1.1 Explaining policy

As promised, here’s the first section of the first chapter. In the final document it will be preceded by an introduction, but I haven’t written that yet… So here you’re dumped right into the action. I’ll give the chapter structure here, though, to give a vague idea of how things fit together:

  1. Economic policy and inflation
  2. Monetary policy: the state in the capitalist financial system
  3. 1945-65: Inflation and ‘external balance’
  4. 1945-65: Counter-inflation policy in general
  5. 1945-65: Counter-inflation monetary policy
  6. 1965-85: Inflation and the exchange rate
  7. 1965-85: Counter-inflation policy in general
  8. 1965-85: Counter-inflation monetary policy
  9. Conclusion: the 1980s and beyond

So the first two chapters are theory chapters, and in fact the first may be split in two.

I’m sure no one will want to, but you never know what will happen once stuff’s on the web and it gets Googlified (my Keynes stuff has had a strange journey) so I’m putting a standard disclaimer on each page: This is a draft of an unfinished document, please don’t quote without getting in touch first. Quoting in blogs is fine.

Explaining policy

My explanation for the development of policy is structural rather than ideological. By this I mean that I do not explain the shifts in policy in my forty-year period as an outcome of ideological struggles, first as the rise of ‘Keynesianism’ and then its fall at the hands of ‘neoliberalism’. I suggest that the relative strengths of the ideologies in political struggle was itself determined by the changing, interdependent structures of state and economy, which exerted strong pressures of selection. This is not to deny independent influence at specific points from the details and discursive structures of the warring ideologies, or from particularities of the actors and groups through which they warred, but I will argue baldly that this is the less enlightening part of the story, and in any case a story already many times told. Beyond the ‘Keynesians versus neoliberals’ story are more subtle questions about how the mainstreams of those ideologies were themselves sculpted by the political-economic field in which they sought to embed themselves: Why, from Keynes, effective demand and the IS-LM apparatus, and not “the euthanasia of the rentier”? On the other side, why Friedman’s strong, rule-bound central bank and not von Hayek’s free banking? Ideologies do not conquer by the superiority of their reasoning, and the structure of the social networks through which they take material political form and come into contest are shaped by selective pressures from the broader social conditions in which they emerge.

Nicos Poulantzas in days before smoking in the office was structurally selected against

Nicos Poulantzas in days before smoking in the office was structurally selected against

Selective pressures of what form? I follow Jessop’s [1990: 260] analysis (adapted from Poulantzas) of the state as “a system of strategic selectivity,” that is

a system whose structure and modus operandi are more open to some types of political strategy than others. Thus a given type of state, a given state form, a given form of regime, will be more accessible to some forces than others according to the strategies they adopt to gain state power; and it will be more suited to the pursuit of some types of economic or political strategy than others because of the modes of intervention and resources which characterise that system.

Or, as he later developed the concept:

The state is an ensemble of power centres that offer unequal chances to different forces within and outside the state to act for different political purposes. How far and in what way their powers (and any associated liabilities or weak points) are actualised depends on the action, reaction, and interaction of specific social forces located both within and beyond this complex ensemble. [Jessop, 2008: 37]

This notion has the advantage of conceiving social structure in a way that does not neglect agency and subjective creativity; it merely emphasises that they are embedded in social structures that put up more resistance against some strategies than others, and thus tend to select some over others. It is not determinist; history remains open to choices and the chance outcomes of interactions between the intertwining strategies of many social actors, outcomes more often than not unintended by anyone in particular.

My object of study, therefore, is the structural pattern that tended to select counter-inflation policy as a dominant aspect of economic policy in Australia during my period, and tended to shape it in a particular form. It is not simply a narrative history of the development of counter-inflation policy; it seeks to go one step deeper to explain why, although other counterfactual histories were certainly possible, the structure of capitalist society was such that the dominance of counter-inflation policy was no accident, was in fact strategically selected, not by the arbitrary ideological whim of policymakers but by the structure of the interdependent state and economic systems in capitalist society at that point in their historical development.

The protagonists of my story are ‘policymakers’, a collective term which denotes a diverse assortment of individuals and institutional actors from Treasurers to central bankers. But in what sense can we consider ‘economic policymakers’ collectively as a strategically-acting subject/actor? For Poulantzas and Jessop subjectivity and agency are explicitly denied to the state as such. Rather, the state is a social relation, in the same sense in which for Marx, capital is a social relation – a structure reproduced through relationships between people, mediated by things. However, de Brunhoff [1978] – writing within the Poulantzian tradition – argues that economic policy, in specific historical conditions, came to act as if it were a unified strategic actor. I will retrace this argument, which explains my reasoning for centring my narrative on the strategic action of policymakers as a group.

Next section


Suzanne de Brunhoff [1978]: The State, Capital, and Economic Policy, translated by M. Sonenscher, Pluto Press, London.

Bob Jessop [1990]: State Theory: putting capitalist states in their place, Polity, Cambridge.

Bob Jessop [2008]: State Power: a strategic-relational approach, Polity, Cambridge.

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7 CommentsLeave a comment

  1. I’m concerned from a theoretical point of view – although not really from the point of view of what is required of you here to furnish a methodology for your investigation – with the notion that ideology has some permanently subordinate role to non-ideological ‘structural’ (I.e. Infrastructural) considerations. I can’t see any prima facie reason why ideology cannot at some junctures play the dominant role, though like all Marxists I tend to see ideology as subordinate to class domination.

    You’re on firmer ground where you suggest a unified strategic actor in economic policy, which would itself mediate the appropriation of ideology to state policy – and to some extent presumably vice versa. But the attempt to couch this is terms of a general relation seems to me too broad a claim.

  2. Hey Mark,

    Yeah I don’t disagree with you – I definitely don’t mean to imply a base-superstructure argument or anything. I see ideology as material, and developments in economic theory and political vision play a far-from-subordinate role throughout, as will become clear. What I’m arguing against is really a kind of ‘zeitgeist’ version of history, where first ‘Keynesianism’ ruled, then along came Milton Friedman and then ‘neoliberalism’ ascended.

    This version of history has both conservative and left forms – one I have in mind as an opponent throughout is Paul Kelly’s conservative ‘The End of Certainty’ – it certainly refers to events from outside the struggle of ideas, but his narrative is based around an incredibly coarse view of the ‘Australian Settlement’ which dates back practically to Federation, and which was suddenly overturned by Keating et al in the 1980s who just had the ‘right ideas’.

    Ideas are important but they never shape policy wholesale or quite as they would on the ideas’ own terms… some practices and institutions are more malleable than others, and like I argue here, what is selected from ideological resources is not decided on a field of ideological struggle.

  3. […] Previous section / Next section […]

  4. Mike,
    I’m excited to read this and the other section over when I have more time and am more awake. For now, on ideology, I hate that category so I like that you’re setting it to one side. On the other hand, I shared Mark’s reservations a bit as I was reading this (your response is a good one, you might make that a footnote or something). On this: “Ideologies do not conquer by the superiority of their reasoning.” I think that’s well put. To play devil’s advocate, though, what are you saying here? I know it’s a side point but I’d like to hear you expand on it, if you don’t mind.
    take care,

  5. Thanks Nate, clearly I need to expand on this a little in the text, I don’t want to offend a marker on the first page! I do realise I’m going through this stuff quickly and not at all reviewing the literature – that’s ’cause of space considerations and supervisor advice that I was getting too bogged down on this stuff so I should just make my assertions and plow on to the substance of the thesis.

    As for what I mean by ‘ideologies not conquering by the superiority of their reasoning’:

    One reason is the inevitable disconnect between an ideological conception about how society works and the complex, real process through which it really works and is reproduced over time. That process is in itself contradictory, which manifests in ‘problems’ and ‘crises’, some periodic and some chronic. The state is held responsible (through various channels) for trying to hold the totality together, patch up the problems and counteract the crises. Yet rarely are the structures and practices of state institutions changed wholesale – so there’s never a chance for an ideology – a conception of how the social whole fits together – to be ‘tried out’. Reforms may be motivated by a broader worldview, but they become piecemeal changes in a system which needs to hold together in reality. So the immense weight of the existing state-economic structure is highly resistant to radical change, except in certain directions which are determined not by ideological logics but by logics inherent in the real structural contradictions. Which is not to say these do not involve ideological elements, or that there is only one way of resolving problems and crises.

    Furthermore, ideologies don’t need to be total in the first place, or even internally consistent or coherent to motivate real changes in structure or practice.

    I’m not explaining myself very well but hopefully it will become more clear as I go along.

    It’s great to get these comments, thanks guys, even if I’m never going to satisfy a pair of philosophers… they are exactly the kind of feedback I was hoping for.

  6. hi Mike,
    That’s a lot clearer, and very interesting. In my own work recently I’m focusing a lot on the common law system (in the US but I think the dynamics are similar elsewhere) and ways that that way of doing law got suspended with the introduction of workmen’s compensation. That seems to me an example of where there was a way for ideology to be tried out. But your over all point stands – this is a relatively small piecemeal sort of change, though it spreads later. Even when it spreads, it’s relatively minor (depending on where we set the goal posts). I’m thinking out loud here, tying this to the stuff I’ve been thinking about re: the relative autonomy of the state and of elements of hte state from each other – perhaps one way that the relative autonomy (and only relative) of elements of the state is useful is in allowing a variety of piecemeal changes and ideologies to exist – a sort of marketplace of ideologies and practices? – to aid the over all goals and functions of the state? I wonder then if we might think of crises as moments of opportunities for bigger changes to be tried out. None of this is a disagreement with what you wrote, as I read it your explanation makes a lot of sense, like I said I’m thinking out loud.
    take care,

    • Hi Nate,

      Yeah I wouldn’t argue against that at all. What you’re describing sounds like ideas in people’s heads which had a chance to be tried out given evident ‘problems’ and the structural power of workers. I guess my only point is that in this case there would be some determination of how the system ended up working by factors other than the idea of just compensation – in fact the definition of ‘just’ would be limited by assessments of capitals’ ‘capacity to pay’, the going wage, etc.

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