance) and 'authority without fear'101 within a gradually expanding and multiracial social democracy that is measured against the universalistic standards of citizenship, social rights, and political participation - in an order in which 'mutuality predominates and satisfaction does not mean triumph of

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one over the repressed needs of the other'.102 However what Australia's experience has to teach the rest of the world is that in nations of this size, the irreducible condition of this modest and once achievable 'utopia' is the integrity of the state - and of its intellectual' and 'constitutional' defences against internally and externally sponsored 'freedom'. If they are not already pre-empted, the fateful choices will be made more difficult by an intellectual preference for 'packages' that are variously time-warped, decontextualised and manipulated as they are brought across the distances from other continents. In a world in which the great developments for good or evil in the next century will probably come from the small and large non-English speaking nations of Asia and continental Europe, there is another obvious disadvantage. Australia is stuck with the language of the two 'great stateless societies' that both seem to show signs of advanced social disintegration (and levels of economic development that have, over the past 15 years, been no better than those of continental western Europe). In the making of these choices, distance and language will, together with some other predictable factors, conspire to make Australians jittery and so will sharpen their sense of loneliness in an island continent. The 'strategic visionaries' will use some hired help to discourage those who have the will to study what is happening in the nations of continental Europe with the news that there too many of the best voices seem to be saying that the state has passed its time as the principal agency of social integration and economic development.103 For those who can, 'grasp the relativity of the form in which their historical substance is cast',104 the encouraging lesson is that this is a 'eurocentric' projection from an experience in which at last (for the first time in its modern history) a European Community has put an end to the possibility of war between former rival states. It has created a context in which states can, without too much hindrance from the two empires that are increasingly preoccupied with their own problems, safely deal with a process of development that is set in a 'field of debates and conflicts whose stake is the social use of the symbolic goods which are massively produced by our post-industrial society'.105 It is along these lines that one should read the astounding developments in Eastern Europe that began with Solidarity. Here again, as Maria Markus has predicted, there is encouragement in what these developments show to be the extraordinary resilience of civil society and indigenous culture 106 - it is only the propagandists who will define it as a Victory for Freedom and Consumption. And, despite attempts in the lead-up to the 1987 election to again make Australians nervous

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by gingering-up 'incentivations' with a little racism, a triumphantly successful half-century of immigration seems, on the contrary, not to have destroyed Australian identity but rather to have created a deepening consciousness of community. This will give the next, still more cosmopolitan, generation of Australians its cultural, trade and Ianguage bridges into the other nations among which it may yet prosper.107 In short, if the Lucky Country is dangerously apathetic there may still remain, on the other side of that coin, enough of the unconsumed metacultural resources of trust and time for it to ward off ideological enthusiasms and to hang on to its own ascetic realism. Australians may then not succumb to the same Nervousness'108 as those beleaguered American liberals who face at close range a pervading and morally exhausted libertarianism that is now little more than aggressive nihilism - which is why (as Steinfels should have said) the New Right is 'thin skinned and bad tempered about its legitimacy'.109 In Australia whatever remains of a sense of patience born through endurance and hardship, together with the benefits of the cultural time lag of three to four years (one of the advantages of distance), may then allow enough time and shelter for a larger history to give its own verdict on the theory and practice of an economic rationalism that some great liberals have judged in this way: 'No Society', Polanyi remarked, 'could stand the effects of such a system of crude fictions' (treating labour, land, and money as commodities) 'even for the shortest stretch of time unless its human and natural substance as well as its business organisation was protected against this satanic mill'.110 Whether a Lucky Country which even the centre-right-wing British Economist describes as one of 'the sunniest democracies in the world' will survive in anything like so pleasant a form is entirely uncertain. These prognostications are met from the Right with the completely correct objection that the predictions of the 'downfall of capitalism' are very old hat indeed and that the lessons of history point, instead, to the extraordinary adaptability of the private enterprise market economy. It is therefore useful to recapitulate the outlines of an appropriate evaluative framework. A proper evaluation of Canberra's economic rationalism would have to be made on several levels and in three dimensions. At the floor level of 'public policy' not much needs to be said because it is clear that economic rationalism asks for nothing less than a clearcut reduction of the public sphere to the private sphere and a parallel reduction of public policy to business policy. The defence and

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advocacy of public policy therefore depends, at another level, on implicit and explicit presumptions about the role of the state (the political dimension) and of its relation to the economic and cultural dimensions as well. At that level an evaluation of Canberra's economic rationalism of the 1980s starts with the elemental economic 'facts' of the case. From this point it is clear that economic rationalism and its panoply of 'reforms' and 'structural adjustments' have resulted in a fall in the real value of wages and salaries of upwards of 10 per cent and, just as in Britain and the United States, an upward redistribution of national income that in Australia is measured by a shift of 3 per cent of national income from wages and salaries to profit share. Since the business and managerial beneficiaries of this redistribution are such a small fraction of the population, the redistribution represents a massive increase in wealth for them. The 'reforms' have failed even in their own terms and the upward redistribution of income signals failure even on the narrowest utilitarian criterion of the greatest (economic) good for the greatest number. It is a failure that will not easily be redeemed since the deregulated economy has allowed the spoils of the upward redistribution of income to increase the foreign debt without appreciable productive investments (see Figure 6.1 above). The 'systemic' effects in the political and socio-cultural dimensions spell out the same judgment. At the beginning of the 1980s Australia already had a small public sector, very low levels of taxation, very low levels of social provision, and a very permissive business environment 1 1 1 by comparison with other major OECD countries. Now, on all these benchmarks, after a decade of economic 'rationalism', the state has, internally and externally, even less 'relative autonomy' than before and a much reduced capacity to control Australian business or to compensate or protect its population from further predatory attacks. At another level, economic rationalism in Australia is a kind of laboratory test of what are, in effect, metatheories of society. At that level evaluation and prediction depend on implicit assumptions as to how societies maintain their integrity and coherence through change and over time. And here the world view of the economic rationalist already presumes that society is, in the words of one waggish critic, always 'less than the sum of its parts' and that it reduces only to the choices of individual producers and consumers. The choices and decisions of individuals are coordinated through the market economy and its capacity for delivering 'efficient and effective outcomes' depends on a relationship with the state that already goes beyond the libertarian presumption that the 'freedom to' pursue one's own individual

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purposes equates on the other side of the same coin, with a 'freedom from' state interference. As we have seen from the Canberra example, the claim is no longer that the state must 'get out of the way' to enhance the steering capacity of the economy but rather that politics, administration, and all the resources of the state shall be mobilised instead to liquefy, dissolve, and instrumentalise every aspect of the lifeworld (including political citizenship, identity, autonomy, responsibility, freedom, and culture) which still resists the external logic of 'incentivation' administered from the top down through an internationalisation of totalitarian 'business democracy'. As we move to the end of a century dominated by economic development, the limits of this process are surely well foretold. Economic rationalism will, like any other self-referential doctrine, probably collapse under the pressure of realities that it cannot grasp perhaps in a very short stretch of time. By one limit, economic rationalism must fail in the face of a finite environment that it can only conceptualise as an exploitable resource or as a 'generic externality'. In the new international order the largest and the most 'developed' nations can put off this realisation at home by skilfully using 'freedom' (or war and 'low intensity conflict') together with their superior leverage over the world economic system to strip Africa and South America bare (with Australia next in the queue): but already the indecent haste betrays a certain dawning understanding that everyone must, in the end, share what will be left of the one planet. From the point of view even of common sense, from which reason may yet emerge as 'an avenging force', there is an ever more glaring contradiction between the forced intensification of production, work, and profitability on one hand and, on the other hand, the pressure of tightening environmental limits that beckon, instead, for the development of whatever social and cultural resources can still be mustered to guarantee social peace at ever lower levels of raw economic exploitation. From that point of view an autarchic economic system denies its own Darwinist assumptions and reappears not as an adaptation of the species to its environment but as precisely the opposite. On the other limit this doctrine and its sponsors will pay the price of casting society itself both as the object of business strategy and, just as negatively, as the generic source of all 'market failure'. It is an aggressive reduction that pretends not to see that in the West in the space of little more than a generation, extended family, church, and local community neighbourhood have all been burnt up as fuel in the engine of economic 'development'. Yet economic rationalism still

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assumes all social relations, social norms, and traditions, all culture and remembered inheritance, and all the institutions of education, of the family, of work, of political participation, and indeed, the social formation of ordinary individual identity - that all this is malleable plastic that will obediently find expression merely as individual calculations of utility coordinated through a market- And, what is more, through a market that will then handle it all 'efficiently and effectively' within whatever strictures of 'reduced complexity' an 'overloaded system' will allow. Take from the individual all that is society, said Rousseau, and you are left with only blind sensation.112 The next generation of Australians may yet be sentenced to stand with the Aborigines whose land was declared a terra nullius and to then say, with them, 'Poor Fellow My Country'.113

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APPENDIXES

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APPENDIX A

METHODS & PROCEDURES

THE INTERVIEW GUIDE The interview comprises 44 'closed' questions and 20 semi-structured or 'open-ended' questions. It was designed to maximise accuracy with a base of extremely reliable closed questions and, further, to elicit from the respondents the meaning and context of their views and judgments by means of the open-ended questions. Accordingly many of the open-ended questions are either explicitly keyed with a 'please explain' question to the closed items or else variously worded and designed to give complementary responses. For the sake of reliability several questions were, in most cases, aimed at each of the central problems of the investigation and these are to some extent reflected in the section headings. In some cases, as with 'anomie', the several questions were in sequence; in other instances, where it seemed more important not to foretell the relationship between questions, they were interspersed across one or more sections. Since our respondents followed the interview from the guide the layout is important: accordingly the page breaks between the double-page spreads in the interview are marked below with a rule.

AUSTRALIAN SENIOR PUBLIC SERVANTS STUDY INTERVIEW GUIDE PART ONE BASIC BIOGRAPHICAL DETAILS, FORMATION AND IDENTITY

A few short questions about your background... 1. What is your age? 2. What was the last secondary school you attended? 3. Your father's occupation? (if occupation such as farmer or

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4. 5. 6. 7.

8. 9.

10. 11.

12. 13. 13a.

14.

businessman then please say whether grazier or small farmer; small businessman or company director, etc.) In what country were you born? Where were your parents born? Mother? Father? Are you: a. married b. remarried c. never married d. deceased spouse e. separated f. divorced g. number of children How many hours a week do you work on average (including take-home and weekend work) ? If separated or divorced: what part have pressures of your work had on the breakup of your marriage? Were they: a. the main cause b. very important factor c. not important d. not applicable. Do you have a serious health problem? a. yes b. no If yes...what part have pressures of your work had in producing this condition? a. the main cause b. very important factor c. not important d. not applicable What is the level of your present position in the SES? For how many years have you held your current position in this department? Were you promoted to an SES position from within this department? a. yes b. no c. not applicable (why?) In what department or agency were you working immediately before coming to this job? a. department b. not applicable

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15.

16. 17.

18. 19.

Are you likely to be promoted to a higher position before you retire? a. yes b. no What is your principal educational qualification? (if B.A., M.A., or Ph.D. etc. then please state major field or discipline) Would you please interpret for us what you see as the major contribution of your work in this department? (We need an extremely brief description of what you do - a couple of lines is ample - then tell us what is worthwhile about it.) What criteria would you use to choose someone to replace you? (what strengths or qualities are really decisive?) In looking back over your career what aspects of your training and/or experience have had the most lasting importance in shaping your approach to your work?

PART TWO AUSTRALIA TODAY

20.

21. 22.

23.

Before we turn to some more specific questions may we begin by asking you what you see as the two main problems facing Australia today? Please indicate which you think is the more important of the two. What do you see as the main obstacles to the solution of these problems? In Australia today would you say that the distribution of GNP is: a. greatly biased towards wage and salary earners b. somewhat biased towards wage and salary earners c. about as it should be d. somewhat biased towards capital e. greatly biased towards capital In general what is your preferred degree of state involvement in the social and economic spheres? a. much more state and/or social provision is necessary b. some more involvement and/or social provision is necessary c. I favour the present balance d. some more individual initiative is necessary e. much more individual initiative is necessary

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24-

25.

26.

27.

28.

29.

What role do you favour for the government in the national economy, especially in income planning? a. full direct control b. large public sector c. limited investment d. incentives e. voluntary guidelines f. none Many of the doubts and fears expressed about the growing intervention of the State in economic and social spheres are fully justified. Do you: a. disagree b. disagree with reservations c. agree with reservations d. agree without reservations In respect of each of the following deregulations' could you tell us whether you: a. fully approve b. approve with reservations c. disapprove with reservations d. completely disapprove - with the deregulation of the Australian dollar. - with the proposed deregulation of financial and capital markets. - with deregulation of the labour market. In a developed and fairly affluent society like ours the relations between capital and labour are: a. more complementary and equal than they are unequal and exploitative b. more unequal and exploitative than complementary and equal c. these categories are no longer particularly relevant (why not?) In general would you say that trade unions have: a. more power than business interests b. both are more or less balanced c. have more power than business interests In general would you say that Australian television and newspaper reporting is: a. biased towards business interests b. biased towards labour c. pretty well evenly balanced

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30.

My general political orientation is: a. radical b. centre-left c. dead centre d. centre-right e. conservative

PART THREE: ANOMIE

We would like you now to turn your attention to the personal and subjective aspects of your experience as a higher public servant. We will start with some closed questions that will show you what we are after. An opportunity for a more open answer follows in a moment. 31. It's the constant conflicts with other people in the service that eats away at you. a. true b. partly true c. not really d. not true at all 32. You do get some worthwhile things though but over all the meaninglessness of it all still gets at you. a. true b. partly true c. not really d. not true at all (we are going to turn to more positive matters soon!) 33. On the whole the job undermines your own sense of identity and of what you are about as a person. a. agree b. agree with reservations c. disagree with reservations d. disagree 34It's just the sheer pressure and volume of the work that hurts. With reduced workloads there would be no psychological and emotional costs worth speaking of. a. agree b. disagree 35. On the whole the psychological and emotional costs of the work outweigh the rewards and satisfactions. a. yes, agreed, these costs do outweigh the rewards and satisfactions b. it's a pretty close thing

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c.

36.

no, the rewards and satisfactions definitely outweigh the costs Please give us your reasons... What are the rewards and satisfactions? What are the negative factors - stresses, frustrations, psychological and emotional costs, etc. ?

PART FOUR PUBLIC POLICY, THE STATE, FORMAL AND 'SUBSTANTIVE' OF STATE ACTION, ETC.

RATIONALITY

We now have a few questions concerning various aspects of government and public policy. 37.

38.

39.

40.

41.

42.

In contemporary social and economic affairs it is desirable that technical considerations be given more weight than political factors. a. agree b. disagree Only when a person devotes himself/herself to an ideal or cause does life become meaningful. a. agree b. disagree The strength and efficiency of a government are more important than its specific programs. a. agree b. disagree It is often said that with sufficient determination and skill a government can command public support for just about any kind of policy or decision. a. agree b. agree with reservations c. disagree with reservations d. disagree. In situations where technical and administrative considerations clash with social values, at the end of the day it is usually the technical and administrative considerations that prevail. a. agree b. agree with reservations c. disagree with reservations d. disagree We recognise that in practice the several pressures which press in upon the development and management of public policy are

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43.

44-

45.

46.

47. 48.

intertwined. However we do commonly distinguish between economic, social, legal-administrative, and political pressures. In the light of our experience how would you rank the relative strength of these pressures. - Can you very briefly explain your reasons? In the final reckoning it is people with expertise in applied economics and financial management who have the the strongest role in shaping policy. a. agree b. agree with reservations c. disagree with reservations d. disagree In cases where there is a clash between the minister's political preference and what the department sees as rational policy it is: a. usually the minister who gets his/her way b. it could go either way with equal probability c. the department view usually wins acceptance The classical view of public administration is still basically correct: the politicians select the values and objectives of public policy and we marshal the knowledge and the means for its implementation. a. agree b. agree with reservations c. disagree with reservations d. disagree We are interested in your assessment of the fragility or sturdiness of our system of government. In the light of your experience as a higher public servant, would you say that our system of government is: a. remarkably sturdy and resilient b. sturdy but faced with threatening pressures c. fragile but holding out d. fragile and threatened with collapse. In your view what are the two or three factors which most impair or threaten its continuing existence and development? In practice it is possible for senior administrators to maintain a neutral position in relation to basic value orientations. a. agree b. agree with reservations c. disagree with reservations d. disagree

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49.

50.

51. 52.

53.

5455. 55a.

56.

First of all, and with respect to the consistency and coherence of policy over time...In the areas in which you have had some experience would you say that, over the last decade and half, the development and management of policy over has a. become more ad hoc, more reactive, and less consistent b. it has remained about the same c. has become more consistent and less ad hoc and reactive. May we now turn to your assessment of the consistency and coherence of policy and management across different departments and sections of government. On the basis of your experience would you say that: a. there is increasing inconsistency and contradiction b. it's about the same as it always has been c. there is increasing rationalisation, consistency and coherence across areas and sections of government action Could you briefly describe the one or two factors that, in your view, most make for consistency and coherence (over time and/or across areas)? What one or two factors are most likely to produce inconsistency and incoherence? In the light of your experience over the last ten years or so would you say that the public service today is: a. stronger and better than it ever has been b. about the same as it always has been c. its overall quality and effectiveness has declined. Can you very briefly indicate your reasons for this judgment? What do you see as the main differences between SES officers like yourself and executives at a comparable level in the private sector? Which of the following statements best fits your view of the differences in the work of senior executives in the public and private sectors: a. too much is made of the differences: higher administration is fundamentally the same kind of work irrespective of location and task b. there are appreciable differences but the similarities are still more important c. the differences are more important than the similarities d. higher administration in the public sector is fundamentally different from what business executives do. Our work mainly involves the application of higher expert =

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57.

58.

technical = value-free knowledge to particular problems a. in this sense it is appropriate to describe us as higher 'technocrats1 b. No, it's not appropriate... Please explain... We would like to have your assessment of the current reforms of the old second division. In your view are these reforms: a. fundamental and timely b. probably worthwhile c. mainly cosmetic d just a nuisance c. largely injurious. Can you give us an extremely brief impression of the reasons you would offer for this judgment?

PART FIVE INTER AND INTRA DEPARTMENTAL RELATIONS AND DIFFERENCES

59.

We want to find out what similarities and differences exist between second division (SES) officers in different categories of departments and locations. May we ask you what you see as the two or three main differences between second division officers here in this department as compared with those in: (omit category to which respondent belongs) a. central agencies such as Treasury, Finance, and Prime Minister and Cabinet b. program or service departments such as Health, Education, Aboriginal Affairs, Social Security, Community Services, Veterans' Affairs c. market-oriented departments such as Trade, Primary Industry, Resources and Energy, Industry Technology and Commerce. d. SES officers outside Canberra in the regional offices.

60.

May we ask you to reflect for a moment on what factors are most effective in securing your agreement with the preferences of the senior officers at higher levels in the SES and/or with those secretaries to whom you are directly accountable. Please look at this list of factors and rank from one to four those that you think are most important in securing your agreement. You may include and rank another factor if you think we have missed something important. Agreement is secured:

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a.

6L

because of prospective inducements and rewards both formal and informal b. because of the latent or manifest threat of informal and formal sanctions c. because of my regard for the superior's technical knowledge and expertise in the area concerned d. because I accept the superior's authority to issue directives e. because I have special regard for the personal qualities of the senior officer concerned f. because the senior officer offers arguments that I personally find convincing and persuasive g. any other reason we have missed (please specify) We should like to have your perceptions of the criteria on which your senior second division (SES) and/or first division heads assess and respond to the work at your level. Please look at the list, add an extra criterion if you would like, and rank them in the order in which you think they are applied. a. economy and efficiency b. style and presentation c. immediate political pay-off for the government of the day d. intellectual cogency e. departmental, divisional, or sectional interests f. real benefit to public g. consistency with past practice h. potential effectiveness i. other (please specify).

62.

In general how are major disagreements and uncertainties on important policy matters resolved? (two or three ways? Can you also rank them?)

63.

Towards the end of the year we may need to pursue some further uncovered questions in a small number of follow up interviews with respondents who are perceived to be fairly typical of SES officers in your department. If you are sure that you have no objections would you please give us the names of up to three officers in this department whom you would see as fairly typical members of the SES? To save time may we have your permission to collect details of your background, educational qualifications and career history from your return to the Senior Executive Inventory?

64.

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a. yes b. no. The End* We know how busy you are and we are extremely grateful for the time you have given us. Thank you! Please be sure to return this guide to the interviewer.

SAMPLE AND INTERVIEWING PROCEDURES In early 1985 the Office of the Public Service Board gave its official support for the study. John Russell, then Assistant Commissioner for Research and Information, gave us a letter generically addressed to all of Canberra's Senior Executive Service Officers commending the study and inviting them to make themselves available for interview. In order to ensure that the names and addresses of potential respondents would remain confidential to us, we (not the Board) then sent out this letter ourselves to our own randomly selected sample of interviewees with a request for an interview. The number of people refusing interview was negligible (about 5 per cent or less) and 215 basic interviews with 196 men and 19 women were conducted from May 1985 to October 1986. The 187 people who were interviewed in Canberra, and the 28 located in the Commonwealth government's regional offices in four states, belonged to three different groups of departments. One group was made up of 65 central agency officers from the departments of Prime Minister and Cabinet, Treasury, and Finance. In terms of the pre-July 1987 nomenclature, the second group comprised 62 SES officers from the marketoriented departments of Trade (including Austrade), Primary Industry, Resources and Energy, and Industry, Technology and Commerce. A third group of 88 officers belonged to the program and service departments of Health Education and Youth Affairs (including the Schools Commission). The sample included about one-half of the total number of SES officers in these departments. It also comprised about one-seventh of the whole Senior Executive Service population of some 1600 people but except in a few explicit instances no hard generalisations and inferences are made about that larger and sometimes differently constituted population. The proportions in the sample are also roughly representative of distributions in the six levels of the Senior Executive Service. Unfortunately they are necessarily also roughly representative of the gender composition of the Service. After a trial comparison of about three-quarters of the female interviews with those of a much larger body of males it was clear that no statistically valid comparisons would be possible and further thoughts of skewing

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the sample by interviewing other women from departments not hitherto included in the study were abandoned because of the impossibility of reporting the answers of the female respondents without revealing the indenties of individuals. First of all the principal researcher conducted about 15 trial interviews to refine the instruments. Then more 'training' interviews were undertaken with the two interviewers. In every case the interview was personally and verbally administered with the interviewee following the questions in written form from a copy of the guide (see above). There was no variation in the sequence or wording of the questions. For the sake of enhanced reliability the two interviewers each administered interviews in all of the selected departments in roughly constant proportions. With a set of criteria provided by the principal researcher and after some supervised practice sessions, the interviewers coded the interviews from their own written transcript as soon as possible after completing the interview. They also supplied a cover page with summary notes of highlights in the interview and, as necessary, some colour-coded underlining and queries about problematic responses and codings. In practice it was possible to write down verbatim all the main points given in response even to the more demanding open-ended questions. These transcripts were then used by the principal researcher to check the accuracy of the coding before entering the anonymous information into the data set. Confidentiality has been respected in every detail and the data set has not and will not be communicated to anyone with coded biographical information that might subsequently allow the reconstruction or detection of individual identities. In addition to the main data set of 215 interviews, the principal researcher conducted some 25 additional interviews before, during, and, most importantly, as follow-up after the program of main interviews. The 20 or so follow-up interviews were of varying formality and length and were conducted with some of those SES officers who were cited by their colleagues as typical cum 'representative' of SES officers in their own department (see question 63 in the guide above) and, additionally, with a variety of other officers who were judged to have useful information and perspectives on the emerging data. The ambiguity in the number of these and other follow-up interviews depends on how they are counted and, more specifically, on whether one counts interviews with ex-SES officers, with ministerial staff who would or did not become SES officers, and, in many cases, on whether or not one should count long conversations with a few people some of whom were willing sounding boards (sometimes, ministers, politicians, and others who were not SES officers) who were often as much friends as they were interviewees. 256

APPENDIX A: METHODS & PROCEDURES

DATA ANALYSIS All the data were analysed with the 'SPSS-X' Statistical Package for the Social Sciences. The procedures followed a fairly conventional progress that lasted for about six months and began with frequencies and then proceeded to many sets of cross-tabulations, to a series of factor analyses and to some (Spearman - rho) correlations between selected variables. The cross-tabulations were done in stages. The first and most important building blocks for the analysis were generated by crosstabulating the independent variables of department, location, and the other largely biographical data drawn mainly from part one of the interview, with other variables created from answers to items in the body of the interview schedule. With checks to avoid distortions, the values of the original frequencies for the 'closed' (or fixed choice) items in the interview were consolidated first by excluding the small number (almost invariably less than 5 per cent) of 'no answer1 responses, and second for some items, by aggregating answers of, for example, 'strongly agree' and 'agree with reservations' into a single value. Further sets of cross-tabulations were made from the independent variables (department category, self-designated political orientation, age, and type of university education, etc.) that were then, with 'multiple response' in SPSS-X, cross-tabulated with new dependent variables constructed from the answers given to the open-ended questions. For the sake of avoiding artificial, dubious, and unnecessary enhancements to what was obviously a strong body of data, no weightings were used. The fuller details that are given in the notes to the tables show that with only one exception all the cross-tablulations are statistically significant at the %2 test p <0.05 level. As I have explained above a proportionately representative sample of 19 females does not allow statistically significant cross-tabulations by gender and forced me to resort where appropriate to what are, strictly, only impressions of similarities and differences of the responses of women as compared with the men. Similarly, the factor analyses were made in several stages: the first consisted of factor analyses of separately rotated matrices of variables constructed from different blocks of the 'closed' or fixed choice items in the interview. Where strong relationships between variables were found - as for example among those that were used in Chapter 2 to give a scale for such new variables such as 'economic rationalism' and 'anomie' - 'alpha' coefficients were calculated, and the values duly reported, to assess the reliability of these composite variables.

257

APPENDIX B

MAJOR ECONOMIC TRENDS 1975-1988 Year

1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988

Wage & profit shares of national income1

W 68.9 67.5 66.8 63.3 61.5 61.1

112

6L9

114

63.4 64.0 61.0 60.5 59.3 59.5 58.4

11.8 11.4 13.8 14.6 14.8 14.6 15.3

P 13.1 13.5 12.3 13.6 13.9

Change in Australian Real GDP compared to the seven major OECD countries2

Australia

Commonwealth Public Sector Outlays as a percentage of GDP3

All Public Sector Outlays as a percentage of GDP 4

OECD

2.9 3.3 1.0 2.7 4.2 2.3 3.0

-0.4

-0.4

-0.8

0.5 6.9 4.9 2.1 4.1

3.1 3.6 2.8 3.5

n/a

n/a

4.9 4.0 4.6 3.1 1.1 2.0

5.4

28.0 29.1 28.8 29.5 28.1 27.3 27.4 28.1 30.3 31.2 31.5 31.5 30.5 28.2

36.1 36.7 37.2 38.6

1L1 37.4 37.6 39.3 42.9 43.3 43.4 44.0 43.4 40.1

Notes 1. Treasury, The Round Up: March 1985, Australian Government Publishing Service, Canberra, 1985, p. 11 and January 1988, p. 11; Treasury, The Economic Round Up: May 1990, Australian Government Publishing Service, Canberra, 1990, p. 43. 2. OECD Economic Outlook: Historical Statistics 1960-1987, OECD, 1989, p. 44. 3. W.E. Norton & C.P. Almyer, Australian Economic Statistics 1949/50-1986/87: 1 Tables (RBA Occasional Paper No. 8A), Reserve Bank of Australia, 1988, p. 43; and Commonwealth of Australia, Budget Statements 1989-90: Budget Paper No. 1, Australian Government Publishing Service, Canberra, 1989, pp. 6.11 and 6.17 4. Norton & Almyer, p. 32; and Commonwealth of Australia, Budget Statements pp. 6.11 and 6.17

258

Year

Change in

Unemployment

Annual

Unit Labour Costs as a percentage of GDP5

Rate6

percentage debt as a change in percentage the Con' of GDP 8 sumer Price Index7

%

1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 5. 6. 7. 8. 9.

11.4 93

£2 5.4 11.0 12.2 16.5 3.2 3.2 4.0 8.5 4.2 6.9

%

%

3.5 3.5 4.0 4.8 4.3 4.5 4.6 5.5 8.4 7.1 6.7 6.7

16.7 12.8 14.0 9.4 8.2 10.1 9.4 10.4 11.5 6.9 4.3 8.4 93 7.3

6£ 6.2

Net External Current

%

3.1 4.5 6.5 7.4 5.7 6.2 10.5 13.5 15.3 23.4 30.8 31.0 32.3

Account Deficit as a percentage of GDP 9

%

4.9 4.9 -2.9 -3.2 -3.5 4.7 -4.1 -5.9 -4.0 -3.8 -5.2 -6.1 rlQ -4.1

OECD Economic Surveys: Australia, OECD, 1987, p. 94; 1987/88, p. 100; and 1989/90, p. 110. Norton & Almyer, p. 116; and OECD Economic Surveys: Australia, 1989/90, p. 17. Norton & Almyer, p. 153 and Commonwealth of Australia, Budget Statements 1988-89, p. 22. Norton & Almyer, p. 28 and OECD Economic Surveys: Australia, 1989/90, p. 118. Norton & Almyer, p. 2 and Commonwealth of Australia, Budget Statements 1988-89, p. 23.

259

APPENDIX C

MAJOR EVENTS 1975-1990

1975 • Majority Whitlam Labor Government brought down by 'constitutional coup' - 11 November. 1976 • Report of the 'Coombs' Royal Commission on Australian Government Administration- Report largely ignored by Fraser Liberal/National Government. • Department of Treasury split into Treasury and a new Department of Finance with responsibility for overseeing total Commonwealth expenditure - December. 1979/80 • Strong tightening of fiscal policy coupled with sharp tax increases. 1981 • Campbell Report recommends financial deregulation. 1982-83 • Fraser Government secured a 'Wages pause' that held back wage increases. 1983 • Unemployment reached post-war peak averaging 8.4 per cent for the year. • Accord between Labor Party and Australian Council of Trade Unions on economic policy - February. • Federal Election, Hawke Labor victory (First Hawke Government) - March 260

APPENDIX C: MAJOR EVENTS 1975-1990

'National Economic Summit' convened by Hawke Government sought to bring about 'tripartite/corporatist' consensus between government (federal and state), business, and unions, (and professional and other groups) - April. Exchange rate 'floated' - December. Partial deregulation of the Banking Industry. 1984 • Hawke 'Trilogy1: pre-election promise to halt increases in total taxation, expenditure, and budget deficits (each as a percentage of GDP) throughout its next term. • Creation of the Senior Executive Service - May. • Federal Election, Labor re-elected (Second Hawke Government) - December. 1985 • Seventeen foreign banks given licences to trade in Australia February. • Treasurer's Economic Statement began the process of massive expenditure cuts ($1.25 billion) - May. • 'Tax Summit' convened by Hawke Government - July • Accord Mark II between Labor Government and ACTU: revision of Accord to allow discounting of wages and ongoing wage restraint. 1986 • Federal Treasurer makes 'Banana Republic' speech - 14 May. • US credit rating agency Standard & Poors drops Australia's credit rating from AAA to AA+ - December. 1987 • Two-tier wages system with second tier wage increases conditional on productivity increases - March-April. • Federal Election and Labor re-elected (Third Hawke Government). • 'Bastille Day' restructuring of the Commonwealth Public Service into 'megadepartments' - July. • Stock market crash - October.

261

ECONOMIC RATIONALISM IN CANBERRA

1990 • Federal Election and Labor re-elected (Fourth Hawke Government) - March. • The fall of the high-profile corporate 'entrepreneurs', including Scase, Bond, Connell, Elliot, and Herscu, in spectacular crashes, most involving criminal charges. • Report of the Senate Standing Committee on Finance and Public Administration's Enquiry into the Development of the Senior Executive Service gave bipartisan support for existing reforms and 'rationalisations' - September. • Special Premier's Conference, public promotion of the 'New Federalism'. Mooted gradual shedding of federal government program and service functions to the state governments - October.

262

NOTES & REFERENCES

INTRODUCTION 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11.

12. 13.

Alain Touraine, 'Is Sociology Still the Study of Society?', Thesis Eleven, No. 23, 1989, pp. 5-34. The words of one of the founding fathers of the Australian federal state, Alfred Deakin, The Age, 10 June 1890; as quoted by Stuart Macintyre, Winners and Losers, Allen & Unwin, Sydney, 1985, p. 40. That is how Sir Frederick Eggleston described Deakin and Barton. See Tim Rowse, Australian Liberalism and National Character, Kibble Books, Melbourne, 1978, pp. 107-08. Donald Home, The Lucky Country, Penguin, Ringwood, 1964. Russell Ward, The Australian Legend, Oxford University Press, Melbourne, 1958. Francis Castles, 'Australia and Sweden: the politics of economic vulnerability', Thesis Eleven, No. 16, 1987, p. 116. This sentence paraphrases the words of R. Rosecrance, 'The Radical Culture of Australia' in Louis Hartz, The Founding of New Societies, Harcourt Brace and World, New York, 1964, p. 310. J.P. Nettl, 'The State as a Conceptual Variable', World Politics, Vol. 20, July 1968, pp. 559-92. S. Encel, Equality and Authority: a study of class, status and power in Australia, Cheshire, Melbourne, 1970. Joel D. Aberbach, Robert D. Putman & Bert A. Rockman, Bureaucrats and Politicians in Western Democracies, Harvard University Press, Cambridge, Mass., 1981. Michel J. Crozier, Samuel P. Huntington & Joli Watanuki (eds), The Crisis of Democracy: report to the Trilateral Commission on the GovernabiU ity of Democracies, New York University Press, New York, 1975; and Richard Rose (ed.), Challenge to Governance: studies in overloaded politics, Sage Publications, Beverly Hills, 1980. Role of the Public Sector, OECD Economic Studies, No. 4, Spring 1985. Figures given by the Treasurer on 6 September 1989, quoted from

263

ECONOMIC RATIONALISM IN CANBERRA

14. 15. 16. 17. 18. 19. 20. 21. 22.

23. 2425. 26. 27. 28.

29.

Michael Howard, 'Public Expenditure Constraint', Discussion Paper No. 4, November 1989, Public Sector Research Centre, University of New South Wales. As quoted in Howard, PSRC Discussion Paper No. 4, p. 2. Aberbach et al., Bureaucrats and Politicians in Western Democracies. John Maynard Keynes, The General Theory of Employment, Interest, and Money, Harcourt Brace, New York, 1936, p. 383. Sir William Armstrong speaking of the British Civil Service, as quoted by H. Heclo & A. Wildavsky, The Private Government of Public Money: community and policy inside British politics, Macmillan, 1973, pp. xiv-xv. Geoffrey Hawker, Who's Master, Who's Servant?, Allen & Unwin, Sydney, 1981. This epithet belongs to Peter Self, Econocrats and the Policy Process: the politics and philosophy of cost-benefit analysis, Macmillan, London, 1975. This 'list' is adapted from Burke C. Thompson, Making Sense of Reification: Alfred Schutz and construction theory, Macmillan, London, 1982, p. 88. John A. Rohr, 'Public Administration and the Constitutional Bicentennial: an essay on research', International Journal of Public Administration, Vol. 4, No. 4,1982, pp. 349-80. For want of space to explain this notion it can be assumed crudely, and in contradistinction to orthodox socialist notions, to refer to a distribution of income that is guaranteed through a centralised wage fixing system. For this reason it is already an economistic notion and one that owes its distinctive form to an Australian history in which the Labor Party achieved great parliamentary strength before the turn of the century and so before the process of industrialisation had begun. See Peter Beilharz, 'The Labourist Tradition and the Reforming Imagination' in R. Kennedy (ed.), Australian Welfare, Macmillan, Melbourne, 1989. Hugh Stretton, 'The Quality of Leading Australians', in Australia: The Daedalus Symposium, ed. Stephen R. Graubard, American Academy of Arts and Sciences, Angus & Robertson, Sydney, 1985. C. Geertz, The Interpretation of Cultures, Hutchinson and Co., London, 1975, pp. 312-13. J. Nettl, 'The State as a Conceptual Variable', World Politics. Pierre Birnbaum, 'States, ideologies and collective action in Western Europe', International Social Science Journal, Vol. XXXII, No. 4, 1980, pp. 671-86. The words are those of Alfred Stepan as quoted by Peter B. Evans, Dietrich Rueschemeyer & Theda Skocpol, Bringing The State Back In, Cambridge University Press, Cambridge, 1985, p. 7. Stephen Krasner, Defending the National Interest: raw materials investments and US foreign policy, Princeton University Press, Princeton, 1978; and Peter Katzenstein, Between Power and Plenty: the foreign economic policies of advanced industrial states, University of Wisconsin Press, Madison, 1978. Greg Grough & Ted Wheelwright, Australia: a client state, Penguin

264

NOTES & REFERENCES

30. 31. 32.

33.

3435. 36. 37. 38.

39. 40. 41.

42.

Books, Ringwood, 1982. Although most of the foreign capital comes from Japan, the all'important ideas that legitimate the surrender of control come principally from America and Britain. E.P. Thompson, The Poverty of Theory and Other Essays, Merlin Press, London, 1978. Boris Frankel, Marxian Theories of the State: a critique of orthodoxy, Monograph Series No. 3, Arena Publications, Melbourne, 1978. See Jane Marceau, A Family Business? The Making of an International Business Elite, Cambridge University Press and Editions de la Maison des Sciences de l'Homme, 1989, and J. Higley, D. Deacon & D. Smart, Elites in Australia, Routledge, London, 1979. See J. Habermas, The Theory of Communicative Action, Vol. 1. Reason and the Rationalization of Society, trans. Thomas McCarthy, Beacon Press, Boston, 1981, pp. 1-7, and Max Weber, '"Objectivity" in Social Science and Social Policy', in The Methodology of the Social Sciences, Edward A. Shils & Henry A. Finch (eds), Free Press, New York, 1949. See Aberbach et al, Bureaucrats and Politicians in Western Democracies, p. 14- These two notions come originally from Richard Rose and Samuel H. Beer respectively. Niklas Luhmann, The Differentiation of Society, trans. Stephen Holmes & Charles Larmore, Columbia University Press, New York, 1982, pp. 200-01. Max Weber, £00710771)1 and Society, Guenther Ross & Claus Wittich (eds), University of California Press, Berkeley, 1978, Vol. 2, p. 1402. Claus Offe, Disorganised Capitalism: contemporary transformations of work and politics, ed. John Keane, Polity Press, Cambridge, 1985, p. 131. My translation from Mikel Dufrenne, "La Rationalite aujourd'hui" in Rationality Today, ed. Theodore F. Geraets, University of Ottawa Press, 1979, p. 25. This collection contains the proceedings of the International Symposium on 'Rationality Today* held at the University of Ottawa in October 1977. The original appears on p. 25 thus: Le jeu de la raison n'est pas facile: dire non au systeme, c'est intellectuellement facile, meme s'il y faut parfois de Pheroisme: mais comment dire a la fois oui et non? Comment inventer une strategic sans faire le jeu des strateges? Comment concilier la spontaneite et Porganisation? Comment vouloir l'efficacite et refuser la technocratic? Ou encore comment naviguer entre un rationalisme qui identifie rationalite et rationalisation et un irrationalisme qui nous laisse sans resources? See Chapter 5 , pp. 199-205. Niklas Luhmann, Closure and Openness, European University Institute, Florence, Working Paper No. 86/234, p. 5. The phrase 'rancour against modernity' is another of the subtle and brilliant provocations of Niklas Luhmann who speaks of 'modernity' in a sense that is now normally understood as 'post-modernity*. See his The Differentiation of Society, p. xxiii. The attacks on intellectuals were made 'official' and given international

265

ECONOMIC RATIONALISM IN CANBERRA

43. 4445.

46. 47. 48.

respectability with the Report to the Trilateral Commission of Crozier et aL, see especially pp. 30-33. Alain Touraine, 'Is Sociology Still the Study of Society?', p. 26. Jiirgen Habermas, Communication and the Evolution of Society, trans, and introduced by T. McCarthy, Beacon Press, Boston, 1979, p. 199. The quotation marks contain a paraphrasing of Alain Touraine, T h e Waning Sociological Image of Social Life' in The Global Crisis: sociological analyses and responses, ed. E.A. Tiryakian, E.J. Brill, Leiden, The Netherlands, 1984, p. 40 Noam Chomsky, Necessary Illusions, 1988 Massey Lectures, Canadian Broadcasting Commission. These paragraphs give the broad outlines of the method and purposes of the study. The technical details are presented in Appendix A, pp. 245-57. H. Heclo & A. Wildavsky, Private Government of Public Money, p. xii.

CHAPTER 1 1. 2. 3. 4. 5. 6.

7. 8.

P. Groenewegen, 'The Political Economy of Australian Federalism, 1901-81', in B. Head (ed), State and Economy in Australia, Oxford University Press, Melbourne, 1983, p. 188. P. Groenewegen, p. 188. P. Grabosky and ]. Braithwaite, Of Manners Gentle: enforcement strategies of Australian business regulatory agencies, Oxford University Press, Melbourne, 1986. See Australia, OECD Economic Surveys, March 1987, Paris, pp. 36-7. P. Brain, Ainsley Jolley & Ian Manning, 'Labor Market Options for Australia', in Restructuring Australia, No. 8, National Institute of Economic and Industry Research, March 1988, p. 37. W.E. Norton & C.P. Almayer, Reserve Bank Bulletin, as quoted by Michael R. Johnson, 'Reassessing the Economic Role of the Public Sector in Australia', Public Sector Research Centre, University of New South Wales, July 1990. I owe the idea of putting these two questions in this way to John Higley, Desely Deacon & Don Smart, Elites in Australia, Routledge & Kegan Paul, London, 1979, p.290. These were intrinsically difficult questions. Difficulties in dealing with the complexities of the data were anticipated with a decision to code the problems and obstacles into three broad categories of 'economic', 'social', and 'political', and, within each of these categories, into a much larger array of items. Since the information from the short-answer questions would provide a first level of reasonably 'hard' and unambiguous data it seemed appropriate to frame the open-ended questions with a more ambitious strategy that would, firstly, organise the data into these three broad categories, and thereafter eschew the safe but reductive

266

NOTES & REFERENCES

9.

10. 11.

12.

13.

1415.

16.

approach of 'big numbers/big boxes' and strive instead for more detail with smaller numbers spread over a much larger array of sub-categories. By counting up the number of times particular items are mentioned we get frequencies that give an interesting picture of the problems our respondents deemed important and, just as significantly, of those to which they assigned a lesser importance or did not mention at all. With the factor analysis we took the further step of drawing together the broad outlines of the associations made between the various problems and obstacles that our respondents brought to our attention. Unemployment was coded into two separate categories of 1. unemployment (economic) which was used when unemployment was mentioned strictly in economic terms and as a cost either in terms of lost productive capacity or in terms of the costs to the economy of 'the dole', and 2. unemployment (social) which was used when the problem was raised in terms of its psychological and social costs. In terms of the proportions in Table 1.1 the frequency for the first category is 4.9 and 14-8 for the second, as shown in the table. Donald Home, The Lucky Country, Penguin, Ringwood, 1964This is the modal form of reference to industrial relations and all mentions of industrial relations as an obstacle were only coded as such if they were proffered in that form. Industrial relations is, however, a recurring theme that comes up in other contexts as well. Where the conflictual element was not stressed and where there was no obvious 'economic accusation', the mentions were more appropriately coded as 'institutional inertia'. Where the stress was set on backward management and leadership it was coded accordingly, and not as industrial relations. Statement of Accord by Australian Labor Party and the Australian Council of Trade Unions Regarding Economic Policy, ACTU, Melbourne, February 1983. Reproduced also as 'Appendix A' in Frank Stilwell, The Accord and Beyond, Pluto Press, Sydney and London, 1986. The proportion is falling and to 1990 has declined from a clear majority to about 42 per cent overall. Still a majority of approximately 60 per cent of workers in the public sector are unionised and membership is strong in the traditional manufacturing sectors but lowest of all among part-time and new service industry workers. A. Davies, Australian Democracy, 2nd ed., Longman Cheshire, Melbourne, 1964, p.l. In the seven nation Aberbach et al. study, Bureaucrats and Politicians in Western Democracies, Harvard University Press, Cambridge, Mass., 1981, pp. 47-67, we see that in those seven nations nearly half of them are the children of fathers with higher management or professional occupations and so from families in about the top 3 per cent of the socio-economic spectrum. See Chapter 2. That is why these references to 'vested interests' figured so prominently in the frequency counts but do not show up strongly in the factor analysis.

267

ECONOMIC RATIONALISM IN CANBERRA

CHAPTER 2 1.

The term 'political administrators' is borrowed from Heclo and Wildavsky who use it because they want to make the point, as I do, that at this top level politics and administration are so intertwined as to require a new generic term that addresses attention precisely to the overlap and interrelation between the two groups. H. Heclo & A. Wildavsky, The Private Government of Public Money: community and policy inside British

2.

politics, Macmillan, London, 1973. Joel D. Aberbach, Robert D. Putman & Bert A. Rockman, Bureaucrats and Politicians in Western DemocracieSy Harvard University Press, Cam-

3. 4.

5. 6. 7. 8.

9.

10. 11.

bridge, Mass., 1981, p. 47. The six nations in this part were the USA, Britain, France, the Netherlands, Italy and the German Federal Republic. Sweden was not covered in this section. R. W. Hawke, Prime Minister, 'Equal Employment in the Australian Public Service: Public Sector Reform on Target', mimeo, Public Service Board, 1986. This part of the interview comprises some 43 questions and statements that our respondents had before them in written form and to which they were asked to respond either with concrete information, as in the biographical section of the interview, or else by selecting from a fixed range of answers of the kind 'strongly agree', 'agree with reservations', 'disagree with reservations', and the like. See Appendix A, pp. 245-57, for further details. Aberbach et al., p. 69. See methodological notes in Appendix A, pp. 245-57. From the paper presented by Prime Minister Hawke, p. 9. Of those from non-English speaking backgrounds, 7.7 per cent were first generation and 8.9 per cent second generation. The proportions of 'second generation' immigrants among the SES i.e the numbers who assign the birthplaces of father and mother to the categories above - are almost exactly the same as for their own birthplace. Although the numbers are too small to mean very much, it is perhaps worth noting that four out of seven of the sample who are of nonEnglish speaking backgrounds are also under the median age of the SES sample: a detail that is either a coincidence or an indication that some effort has been made over the last five to eight years to promote the non-Anglo-Saxons into the SES. The number of nations covered in the Aberbach data varies, on different variables, from five to seven. Accordingly I sometimes refer to 'the five nation study' or 'the six nation study' as the case may be. These are obviously further complicated when comparisons have to be made with another body of data that is, for our purposes, somewhat outdated. However too much can be made of this. Presumably about half of the people Aberbach studied were still in their top jobs in 1986.

268

NOTES & REFERENCES

12.

13.

14-

15.

16. 17. 18. 19. 20.

21.

Moreover, since no country has in the meantime made dramatic changes, the 'other half of new recruits will not, over the average of six nations, be so very different. We can only speculate about the reasons for these differences that may owe something to the fact that in nations like France and England there is a single state elite whereas in the Australian federation there are seven state governments and one 'central' government. Higher government posts may therefore be more commonplace and so less 'exclusive'. 'L'EN ARCHIE' is a play on words coined by Mandrin (a pseudonym for a famous left intellectual who was to become a minister in the first Mitterand government); it is based on the acronym 'ENA' referring to the Ecole Nationale d'Administration from which the top 'hauts fonctionnaires' of the 'grands corps' come. Jacques Mandrin, Uenarchie ou les mandarins de la societe bourgeoise, La Table Ronde, Paris, second edition, 1980. The differences between them are discussed by Ann Daniel, 'Research Note: the demography of occupational prestige in the Australian workforce', Australian and New Zealand Journal of Sociology, Vol. 22, No. 2, July 1986. See Ann Daniel, Power, Privilege and Prestige: occupations in Australia, Cheshire, Melbourne, 1983. For the sake of greater accuracy SES respondents who gave their fathers' occupation as businessman, farmer, or public servant and the like, were asked for information that would allow us to rank their fathers, for example, as a company director, middle manager, or small businessman; or as a large grazier, or a farmer with a small, middle, or large property, etc., and in the case of public servants, how their fathers would rank in the present hierarchy of divisions. The scales are 'gender biased' and obligatorily based on fathers' occupations for the obvious reasons, first that most of the mothers in this pre-war period would not have been employed, and second that the occupation of the fathers in that period would give the only statistically reliable measure of socio-economic status. The GPS enrolment is more usually estimated at the lower level of 3 to 4 per cent. P. Boreham, M. Cass & M. McCallum, 'The Australian Bureaucratic Elite: the importance of social backgrounds and occupational experience', Australian and NZ Journal of Sociology, Vol. 15, No. 2, July, 1979. Boreham, Cass & McCallum, 'The Australian Bureaucratic Elite'. Aberbach et al., Bureaucrats and Politicians in Western Democracies, p. 51. Some people would argue that, though slight by comparison with other countries, differences in prestige do exist between the older universities and the new ones that were founded in the 1960s and 1970s. Since the vast majority of our respondents graduated before the newer universities had produced their first graduates, the differences are completely unimportant for our purposes. V. Subramaniam, 'Representative Bureaucracy: a reassessment', American Political Science Review, Vol. 61, 1967, pp. 1010-19; P.E. Sheriff,

269

ECONOMIC RATIONALISM IN CANBERRA

22.

23. 24. 25.

26. 27. 28. 29.

30.

31. 32.

33.

'Unrepresentative Bureaucracy', Sociology, VoL 8, No- 3, 1974, pp. 447-62; H.V. Emy, The Politics of Australian Democracy, Macmillan, Melbourne, 1974; Boreham, Cass & McCallum, 'The Australian Bureaucratic Elite'; S. Encel, Equality and Authority, Cheshire, Melbourne, 1970. This is the format used by Aberbach and his colleagues; see Aberbach et al., p. 80. It is 'impressionistic' only inasmuch as there is no regression analysis to establish the order of the selection effects. However the separate cross tabulations are significant at the %2 test p <0.05 level. Peter Kellner & Lord Crowther-Hunt, The Civil Servants: an inquiry into Britain's ruling class, Macdonald, London, 1980. The cross tabulation is significant at the %2 test p <0.05 level. Of the 50 respondents who gave the 'not relevant' answer, ten said that class relations no longer exist; two said that high rates of pay give the lie to class relations; and 20 said that the structure of industry now assumes a partnership and so gives the lie to exploitative class relations. For the wording of the question see Appendix A p. 248. Values a + b + c were coded as 'controls' and values e + f coded as 'no controls'. The comparison is then between two groups of which the first comprises respondents designating themselves as 'centre-left' and a second group comprising both 'centre right' and 'conservative'. For these cross tabulations N = 155. All the chi squares significance measures for these cross-tabulated comparisons are %2 test p<0001. In a factor analysis of all the 'closed' questions, these variables were related as follows: 'deregulation of labour' factors with 'distribution of GNP' with principal factor loadings of 0.83 and 0.54 respectively. When these are treated (with two other variables, i.e. 'deregulation of capital' and 'deregulation of dollar') as an index of 'economic rationality', the four item index carries an alpha reliability coefficient of 0.72. The other five variables produce another factor - called 'state involvement' - with principal loadings as follows: 'doubts and fears about state intervention' 0.71; 'government role in national economy' - 0.70; 'degree of state involvement' - 0.61; 'trade union power' - 0.51: and when these four items are treated as an index they give an alpha reliability coefficient of 0.54In the countries with a Roman law tradition such as Italy (54 per cent), Germany (66 per cent) and the Netherlands (39 per cent), the top civil servants in the Aberbach study more often cited the law as their major field of university study. See Aberbach et al., Table 3.2, p. 52. The breakdown of the Aberbach categories is not available. This breakdown comes from Peta Sheriff, Civil Service Studies, Vol. 2, HMSO, 1976. Leo Pliatzky, 'Mandarins, Ministers and the Management of Britain', The Political Quarterly, Vol. 55, No. 1, Jan-March, 1984; P. Birnbaum, Les Sommets de VEtat, Editions du Seuil, Paris, 1977; Aberbach et al., esp. pp. 50-2. The conservative opposition Liberal Party, was in 1985 and 1986, still

270

NOTES & REFERENCES

34.

35. 36. 37.

38.

39.

40. 41. 42.

43.

divided between a very small group of the 'wets' who were the 'small 1' liberals, and, on the other side, the 'dries', or economic rationalists, who were then very much in the ascendancy and would later under the leadership of John Howard succeed in almost totally excluding the wets from the shadow ministry and the parliamentary wing of the Party. W.M. Corden, 'The Rule of Technique: The Economic Record in recent years', in The Australian Economist'. 1888-1898, N. G. Butlin, V. W. Fitzgerald & G. H. Scott (eds), Facsimile edition, Vol. 1, ANU Press, Canberra, 1986, pp. xiii-xiv; Evan Jones, 'Positive Economics or What?', Economic Record, September, 1977; Hugh Stretton, Political Essays, Georgian House, Melbourne, 1987, p. 203. With N = 173, the cross-tabulation of 'Economic Rationality', High/Middle/Low, with our two educational categories gives a chi square significance of %2 test p <0.0029. The Role of the Public Sector', OECD Economic Studies, No. 4, Spring 1985, p. 43. Yes Minister is a British satirical television drama series that has had, it seems, a great impact on public perceptions of top public servants who are, in this series, cast as a self-serving and incestuous club of Oxbridge men who are obscurantist, obsequious, and entirely cynical of the public interest. The difficulties are at least threefold. In the first place there is simply the problem of deciding on appropriate 'psychological' or phenomenological criteria. A second, and entirely different, problem arises in deciding on the functional significance that demoralisation has for the system and the structure. This problem is compounded again since the effects are obviously unequal (and probably incalculable) across different groups and individuals: the 'demoralisation' of some individual(s) in one location may lead to disastrous failures or to corruption of a very damaging kind, whereas in some other area it might have no deleterious effects on specific functions and programs. This problem and the unevenness of anomie and unhappiness across different categories of departments will be discussed in the next chapter. This concern with declining morale was a major preoccupation in many of the independent submissions, in October and November of 1989, to the enquiry into the 'Development of the Senior Executive Service' by the Australian Senate Standing Committee on Finance and Public Administration. See especially Chapter 4The average was about 55 hours per week. This information was provided by The Australian Institute of Family Studies who say that, since there are no divorce/separation rate figures for particular occupational or socio-economic status categories, it is not possible to make reliable comparisons with comparable private sector managers or, more generally, with the upper-middle class of the Australian population. Responses to questions 31 to 35 inclusive - seeAppendix A (p. 249) for

271

ECONOMIC RATIONALISM IN CANBERRA

4445. 46. 47. 48.

49.

the wording of the questions - were treated (with unweighted values) as a scale of anomie and produced a good alpha reliability coefficient of 0.719. The frequencies for the whole sample were: high - 0.5 per cent; medium - 15.8 per cent; low - 83.3 per cent. N = 214. In order to force considered answers the two questions were, deliberately, framed quite differently and appeared on different pages of the interview guide. Herbert A. Simon, Administrative Behavior, The Free Press, New York, 1945. See Bernard Schaffer, 'Insiders and Outsiders: insidedness, incorporation and bureaucratic polities', Development and Change, Vol. 11, Sage, London and Beverly Hills, 1980, pp. 187-210. This specialised but essential definition of 'intellectuals' as people who create abstract models that have a 'transcontextuaT application is developed in Chapters 4 and 5. Aberbach presented them with the statement, 'the strength and efficiency of a government are more important than its specific programs' and got 60 per cent agreement across the four nation sample. Here I asked them the same question in 1986 and got only 49 per cent agreement. See Aberbach et. al., p. 92. The word 'essential' was (unintentionally) replaced with the softer 'desirable'.

CHAPTER 3 1. 2. 3.

4.

5.

'By and large the same' because these responses are quite strongly related. See above Chapter 2, p. 58 and footnote 29. See p. 245 and detail of interview guide in Appendix A, pp. 245-47. With respect to political orientation, Left = centre left (there being no respondents who designated themselves radical) whereas Right = centre right + conservative. With respect to the type of education, Soc. (Social) = those with degrees in Social Sciences, Humanities, and Law, whereas Business = those with degrees or major specialisations in Economics, Commerce, Business Administration. See Chapter 2 for further details about these categories. Value labels are presented here in their altered and aggregated form and there is also some slight deviation from the wording of the original questions put to the respondents in the interview. The original form is shown in the interview guide given in Appendix A, pp. 245-47. As I have explained the coding to the answers given in answer to the 'why not?' response showed that these responses were in almost every case tantamount to the first of these three responses; that is to say they denied that relations were unequal and exploitative and so the figures in brackets give aggregate percentages for responses 1 and 3. Of the 50 respondents who gave this 'not relevant' answer, ten said that class relations no longer exist; two said that high rates of pay give the lie to class

272

NOTES & REFERENCES

6. 7. 8. 9. 10. 11. 12. 13. 14. 15.

16. 17. 18.

relations; and 20 said that the structure of industry now assumes a partnership between capital and labour and so gives the exploitative nature of class relations. Department of the Prime Minister and Cabinet, Annual Report 1985-86, Australian Government Publishing Service, Canberra, p. 1. The Treasury, Annual Report, Australian Government Publishing Service, Canberra, 1986, p. 1. Greg Whitwell, The Treasury Line, Allen & Unwin, Sydney, 1986, p. 6. Department of Finance, Annual Report, Australian Government Publishing Service, Canberra, 1986, p. 1. Sixty-six per cent of them hold degtees in economics. See pp. 54-64 in Chapter 2. See discussion in Chapter 4. The term is taken from Peter Self, Econocrats and the Policy Process: the politics and philosophy of cost-benefit analysis, Macmillan, London, 1975. These results are presented and discussed in Chapter 4, pp. 136-8. The sample excludes many smaller departments with some obvious market interface. Some of those that were excluded but which existed as discrete entities before the July 1987 reorganisation and aggregation into super-departments include: Employment and Industrial Relations, Aviation, Transport, and Communications. These departments were not included first because it seemed important not to spread the interviews too thinly and to concentrate instead on a smaller number of departments in order to get some feeling for the particular character of the different departments and, second, given the aims of the study, it seemed wise to exclude smaller departments and those with mixed functions of a kind that would give the lie to their inclusion in this category as marketoriented departments. In every case here the figures are rounded from statistical appendixes of the annual reports of the departments for the fiscal year 1985-86. One of the shortcomings of the study is that there was no accurate count of officers recruited from outside the service. See Chapter 4, p- 121. The coding instructions for these values in Table 3.7 are as follows: 1. Private/ego satisfactions: e.g. sense of achievement, sense of challenge, vindication of abilities etc., i.e. emphasis is overwhelmingly on inner states of feeling rather than outcomes. 2. Economic management: macro-economic planning, economic planning, making the economy work. 3. Value-oriented: welfare, care, redistribution, support for needy, promoting equity, stress on needs of clients with social justice element implicitly or explicitly present. 4. Political: serving the minister, the government, help give expression to the will of the elected representatives of the people, keeping the government out of trouble. 5. Leadership: getting employees/teams working well together. 6. Saving the taxpayers' money: where economic management and rationalising expenditure, etc. is identified narrowly with savings.

273

ECONOMIC RATIONALISM IN CANBERRA

19. Australian slang for illicit deals, claims and 'perks', referring in this case to the practices of the departments of Trade and Primary Industry that became notorious under the conservative Liberal/Country Party coalition governments of the 1960s and early 1970s for funnelling large subsidies to farmers. 20. The Labor Party is organised in terms of three, semi-official, factions: Left, Centre Left, and Right. 21. The order in the ministry is, as our respondents tell us, very important indeed and a good reflection of how much 'clout' your minister will have among his colleagues. 22. There is no space to take up this matter here. It must suffice to point out that the ethos of the state departments is generally more influenced, as one might expect, by local and party politics at the grassroots than the more remote Canberra apparatus that pays only scant attention to the pleadings of local federal MPs on most service and program matters. Moreover, the ethos and culture of the state bureaucracies seems to be more influenced by the type of professionals who deliver the services; therefore there is a tendency, for instance in a department of Public Works, for engineers to dominate all other professionals. Certainly, the state administrations have traditionally been less highly 'rationalised' and, so far as one can tell without thorough research, there is nothing like the same emphasis on 'policy'. Certainly, there are many fewer economists. 23. The comparison is statistically significant at %2 test p <0.05. 24- Of course these particular observations need to be interpreted with caution since the numbers are very small - i.e.. over the whole population of 215, four are separated, nine are divorced, and 21 have a serious health problem. The rate of first-marriage breakdown among them is in the order of 13 per cent as compared with a national rate (on figures supplied by the Australian Institute of Family Studies) of first-marriage breakdown for males in the same age groups of 18.7 per cent. 25. Indeed our metaphor of a triangle is a touch misleading here because there is very little ongoing interaction between market departments and program and service departments. What matter are the symbolism and the 'politics of legitimation' that decide their relative status and relation to society . 26. For example on Question 47 (see Appendix A, p. 251), the program and service department people were three times more likely than their counterparts in the central agencies, and twice as likely as those in the market departments, to stress the deleterious effects of political polarisation and excessive contestation. Especially for program and service departments, this is a preoccupation that recurs in a number of different contexts - as in Question 20 and Question 21.

274

NOTES & REFERENCES

CHAPTER 4 1. 2.

3.

4-

5.

6. 7.

8.

G. Konrad & I. Szelenyi, Intellectuals on the Road to Class Power, Harcourt Brace Jovanovich, New York, 1979, pp. 30-1. The other two bills introduced on the same day by the Minister assisting the Prime Minister for Public Service Matters (Mr John Dawkins) were the Merit Protection (Australian Government Employees) Bill 1984; and the Members of Parliament (Staff) Bill 1984, which formalised the right of ministers to hire a small staff of so-called political appointees or 'minders'. Public Accounts Committee's 202nd Report, Australian Government Publishing Service, Canberra, 1983. The strong measure of consensus was clear even in the proceedings of a seminar, held while the Fraser government was still in office, by the Joint Parliamentary Committee of Public Accounts in Canberra on May 21 1982, and summed up in notes by Professor Diane Yerbury. Peter Wilenski, 'Political Problems of Administrative Responsibility and Reform', Australian Journal of Public Administration, Vol. XXXVIII, No. 4, December 1979, pp. 345-60, reproduced by permission of the Editor, Australian Journal ofPublical Administration. John Uhr, 'Does Public Administration Have a Future?', Canberra Bulletin of Public Administration, No. 52, October 1987. See also the discussion in 'Public Service Reform 1984', the title of a whole issue of the Canberra Bulletin of Public Administration, Vol. XI, No. 1, Autumn 1984, and especially the article therein by the Hon. John Dawkins MP, then Minister for Finance and Minister Assisting the Prime Minister for Public Service Matters, who was the minister with formal responsibility for the reforms; and, see also, 'The Senior Executive Service: elite, cadre, or same old second division', paper presented by Geoffrey Hawker at 'New Developments in Public Sector Management 6; public service reforms' held at the Centre for Continuing Education, Australian National University, April 1984; the opening address to that conference by John Dawkins; and, also given at the same conference, the views of David Connolly, the Opposition spokesman on public service matters, 'Hie Opposition's View on the White Paper Reforms'. Public Service Board, Annual Report 1983-84, Australian Government Publishing Service, Canberra, 1984, pp. 4-5. John Dawkins, 'Reforming the Australian Public Service', Canberra Bulletin of Public Administration, Vol. XI, No. 1, Autumn 1984, pp. 5-10, being the text of an address to a 24 January 1984 seminar of the Royal Australian Institute of Public Administration (ACT Division). This change drew some impetus from the arguments of a senior IBM executive to the Public Accounts Committee that produced the Report on which the reforms of the SES were premised. The individual concerned was also the most senior private sector person to have participated in the Interchange Scheme of exchanges between the private and public sectors.

275

ECONOMIC RATIONALISM IN CANBERRA

9.

The earlier Whitlam Labor government tried this with very mixed results that are attributed to several factors. These political appointees were usually quite junior people who were nearly always outwitted by experienced permanent heads who, at that stage, regarded these political appointees as either incompetent meddlers or as usurpers of the proper advisory role of the public service. Many ministers did not have the experience, the will, and in some cases, the ability to use these appointees properly and therefore chose them inappropriately. See Peter Wilenski, Public Power and Public Administration, Hale &L Iremon-

10.

11. 12.

13. 1415.

16.

ger, Sydney, 1986, and his 'Ministers, Public Servants and Public Policy', The Australian Quarterly, Vol. 51, No 2, June 1979. It is the presence and the increasing influence of these political appointees that leads to the somewhat exaggerated claim that the Australian system is for this reason now halfway between Whitehall (where only the Prime Minister has a staff of political appointees) and Washington (where the political appointment and reappointment of the civil service has been reaching further down from the top with each President). In Canberra the minister still does not choose the SES or even, directly, the secretary of his/her department. The minister's personally appointed staff only rarely include seconded SES and are usually appointed from among younger people either from outside the public service, or from the top of the 'third division' from which the SES are recruited. However, in an effort to impress the SES with the need to do the ministers' bidding, it is often now said, publicly at SES conferences, that no person should be appointed to the SES unless they have served for a time in the minister's office. This is certainly not yet a norm in 1990 but the trend is there. This data was kindly supplied by the Public Service Board, at my request in June 1987, in abstracted computer printout form with no names. However, these designations are formally quite independent of level and so one should not be surprised to find that officers at higher levels are sometimes called 'Principal Advisor' or 'Director' of this or that but this nomenclature is of no particular importance here. Here the age profiles are of the SES as a whole and are updated to 5 May 1988. Figures supplied by Senior Executive Staffing Unit of the Public Service Commission, May 1988. To avoid all possibility of confusion here, it is important to note that, so far as we know, there have been no 'two level jump' promotions within departments among people who are already in the SES. For example people are not promoted from say the Assistant Secretary levels directly to the Deputy Secretary levels and so miss, or 'jump' over, the intervening First Assistant Secretary levels. The term is borrowed from J. Habermas, 'Aspects of the Rationality of Action' in Rationality Today, ed. Theodore F. Geraets, University of Ottawa Press, Ottawa, 1979, p. 191.

276

NOTES & REFERENCES

17.

18.

19.

20.

21. 22.

23. 24.

In 1982 promotions between departments accounted for 20.9 per cent of all promotions; in 1983, 20.3 per cent; in 1984, 20.1 per cent; in 1985, 20.2 per cent; and in 1986, 17.9 per cent. Figures are for the whole SES and were supplied by the Senior Executive Service Unit of the Public Service Commission (the successor to the Public Service Board) in early 1988. The five year average figure is 19.88 per cent. See, P. Weller & J. Cutt, Treasury Control in Australia: a study in bureaucratic politics, Ian Novak, Sydney, 1976; Greg Whitwell, The Treasury Line, Allen & Unwin, Sydney, 1986; and Treasury: its policies and personalities', special issue, Canberra Bulletin of Public Administration, No. 53, December, 1987. In respect of new economists entering at the lower end of the hierarchy, it is worth noting that, in 1986, the Treasury withdrew from a coordinated graduate recruitment campaign conducted by the Public Service Board and decided to recruit its own economists on its own criteria. The term 'generalist manager' is a description that a great many of our respondents applied to themselves (especially those who were not doing 'policy work' in 'policy departments'). It seems to owe its origins in the management literature to John P. Kotter, The General Managers, The Free Press, New York, 1982. See the section 'Technocrats' in Chapter 2 above and note that this view of the similarities and differences between the private and public sectors is extremely closely related to the set of variables covered in that discussion about 'technocrats'. If it is added to that list of variables given in Table 2.5 and if that list is then treated as a scale, the 'alpha' reliability coefficient on these six variables drops marginally to what is still a very high level of alpha .86. In short their answers to this question follow in lock step with the answers they give to those other questions and are an integral part of the way they see this slice of the world. See Chapter 3 above, pp. 97-106. I am referring here more precisely to the results of the factor analysis that brings these these three responses together in one factor with loadings as follows (in bold type): 1. Question 39, 'STRENGTH': .70. 2. Question 55a, 'SEN EXECS PUBLIC/PRIVATE': .54. 3. Question 37, 'WEIGHT': .51. See Appendix A, pp. 234-54 for precise wording of the questions. Without other evidence, 'tend' is about all that one would dare say about this because the chi square significance on the cross-tabulation is X2 test p <0.11 and so just above the lower threshold of %2 test p <0.1. The political context of the Australian Senior Executive Service is compared with that of other countries, and especially the United States, by J. Uhr, 'Rethinking the Senior Executive Service: executive development as political education', Australian Journal of Public Administration, Vol. XLVI, No. 1, March, 1987, pp. 21-36; and also by the same author, 'Does Public Administration have a Future?', Canberra Bulletin of Public Administration, No. 52, October 1988, pp. 86-9; and by Dr

277

ECONOMIC RATIONALISM IN CANBERRA

25. 26.

27.

28. 29.

30.

31. 32. 33.

Patty Renfrow, in her address to the Royal Australian Institute of Public Administration's National Colloquium on the Senior Executive Service, Parliament House, Canberra, 9 October 1990. The chi square is %2 test p <0.06 (0.03 before 'Yates correction'). The chi square here is significant at %2 test p <0.09. and would come in under the better %2 test p <0.05 level had we chosen to recode the evasive 'not relevant' responses to that item in the light of answers to the 'please explain' question. See Table 3.2 in Chapter 3 above. This raises a methodological problem. Some people will want to object that this 'method' makes the dubious assumptions either that the respondents can know why they comply and/or that they will tell the truth. There is some force in both objections that oppose what I take to be a stronger objection, namely that it is more untenable to assume (as do those who would want to analyse these phenomena from post-structuralist perspectives strictly as 'discourses') that the self-understanding of the respondents is illusion or mischief- or both - and thus simply the shadow of external structures and categories that only the external observer can supply. It would be silly to take what the respondents say as 'fact' (this would reduce the sociological analysis to a naively positivist description) but one must start with their constructions of their situation. The items were put with just this wording but in a different order. See the interview guide in Appendix A, pp. 253-4. These six categories are the six of the eight forms of power that depend, according to Denis Wrong's typology, on the assent of the power subject. The limits of submission and motives for compliance are my additions. See Denis Wrong, Power: its forms, bases and uses, Blackwell, Oxford, 1979, Chapters 2 and 3. First ranking was given by 87 per cent to discussion as the principal means of resolving 'major disagreements and uncertainties on important policy matters'. They virtually all agreed that, when discussion does not solve the problem, it is passed to the next most senior person, usually the head of the division or up further to the deputy secretary or secretary, and when that fails, it is the minister who decides. Wilenski noted that, in order to succeed, reforms in the public sector need to have a clear and strong core of legal and structural changes for just this reason. Although 'intellectual cogency' is ranked highest in all three department categories, the comparison is still significant at %2 test p <0.05. The figures for the SES as a whole in this table are approximations taken from 'Profile of the Senior Executive Service, Draft paper', Public Service Board, January 1985, mimeo. The proportion of 25 per cent with an economics and business-oriented education is a figure supplied by the Senior Executive Service Unit of the Public Service Commission and includes, specifically, people with degrees in economics, commerce, accountancy and business administration but it does not include, as does my sample, people with degrees in Arts and/or others who designated economics as their major field of university specialisation and so, in this

278

NOTES & REFERENCES

34. 35.

36. 37. 38. 39.

40. 41. 42.

43. 44.

45.

respect, the comparison with the SES as a whole needs to be interpreted with caution (the discrepancy may be as much as 5 per cent). The median age for the SES as a whole may not be accurate: but the average age in 1986 of whole of the SES population was 47. This is perhaps a 'cheap shot' at Niklas Luhmann. The discussion will be taken up in Chapter 5. N.G. Butlin, 'Human or Inhuman Capital? The economics profession 1916-87', Working Paper No. 91, Department of Economic History, Research School of Social Sciences, Australian National University, September 1987. See Chapter 3, Table 3.6, p. 94, above. The Treasury Annual Report 1985-86, Australian Government Publishing Service, Canberra, pp. 47-8. The point is made strongly with a quotation from Lord Armstrong, the former head of the British Treasury, that is to be found in Peter Wilenski's, 'Political Problems of Administrative Responsibility and Reform'. J. Higley, K.E. Brofoss & K. Groholt, T o p Civil Servants and the National Budget in Norway' in Mattei Dogan (ed.), The Mandarins of Western Europe, Sage, New York, 1975, excerpted here from the longer quotation used by Peter Wilenski, in his 'Political Problems of Administrative Responsibility and Reform', p. 352. For the context see Greg Whitwell, The Treasury Line. From the 'Prime Minister's Press Conference, Tuesday 14 July 1987', Canberra Bulletin of Public Administration, No. 52, October 1987, p. 16. See, 'Growth in Australian Social Expenditures', Council Paper No. 17, Economic Planning and Advisory Committee (EPAC), March 1986; and also, 'Aspects of the Social Wage: a review of social expenditures and redistribution', Paper No. 27; and further the Annual Reports of the Department of Social Security. For the fine detail, see the Treasury's forward estimates - all published by the Australian Government Publishing Service. Senator Arthur Gietzelt, Is Disillusionment with the ALP Permanent?, paper presented to 'Politics in the Pub', Harold Park Hotel, Sydney, 22 April 1987. It is also a rule of Cabinet that papers should be available to members ten days before the meeting but we were told that the Treasury submissions are 'always' brought to the meeting or circulated at the very last moment; according to our respondent, this is so that the other ministers will not have time to take a position. Only Finance, if their support is needed, would have seen them. At one stage the Health Insurance Commission which is, in the Australian federal system, the main lever that the Canberra government has over health policy in the states (for which it is held electorally, but not constitutionally, responsible) was removed from the health portfolio altogether. The conservative Liberal government of Prime Minister Fraser turned a blind eye to 'medifraud' and to overservicing to the point where it became a national scandal that occasioned enquiries

279

ECONOMIC RATIONALISM IN CANBERRA

46.

47.

48.

49.

50. 51. 52. 53. 54.

from the Public Accounts Committee. That committee preferred to scapegoat the department rather than to set the blame on Prime Ministers who then, as now, feel so much pressure from Australia's cynical and greedy medical establishment that they will, as the doctors know, give in to pressure and short-circuit the policy process in a way that gives the doctors considerable scope to impose their own interests directly, through the Department of the Prime Minister and Cabinet, upon the Department of Health. There are a number of organisations such as the Brotherhood of St Laurence and the Australian Council of Social Services (ACOSS) which do make budget representations to an Economic Planning and Advisory Council that is chaired by the Prime Minister. But only ACOSS had a single full-time salaried person in Canberra to put its view; the point here is, of course, that this amounts to nothing in comparison with the continuous stream of representations that come from the private sector organisations and Canberra-based lobbyists. That was the assessment of a British consultant, David Heald, delivered in his report, 'Privatisation and Public Sector Reform in Australia: regaining control of the agenda' to the Executive of the Australian Council of Trade Unions, on 3 November 1986. Trevor Matthews first drew attention to this problem in his submission, 'Interest Group Access to the Australian Government Bureaucracy', Appendix 2.D, Report of the Royal Commission on Australian Government Administration, Australian Government Publishing Service, Canberra, 1976, Vol. 2, pp. 332-66. John Freebairn, Michael Porter & Cliff Walsh (eds), Spending and Taxing; Taking Stock, Allen &. Unwin, Sydney, 1987. The 25 organisations range from the Association of Bread Manufacturers of Australia and New Zealand, to the Australian Bankers' Association, the Australian Coal Association, the Life Underwriters Association of Australia, the National Farmers' Federation, the Business Council of Australia, the Australian Chamber of Commerce, and the Australian Federation of Employers. The latter three organisations are cross-linked through a number of right-wing 'research' centres and groups; see Ken Coghill (ed.), The New Right's Australian Fantasy, McPhee Gribble/Penguin, Melbourne, 1987, esp. pp. 145-60. See Phil Raskall, 'Wealth: who's got it? Who needs it?', Australian Society, Vol. 6, No. 5, May 1987, pp. 21-24; and Andrew Dilnot, 'Wealth: from the least to most', Australian Society, Vol. 9, No. 7, July 1990, pp. 14-17. With a loss of only two of its 13 seat majority, but with a margin of only 3 per cent of the vote. 'The New Machinery of Government' - the Prime Minister's Media Statement, Tuesday 14 July 1987, as reproduced in Canberra Bulletin of Public Administration, No. 52, October, 1987. This is one of the best remembered phrases of former Liberal (= conservative) Prime Minister, Malcolm Fraser. This was corroborated by many press reports including, Jane Ford, 'PS reorganisation causing discord and fall in morale', Financial Review, 8

280

NOTES & REFERENCES

55. 56. 57.

58. 59. 60.

61.

62. 63. 64-

65. 66.

October 1987; Tublic Service "influx for 18 months'", Canberra Times, 13 December 1987; 'Executives suffer stress in "callous PS restructure"', Weekend Australian, 26-27 March 1988. Sir Richard Clarke, 'The number and size of government departments', Political Quarterly, No. 43, 1972 as quoted in The Canberra Bulletin of Public Administration, No. 52. p.60. Gough Whitlam, The Whitlam Government, 1972-1975, Penguin Books, Ringwood, 1985, p. 315. See the 'Karmel Report', Schools in Australia: Report of the Interim Committee for the Australian Schools Commission, May 1973, Australian Government Publishing Service, Canberra. The author is a prominent and liberally-minded economist who was greatly helped by a brilliant sociologically-oriented researcher, Jean Blackburn, who subsequently became one of the leading Commissioners. Jean Blackburn is one of Australia's truly remarkable women of modern times and she, together with Joan Kirner (a minister, in 1988 in the Victorian state government and subsequently Premier), Ken McKinnon, the first Chairman of the Schools Commission, and the late David Bennett all had great ability and they all shared what would be called, in today's jargon, an avowedly social 'mission'. From the Prime Minister's Press Conference, Tuesday 14 July 1987. John Dawkins, 'Reforming the Australian Public Service'. The peak business organisations and the Right-wing 'think-tanks' had for many years been pressing for increasing 'commodification' of the education system and this shows up in resemblances, for example, between the Dawkins Green Paper and first the 'Business Council of Australia Education and Training Policy', February 1987, especially sec. 5.2 (mimeo, Business Council of Australia); and, as a second example, Freebairn et al. (eds), Spending and Taxing, pp. 114-18. This is not the place to argue for or against a shakeout of the tertiary education system. The point is that the Dawkins Green Paper was a shoddy document written in managerialist terms, in apparent ignorance of all preceding knowledge about the management of education systems, and on the mistaken (positivist) assumptions that 'efficient and effective organisation' is independent of the nature of the task. Amanda Buckley, 'Keating-Button Row Masks Wider Debate', Financial Review, 27 September 1987. Amanda Buckley, 'Button, Charles Go on Attack over IAC, Financial Review, 25 September 1987. An employee of the Business Council of Australia told me "that members of the Council are constantly in touch with Treasury officials', a fact that is confirmed, with equal normality, by the Treasury officials themselves: one presumes that the same is true of the other peak business organisations as well. That is the perception of one of them, Mr Ross Gittins, Economics Editor of the Sydney Morning Herald, See therein his 'Monday Comment' for 4 April 1988. The names, the numbers and the business houses are given by Edward

281

ECONOMIC RATIONALISM IN CANBERRA

67. 68.

69. 70.

71. 72. 73. 74. 75.

76.

77. 78. 79.

W Shann, 'Economic Policy Institutions in Australia', Canberra Bulletin of Public Administration, No. 53, December 1987, see especially Tables 2 and 3, pp. 32-3. As reported by Kate Legge, 'Keating numbers man defects', Sydney Morning Herald, 18 September 1987. The crucial contests between the different groups of economists turn on battles over just these highly technical and formally modelled projections. In this case the Treasury/IAC Orani-modelled projections of outcomes were in direct conflict with those that emerged from another study conducted by the National Institute of Economic and Industry Research and, significantly, supported by the Confederation of Australian Industry. See Tom Burton & Paul Grigson, Sydney Morning Herald, 20 April 1988. Report to the Prime Minister by the Efficiency Scrutiny Unit on Successor Body to Public Service Board, extracts from Canberra Bulletin of Public Administration, No. 52, October 1987, pp. 68-70. The person concerned is Mr David Block and the details are taken from the Who's Who entry as it appears in 'Who is David Block?', Canberra Bulletin of Public Administration, No. 52, October 1987, and the Financial Review, 31 July 1987, Weekend p. 5. 'Extracts from Report to the Prime Minister by Efficiency Scrutiny Unit on Successor Body to Public Service Board', Canberra Bulletin of Public Administration, No. 52, October 1987, p. 68. Ibid. Ibid. Review of the Efficiency Scrutiny Program, a Report of the Senate Standing Committee on Finance and Public Administration, Australian Government Publishing Service, Canberra April 1989, p. 63. See John Uhr, 'Does Public Administration Have a Future?', and Anna Yeatman, 'The Concept of Public Management and the Australian State in the 1980s', Australian Journal of Public Administration, Vol. XLVI, No. 4, December 1987. The 'big end of town' is an expression used to refer to the financial institutions in downtown Sydney by Neville Wran, the Premier of New South Wales from 1976 to 1986, and the first of the new style Right faction Labor state premiers whose successes the Hawke government sought to emulate. Significantly, before the changes of 1984 they used to be called 'Permanent Heads'. The Public Accounts Committee is the other principal body here. Sir Arthur Tange, retiring Secretary of the Department of Defence, and one of the more redoubtable 'old hands' makes some similar points. See his comments on the reforms in Canberra Bulletin of Public Administration, Vol. XI, No. 1, Autumn 1984.

282

NOTES & REFERENCES

CHAPTER 5 1.

2. 3.

4.

5. 6. 7. 8. 9. 10. 11.

This is Tom McCarthy's extract and variation of his own translation that is taken from J. Habermas, The Theory of Communicative Action, Vol. 2, Lifeworld and System: a critique of functionalist reason, trans. T. McCarthy, Beacon Press, Boston, 1987, p. 185. McCarthy's variation quoted here appears in his introduction to Vol. 1, Reason and the Rationalization of Society, Heinemann, London, 1981, p. xxxi. Report of the Royal Commission of Australian Government Administration, Australian Government Publishing Service, Canberra, 1976. G.E. Caiden, The Commonwealth Bureaucracy, Melbourne University Press, Melbourne, 1967; H. Emy, The Politics of Australian Democracy, Macmillan, Melbourne, 1974; S. Encel, T h e Recruitment and Careers of Higher Government Officials', Public Administration, Vol. 18, 1959, pp. 63-75; J.D.B. Miller, Australian Government and Politics: an introductory survey, Gerald Duckworth & Co., London, 1954; R.S. Parker, 'Public Service Neutrality: a moral problem: the Creighton case' in B.B. Shaffer & D.C. Corbett (eds), Decisions: case studies in Australian administration, Cheshire, Melbourne, 1965, pp. 201—04; R.S. Parker, 'The Public Service Inquiries and Responsible Government', in R.F.I. Smith & P. Weller (eds), Public Service Inquiries in Australia, University of Queensland Press, St Lucia, 1978, pp. 354-9; R. Wettenhall, 'The Ministerial Department: its British origins and Australian adaptations', Australian Journal of Public Administration, Vol. 33, No. 3,1973, pp. 233-50. John Higley et al., Elites in Australia, Routledge, London, 1979, is, among other things, a study of the 'first division' of the (Australian) commonwealth public service in the mid 1970s and a comparison of this group with private sector elites. Joel D. Aberbach, Robert D. Putman & Bert A. Rockman, Bureaucrats and Politicians in Western Democracies, Harvard University Press, Cambridge, Mass., 1981. Hugh Stretton, Political Essays, Georgian House, Melbourne, 1987, p. 202; S. Encel, Equality and Authority, Cheshire, Melbourne, 1970, pp. 72-3. J. Aberbach et al., Bureaucrats and Politicians in Western Democracies, Harvard University Press, Cambridge, 1981, pp. 115-16; 117-69 passim. Russell Ward, The Australian Legend, Oxford University Press, Melbourne, 1978. Hugh Heclo, Modern Social Politics in Britain and Sweden: from relief to income maintenance, Yale University Press, New Haven, 1974. As quoted by John Uhr, 'Rethinking the Senior Executive Service: executive development as political education', Australian Journal of Public Administration, Vol. XLVI, No. 1, March 1987, pp. 20-36. See Report of the Royal Commission of Australian Government Adminis-

283

ECONOMIC RATIONALISM IN CANBERRA

12.

tration, Australian Government Publishing Service, Canberra, 1976, p. 57 and Section 4.1, 'The Collective Problem'. M. Crozier, S. Huntington & J. Watanuki, The Crisis of Democracy: report on the governability of democracies to the Trilateral

13.

14. 15.

Commission,

University Press, New York, 1975. This is a paraphrase from a brilliant essay by Graham Little, 'Whitlam, Whitlamism, and the Whitlam Years' that appears as a chapter in a collection of papers of the Australian Fabian Society, Gough Whitlam (ed.), The Whitlam Phenomenon, Penguin Books, Ringwood, 1986, pp. 60-77. Gough Whitlam, The Whitlam Government, 1972-1975, Penguin, Ringwood, 1985, pp. 700-01. A. Gouldner, The Future of Intellectuals and the Rise of the New Class,

Seabury Press, New York, 1979. See also Anna Yeatman, 'Hie Concept of the Public Management and the Australian State in the 1980s', Australian Journal of Public Administration, Vol. XLVI, No. 4,

16.

17. 18. 19.

20. 21. 22. 23. 24.

December 1987, pp. 339-53. It is significant that the worst thing that such intelligent critics as Tim Rowse have said of this man is that he is a 'liberal' and, by implication, the embodiment in modern clothes of the 'founding fathers' of Australia's federation and of its paradoxically 'state-centred' and socially expansive liberalism - a spirit that has more in common with Australia's 'laborism' than with that institutional misnomer that is today called the Australian Liberal Party. H.C. Coombs, Trial Balance, Macmillan, Melbourne, 1981; Tim Rowse, Australian Liberalism and National Character, Kibble Books, Melbourne, 1978; Tim Rowse, 'Postwar Australia: a personal history', Island, No. 12, 1982, pp. 13-18. Report of the Royal Commission on Australian Government Administration, p. 300. A. Gouldner, The Future of Intellectuals and the Rise of the New Class. Report of the Royal Commission of Australian Government Administration;

T. Matthews, 'Interest Group Access to Australian Government Bureaucracy', in Report of the Royal Commission of Australian Government Administration, Appendices to the Report, Vol. 2, pp. 339—40. See Peter Self, 'The Coombs Commission: an overview', in R.F.I. Smith & P. Weller (eds), Public Service Enquiries in Australia, University of Queensland Press, St. Lucia, 1978, pp. 310-33. Hugh Collins, 'Political Ideology in Australia: the distinctiveness of a Benthamite society', in Stephen R. Graubard (ed.), Australia: the Daedalus symposium, Angus & Robertson, Sydney, 1985, pp. 147-69. Andre Metin, Socialism Without Doctrine, trans. Russell Ward, Alternative Publishing Co-operative, Sydney, 1977, first published in French in 1901. F. Castles, 'Australia and Sweden: the politics of economic vulnerability', Thesis Eleven, No. 16, 1987, pp. 112-22. Nancy Fraser, 'Women, Welfare and the Politics of Need Interpretation', Thesis Eleven, No. 17, 1987, pp. 88-107; Nancy Fraser, 'Social

284

NOTES & REFERENCES

25. 26. 27. 28.

29. 30.

31. 32.

33. 34.

35.

Movements vs Disciplinary Bureaucracies; the discourses of social needs', Centre for Humanistic Studies, University of Minnesota, CHS Occasional Papers, No. 8, 1987; Liz Fulop, How the West was Won and Lost, PhD dissertation, University of New South Wales, 1991. Peter Self, 'The Coombs Commission', p. 313. Ibid, p. 315. Report of the Interim Committee for the Australian Schools Commission, Schools in Australia, May 1973, p. 126. M. Pusey, The Dynamics of Bureaucracy, John Wiley & Sons, Sydney, 1976, pp. 25-30; I refer to the 'second wave' of human relations theory of which the best examples are Bennis, Argyris, McGregor, and Likert. The 'existentialist' influence comes principally from Maslow and Rogers. C.P. Snow, Two Cultures: and a second Look, Cambridge Univeristy Press, Cambridge, 1969. K.O. Apel, Das Aprior der Kommunikationsgemeinschaft, Vol. 2 of Transformation der Philosophie, Frankfurt 1973, and extracts therefrom in K.O. Apel, 'The A Priori of Communication and the Foundation of the Humanities', Man and World, Vol. 5, 1971, pp. 3-37. Report of the Royal Commission of Australian Government Administration, Section 2.4.4, p. 22. A contradiction that forces on the public servant what Robert Merton once called a 'schizoid' turn of mind. See his brilliant Part Two of Social Theory and Social Structure, The Free Press, New York, 1968 edition. Alisdair Maclntyre, After Virtue: a study in moral theory, 2nd ed., Duckworth, London, 1985, pp. 272-3. Many of the confusions and abuses arise because the term takes nearly opposite meanings from what are today the two competing French and German contemporary social theories of Foucault and French post-structuralism on the one hand, and the extensive literature that has developed from Habermas on the other. In Foucault it is usually defined as the form of social power in language; in the theory of Habermas, it is defined, in an opposite way, as the form of critical reflection and so as the 'method' for the transcendence of ideologically frozen representations of power. One might almost say here 'to culture' but in keeping with changes in social theory this is now misleading because it either presupposes a nonexistent or at least a highly problematic cultural consensus that no person could ever satisfactorily describe and/or it commits the enquiry to a misleading preoccupation with the contents of culture rather than to the much more important forms of its articulation and reproduction. It is precisely to avoid these difficulties and to shift attention to just this more important aspect that studies of culture, and of political culture, are moved here into what is now commonly referred to as the language paradigm - how, one might ask, could culture (s) be found other than 'in' and 'through' language?

285

ECONOMIC RATIONALISM IN CANBERRA

36.

37. 38.

39. 40. 41. 42. 43. 4445. 46. 47. 48.

The fundamental philosophical and social theoretical distinction between social action and behaviour is central for this whole discussion. In my little book Jiirgen Habermas, Ellis Horwood/Tavistock, Chichester and New York, 1987, pp. 19-26, there is an elementary discussion of what is at stake. As a rough and basic minimum here it should be assumed that action is used in a way that is close to what Max Weber defines as 'meaningful social action' and thus in a way that always preserves a relation between the acting subject and the intersubjective world (of culture and symbolic interaction) on the one hand, with the object and the object world on the other. Problems of rationalisation and legitimation therefore centre on this relation between these two orders of 'reality', and never admit that either can be validly absorbed and swallowed into the other. In what follows we shall treat the philosophically bankrupt and shallow empiricist notion of 'behaviour' that is rife in the so-called 'behavioural sciences' with the contempt that it deserves and so refer, in various ways, to 'behaviourisation' as the reduction of action to the structures of an 'object world' that is methodologically secured with what is commonly, but not necessarily, a 'false science' of object ificat ion. Hugh Stretton, Political Essays, p. 202. N. G. Butlin, 'Human or Inhuman Capital? The Economics Profession 1916—87', Department of Economic History, Research School of Social Sciences, Australian National University, Working Paper No. 91, September 1987. Professor John Nevile, Dean of Faculty of Commerce, University of New South Wales in an interview, 1 February 1988. See Chapter 2, especially pp. 58-64Paul A. Samuelson, Economics: an introductory analysis, first edition, McGraw-Hill, New York, 1948. Richard G. Lipsey, An Introduction to Positive Economics, Weidenfeld & Nicolson, London, 1963. See Evan Jones, 'Positive Economics or What?', Economic Record, Vol. 53, No. 14, September 1977, pp. 350-63. Hugh Stretton, Political Essays, p. 202. Jiirgen Habermas, Knowledge and Human Interests, translated by J. Shapiro, Heinemann, London, p. 4. I have added the '[all]' to make the meaning plain. Burke G. Thomason, Making Sense of Reification± Macmillan, London, 1982, p. 88. David Hume, On Human Nature and Understanding, edited and introduced by Anthony Flew, Collier Macmillan, London and New York, 1962, p. 290. In Ian Castles' article, 'Political Theories of Modern Government III', Canberra Bulletin of Public Administration, Vol XIII, No. 4, Summer 1986, pp. 398-402; he is quoting here Jurg Niehans, 'Economics: history, doctrine, science, art', Kyklos, Vol. 34, 1981, pp. 169-70. It is

286

NOTES & REFERENCES

49. 50. 51.

52. 53. 54.

55. 56. 57.

58. 59. 60. 61. 62.

also on p. 401, in his criticism of Peter Self, that the claim to 'scientific objectivity' is made. Georg Simmel, The Philosophy of Money, translated by Tom Bottomore and David Frisby, Routledge, London, 1978. The quotation is taken from the Introduction, p. 33. H.J. Lieber, 'Kulturkritik und Lebensphilosophie' as quoted in Bottomore and Frisby's introduction to SimmePs Philosophy of Money, p. 35. S.J. Butlin quoting one of his respondents in T h e Hundredth Record', in S.J. Butlin, V.W. Fitzgerald & R.H. Scott (eds), The Australian Economist 1888-1892, Facsimile edition, Vol. 1, Australian National University Press, 1986, p. xxxiii. S.J. Butlin, quoting Stigler (President of the American Economic Association), p. xxxix. Ibid., p. xxxv. The concept comes from Alvin Gouldner, The Future of Intellectuab and the Rise of the New Class, and is deftly elaborated by Anna Yeatman, 'The Concept of Public Management and the Australian State in the 1980s', pp. 339-53. Annual Report, Department of Finance, Australian Government Publishing Service, Canberra, 1986, p. 18. Niklas Luhmann, The Differentiation of Society, trans. Stephen Holmes and Charles Larmore, Columbia University Press, New York, 1982. This is Habermas' metaphor. He of course accepts, as one must, that vast tracts of social life and experience are differentiated from the 'lifeworld' (Lebenswelt) and systemically coordinated in this way. See Volume 2 of his Theory of Communicative Action. Adapted from Burke C. Thompson, Making Sense of Reification: Alfred Schutz and Constructionist Theory, Macmillan, London, 1982, p. 88. See Chapter 3, Table 3.3, p. 85 Interview with John Langmore MP, Member for Fraser, 25 May 1987. J. Habermas, Knowledge and Human Interests, especially pp. 301-17. M. Crozier et al, The Crisis of Democracy; Colin Campbell, Governments under Stress: political executives and key bureaucrats in Washing-

ton, London and Ottawa, University of Toronto Press, Toronto, 198?; Richard Rose (ed.), Challenge to Governance: studies in overloaded poli-

63.

64. 65. 66.

tics, Sage Publications, Beverley Hills, 1980; Ernest Gellner, Nations and Nationalism, Basil Blackwell, Oxford, 1983. A problem that is inherent in the very development of pluralism in modern conditions as my colleague Jennifer Wilkinson has helped me to understand. J.Wilkinson, Pluralism and the Australian Left, University of New South Wales PhD thesis, forthcoming. H. G. Gadamer, Wahrheit und Methode, Tubingen, 1965, translated by William Glen-Doepel as, Truth and Method, Sheed & Ward Ltd, London, 1975, Part Three. Forty-two per cent of the respondents said they had been in the present job for less than two years. N. Luhmann, The Differentiation of Society, Chapter 13, 'The Future

287

ECONOMIC RATIONALISM IN CANBERRA

67. 68. 69. 70. 71.

72. 73.

74. 75. 76. 77. 78. 79.

80.

81.

Cannot Begin: temporal structures in modern society', especially pp. 280-2. See Chapter 4, pp. 151-3. As reported by Michelle Grattan, Canberra Correspondent, in The Age, Melbourne, 14 February 1989. From the interview by Michelle Grattan. From the interview by Michelle Grattan. We shall not be the first to observe that these new economically oriented management technologies are anti-social. See for example, A. Hopwood, 'Accounting and the Pursuit of Efficiency' in A. Hopwood & C. Tompkins (eds), Issues in Public Sector Accounting, Putnam, London, 1984; A. Gray & W. Jenkins, 'Accountable Management in British Central Government: some reflections on the financial management initiative', Financial Accountability and Management, Vol. 2, No. 3, Autumn 1986, pp. 171-86; J. Guthrie, 'Public Sector Audit of Programmes and Management in Australia', Managerial Auditing Journal, Vol. 2, No. 3, 1987, pp. 10-16. See Chapter 4, pp. 121-6. The metaphor is somewhat inappropriate since they return, with great vigour, to colonise the line departments. In 1990 virtually all the secretaries appointed under Hawke to head the line departments have held SES posts in his Department of Prime Minister and Cabinet. Richard Sennett, The Fall of Public Man, Cambridge University Press, New York, 1974. See Chapter 3, Table 3.4, p. 87. Jiirgen Habermas, Legitimation Crisis, translated and introduced by Thomas McCarthy, Beacon Press, Boston, 1975, pp. 76-92; Arthur Brittain, The Privatised World, Routledge, London, 1977. Philip Rieff, Triumph of the Therapeutic, Penguin University Books, Middlesex, 1966. It is Sennett who chose these words from de Toqueville for the frontispiece of his book, The Fall of Public Man. This is one of the questions that was first used in the Aberbach study and of which the exact wording is as follows: 'Only when a person devotes him/herself to an ideal or cause does life become meaningful' and to which the frequencies were, (a) agree 29 per cent, and, (b) disagree 69 per cent. D. McClelland, The Achieving Society, D. Van Nostrand Co., Princeton, 1961. It is no coincidence that McClelland's theory of motivation rose to influence at the time that our young executives were in training. One notes that its appeal to the economic/managerialist culture is surely related to the positivist assumptions that led McClelland later to insist that 'achievement motivation' was not culture bound. For the wording of these questions see Appendix A,pp. 245-54. In response to question 31, 24.2 per cent admitted to constant conflict; on question 32, 19.6 per cent admitted to some experience of meaninglessness; on question 33, 7.9 per cent admitted to some undermin-

288

NOTES & REFERENCES

82.

83. 84. 85.

86. 87. 88. 89.

90. 91.

ing of identity; on question 34, 11.2 per cent agreed that the pressure of the work was hurting them; and on question 35, 30.3 per cent thought that the psychological and emotional costs of the work were close to, or in 3.3 per cent of the cases actually did, outweigh the rewards and satisfactions of the job. When these items were combined into a single scaling variable, 15.3 per cent admitted to some anomie. The cross tabulation is significant at the y} test p <0.05 level. Although the numbers are small it is worth noting that the program department people are more likely to report stress-related health problems and stress-related family separations. See Chapters 3 and 4 in which the evidence shows a converging correlation between positivism, managerialism, and technocratic orientations. This was most keenly felt in the central agencies and most especially in Prime Minister and Cabinet. One is here reminded in the words of perhaps the world's best known cultural anthropologist, that: There are at least three points where chaos - a tumult of events which lack not just interpretation but interpretability - threatens to break in upon man: at the limits of his analytic capacities, at the limits of his powers of endurance, and at the limits of his moral insight. Bafflement, suffering, and a sense of intractable ethical paradox are all, if they become intense enough or are sustained long enough, radical challenges to the proposition that life is comprehensible and that we can, by taking thought, orient ourselves effectively within it. Clifford Geertz, The Interpretation of Cultures, Hutchinson, London, 1973, p. 100. John A. Rohr, 'Public Administration and the Constitutional Bicentennial: an essay on research', International Journal of Public Administration, Vol. 4, No. 4,1982. pp. 349-80. Philip Rieff, The Triumph of the Therapeutic. Herbert Marcuse, Five Lectures: psychoanalysis, politics and Utopia, Allen Lane The Penguin Press, London, 1970; and, One Dimensional Man, Abacus, Boston, 1964. Address by John Dawkins to Royal Australian Institute of Public Administration (ACT Division) seminar on 24 January 1984, in Canberra Bulletin of Public Administration, Vol. XI, No. 1, Autumn 1984, pp. 5-10. Dawkins, address to RAIPA, italics in the original. In John Uhr's excellent article, 'Rethinking the Senior Executive Service: executive development as political education', Australian Journal of Public Administration, Vol. XLVII, March 1988, pp. 4-19, he tells us that the term was first coined by B. Guy Peters. See also Elaine Thompson, 'The Washminster Mutation', in P. Weller and D. Jaensch (eds.), Responsible Government in Australia, 3rd ed. Drummond for APSA, Richmond, Victoria, 1980, pp. 32-40.

289

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92. 93.

94. 95.

96. 97. 98. 99. 100. 101. 102.

103.

See Chapter 1. Paul Ricoeur, in La Rationalite Aujourd'hui, edited by Theodore F. Geraets, Editions de l'Universite d'Ottawa, Ottawa, Canada, 1979, p. 239. This is my translation of the original as follows: Le destin de la raison pratique se joue desormais au niveau des processus d'objectivation et de reification au cours desquels les mediatations institutionnelles deviennent etrangeres au desirs de satisfaction des individus. La raison pratique, dirai-je, est Tensemble des mesures prises par les individus et les institutions pour preserver ou restaurer la dialectique reciproque de la liberte et des institutions, hors de laquelle il n'est pas d'action sensee. Editorial, Times on Sunday, 19 July 1987, p. 12. In the wake of the 'David Coombs affair' which saw a senior Labor Party official embarrassed by Opposition accusations of impropriety in business negotiations with a USSR Embassy official, new procedures were introduced to require the formal registration of lobbyists. When early in 1987 I asked officers of the Public Service Board to show me the register I was told that that information was not public - but they did send me copies of the official forms that I would have to fill out if I wanted to register as a lobbyist! Judith Whelan, 'Forget the long lunch, just work on the numbers', Times on Sunday, 6 March 1988, p. 25. Luhmann, The Differentiation of Society, pp. 151-52. © (1982) Columbia University Press, New York. Used with permission. See Chapter 4, pp. 134-8. A similar argument is made by Andrew Arato and Jean Cohen in 'Civil Society and Social Theory', Thesis Eleven, No. 21, pp. 40-65, especially, p. 58. This is Luhmann's formulation. Alain Touraine, 'The Waning Sociological Image of Social Life', in The Global Crisis, edited by Edward.A. Tiryakian, E.J. Brill, Leiden, The Netherlands, 1984, p. 36. Jiirgen Habermas, Communication and the Evolution of Society, trans^ lated by T. McCarthy, Beacon Press, Boston, 1979, p. 194. To avoid confusion it is important to be clear that Habermas never suggests that the state can bring about integration in and of itself. His assumption is of course that integration comes from out of society and that the state is at best a medium for an integration that can, ultimately, be secured only 'communicatively'. Claus Offe, 'The Theory of the Capitalist State and the Problem of Policy Formation', in Stress and Contradiction in Modern Capitalism, Heath & Co., New York, 1975; L.N. Lindberg, R. Alford, C. Crouch & C. Offe, (eds), 'Crisis of Crisis Management: elements in a political crisis theory', International Journal of Politics, Vol. 6, No. 3, pp. 26-61; and John Keane (ed.), Disorganized Capitalism, : contemporary transformations of work and politics, Polity Press, Cambridge, 1985.

290

NOTES & REFERENCES

104. 105. 106. 107.

108.

109. 110. 111. 112.

113.

114. 115.

116.

117.

Andrew Theophanous, Australian Democracy in Crisis, Oxford University Press, Melbourne, 1980. J. O'Connor, The Fiscal Crisis of the State, St. Martin's Press, New York, 1973. Figure 5.2 is my interpretation of the model first sketched by Habermas in Legitimation Crisis, p. 5. This elementary construction is explained in Chapter 4 of my book Jiirgen Habermas. That is the stated hope of David Block, the architect of the Bastille Day restructuring of 1987, who goes so far as to say, '...please, never, ever, think that you have to go further than the great "Nugget" Coombs'. See David Block in Australian Administration Magazine, Vol. 2, No. 1, 1987, pp. 7-8. In recent utterances a long since retired 'Nugget' Coombs leaves little doubt that he is not so pleased with what has been done in his name. Peter Wilenski, Public Power and Public Administration, Hale & Iremonger, Sydney, 1986; and David Block as quoted in 'Who is David Block?', Canberra Bulletin of Public Administration, No. 52, October 1987, p. 71. As summarised by Joel D. Aberbach, Robert D. Putman & Bert A. Rockman, Bureaucrats and Politicians in Western Democracies, Harvard University Press, Cambridge, Mass., 1981, p. 15. See Part One of the Report to the Trilateral Commission. See Chapter 4, pp. 134-8, and especially Figures 4.4 and 4.5. Max Weber, The Methodology of the Social Sciences, translated and edited by E. Shils & H. Finch, New York, Free Press, 1949, p. 18, pp. 72-91 passim; Rogers Brubaker, The Limits of Rationality: an essay on the social and moral thought of Max Weber, George Allen & Unwin, London, 1984, pp. 68-87. The notion of 'allocative politics' comes from David Easton, The Political System, Knopf, New York, 1953, and is related to the the contemporary literature on the state by G. Poggi, The Development of the Modern State, Stanford University Press, Stanford, 1978. In our context here the problems and limits of allocative politics are discussed from the critical functionalist position by Claus Offe, 'The Theory of the Capitalist State and the Problems of Policy Formation' ; and from the conservative liberal viewpoint of the 'overload theory' by M. Crozier et al. in The Crisis of Democracy. Niklas Luhmann, The Differentiation of Society, p. 196. Peter Self sets out to unravel what economists do with the notion of 'externality' without seeing that its premisses lie in a systems logic and in an empiricist view of society. See, Econocrats and the Policy Process, Macmillan, London, 1975. Niklas Luhmann, 'Closure and Openness: on reality in the world of law', European University Institute Working Paper No.86/234, San Domenico (Florence), 1986, pp. 3-5. The view of Luhmann as represented and quoted by Jiirgen Habermas, Legitimation Crisis, p. 136.

291

ECONOMIC RATIONALISM IN CANBERRA

118. 119. 120.

121. 122.

123. 124-

See Jiirgen Habermas, Towards a Rational Society, translated by J. J. Shapiro, Beacon Press, Boston, 1971, pp. 112-113; and my own Jiirgen Habermas, Chapter 4. Habermas paraphrasing Luhmann's view in Legitimation Crisis, p. 136. That is the argument of the first part of Georg Simmel's extraordinarily 'modern', and brilliant, Philosophy of Money, which is developed by Niklas Luhmann. See especially Luhmann's chapter on 'The Economy as a Social System', and Part Three, of The Differentiation of Society. Luhmann, The Differentiation of Society, p. 224Despite the paradigmatic differences 'Language is an operating culture' (W.H. Goodenough, Culture, Language and Society, 2nd ed., Benjamin-Cummings Publishing, Menlo Park, 1981, p. 110) whether it is theorised in terms of the post-Wittgensteinian 'ordinary language' philosophy of Austin, Seale, and Strawson, that Habermas has taken over; or according to the French post-structuralist fashion (raw, uncooked); or in terms of the distinction made in the philosophy of language between 'natural' and artificial or constructed languages. Luhmann, 'Closure and Openness', p. 25. This strong and worthy notion of scepticism has its root in Greek philosophy and is carried, into Hegel's Encyclopedia (section 81) and his Lectures on the History of Philosophy where it becomes a constituent of

125. 126. 127. 128. 129. 130. 131.

the dialectic and a principal means of raising 'the freedom of Reason above the necessity of nature'. In the French philosophical tradition, and especially for Rousseau, scepticism has a similarly creative valence. Anna Yeatman defines some of their virtues and vices in her excellent article, 'The Concept of Public Management and the Australian State in 1980s', pp. 339-53. T. C Schelling, Strategy and Conflict, Harvard University Press, Cambridge, 1960. J.P. Nettl, T h e State as a Conceptual Variable', World Politics, Vol. 20, July 1968, pp. 557-84. R. Rosecrance, 'The Radical Culture of Australia', in Louis Hartz (ed.), The Founding of New Societies, Harcourt Brace, New York, 1964See Figure 5.2, p. 197. Peter B. Evans, Dietrich Rueschemeyer & Theda Skocpol (eds), Bringing the State Back In, Cambridge University Press, New York, 1985, especially the introduction. Nancy Fraser, 'Women, Welfare and the Politics of Need Interpretation'.

292

NOTES & REFERENCES

CHAPTER 6 1. 2.

3. 4. 5.

Anonymous, 'The Crocodile Ride', in Merrily Merrily, Nursing Mothers' Association of Australia, Nunawading, 1979, pp. 208-09 Alain Touraine, 'The Waning Sociological Image of Social Life', in The Global Crisis, Edward A. Tiryakian (ed.), E.J.Brill, Leiden, the Netherlands, 1984, pp. 33-45; and Alain Touraine, 'Is Sociology Still the Study of Society?', Thesis Eleven, No. 23, 1989, pp. 5-35. Theda Skocpol, 'Political Response to Capitalist Crisis: neo-Marxist theories of the state and the case of the New Deal', Politics and Society, Vol. 10, No. 2,1980, pp. 155-201. R. Rosecrance, 'The Radical Culture of Australia' in Louis Hartz (ed.), The Founding of New Societies, Harcourt Brace, New York, 1964, p. 310. See Stephen Krasner, Defending the National Interest: raw materials investments and U.S. foreign policy, Princeton University Press, Princeton, 1978, p. 57 for a model that was first developed by Krasner and subsequently by Peter Katzenstein in the conclusion to Between Power and Plenty: the foreign economic policies of advanced industrial states, Uni-

6.

7.

8. 9. 10. 11. 12. 13. 14. 15.

versity of Wisconsin Press, Madison, 1978. The term is taken from a path-breaking article by J.P. Nettl, 'The State as a Conceptual Variable', World Politics, Vol. 20, July 1968, pp. 557-84, that has obviously had a decisive influence on Skocpol and her (then) Princeton University colleagues. N.G. Butlin, A. Barnard & J J. Pincus, Government and Capitalism: public and private choice in twentieth century Australia, Allen & Unwin, Sydney, 1982, p. 320: the emphasis is mine. See also Butlin's 'Trends in Public/Private Relations, 1901-1975' in B. Head (ed.), State and Economy in Australia, Oxford University Press, Melbourne, 1983. Ivan Szelenyi, 'The Relative Autonomy of the State or the State Mode of Production', in M. Dear and M. Scott (eds), Urbanisation and Urban Planning in Capitalist Society, Methuen, London, 1984Butlin et al., p. 322. Harry Eckstein as quoted in T.V. Matthews, 'Business Associations and the State, 1850-1979', in State and Economy in Australia, Brian W. Head, (ed.), Oxford University Press, Melbourne, 1983, p.143. Peter Evans, Dietrich Rueschemeyer & Theda Skocpol (eds), Bringing the State Back In, Cambridge University Press, Cambridge, 1985. Trevor Matthews in Brian Head's State and Economy in Australia, pp. 115-49. P.D. Groenewegen, 'The Political Economy of Federalism, 1901-81' in Brian Head's State and Economy in Australia, p. 189. Ibid. Seymour Martin Lipset, 'Radicalism or Reformism: the sources of working class polities', American Political Science Review, Vol. 77, March 1983, pp. 1-18 as quoted by Stephen Krasner, 'Approaches to the State:

293

ECONOMIC RATIONALISM IN CANBERRA

alternative conceptions and historical dynamics', Comparative Politics, Vol. 16, No. 2, January 1984, pp. 223-46 - the phrase in the square brackets is Krasner's. See also Lipset's, The First New Nation, Basic Books, New York, 1963, especially Chapter 5 and Part Three; and also B. Badie & P. Birnbaum, La Sociologie de VEtat, Editions Grasset et Fasquelle, Paris, 1979; and, for an elementary statement of some of the outlines, see M. Pusey, 'State and Polity', in A Sociology of Australian Society: introductory readings, Jake M. Najman & John S. Western (eds), Macmillan, Melbourne, 1988. 16. The first Labor government was elected in Queensland in 1899. 17. S.F. Macintyre, 'Labour, Capital and Arbitration 1890-1920', in Brian Head's State and Economy in Australia, p. 104- See also Stuart Mac intyre's excellent book, Winners and Losers: the pursuit of social justice in

Australian history, Allen & Unwin, Sydney, 1985, especially Chapter 3. 18. Or even contending 'fractions of capital'. 19. This is not to imply that autonomy is somehow a function of isolation since, obviously, one can conceive of a state that is autonomous but not isolated and, conversely, of one that is isolated and with little or no autonomy (for example many of the small Pacific nations). 20. N. Butlin, in Brian Head's State and Economy in Australia, p. 84- See also, Butlin, Barnard & Pincus, Chapter 7. The emphasis is mine. 21.

Boris Frankel, Marxian Theories of the State: a critique of the orthodoxy,

Monograph Series No.3, Arena Publications Association, Melbourne, 1978. 22.

Jacques Mandrin, VEnarchie ou les Mandarins^ de la Societe Bourgeoise,

Editions de La Table Ronde, Paris, 1980. 'L'Enarchie" is an aphorism that stands for 'ENA\ the Ecole Normale Superieure, which trains the top bureaucrats (les hauts fonctionnaires) and, it is said, the name of the author is a pseudonym for a certain minister of culture. See also Francois Dupuy & Jean-Claude Thoenig, La Sociologie de VAdministration Francaise, Armand Colin, Paris, 1983, esp. pp. 39-55; and P. Birnbaum, Les Sommets de Vlztats, Editions du Seuil, Paris, 1977; and, Ezra N. Suleiman, Politics, Power and Bureaucracy in France, Princeton Uni-

versity Press, Princeton, 1974. 23. See Chapter 2, pp. 50-64, and Chapter 3, especially p. 79 24- Badie & Birnbaum, La Sociologie de VEtat, Chapters 3 and 8. 25. In this context see the comparative history of Louis Hartz (ed.), The Founding of New Societies, Harcourt Brace, New York, 1964; Professor Manning Clark's monumental six volume History of Australia, Melbourne University Press, 1987, in which Britain and Australia are counterposed in the subtitle to the sixth volume as, respectively, 'the old dead tree and the young tree green'; and Russell Ward's, The Australian Legend, Oxford University Press, Melbourne, 1958. 26. I. D. McNaughtan, 'Colonial Liberalism, 1851-92' in Australia: a social and political history, Gordon Greenwood (ed.), Angus & Robertson, Sydney, 1955, p. 103. 27.

R. Kennedy (ed.), Australian Welfare History: critical essays, Macmillan,

294

NOTES & REFERENCES

28. 29.

30. 31. 32. 33.

34-

35. 36. 37.

Melbourne, 1982; and R. Kennedy (ed.), Australian Welfare: historical sociology, Macmillan, Melbourne, 1989. Donald Home, The Lucky Country: Australia in the sixties, Penguin Books, Ringwood, 1964Restructuring Australia, National Institute of Economic and Industry Research, No. 8. March 1988. The quotation is from p. 10 of Ian Manning's review article, 'Policy for Restructuring: the boundaries of the debate', pp. 5-10. The emphasis is mine. David Adams, 'Political Review', Australian Quarterly, Spring 1986, pp. 326-35. M. L. Alexander, 'Australia in the Capitalist World Economy', in Brian Head's State and Economy in Australia, p. 143. Francis Castles, 'Australia and Sweden: the politics of economic vulnerability', Thesis Eleven, No. 16, 1987, pp. 112-21. Australia Reconstructed, ACTU/TDC Mission to Western Europe, Australian Government Publishing Service, Canberra, 1987. Significantly this mission was supported by John Button, the Centre Left Minister for Industry, Technology and Commerce. Maria Markus says this comparison is misleading by virtue of Australia's isolation and the enormous size of the territory (about the same size as the United States without Alaska and the lakes) and the consequent necessity for a hugely expensive infrastructure that does not apply in the same way for Sweden. In some measure I agree but just these factors strengthen the arguments of this study for the important role of the nation-building state. Francis Castles, 'Australia and Sweden'. The preceding paragraph paraphrases Castles' argument. Ibid. Claus Offe, 'The Theory of the Capitalist State and the Problem of Policy Formation', in Stress and Contradiction in Modern Capitalism: public

38. 39. 40.

41-

policy and the theory of the state, Leon N. Lindberg et al. (eds), Lexington Books, Lexington, Mass., 1975, pp. 125-45. The emphasis is Offe's. Peter J. Katzenstein, Small States in World Markets, Cornell University Press, Ithaca, 1985. Stuart Macintyre, Winners and Losers, Chapter 3, 'A Fair Wage'. I am relying heavily here on Castles, on Macintyre, and on Jocelyn Pixley's working through of these keystones in her PhD thesis, Radical Ideas: Conservative Policies: Alternatives to Wage Labour, University of New South Wales, 1988. Document D6-83, distributed by the Australian Council of Trade Unions, and authorised by W. Kelty, Secretary, ACTU, 1983. The best book about the all-important Accord is Frank Stilwell's, The Accord and Beyond: the political economy of the Labor government, Pluto Press, Syd-

ney, 1986, which also contains the full text of the Accord as an appendix. 42. David Heald, in his November 1986 consultant's report to the ACTU, 'Privatisation and Public Sector Reform in Australia: regaining control

295

ECONOMIC RATIONALISM IN CANBERRA

43. 4445. 46.

47. 48. 49.

50. 51. 52.

53. 54. 55. 56. 57. 58. 59.

of the agenda', compares the Australian situation with that of Thatcher's Britain and concludes that one of the major differences is the discipline of the Australian body and its willingness and capacity to work constructively with government in the formation of social and public policy. Lester C. Thurow, Zero-Sum Society: distribution and the possibilities for economic change, Basic Books, New York, 1980. W. M. Corden, Trade Policy and Economic Welfare, Oxford University Press, London, 1974, p. 108 as quoted by Castles. Editorial, Sydney Morning Herald, Tuesday, 3 January 1989, p. 10. The very notion of a national 'credit rating' is little more than a potent ideological fiction since there is no 'independent' assessment of a nation's net assets or of any of the real factors - natural and social resources - upon which its 'income' or 'wealth' might depend. See, Frank Stilwell, The Accord and Beyond, Pluto Press, Sydney, 1986; and, for a description of the changes, Australia, 1989/90 OECD Economic Surveys, Paris, 1990, pp 57-77. According to both stated and unstated policy they will keep or strengthen the penal provisions and abolish the major wage setting function. 'The Role of the Public Sector', OECD Economic Studies, No. 4, Spring 1985; Francis Castles, Australian Public Policy and Economic Vulnerability: a comparative and historical perspective, Allen & Unwin, Sydney, 1988; Francis Castles, The Working Class and Welfare: reflections on the political development of the welfare state in Australia and New Zealand 1890-1980, Allen & Unwin, Wellington, 1985; Lois Bryson, 'Welfare Issues of the Eighties' in J.M Najman & J.S. Weston (eds), A Sociology of Australian Society: introductory readings, Macmillan, Melbourne, 1988, Chapter 10, pp. 486-516. David Heald, Frances Castles, ]. Pixley. P. D. Groenewegen, 'The Political Economy of Federalism 1901-81', in Brian Head's State and Economy in Australia, pp. 169-99. See Colin Kearney & Mehdi Monadjemi, 'Fiscal Policy and Current Account Performance: international evidence on the twin deficits', Working Paper No. 95, Centre for Applied Economics, University of New South Wales, subsequently published in Journal of Macroeconomics, Vol. 12, No. 2,1990. Frank Stilwell, p. 68. Alain Touraine, 'Is Sociology Still the Study of Society?', pp. 5-34H.H. Gerth & C. Wright Mills (eds.) From Max Weber, Routledge & Kegan Paul, London, 1948, p. 280. Daniel Bell, 'Models and Reality in Economic Discourse', in The Crisis in Economic Theory, Daniel Bell & Irving Kristol (eds), Basic Books, New York, 1981, p. 56. See Table 3.6 in Chapter 3, p. 94 See Tables 3.3 and 3.4, pp 85 and 87. From notes 'About the the Conference' at the head of the publicity

296

NOTES & REFERENCES

60.

61. 62.

63.

64. 65.

66.

67.

68. 69. 70. 71.

leaflet for the Conference on T h e Welfare State' held at Menzies Hotel, Sydney, Friday 13 (!) November 1987. Australian Institute of Public Policy, 'What Why How?', AIPP Pamphlet, Perth, as cited by Ross Ward, Australia's Public Policy Think Tanks: reaching for the policy agenda, B.Soc.Sci. hons. dissertation, University of New South Wales, 1988. See the introduction by John Stone in Arbitration in Contempt: Proceedings of the H.R. Nicholls Society, published by H. R. Nicholls Society, Melbourne, 1986, pp. 9-15. Marian Sawer's, Australia and the New Right, Allen & Unwin, Sydney, 1982, was the first, and very early, account of New Right influence and organisation. Another is Bette Moore & Gary Carpenter's 'The Main Players' in The New Right's Australian Fantasy, Ken Coghill (ed.), McPhee Gribble/Penguin, Melbourne, 1987, pp. 145-61. The Parliament of the Commonwealth of Australia Joint Committee of Public Accounts, Report 302, 'Engagement of External Consultants by Commonwealth Departments', Australian Government Publishing Service, Canberra, 1990; Pilita Clark, 'Consultant: a rich public servant', Sydney Morning Herald, 11 November 1989, p. 1; Louise Dodson, 'Reforms bring a rash of consultants to help government', Financial Review, 26 September 1989, p. 5. This is the topic of a study conducted by the Public Sector Research Centre at the University of New South Wales, titled 'The McKinsey Syndrome: international consultants and Australian governments'. The Senior Executive Service of the government of New South Wales comprises some 500 persons all of whom are employed on contracts with yearly appraisals made by a private firm of consultants, Cullen Egan Dell. See the address of Ken Baxter, Deputy Director General, Premier's Department, New South Wales, to National Colloquium of the Royal Australian Institute of Public Administration, on the Senior Executive Service, Parliament House, Canberra, 9—10 October 1989. Edward W. Shann, 'Economic Policy Institutions in Australia', Canberra Bulletin of Public Administration, No. 53, December 1987, pp. 24-35, traces the migrations of former Treasury officials into key positions including the financial press. Relative to other principal members of the EEC, and in its own terms, Britain's 'economic miracle' is, according to Grahame Thompson, more like a failure: see his 'Privatisation and the Thatcher "Miracle": any lessons for Australia?', H.V. Evatt Research Centre, Sydney, November 1988. K. Windschuttle, The Media, Penguin Books, Ringwood, 1988 (new edition), p. 84. Ibid, p. 85. This is Graham Little's brilliant formulation in The Whitlam Phenomenon, Gough Whitlam (ed.), Penguin, Ringwood, 1986, p. 70. Geoffrey Blainey, 'Australia: a bird's eye view', Australia: the Daedalus symposium, Stephen R. Graubard (ed.), Angus & Robertson, Sydney,

297

ECONOMIC RATIONALISM IN CANBERRA

72. 73. 7475. 76. 77. 78. 79.

80. 81. 82.

83. 8485. 86. 87.

1985, pp. 1-29; and Tyranny of Distance: how distance shaped Australia's history, Sun Bocks, Melbourne, 1966. Hugh Collins, T h e Political Ideology in Australia: the distinctiveness of a Benthamite society', in Australia: the Daedalus symposium, pp. 147-171, p. 155. Andre Metin, Socialism Sans Doctrine, originally published in 1901 and translated by Russell Ward, as Socialism Without Doctrine, Alternative Publishing Cooperative, Sydney, 1977. Pierre Birnbaum, 'Central Patterns: states, ideologies, and collective action in Western Europe', International Social Science Journal, Vol. XXXII, No. 4,1980, pp. 671-86. John Maynard Keynes, General Theory of Employment, Interest, and Money, 1936, Macmillan, London, p. 383. Hugh Collins, 'The Political Ideology in Australia', p. 165. R. S. Parker, Tower in Australia', Australian and N.Z. Journal of Sociology, Vol. 1, October 1965, pp. 85-96. R. Rosecrance, 'The Radical Culture of Australia', p. 130. There is yet another irony in that it is Irving Kristol, a distinguished American neoconservative (and so one of a family who are paid huge sums of money by Australian business, and perhaps other 'benefactors' as well, to lecture Australians on the benefits of American laissez-faire politics) who eloquently and accurately explains that Adam Smith was a moralist with a strong sense of society and that he 'never celebrated self-interest per se as a human motive, he merely pointed to its utility in a population that wished to improve its condition'. See, Irving Kristol's Chapter 11, 'Rationalism in Economics' especially p. 206 in D. Bell & I. Kristol (eds.), The Crisis in Economic Theory, Basic Books, New York, 1981. Hugh Stretton, Political Essays, Georgian House, Melbourne, p. 202. Hugh Collins, 'The Political Ideology in Australia', p. 156. After Gouldner it is Anna Yeatman who so deftly refers to the 'teleological promiscuity' of our public servants, in 'The Concept of Public Management and the Australian State in the 1980s', Australian Journal of Public Administration, Vol. XLVI, No. 4, December 1987, pp. 339-53. Alan Ashbolt, 'The Intellectuals Have Joined Us', Sydney Morning Herald, 4 June 1988. Sir Frederick Eggleston, 'The Australian Nation', in George Caiger (ed.), The Australian Way of Life, Heinemann, London, 1953, p. 11. Max Weber, The Protestant Ethic and the Spirit of Capitalism, Allen & Unwin, London, 1976. Hugh Stretton, 'The Quality of Leading Australians', pp. 197-231. In Australia: the Daedalus Symposium, Gordon Jackson (p. 238) cites George W. England, 'Managers and Their Value Systems', Economic Impact, No. 27, 1979, pp. 23-7, in affirming the results of a University of Minnesota study showing that Australian managers had a 'high moralistic orientation, placed low value on achievement, success, competition, and risk...[and] were not very amenable to change'. Stretton

298

NOTES & REFERENCES

88.

89. 90.

91.

92.

93. 9495.

96. 97. 98. 99. 100

makes the same observation that is now routinely made and confirmed by subsequent studies. Noel Butlin, 'Bicentennial Perspective of Australian Economic Growth', Inaugural Address to the Economic History Society of Australia and New Zealand, delivered at the University of Adelaide, 25 August 1986, under the title a Tale of Two Centuries'. I have paraphrased from p. 42. See, the Hon. Barry Jones, Sleepers Wake! Technology and the Future of Work, Oxford University Press, Melbourne, 1982. Jurgen Habermas, 'The New Obscurity: crisis of the welfare state and the exhaustion of Utopian energies', Philosophy and Social Criticism, No. 11, 1986, pp. 1-19; Claus Offe 'II. Democracy Against the Welfare State? Structural Foundations of Neoconservative Political Opportunities', Political Theory, Vol. 15, No. 4, November 1987, pp. 501-37. See Gary Wills, 'The Politics of Grievance', a review in New York Review of Books, Vol. XXXVII, No. 12, July 1990, pp. 3-4, of Kevin Phillips' The Politics of Rich and Poor: wealth and the American electorate in the Reagan aftermath, Random House, New York, 1990; and, Gary Wills, Reagan's America: innocents at home, Doubleday, 1987 and Stanley Hoffman's review of the latter in New York Review of Books, Vol. XXXIV, No. 9, May 1987, pp. 3-8; and John Kenneth White, The New Politics of Old Values, University Press of New England, 1988. J.A. Nathan, 'Dateline Australia: America's foreign Watergate', Foreign Policy, Vol. 49, 1982-83, pp. 168-85; and Tim Rowse, 'The CIA and the Kerr Coup' in Australians from 1939, A. Curthoys, A.W. Martin & Tim Rowse (eds), Fairfax, Syme & Weldon Associates, Sydney 1987. Richard Hall, The Secret State, pp. 186-90, as quoted in Donald Home, 'Who Rules Australia?', in Australia: the Daedalus Symposium, p. 186. Reinhold Niebuhr, The Irony of American History, Charles Scribner's Sons, New York, 1962. C. Lasch, Culture of Narcissism: American life in an age of diminishing expectations, Norton, New York, 1978; Noam Chomsky, Necessary Illusions, CBC 1988 Massey Lectures, CBC Enterprises, Montreal and Toronto, 1989. Louis Hartz, The Founding of New Societies: studies in the history of the United States, Latin America, South Africa, Canada, and Australia, Harcourt Brace and World, New York, 1964, p. 118. P. Brain, A. Jolley & I. Manning, 'Labour Market Options for Australia', National Institute of Economic and Industry Research Study, No. 8, March 1988, p. 54. Pierre Birnbaum, p. 683. I think this means closing the space between 'system and lifeworld' so that there is rational differentiation and coordination but no colonisation of the latter by the former. R. C. Lane, 'Markets and the Satisfaction of Human Wants', Journal of Economic Issues, Vol. 12, 1978, p. 803, as quoted in Claus Offe, Disorganized Capitalism, John Keane (ed.), Polity Press, Cambridge, 1985, p. 143.

299

ECONOMIC RATIONALISM IN CANBERRA

101. This is Agnes Heller's phrase. 102. Jiirgen Habermas, Communication and the Evolution of Society, translated and introduced by Thomas McCarthy, Beacon Press, Boston, 1979, p. 199. 103. See especially Alain Touraine, 'The Waning Sociological Image of Social Life'. 104- R- Rosecrance, 'The Radical Culture of Australia' p. 310. 105. Alain Touraine, 'The Waning Sociological Image of Social Life', p. 40. 106. Maria Markus, 'Formation and Restructuring of Civil Society: is there a general meaning in the Polish paradigm?', International Review of Sociology, Vol. XXI, No. 1-2-3,1985, pp. 5-24. 107. This is the far-sighted view of Dr Peter Shergold, an influential advisor and Deputy Secretary of the Department of Prime Minister and Cabinet, outlined in an address to the alumni of the Bachelor of Social Science and Policy Program, University of New South Wales, November 1989. 108. With these allusions I am drawing heavily here on a brilliant review article by Michael Walzer, 'Nervous Liberals', in his Radical Principals, Basic Books, New York, 1980. 109. What Steinfels does say is that it is the 'New Class that is bad tempered and thin-skinned...' Peter Steinfels, The Neo-Conservatives: the men who are changing America's polities', Simon & Schuster, New York, 1979, as quoted in Walzer, p. 104110. Claus Offe quoting Polanyi in, Disorganized Capitalism, p. 53. 111. P. Grabosky and J. Braithwaite, Of Manners Centle: enforcement strategies of Australian business regulatory agencies, Oxford University Press, Melbourne, 1986. 112. My paraphrasing; see Anthony Giddens (ed.), Emile Durkheim: selected writings, Cambridge University Press, Cambridge, 1972, p. 27. 113. Xavier Herbert, Poor Fellow My Country, Collins, Sydney, 1975.

300

INDEX

Aberbach J. et al. study 2, 24, 47, 52, 57, 59, 75,160,161, 216, 268 Aboriginal Affairs, Department of 6, 25, 77, 98, 99, 104, 105, 121, 133,136,149 Aborigines 41, 215, 242 Accord 7, 33, 221, 223, 227, 260 accountability 101, 154 accountants 186, 202, 235 practices 32, 42, 102, 233 technologies 108, 183, 202 action(s) 77, 170, 171, 190, 202 and structure 68 communicative 237 administration 4, 73 age 4, 8, 46, 47, 83,118,131,154 amalgamations 25, 33, 76, 81, 146 Apel, Karl Otto 167 Arbitration Commission 180, 221 'archaeology' 97, 99, 107 Argentina 218 attitudes 35, 39, 43 Australia 15, 208, 213, 215, 218, 219,221 Constitution 29 Council of Trade Unions 33 culture 237 deficit 32 development 15 economy 32, 34, 37, 81, 258-9 exports 32 future 234, 235 Gross Domestic Product 32, 40, 61, 62, 259 distribution 61, 62, 125, 271 Gross National Product, 58 distribution of 80, 106, 270

301

history 217 images of 10, 26, 29, 37 income distribution 79 isolation 12, 32, 230, 233 manufacturing industries 32, 34 obstacles facing 33, 35, 36, 38, 43, 266 attitudes and values 36 consensus 36, 39 education 36 industrial relations 36, 39, 268 industries 36, 39 institutional inertia 36 leadership 36 markets 36, 39 taxation 39 vested interests 36, 39 wages and salaries 36, 39 population 32, 49, 50 problems of 33, 34, 35, 37, 38, 39, 43, 266 attitudes and values 34 economic 34 education 34 industrial relations 39 industries 34 public sector 34 social inequalities 34 unemployment 34 wages and salaries 34 secularism 230, 231 states 31, 98, 213, 214, 224, 228, 269, 274 taxation 143 terms of trade 32 traditions 74, 205 universities 6, 232, 233

INDEX

Australian Assistance Plan 165 Australian Council of Trade Unions 218, 221, 260 Australian Schools Commission 165 Australian Senate Standing Committee on Finance and Public Administration 271 Beer, S. 198 behaviour 170, 171,202,286 Bentham, Jeremy 232 Birch, Charles 233 Blackburn, Jean 281 Block, David 292 Britain 2, 10, 12, 32, 53, 59, 60, 75, 213, 216, 217, 221, 223, 230, 231,240,269,294,296,297 Broom, L. and Jones, F. 50, 51 budget 4, 33, 89, 134, 135, 224, 227, 261, 280 bureaucracy (see also state apparatus) 3, 5, 7, 10 bureaucrats 5, 8, 47 top (see also SES) 29, 34 business 58, 62, 96, 133, 1 4 2 ^ , 150, 154, 155, 163, 214, 221, 223, 230, 236, 240, 241, 281 Business Council of Australia 281 businessmen 235 Butlin, S.J., 177 Butiin, Noel 234, 236 Button, John 149, 150, 151 cabinet 7, 9, 66, 75, 86, 88, 98, 107, 112, 131, 136, 138, 139, 141, 144,145,154, 279 Caiden, G.E. 284 Cameron, Rod 190 Canada 213, 214,231 career(s) 114, 133, 167, 169, 182, 183 career service 20, 151, 153, 160, 182, 188, 192 Cass, M. 52 Castles, Francis 218, 219 Catholics 41, 56, 79 central agencies 6, 8, 9, 25, 59, 76, 78-93, 95, 98-102, 107, 108, 115, 116, 118, 120, 125, 126, 130, 134, 136, 141-8, 154, 174,

175, 181, 182, 183, 186, 192, 193,198, 209, 222, 226 characteristics 85 Centre for Independent Studies (CIS) 227 Centre for Policy Studies (COPS) 227 challenge 186 Charles, Dr David 150, 183 Chartist movement 217 Chifley, Ben 160 citizenship 12, 165, 188, 190, 204, 236, 237, 241 Clark, Manning 13, 233, 294 Clarke, Sir Charles 147 clients 89, 100, 103, 136, 149, 155, 165,178,181,184,192 SES as captives of 95, 109 Codd, Mike 183 coherence 65, 87, 89, 136, 154, 168, 192, 198, 201 colonisation 10, 18, 179 committed centrists (see also Aberbach et al) 5, 57, 58, 74, 160, 161, 188 Committee of Public Accounts 276 commodification 176, 179 commonwealth government (see government, federal) community 167, 190 Community Services, Department of 6, 25, 77, 98,149 complexity 161, 174, 191, 199, 201, 204, 242 conflicts 105 Connolly, David 275 Connor, Rex 211 consensus 35, 170 consistency 65, 87, 89, 130, 136, 137,154, 168,192,198 consultants 228 Coombs Royal Commission into the Australian Public Service 52, 161, 162, 163, 164, 165, 159, 169, 260 Coombs, H.C. 162, 198, 199, 291 coordination 10, 18, 104, 108, 112, 116,154,164,196,199,209 corporatism 6 credit rating 222, 223, 224, 261 crisis 197, 198 of modernity 195, 196, 206

302

INDEX

of society 16, 160, 196 of the state 3, 16, 17, 19,64, 108, 160, 195,196, 206, 210 Crisis of Democracy, 5, 17

Crozier,M. 17, 198,291 culture(s) 9, 10, 12, 18, 21, 44, 111, 160, 169, 173, 174, 176, 177, 179, 180, 182, 183, 195, 206, 208, 210, 212, 217, 224, 231, 241, 285 Benthamite 231 moral 168, 182, 188,231 Daniel, Ann 50, 51 Davies, Alan 37 Dawkins, John 147, 148, 188, 193, 275 de Toqueville, A. 185 Deakin, A. 1 debt 42, 202, 224, 235 deficit 33 degrees university 59, 88, 91,98 higher/post-graduate 132 demoralisation 182 deregulation 12, 125, 210, 240 banking industry 261 capital markets 222, 270 dollar 63, 211,222, 261,270 economy 135 financial markets 211, 260 labour market 58, 61, 62, 78, 80, 84, 106, 210 development 1, 12, 17, 22, 195, 212, 215, 237, 238, 241 differentiation 18, 77, 117, 179, 180, 192 discourses 279 dispositions 146 distance 179, 180 Easton, David 292 Eckstein, H. 214 econocrats 7, 87 economic departments (see central agencies) economic management 95 economic rationalism 1, 4, 7, 10, 12, 13, 18, 19, 20, 21, 57, 74, 78, 97, 107, 108, 134, 154, 159,

170, 171, 183, 187, 192, 194, 208-12, 220-5, 233, 239, 241 economic rationalists 8, 47, 59, 75, 126,135,144-9,174,271 economics 2, 6, 8, 10, 72, 73, 77, 102, 154, 171, 173, 175, 190, 217,223,232,233 curriculum 5, 6 neoclassical 225 profession 60 economists 5, 6, 7, 11, 18, 24, 62, 110, 132, 133, 143, 150, 154, 172, 173, 175, 182, 186, 192, 202, 216, 277 economy 9, 10, 18, 21, 30, 34, 35, 42, 44, 64, 107, 108, 109, 130, 143, 152, 179, 180, 193, 195, 200, 206, 209, 210, 219, 225 global 18 international 43 world 12, 26, 37, 208, 209, 210, 225,234 Education, Department of 6, 8, 35, 37, 55, 77, 97, 99,147,148, 166 education, 4, 46, 74 economics 109 elite 55, 59, 83, 98, 100, 163, 233 liberal 172 system 37 university 94, 98, 162, 171 Education and Youth Affairs, Department of 25 European Economic Community (EEC) 209, 216, 219, 298 effectiveness 130, 153, 154 efficiency 17, 20, 22, 66, 95, 114, 125, 130,153,154,172,189,210 Efficiency Scrutiny Unit 152, 153 elite(s) 7, 16, 111, 163, 179, 183, 233,269,283 Elliott, John 190 empiricism 13, 21, 166, 172, 203, 217,232 Employment and Industrial Relations, Department of 152 Employment, Education and Training, Department of 182, 193 Emy, H. 283 Encel, S. 233, 283 enterprise 43 environment 21, 24, 45, 76, 123, 210, 220

303

INDEX

Equality of Employment Opportunity 86, 151 ethic of vocation 20, 168 ethics 41, 168, 187 exchange 42 exchange rate 150 Expenditure Review Committee 107,138,139,141,135, 224 experience 6, 54, 59, 63, 73, 74, 88, 94,105,106,109,133,181 hands-on 9 life 8 overseas 9, 88, 93, 94, 100, 109, 133,226 practical 92 private 94, 99 real-world 9 work 93, 94, 100 externality 200, 204, 241 federalism 31 Federation 3, 98, 213,215, 216 federations 30 Finance, Department of 6, 8, 25, 76, 81, 82, 86, 92, 104, 108, 126, 134, 135, 136, 138-41, 145, 146, 152, 177, 178, 179, 184, 227, 260, 279 Financial Management Improvement Plan 89, 140 FitzGerald, Dr Vince 182, 183 flexibility 189 Foreign Affairs, Department of 149 Foucault, M. 285 France 50, 53, 60, 213, 217, 221, 269 Frankel, Boris 216 Fraser, Bernie 183 Fraser, Malcolm 134, 198, 279, 280 Fraser, Nancy 18, 165, 205 Freedom of Information 151 Fulop, Liz 165 General Agreement on Tariffs and Trade (GATT )133, 226 Geertz, Clifford 13, 289 gender 8, 24, 41, 46-8, 195, 223, 233, 269 generalists 8

Germany 221 Gorbachev, Mikhail 194 government 63, 65, 66, 74, 112, 211, 229 federal 3, 30,148 Fraser Liberal 3, 7, 8, 32, 33, 66, 82,134, 260, 275 Hawke Labor 3, 4, 7, 31, 32, 64, 66, 74, 91, 98, 106, 113, 132, 140, 153, 154, 170, 188, 190, 211, 221, 222, 228, 261, 262, 282, 288 Labor 4, 5, 214 Centre Left faction 7, 124, 168 Right faction 7, 139, 149 Left faction; minority 7 Right-wing 136 Liberal 3, 5, 7,64,97, 160, 214 Menzies Liberal 162, 216 roles 74 state 67 Whitlam Labor 64, 66, 110, 159, 161, 163, 164, 166, 169, 170, 171, 184, 190, 196, 199, 211, 260, 276 Greens 22, 187 Groenewegen 214 H.R. Nicholls Society 227 Habermas, Jurgen 17, 18, 22, 26, 129, 171, 175, 179, 185, 196, 197, 201, 206, 237, 285 Hawke, R.J. 141, 146 (see also government, Hawke Labor) Hayek, F. 227 Health, Department of 6, 25, 77, 97, 99,105,121,141,149, 280 Heclo, Hugh 23, 161 Hegel 293 Heller, Agnes 237 history 230, 233, 239 Hobbes 232 Home, Donald 13, 233 Howard, John 271 human relations 166 Hume, David 173 identity 9, 10, 12, 14, 18, 21, 208, 209, 210, 224, 233, 235 national 6, 15 social 171, 173

304

INDEX

ideology 19, 30, 31, 165, 169, 174, 175,231 'incentivation' 203, 210, 230, 231, 237, 239, 241 income 221 redistribution 219, 224 independence 14 industrial relations 35, 37, 213, 215 Industrial Relations Commission 222-4 industrialisation 14 industries 7, 36, 37, 42, 43, 93, 142, 145,150, 228 Industries Assistance Commission 149 industry investment. 151 Industry, Technology and C o m ' merce, Department of 6, 25, 90, 91, 149, 150, 183 inequality 24, 41,55, 106 inflation 33, 34 Institute of Public Affairs 227 Institute of Public Policy 227 institutional inertia 37 instrumentalism 188 integration (see rationalisation) integrity 14, 168, 208 intellectual skills 88, 89, 109, 126 intellectuals 2, 47, 73, 111, 112, 126, 130, 133, 162, 176, 179, 180, 195, 201, 202, 205, 206, 225, 265,272 interest group(s) 143, 155, 163 interest(s) 2, 15, 165, 179, 183, 213, 225, 230, 231 logic of 176 public 15 vested 15, 154 International Monetary Fund (IMF) 88, 133 investment 12, 33, 143, 210-14, 219, 224, 240 Japan 216 job dissatisfaction 101 rewards 100 satisfaction 7, 88, 95, 100, 109,126, 185, 186, 29

Katzenstein, Peter 15, 220 Keating, Mike 183 Keynes, J.M., 5, 7, 63, 107, 179, 231 Kirner, Joan 281 Krasner, Stephen 15, 212, 213 Kristol, Irving 298 Labor Party 7, 31, 58, 114, 146, 154, 215,221 Centre Left faction 100, 107, 155 Centre Right faction, 125 Left faction 98, 107, 139, 147, 155,224 politicians 162 Right faction 107, 154, 155, 282 Iabourism2, 12, 221,231,264 labour market 12, 35, 42, 43, 219, 236 laissez-faire 6, 32, 56, 107, 110, 219, 227, 229, 298 Langmore, John 179 language 167, 171,203 leadership 37, 43, 66, 105, 129, 132, 134, 267 legitimacy 106-9, 126, 132, 195, 239 legitimation 143, 155, 176, 217, 229, 286 Liberal Party 30, 58, 113, 114, 151, 168, 190, 203, 223, 227, 228, 270 Liberalism 195 lifeworld 175, 233, 241 Lipset, S.M. 214 Lipsey,R.G. 172 Little, Graham 284 lobbyists 121, 142, 191, 280 Locke, John 232 Lucky Country 1, 23, 35, 43, 208, 215,218,239 Luhmann, N. 18, 26, 178, 179, 191, 194, 201-3, 220, 279, 290 Lynch, Phil 64 management 44, 72, 73, 89, 99, 116, 127, 136, 137, 146, 166, 192, 233,267 'technologies' 228 managerialism 20, 102, 121-5, 146, 281, 288, 289 managerialists 8, 125

305

INDEX

managers 67, 102, 103, 108, 114, 126,187,190, 233 manipulation 230 Marcuse, Herbert 187 market(s)3, 10, 17, 22, 43, 125, 171, 173, 179-83, 193-6, 201, 204, 206, 226, 230, 235, 242 financial 63 free 64 labour 63 market economy 239, 240 market-oriented departments 6, 9, 76, 78, 79, 84, 86, 90-7, 99, 102, 115, 116, 126, 134, 136, 142,143,144,151,209 characteristics 93 structure 142 marketplace 42 f Markus, Maria 18, 238, 295 Marx, Karl 19 Matthews, T. 214 McKinnon, Ken 281 media 13, 150, 229 Menzies, R.G. (see also government, Menzies Liberal) 160, 161 merit 116, 151, 169,276 migrants 41 Mill, J.S. 232 Miller, J.D.B. 283 Mills, C W . 174 Minister of Finance 4 minister(s) 2, 7, 8, 44, 66, 70, 73, 75, 86, 88, 98, 102, 107, 114, 116, 121, 131, 134, 136, 138, 141, 144,146,151,188-93, 276 mobility 103, 113-19, 145, 152, 164, 181-5,194, 227 models 8, 176, 177,178, 181 modernisation (see also development) 1, 2, 11, 12, 17, 19, 20, 22, 26, 32, 198, 199, 205, 235 modernity 196, 198, 201, 202, 205 morality 195 motivation 128, 185-7, 194, 226, 288

national income, distribution 213 National Institute for Labour Studies 228 need(s) 12, 22, 42, 108, 165, 176, 181, 200, 205, 226, 237

social 7, 44, 164, 165, 168, 173, 179, 195, 200, 225 neoconservatives (see also New Right) 17 Nettl, J.P. 2, 14 neutrality 75 Nevile, John 286 New Class 64, 163 New Right 64, 106, 133, 194, 227-30, 235, 239, 297 New South Wales 229 norm-setting 119, 120, 126, 132, 138, 154, 184 norms 7, 8, 10, 18, 44, 108, 109, 110, 127, 133, 152, 160, 168, 169, 173, 174, 177, 204, 210, 242 O'Connor,]. 17, 197 Offe,C. 17, 18, 197, 220,291 Old Right 194 Organisation for Economic Cooperation and Development (OECD) 3, 13, 32, 33, 59, 64, 88,113,133,150,224,226,230 Parker, Robert 231, 284 participation 12, 165, 174, 187, 188, 237, 242 phenomenology 178 pluralism 165, 193 Poggi, G. 292 Polanyi, K. 239 policy 5, 8, 9, 18, 31, 56, 63, 65, 67, 72, 74, 77, 82, 83, 99, 103, 104, 109, 116, 123, 127, 133, 136, 137, 140, 147, 163, 167, 172, 189, 192, 220, 216 budgetary 228 coordination 65 orientations 6 public 2, 14, 16, 19, 20, 22 social 74 political administration 11, 24, 199 political administrators 45, 76, 225 political dispositions 74, 111 political orientations 6, 47, 100 politicians 5, 37, 125 politics 10, 13, 43, 73, 109 images of 41 of knowledge 131 polity 188 images of 41

306

positivism 2, 68, 123, 125, 172, 174, 176, 186, 189, 203, 226, 232, 278 post-modernisation 21 post-modernism 11, 17, 20, 26, 166, 191,194,199, 235 Post-War Reconstruction, Department of 160 power 7, 108, 128, 132, 191, 192, 206, 278 Primary Industry, Department of 6, 25, 77, 90,149 Prime Minister and Cabinet, Department of (PM&C) 6, 8, 25, 71, 76, 81, 82, 86, 88, 92, 108, 120, 126, 132, 140, 146, 152, 179, 183, 184, 288 private sector 92, 94, 102, 109, 121, 133, 142, 143, 144, 152, 153, 168,179,185, 229, 280 characteristics 124 senior executives 122 privatisation 125, 135, 210 program and service departments 6, 9, 77, 78, 84, 86, 97-106, 115, 118, 132, 136, 149, 154, 178, 186,192, 209 characteristics 104 promotion(s)(see also mobility) 8, 113, 114, 117, 119, 120, 152, 162, 164, 169, 182, 183, 186, 193 protection 149 psychologists 11 psychology 226, 233 Public Accounts Committee 113, 228, 275, 280, 282 public administration 69, 114, 125, 151, 153, 159, 179, 203 discourse 169, 170 earlier culture of 161 environment of 162 norms 153 public interest 164, 182 public opinion 190, 191 public policy 68, 78, 174, 199 public sector 3, 33, 36, 64, 74, 92, 114, 115, 122, 123, 126, 152, 185, 216, 224, 240, 267 characteristics 124 senior executives 122 public service 6, 8, 114, 115, 168 Public Service Act 151

Public Service Board 113, 151, 182, 278 public service training 93, 94 public sphere 11, 164, 165, 170, 174, 184,195,201,225,231,239 rationalisation 3, 6, 8, 9, 19, 21, 22, 26, 65, 66, 89, 102, 106, 112, 129, 134, 135, 136, 146, 153, 154, 170, 176, 179, 180, 188, 192, 196, 198, 199, 205, 287 and coordination 20 formal 135, 176, 199 lateral 112, 134 of society 22 politics of 141, 143 vertically, 126 rationality 18, 19 formal 19, 109, 141, 151, 153, 175, 200, 205 coherence 20 consistency 20 practical 20, 109 strategic 19 recolonisation 12 reformers 130, 173, 176, 195, 207 reform(s) 2, 3, 4, 8, 9, 11, 12, 14, 17, 19, 32, 65, 112, 115, 145-53, 155, 160, 162, 167, 171, 178, 183, 189, 194, 196, 198, 204, 205, 210, 276 Whitlam Labor government, 160-169 relative autonomy 12-15, 206, 211-18,236,237,240 Renfrow, Patty 278 Report of the Royal Commission into the Australian Public Service (RCAGA) (see Coombs Royal Commission) Resources and Energy, Department of 6, 25, 70, 77,90,91,92, 121, 149 responsibility 73, 102, 127, 169, 179, 180,183,187,188, 241 responsiveness 189 rewards 113, 123, 128, 186, 194 Ricoeur, Paul 190 Rieff, Philip 185, 187 Rohr, J. 161 role models 94 Rose, R. 198

307

INDEX

Rousseau, E. 292 Rowse, Tim 284 Ryan, Susan 147

sample 24, 25 Samuelson, P.A., 172 sanctions 127, 128 satisfactions 7, 88, 95, 185, 186 Sawer, Marian 297 scepticism 203 Schools Commission 147, 148 science 149, 173, 174, 175, 177 accountancy 11 neoclassical economics 11 psychology 11 scientism 10, 173, 175, 201, 203 secretaries (departmental) 82, 91, 98, 116, 118, 120, 127, 132, 146,151,182,288 selection 6, 77, 117, 179 Self, Peter 165, 284, 291 Senate Standing Committee on Finance and Public Administration 153, 262 Senior Executive Service (SES - see also reforms) 2, 4, 8, 25, 33, 46, 47, 52, 54, 56, 58, 65, 67, 68, 73, 74, 86, 113, 114, 131, 146, 153,185, 255, 262 age 59, 78, 132 background educational 120, 172 social 4, 46-50, 115 criteria of evaluation 153 demoralisation 65 divorce 65, 101 economics degrees 59 education 79 environment of 109, 110 ethnic origins 49 evaluation 130 health problems 101 images of 160 inequalities in 8 interviews 23, 24, 46, 245-54 job satisfaction 87 life experience 5 policy orientations 83, 84 political attitudes 4 political orientation 4, 56, 59, 79

qualifications 132 rewards 65 selection criteria 89 seniority 59 social background 4 social characteristics 78, 83 socio-economic status 54 tenure 128 university degrees 53, 59-62, 78, 79 women, proportion of 48 work 73 Senior Executive Staffing Unit 152 seniority 4 service and program departments (see program and service departments) Shergold, Dr Peter 301 Simmel,G. 175,202 Simon, Herbert 2, 68, 202 Skocpol,T. 212,214 Smith, Adam 232, 298 Snow, C.P 166 social background 5, 6, 8, 39, 53, 54, 56, 58, 59, 74, 99 differentiation 53, 74 inequalities 53 selection 4, 53, 74 social action 23, 42, 167, 171, 173, 177,235,286 social class 50 social democracy 1, 5, 10, 12, 22, 106, 123, 163, 192, 205, 209, 218,227,231,236,237 social inequality 35, 40, 41, 147, 197 social justice 107, 114, 125, 153 social movements 19, 22 social needs 7, 44, 164, 165, 168, 173,179,195, 200, 225 social origins (see social background social reproduction 19 social responsibility 41 Social Security, Department of 6, 25, 77, 97, 99, 104, 138, 139, 140,141,149 social service 64 social structure 4, 16, 213, 215 social system 45, 164 social welfare 3 socialisation 45

308

INDEX

society 6, 7, 9, 10, 14, 16, 19, 22, 40, 45, 109, 159, 167, 173, 180, 183, 185, 188, 196, 199-204, 209 civil 9, 10, 12, 14, 15, 18,21, 164, 170, 171, 172, 179, 182, 190, 208-9,211,212,217,224,238 coordinating structures 9 images of 39, 54, 55, 111,180 reproduction 17, 22, 164, 170, 205, 206, 207 utilitarian 40 solidarity 83 sovereignty 13 Soviet Union 10 state 1, 2, 6, 9-14, 64, 124, 143, 159, 163, 166, 170, 179, 188, 196, 199, 201, 206, 209-12, 215, 217, 229, 235, 237, 238, 240 action 171, 182 economically rationalist 112 images of 115 integrity 15, 16 intervention 57, 58, 64, 79, 80, 84, 106,107,142,155, 219, 270 minimalist 112 nation-building 63, 112, 142, 145, 155, 164, 214, 236, 295 power of 4, 6, 111,213 social democratic 7, 107, 125, 155 stong/weak 107, 211-17 structures 112, 164 theories of 16, 24 utilitarian 232 welfare 7, 107, 108, 110, 155 state apparatus 2-5, 8, 9, 10, 13, 14, 15, 16, 19, 20, 22, 23, 24, 25, 26, 30, 33, 44, 45, 65, 66, 76, 79,88, 109, 111, 126, 159, 160, 198, 205, 206, 209, 216, 217, 222, 225, 234 archaeology of 6 environment 77 formal 109 independence 15 legitimacy 97 overloaded 3 states 10, 17 state governments 223 state provision 106 structures 76, 129 states' rights 31

statesmen 183 Steinfels, P. 239 Stretton, Hugh 13, 172, 233 structure(s)169, 170 and actions 77, 111 coordinating 17, 235 formal 68, 169 informal 169 normative 110 social 173 Sweden 1, 12, 16, 32, 143, 218, 219, 295 system 10, 11, 18, 20, 21, 24, 176, 179, 180, 184, 187, 188, 191, 193, 195, 204, 220, 233 economic 210, 211, 225 environment 225 environment of 200, 204 logic 202 overloaded 242 social 199 system structures 175-9, 188, 200 systems logic 11, 176, 177, 180, 195 processes 178 systems theory 174 Szelenyi, I. 214 tariffs 37, 213 taxation 3, 30-4, 43, 214, 224, 240, 260, 261 technocracy 11, 20, 47 technocrats 67, 70, 73, 74, 93, 123, 126, 162, 176 technology 112, 151, 167, 184 Tertiary Education Commission 148 Thatcher, Margaret 184, 194, 223, 296 think-tanks 133, 143, 227, 281 Thurow, L. 221 time 179, 181, 184, 193, 234, 239, 240 Touraine, Alain 1, 18, 196, 225 Trade, Department of 6, 25, 77, 90, 91,93,97,105,149 Trade and Primary Industry, Department of 107 trade unions 6, 7, 35, 42, 58, 62, 142, 145, 180, 215, 227 traditions 181, 199, 204, 210, 230, 236, 242 training 100

309

INDEX

Treasurer 82, 83, 144, 222, 261 Treasury, Department of 6, 8, 25, 76, 81-3, 86, 88, 92, 104, 108, 120, 121, 126, 133-41, 145, 146, 149, 151, 163, 177, 179, 183, 184, 202, 224, 227, 260, 279 economists 229 Trilateral Commission 162, 197 trust 195, 239 uncertainties 20, 35, 128 unemployment 32, 34, 35, 40, 41, 260, 267 United States 2, 10, 15, 30, 60, 212, 213, 214, 216, 230, 231, 240, 295 universalism 169, 225, 230, 232, 235,237 universals 180 Urban and Regional Development, Department of 165 Uruguay 218 utilitarianism 163, 204, 226, 232, 240 utility 22, 242

Whitlam 113 Whitlam, Gough (see also government, Whitlam Labor) 113, 147,162, 236, 284 Wildavsky, Aaron 23 Wilenski,Dr Peter 113, 151,278 Wilkinson, Jennifer 287 Williams, Helen 147 Willis, Ralph 147 Windschuttle, K. 229 work 35, 40, 83, 88, 92, 99-102, 112,122,125-7,181,226,242 ethic 35, 39, 40, 43, 145 experience 4 intellectual 112 values 94, 95 World Bank 13, 133, 226 Wran, Neville 282 Yeatman, Anna 292, 298

value neutrality 68, 69, 73, 125 values 35, 39, 43 vested interests 42, 43, 163, 164, 180, 182, 193 Veterans' Affairs, Department of 6, 25, 77, 98,136,139,141,149 vocation 167 ethic 182 vulnerabilities 12, 218, 224, 225 wages 32, 213, 240 wages system 5, 12, 32, 37, 43, 220, 221,223,224,261,264,296 Ward, Russell 161 Washington 113, 114, 277 Weber, Max 19, 199, 230, 286 welfare 135, 143, 164, 176, 219, 223, 224, 226 welfare state 106, 123, 125, 136, 142, 223 Westminster 4, 30, 113, 168, 188 Wettenhall, R. 283 Wheelwright, Ted 233

310