AUSTRALIAN FINANCIAL REVIEW MAGAZINE
It’s hard to overestimate the influence conservative think tanks have had on the political agenda in Australia. Now, however, they are girding their loins for a defensive battle against signs of a renaissance on the left - a battle some say they’re losing.
by Wilson da Silva
GREG LINDSAY should be a man content. His creation, the Centre for Independent Studies (CIS), is today the most influential think tank in the country, its unique brand of social conservatism and neo-classical economics now largely mirrored in Coalition Government policy. Not only is the 25-year-old institution a firm favourite of the Prime Minister, it is increasingly hailed by both sides of politics. A moment of triumph, you might think. And yet, Lindsay is troubled.
“The country’s a way better place than it was 25 years ago,” he told The AFR Magazine. “Trends are going the way we have argued. But I don’t think [the market economy model] has won. Interventionists are still there, supporters of regulation are still there. We have to fight that.
“Most of these arguments - you’ve got to keep re-stating them, repackaging and re-organising; say it again, get someone else to say it. It’s a cultural thing too. We’re working through these cultural tides - one’s going out, and ours is coming in. We’ve got to make sure ours stays in.”
It’s a message that has been continually underlined by the Government of late. “The lesson of the last six years is that you always push forward,” Prime Minister John Howard told the Liberal Party’s Federal Council in April. “The task is never done. The reform process is never completed. The economy is never perfect.”
The Party’s retiring treasurer, Ron Walker, echoed the call: “I think the biggest challenge the party’s got is to keep the reform going and to keep up with new ideas.” His replacement as treasurer, Malcolm Turnbull, used the same occasion to launch a research report on the future of education. The product of another think tank - the Liberal Party’s own Menzies Research Centre - the report called for a wholesale shake-up of education, replacing government funding with vouchers that parents could use in any school, public or private. Although summarily dismissed by Education Minister Brendan Nelson, the report was the grandiose flourish that marked Turnbull’s debut as a Coalition policy player.
“Information is to public policy debate what gasoline is to a motor car,” Turnbull told The AFR Magazine. “You need to have facts, information and comparisons with other countries. That’s where think tanks can be very useful.” The era of winning government with political spin, or waiting for the other side to crash, is coming to a close, according to Turnbull. “The electorate want to see innovation, ideas and creativity. That isn’t saying they want the world turned upside down, but they want to see that you’re thinking about things.”
There is an urgency to this search for new ideas, particularly now that much of what was once called the New Right agenda has been implemented. At the apex of their influence, conservative think tanks are nevertheless redoubling their efforts - against re-regulation, against the slowing of reform, against irrelevance.
Take the CIS. Its headquarters in the Sydney north shore suburb of St Leonards is expanding and office space is at a premium. It is hiring new staff, and has recently brought back sociologist Peter Saunders from Britain to join its team.
And the CIS isn’t the only one worried. “Many in the Right have conned themselves that we’re at the ‘end of history’ ... that we’ve won,” says John Roskam, the outgoing executive director of the Menzies Research Centre. “The realm always has to be defended, and we always have to be mounting arguments as to why the state should be smaller.”
Dr Mike Nahan, executive director of the Institute of Public Affairs (IPA) agrees. “We’re in defensive mode and we’re losing,” he says. “The old institutions of big government and socialism have crumbled. But I think [the Left] are coming back more strongly than most people realise, both institutionally and in terms of the public debate.”
THEY CALL themselves the “Fifth Estate” - a 20th century addition to democracy’s pillars of the executive, the legislature, the judiciary and the media. Unlike the others, however, think tanks conduct their business in private and are comparatively little studied. Yet when the political history of the late 20th century is written, think tanks will figure prominently, because the influence of these well-funded and largely unaccountable ideas factories has been nothing short of phenomenal.
Considering the strange fluidity in Australian politics just now, it’s a good time to be a think tank: a time when the Liberal Party has mastery over national politics, but has lost government in every state and territory; when Labor mavericks such as Mark Latham get more praise from Liberals than within their own party; when the prescriptions of right-wing think tanks are lauded by John Howard and Labor premiers alike, and when Liberal opposition leaders such as NSW’s John Brogden are starting to use the language of New Labour.
And yet it is also a time when the Right finds itself defending old victories more often than winning new ones; when the NSW Liberal Party not only anoints a leader from its unlikely Left, but finds its strategists talking of a sea change in community attitudes away from the economic zealotry of the 1980s and 1990s. Suddenly ideas are back in vogue, and both sides of politics are searching. What’s intriguing is just how fluid this process is: how the borders that once defined political ideologies have disintegrated; how both sides of politics came to drink from the same well.
Take Australia’s oldest think tank, the IPA, which was established in 1943 and reinvigorated in the 1980s by Liberal apparatchik (and now Senator) Rod Kemp. Like many New Right think tanks around the world, it has been highly successful at implementing its agenda. Its campaign to reform government finances saw every State and Federal budget balanced by 1995; its policy prescriptions for Victoria and Western Australia were snapped up by the Liberals and used as manifestos once in power.
And yet, this ivory tower of the New Right these days claims a host of Labor converts: the former Tasmanian Labor Premier Michael Field “was very close”, says Nahan, as is former Hawke finance minister, Peter Walsh. One-time Labor minister in the Keating Government, Gary Johns, has been on staff since 1997.
Nahan says that those federal Labor mavericks, Mark Latham and Lindsay Tanner, are “very active” - as are a growing number of senior Labor figures.
Nahan counts among the IPA’s friends former Federal Labor minister Peter Cook, and frontbenchers Kim Carr, Kevin Rudd and Craig Emerson (whom Nahan has known since university), and senior Labor staffers such as Michael Keating. Core IPA issues such as energy deregulation, privatisation and the debunking of global warming have seen the Institute bring “every Labor player, State and Federal, in here to talk about it, to debate and discuss policy” with the IPA’s staff and researchers.
“The IPA has a stronger philosophical relationship with the Liberal Party,” he admits. “But we’ve had some good dialogue with Labor premiers. And let’s face it, the Labor Party were the reformers of liberal market strategies in the 1980s and 1990s. They probably saw the IPA more often in the enemy’s camp, but they listened to us. Labor or Liberal, there are not huge differences these days. They [both] know that privatisation increases accountability, it drives efficiencies, and there’s no going back.”
Think tanks all agree, however, that the community’s appetite for more change is waning. Sound arguments for further reform are no longer enough; in such a climate, proponents often find themselves having to resort to tactical distractions - like debunking leftist élites or railing against asylum seekers.
“The refugee issue is about playing positions and smart wedge politics, it’s not about think tanks and the role of ideas in politics,” says Professor Ian Marsh of the Australian National University, who has studied think tanks around the world. “It’s a bit of rhetorical play, and there’s a limited lifespan to fraudulent arguments. Usually rhetorical plays run out of steam.”
This change in mood has not only worried the New Right and driven them to redouble their efforts, it has also triggered the rise of more recent coalitions that are assiduously working to build networks and influence public policy. One of these is the Bennelong Society, aimed at challenging Aboriginal self-determination, the stolen generations, and concepts of “white guilt”.
The president is former Liberal Aboriginal affairs minister John Herron, and the board includes former minister Peter Howson, the former president of the NSW Bar Association David Bennett, right-wing intellectual Des Moore, Labor’s Gary Johns, and the president of the H.R. Nicholls Society, Ray Evans, as secretary.
Another is the Lavoisier Group, which is dedicated to the dismantling of the Kyoto Protocol and attacking the scientific case for global warming. Presided over by Peter Walsh, it includes businessmen Harold Clough and Ian Webber, with Ray Evans again as secretary.
The Liberal Party’s own think tank is experiencing a renaissance. Housed in the party’s Canberra headquarters, the Menzies Research Centre has been largely quiescent since it was founded eight years ago by Tony Staley, the party’s former federal president. Since his appointment as chairman earlier this year, Malcolm Turnbull has set about raising both its profile and its output. To come are reports on globalisation, indigenous education, families and the declining birth rate. Online forums are also being created.Where once it commissioned the occasional paper or arranged a lecture, Turnbull wants to see the centre leading public policy debate in much the same way as Sydney’s CIS.
That is no small ambition. No think tank is as quoted by so many, so often and in so wide a range of forums as the CIS. None is so well funded, nor as capable of bringing together such a powerful coterie of men and women from both sides of politics.
The CIS has long been a champion of the laissez-faire economics of the New Right. But where think tanks on the Right have been reluctant to tackle social policy, the CIS has waded in deep. It’s a tactic that has attracted the close-knit minority of social conservatives in the Federal Cabinet, among them John Howard, Tony Abbott, David Kemp and Nick Minchin. And it is among these that the CIS appears to have become a lightning rod for ideas.
Its arguments for restoring marriage and family traditions, for parental choice in schooling, private health care, baby bonuses, and for limiting multiculturalism; and against sole parent families and welfare dependency - all find echoes in Howard Government policies.
And all are ideas which take their inspiration from the brand of social theory developed by Friedrich von Hayek (1899-1992). The Austrian economist argued for a market economy with minimal regulation, and reward for the pursuit of individual gain. True social justice, he maintained, could only be pursued voluntarily by groups such as charities - with the family a central pillar of his theory of “spontaneous order”.
Hayek’s ideas have been enormously influential. Margaret Thatcher dubbed his treatises on social order “masterpieces”. According to Conservative Party insider John Ranelagh, during a key meeting about future directions in the 1970s, Thatcher interrupted discussion, reached into her briefcase and, holding up a book, said: “This is what we believe”. It was Hayek’s 1960 The Constitution of Liberty, considered a bible of the new social conservatism.
Hayek was the economist most cited by former US President Ronald Reagan. Of the 76 economic advisors on Reagan’s 1980 presidential campaign, 22 were members of the Mont Pelerin Society - an influential but secretive group of free market intellectuals established by Hayek in 1947, named for the Swiss villa where they first met. The society’s role in igniting the New Right revolution has only recently been acknowledged by scholars.
“[The society] exerted influence, not by pressing an agenda upon governments, but by generating and spreading neo-liberal ideas,” says historian Professor Jerry Muller of Washington’s Catholic University. Hayek’s society played midwife to scores of neo-liberalist think tanks. The CIS’s Greg Lindsay is one of its current vice-presidents.
Critics have called the Mont Pelerin Society a vast Right-wing web of intrigue, a Club of Rome of the New Right. Its members say it is merely a voluntary association of free thinkers, albeit a shy one that holds closed meetings. The Sunday Times called the group the most influential think tank of the second half of the 20th century: “Indeed, Hayek and the Mont Pelerin Society are to the 20th century what Karl Marx and the First International were to the 19th century.”
Progressive intellectual Susan George, author of A Fate Worse Than Debt, told a UN conference in Bangkok in 1999 that the society had been underestimated for too long. “Starting from a tiny embryo, the neo-liberals and their funders have created a huge international network of foundations, institutes, research centres, publications, scholars, writers and public relations hacks to develop, package and push their ideas and doctrine relentlessly. They made neo-liberalism seem as if it were the natural and normal condition of humankind.”
Hayekian think tanks such as the CIS build influence with the mighty, launch missiles into debates of the day, and use the media to shoot down leftist arguments. Opinion pieces by CIS scholars appear in the nation’s publications in any given week - articles paid for by the CIS and then placed with newspapers.
The 14 scholars on the CIS’s payroll include Wolfgang Kasper, Peter Saunders, Barry Maley, Helen Hughes, Andrew Norton, Owen Harries, Jason Soon and Jennifer Buckingham. They target newspapers of influence and appear on radio and TV programs favoured by the educated middle-class. “They understand how to use the media; how to get their message heard,” says Ian Marsh.
Founded by Lindsay, then a maths teacher, with just $400 and a backyard shed in a shared house, the Centre now has an annual budget of $1.3 million and more than $650,000 in assets, and employs 21 full- and-part-time staff. After surviving on a shoestring operation for its first few years, in 1979 Western Mining Corp’s Hugh Morgan came up with $40,000 a year for five years from various sources, establishing the Centre on a solid footing.
These days, it has no shortage of wealthy and powerful friends. Its chairman is Alan McGregor of James Hardie Industries and the deputy Michael Darling, a wealthy businessman and former director of the Australian Stock Exchange. Board members include Andrew Kaldor, Robert Champion de Crespigny, Marco Belgiorno-Zegna, and Donald Morley, a long-time finance director at Western Mining, along with Western Mining fellow director M. John Phillips, who is a former deputy governor of the Reserve Bank. Its library is named after P.P. McGuinness, who donated his book collection.
John Howard has not only attended functions and given speeches (twice since becoming PM), he is also a subscriber to its publications, paying with his own chequebook. “I think it has made a tremendous contribution to the intellectual debate,” Howard enthuses in a membership brochure. “It has made better policy and we have better governments on both sides of the political equation as a result.”
And, just as at the IPA, it’s not just Liberals who are friends. According to Ian Marsh, NSW Police Minister Michael Costa is influenced by the CIS, as is the NSW Labour Council. NSW Labor Premier Bob Carr has attended many functions since he was personally introduced 20 years ago and the CIS website features his endorsement: “The Centre for Independent Studies is a jewel in Sydney’s crown”.
“They’re one of the better think tanks,” says CIS regular Mark Latham. “They’ve been interesting and fresh, open-minded. I’ve been to different seminars and contributed to their publications when it comes to social capital and some aspects of welfare reform. I don’t agree with everything they say, but they’re the most effective.”
wHat is troubling the New Right is not just the diminishing appetite for reform or a wave of corporate scandals and company collapses tarnishing the neo-liberal veneer - there is also the worrying resurgence taking place on the progressive side of politics.
What was once the Left has become the connoisseur’s mix of Left and Right ideology loosely grouped under what is known as The Third Way. Although largely associated in the public mind with British Prime Minister Tony Blair’s New Labour, among scholars it is shorthand for an emerging market-oriented Left ideology - what Latham likes to call “border crossing politics”. Leading proponents in Australia are Latham, Lindsay Tanner and Dr Peter Botsman, executive director of the new progressive think tank, the Whitlam Institute.
Housed in a 19th century cottage amid the rolling hills of the University of Western Sydney’s Parramatta campus, the institute is chaired by businessman Nick Whitlam, and its board includes Latham, the former Keating treasurer John Kerin, political journalist Alan Ramsey, and former Howard minister Warwick Smith, now an executive director at Macquarie Bank.
Botsman believes the year-old institute, with its focus on the concerns of western Sydney, is reviving the kind of thinking that once drove the ALP - before it became dominated by party apparatchiks, union musclemen and factional warriors. He is dismissive of Bob Carr as a man mired in a world driven by opinion polls and machine politics, whose first instinct is to out-Right the conservatives - a tactic he believes is destined for failure.
“You can’t hold and sustain government without solving problems,” Botsman told The AFR Magazine. “People are swinging to find something that’s going to work, and governments are not doing the hard policy work any more. Public services are increasingly politicised and factionalised [to the point] where they now mirror the factions [of both parties].
“What Labor needs is a soul-searching for new ideas, to revive the ideological base. To an extent, the Right are right, and the Left are right. The welfare state has not worked, it has created dependency, but you can’t just leave it to the market, the economy can’t solve everything. So we’ve got to find a new combination of both that’s going to make a difference.”
Botsman believes the Third Way is an emerging political narrative rooted in Whitlamism.
And he’s a convert: the former director of the leftist Evatt Foundation was a trenchant critic of privatisation and a passionate supporter of the Keating Government’s reconciliation and republican push, who was deeply shocked by Labor’s loss in 1996.
“Then, going out west every day on the train, I realised why people had voted against Labor,” he recalls. “People had been completely untouched by those things. They were still living in social exclusion zones where there were no jobs, and where there was fear of gang violence. We didn’t have enough of an understanding of what was happening at the grass roots.”
Some commentators believe the Third Way was really invented in Australia under Hawke and Keating, whereupon it was borrowed by Blair and mixed with a dose of communitarianism and mutualism. Marsh says that Blair was also aided by a “blossoming of think tanks of the centre-left”, such as Demos, the Employment Institute and the Institute for Research on Public Policy.
Such a blossoming of the Left could well be under way in Australia. Apart from the Whitlam Institute, Labor’s Evatt Foundation has moved to the University of NSW and found a new lease of life as a centre for discussion and inspiration. It certainly has a Left pedigree; board members include former and current Labor Left MPs Bruce Childs, Jeannette McHugh and Ron Dyer; and academic Frank Stilwell.
But Evatt has been largely sidelined by the Labor leadership. In 2000, it had the Commonwealth Government redirect the foundation’s $100,000-a-year grant to the ALP-based Chifley Research Centre. (The grant matches the annual allocation to the Menzies Research Centre which dates from 1996.) A virtual think tank nominally based in Canberra, Chifley has been largely inactive, its major achievement being the development of Labor’s Knowledge Nation statement, which Kim Beazley took to the 2001 federal election.
A recent progressive think tank is the Brisbane Institute, which Botsman founded in 1999 during his term as Professor of Public Policy at Queensland University. Through its Biofutures series of reports, conferences and seminars, it argued the case for making Queensland a biotechnology hub and helped develop Labor Premier Peter Beattie’s Smart State strategy.
Still based at the university, and led by Ray Weekes, the former managing director of Castlemaine Perkins, its board includes Australia Council deputy chair Helen Nugent, gallery owner and Opera Australia board member Philip Bacon, and Latrobe University academic Robert Manne. Latham calls it the best centre for the discussion of progressive ideas in the country.
The Australian Fabian Society is an old Left institution newly revived. Largely made up of Labor supporters, it has been active in arranging lectures and publishing books, political monographs and discussion papers. Latham is active here too, having spoken on several occasions on future directions for the Labor Party.
Within the ALP, a new Perth-based group, Labor 21, emerged following the party’s 2001 election loss. It seeks to refashion social democratic politics from within.
Led by federal frontbencher Carmen Lawrence, it includes Tasmanian MP Duncan Kerr, a selection of high-profile WA Labor members, and an assortment of academics and progressives such as the environmental scientist Ian Lowe, former ALP president Barry Jones and indigenous leader Peter Yu.
Labor 21 argues for a new ALP philosophy that re-establishes the organisation as a party of ideas that will attract a broader and younger support base. Lawrence herself has recently called for a redesign of democracy and its institutions to reduce the power of corporate interests over public policy.
by far the most unusual of the new progressive think tanks is the Australia Institute. Founded in 1994 by environmental economist Dr Clive Hamilton, it has grown from its beginnings in a small office above the rooms of a Canberra osteopath, to a suite of rented offices at the Australian National University. Now with a staff of five and an annual budget of $400,000, it publishes a flurry of reports and studies, arranges lectures and makes submissions to public inquiries.
The Australia Institute is funded by donations from its 500 members, as well as philanthropic groups like the Poola Foundation. Its board includes the ACTU’s Sharan Burrow, businessman Tim Todhunter and epidemiologist Tony McMichael. Carmen Lawrence is a strong supporter, and Hamilton was recently appointed to Labor 21’s list of policy debaters.
The IPA’s Nahan regards the Australia Institute as “the only really valid Left-wing think tank in the country”. But while its ideology is broadly progressive, the institute is not so much Left as left-field. Independent of union and government funding, it fires volleys at the Right, Left and Third Way proponents as well as unions, environmentalists and non-government organisations.
While the Institute has a decidedly green tinge, its scope is wide, publishing reports on ageing, native title, gambling, regional development, health spending, industry subsidies and tax reform. It has argued for the replacement of the GDP as a measure of national progress with a GPI (Genuine Progress Indicator), an alternative yardstick it says is just as rigorous, but more accurate in determining national wellbeing.
“Credibility is very hard to build, but very easy to lose, so we are very focused on research - everything we do is peer-reviewed,” says Hamilton. “The Left is associated with socialism, and socialism’s defining feature is public ownership of the means of production - we don’t advocate that. But we’re not preoccupied with private ownership either. If anything, we’re about redefining progress in social terms, not just economic growth.”
Hamilton accuses the CIS of poor scholarship and of producing ideologically-driven reports advocating the dismantling of government: “They’re not just wrong, they’re dangerous, because to them the evidence is irrelevant,” he says.
The Australian Collaboration is yet another new progressive group. Like the Australia Institute, this Melbourne-based fusion of intellectuals, charities, church groups and non-government organisations, argues for policies that strike a better balance between social, environmental and economic concerns. Its members include the National Council of Churches, the Australian Consumers Association, the Australian Conservation Foundation (ACF), the Federation of Ethnic Communities Councils, and the Aboriginal and Torres Strait Islander Commission. Victorian Premier Steve Bracks is among its supporters.
Created in August 2000, Australian Collaboration is led by retired professor of environmental planning, and former ACF president, David Yencken. “There’s a lack of debate and discussion of policy,” he says. “The right-wing think tanks have had their day. There are some alternative arguments now that are being put very strongly.”
Their first report, “A Just and Sustainable Australia”, argued for long-term planning and a redefinition of democracy. Its second - “Where Are We Going?” - called for more detailed analysis of social trends by government, and the setting of national and local goals. Yencken sees the groups as part of a larger civil movement that is questioning the excesses of the market economy. It shares some of the same concerns as the “anti-globalisation movement” - a term he regards as a misnomer. The Seattle protesters were not against globalisation, he says, but upset that the process often exacerbates economic disparities, and at the lack of accountability of transnational bodies.
“Not everything has to be seen from the economic perspective,” says Yencken. We need to look at the triple bottom line: society, the economy and the environment.”
While the Right may be under siege on many fronts, the question is whether that attack is a storm that will pass?
Or will Hayek’s ideas - like those of his great rival, John Maynard Keynes - begin to wane at exactly the point where they appear to be at the apex of their power?
While the Left may not be dead - and may no longer even be called the Left - the enemies of the Right are certainly massing. The emergence of progressive think tanks suggests parallels with the rise of the Right in the 1970s and 1980s and the ensuing transformation of the political landscape. A sea change, or the Left’s last gasp?
Either way, one thing is certain: think tanks will continue to drive public policy for many years to come.
THE RISE OF THE RIGHT-WING THINK TANK
Think tanks have their origin in the Fabian Society, founded in 1884 in London, and the Brookings Institution in Washington, established in 1916 by a group of business leaders and academics and originally called the Institute for Government Research. The Fabians were intellectuals and middle-class gentlemen - among them, the playwright George Bernard Shaw - who wanted to make Britain a democratic socialist state, and who argued their case at public meetings, and published pamphlets and studies to influence public opinion. They helped establish a party that eventually became, in 1906, the British Labour Party.
In the US, the centrist Brookings Institution was the ideas engine that drove the Democratic Party in the postwar years, culminating in President Lyndon B. Johnson’s “Great Society” initiatives of the 1960s - a Keynesian manifesto authored largely by Brookings. But the interventionist ideas of British economist John Maynard Keynes, which came to dominate the policy world after World War II, had a great rival in the Austrian economist and social theorist Friedrich von Hayek (1899-1992).
As postwar reconstruction economies took on socialist characteristics, followers of Hayek created think tanks to argue the case for a return to small government and the market economy. These included the American Enterprise Institute (1943), London’s Institute for Economic Affairs (1955), the Hoover Institute in California (1959) and Australia’s Institute of Public Affairs (1943). But in the postwar boom, Keynes’ policy prescriptions worked - so much so that in 1971, even Republican President Richard Nixon was able to quip, “We’re all Keynesians now”.
By the early 1970s, in response to rising inflation and unemployment, stagnating economic growth and the oil price shocks of 1973, policy makers were to turn to Hayek’s neo-classical theories at the prompting of supporters such as Milton Friedman. New think tanks of the Right emerged to take the battle to the masses: in Britain, the Centre for Policy Studies was born in 1974, its deputy chair was Margaret Thatcher, who later that year became leader of the Conservative Party. When the Conservatives won power in 1979, she implemented an agenda written by the Centre for Policy Studies and the Adam Smith Institute. It became the manifesto of her revolution.
The trend was mirrored in the US, where the Heritage Foundation was formed in 1973, the Institute for Contemporary Studies (1974) and the Cato Institute (1977). All argued for free economies and small government. Liberalist think tanks shifted to the Right, and even the centrist Brookings Institution distanced itself from Keynes. Reagan’s favourite was the Institute for Contemporary Studies in San Francisco, from which he drew Edwin Meese as Attorney-General and Caspar Weinberger as Defence Secretary. A former chairman is present Defence Secretary, Donald Rumsfeld.
This was the cover story of The Australian Financial Review Magazine in July 2002