Opinion | Big business? Big government? To deliver social change, we need a third way

Neither big government nor big business is capable of addressing the social fallout from neoliberalism – rising inequality, climate warming, populism and polarisation

Social enterprises can deliver true change, but they need private-sector know-how to tap funding from stock markets – to create social equity markets

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Dave Ward, general secretary of the Communication Workers Union, speaks at the first in a series of 50 rallies across Britain organised by the union-led group Enough Is Enough, in London, on August 17. Photo: Bloomberg

Published: 1:30am, 10 Sep 2022Updated: 6:03am, 10 Sep 2022

For too long, we have been told the choice is the state or the market. Former US president Ronald Reagan famously said: “Government is not the solution to our problem. Government is the problem.”

Together with former British prime minister Margaret Thatcher, he launched the global shift towards free-market fundamentalism. This was a right-wing reaction to the endless fiscal deficits and inflation generated by left-wing Keynesian economists’ preference for government intervention to solve market failures.

By the 1990s, US president Bill Clinton and British premier Tony Blair were pioneering the neoliberal middle way, adopting free-market ideas of privatisation, while preaching kinder, gentler social protection. Instead of solving government failure, they ended up with failures of both the market and government, with rising inequality, climate warming, populism and social polarisation.

Neoliberal free-market ideas have, in effect, pushed for bigger governments in thrall to big businesses and huge vested interests. This sparked forces of polarisation since the 1 per cent benefited more than the 99 per cent. Guardian columnist George Monbiot argued that neoliberalism’s failures led to disenfranchisement and a feeling of wanting to go back to old times that opened the door to fascism.

US President Joe Biden’s framing of the fight between democracy and autocracy sounds suspiciously like big business Democrats trying to look green and inclusive, against the MAGA (Make America Great Again) Republicans, who seem like macho white supremacists to many non-Americans.

Economics or politics is supposed to be about “why?”, “what?” and “for whom?” But behind that is another question: who acts to deliver what the people want? Thus, the Trumpian call is for the private sector or big business to make changes, whereas the Bernie Sanders solution is for more government to do the job.