The political economy of the patchwork economy: who wins and who loses?

The purpose of this paper is to argue two main points. One is that the questions and conflicts that are part of the Two Speed debate are not simply the consequence of the resources boom and the strength of the Australian. The second point is that these are not defined or resolved within any abstracted calculus of rational efficiency where actors simply respond to market signals but in more profane struggles between contending interests about the rules of markets and in conflicts power and ideas. They are embedded in deeper processes of structural change that have been transforming economic and social life in Australia and in other formerly industrial Western economies since the 1970s and 1980s when the old manufacturing base and its protective frameworks were cut adrift. The problem of growing economic disparities and fractures at both regional and class levels and the difficulties of transforming investment and work from manufacture into services and technology sectors has been at the heart of debate and conflict in these economies whether there is a resources boom or not. The second point is that these are not defined or resolved within any abstracted calculus of rational efficiency where actors simply respond to market signals but in more profane struggles between contending interests about the rules of markets and in conflicts power and ideas. In other words the reordering of the old manufacturing economies of the West is a profoundly political process. Consequently, this paper is focused, at its most general level, on defining the way political struggles shape processes of restructuring and how they can explain why outcomes are so different. It will be argued that in the Australian case, a new political and ideological settlement is being driven by forces and interests converged around ideas about the primacy of markets and of the ascendancy of the private interest over the more collective agendas. Responses from Prof. Carol Johnson (School of History and Politics), Prof. Christopher Findlay (Exec Dean, Faculty of The Professions) and Prof. Greg McCarthy (Head, School of Social Sciences)