Sunday, September 24, 2006

Migration Matters - End of Consensus

This post continues my discussion on post war migration. It also links to my post Age, Alienation and the Sense of Not Belonging - 1 in that some of the trends I will be talking about are international, imported into Australia in various ways, so that the Australian experience may well help explain a broader sense of disconnect.

My experience as a management consultant has been that things are most talked about when the opposite is in fact happening. Thus the management literature was dominated by the importance of people and the need to improve people management at just the time when process re-engineering and downsizing were at their peak. The focus shifted to the importance of the customer at just the time that firms were introducing new centralised sales systems, cutting face to face customer support, turning customers to numbers. The current focus on the importance of brands and branding coincides with the greatest period of brand destruction in history (post).

The point here is that the current Australian obsession with values, the emphasis here and elsewhere on a 'civil society', is to my mind a sign that we are in fact in trouble in both areas. I want to trace some of the reasons for this, again drawing from my own experience to illustrate points.

Future Shock

In 1970 Alvin Toffler published Future Shock. Written at a time of rapid change, a core message in the book was that each real decision not matter how small imposed stress. The human being could only absorb so much stress, so after a critical point was reached our capacity to respond shut down.

I think that this insight is critical. We are simply shocked out. Again, lessons from management experience can provide useful perspectives.

The last two decades have been been a period of massive restructuring in both public and private sectors.

At organisational level, anybody who has been involved in restructuring knows that restructuring begins with pain, upfront costs. These include not just cash out costs, but also losses in efficiency and in in-house memory.

The gains from even a successful restructure take time, sometimes quite a bit of time. So if, as has too often been the case, another restructure follows quickly, then pain gets extended, gain deferred.

The number of unsuccessful or partially successful restructures is quite high. Given this, it is perhaps not surprising that second and sometimes many more restructures follow the first and in reasonably quick time. This maximises pain, minimises gain. Firms and their people lose their capacity to adjust and the organisation may simply vanish.

The effects of future shock are cumulative and long term. My own brother, a senior engineer with considerable management experience and great technical expertise, chose to retire from Telstra at 55 because he could no longer bear that organisation's approach. Telstra lost his expertise including his knowledge of internet protocols, the nation lost perhaps ten years of highly productive future work.

This is not an argument against change as such or against necessary restructuring although, as I argued in a much earlier post on the electricity industry, apparent productivity gains may be short terms and illusory. Rather, my concern is with the aggregate effect over time on community attitudes and the nation's ability to respond to change.

End of the Australian Social Contract

I have referred several times to Don Aitkin's book What was it all for?, an examination of the changes that had taken place in Australia through the eyes of the Armidale High School Class Leaving Certificate class of 1953.

This was a very lucky class in some ways. Too young for the second world war, too old to have to worry about Vietnam, they started and in most cases continued working in a world of guaranteed long term employment. Some were hit right at the end by the economic change I have been describing, most were not. Yet all felt a sadness at what they saw as the end of the world as they had known it.

Don traces this to the end of the Australian social contract dating back to federation (1901) and the time of Prime Minister Alfred Deakin (1903-1904, 1905-1908, 1909-1910 - see here and here). While many of the main changes especially during Deakin's productive second term were the responsibility of individual ministers, Deakin led in creating many of the institutional arrangements such as the Arbitration Commission that would provide the core Australian framework for the next seventy years.

The Deakin social contract was essentially collectivist. Australian workers were entitled to receive a living wage and share in the benefits of prosperity. The Government took responsibility through mechanisms such as the use of tariffs for the creation of an environment that would allow this to happen.

Like the White Australia Policy of which it was a part, the elements in the Deakinite social contract have been progressively swept away.

In 1962 I did the Leaving Certificate for the second time because my parents were concerned that at 16 just turning 17 I was too young to go to university. Concerned that I would be bored, one of my teachers (Peter Brownie) persuaded me to pick up economics honours.

In history I had already learned about the development of the Union Movement including things such as the 1888 London Match Girls strike as well as the Australian industrial troubles in the 1880s and 1890s. Now when I looked at the basic textbook for the ordinary course written by Cyril Renwick it included sections on the ACTU, Arbitration Commission, tariffs, political parties etc.

In those days manners had not been coarsened, an issue I will return to. Electors were still that or voters, not the contemptuously dismissive term punters, while national figures were still called Mr (there were some Mrs and Misses as well) rather than just their last, sometimes first, name. I may have been a strong Country party supporter and opposed to Labor, but I accepted that the broad Labor Movement was an integral part of the process, that I should learn about it, that its leaders should be accorded the respect due to their positions.

The overall Deakinite social contract that still existed in 1962 was already in decline, although that was not apparent at the time.

As discussed earlier, the White Australia Policy was already being wound back. Tariff protection was now coming under challenge. Import licensing had been abolished in 1960, now under Alf Rattigan the Tariff Board was coming to question the sometimes crazy quilt of high and inconsistent industry protection measures. The tariff clarification and reduction process would proceed in fits and starts, moving forward under the Whitlam Labor Government, slowing under the Fraser Liberal-National Country Party Government, speeding up under the Hawke Labor Government, but the trend was consistent.

To my mind, the first and to lesser degree second Hawke Labor Governments (1983-1984, 1984-1987) were the last Australian Governments set within the old Deakinite social contract frame.

I joined the Commonwealth Public Service as an Administrative Trainee in 1967 before moving to the Commonwealth Treasury at the start of 68 and then to the Department of Industry and Commerce as a second division officer in 1980, so by the time of the first Hawke Government I had worked at increasing levels of seniority under five Prime Ministers: Holt (briefly), Gorton, McMahon, Whitlam and Fraser.

I and many others found the first Hawke Government a refreshing change, breaking from the bounds set by the past. It was also well organised for a new Government, especially in comparison with the previous Whitlam Labor administration.

I also strongly supported Bob Hawke's strong emphasis on the creation of national consensus as a device for bringing about reform. To me, the consensus approach fitted with modern management theory in establishing a process allowing stakeholders to agree on reform and development targets, not (as critics argued) a process for getting to the lowest common denominator.

For a period it was, quite simply fun, especially for someone like me who wanted to develop new approaches. This led to some funny scenes. My traditional political affiliations to the Country Party, now National Party, were well known, including the fact that I had run for pre-selection. So you had the somewhat unusual position of a known National Party supporter insisting to the Minister and his office that the union movement be consulted on certain issues, going to the ACTU Head Office in Melbourne to brief ACTU working parties, or of delivering sessions to rank and file union groups on policy through the Trade Union Training Authority.

And, I must say, I found the union movement very much on the side of the angels when it came to reform within the constraints set by their own structures. Mind you, it had its nerve wracking moments. I still remember Colin Cooper threatening to call a national strike of the telecom unions after a briefing from me to a union group on the need for change in the telecoms sector!

Looking back, the wheels started to come off in 1986.

The reasons for this were complex and deserve a different discussion. But in summary, and as I see it, the introduction of new managerialist approaches across the service borrowed from the private sector centralised power, reducing the freedom of other senior staff to put forward new ideas without more complex clearance procedures. The central coordinating agencies, and especially Treasury and Finance, who had lost power when the Hawke Government first came in and who had different reform agendas, started re-asserting control, reducing access to new ideas. The Government itself lost its sense of freshness. Consensus disappeared as a working concept.

By the time I resigned in mid 1987 the writing was on the wall. Important new initiatives such as the Dawkins Training Reform Agenda were still to come built on the previous cooperative model, but the last major national manifestation of the Deakinite social contract was dead. Individualism was replacing collectivism as the national model.

The institutional and policy manifestations of the previous Deakinite social contract had to change because they were holding Australia back. However, its destruction leaves a hole that has yet to be filled.


Anonymous said...

This is really fascinating, so I have just posted more thoughts on it on my own blog.

Jim Belshaw said...

I am glad that you are enjpying the series, Neil, and my thanks for the incerdibly flattering response on your own blog.

Anonymous said...

Jim, I'm taking the time to read through your past blogs. I feel it's a failure of the medium we communicate in that we tend to read only the last blog and never find time to go back to look at the archives.
My impression is that your experiences would be an invaluable record for historians. Much more relevant than the self-serving memoirs of politicians.

Winton Bates said...

Jim: We seem to be in a hole at the moment in relation to migration matters, but your last sentence seems to be suggesting a much larger hole.

I don't think it true, as is sometimes claimed, that our political leaders lack vision or values, or that their values are not consistent with Australian identity. (In this respect I am more positive about the values espoused by Julia Gillard and Tony Abbott than those espoused by Kevin Rudd in the midst of the GFC.)It seems to me that the big problem our leaders are having is in policy development and implementation.

I was intending to refer you to a post on my blog in which I discussed this - but you have already seen it and provided comments on one aspect.

Jim Belshaw said...

Hi Winton and thanks. I had actually forgotten that earlier discussion, so that the link was very helpful.

I accept that our current political leaders do actually have visions and values; I am not a cynic there. I don't not accept that the big problems our our leaders are having is in policy development and implementation.