*take nothing for granted!
Unless otherwise indicated all photos © Richard McKie 2005 - 2015

Who is Online

We have 380 guests and no members online

Translate to another language

 

 

Thomas Carlyle coined this epithet in 1839 while criticising  Malthus, who warned of what subsequently happened, exploding population.

According to Carlyle his economic theories: "are indeed sufficiently mournful. Dreary, stolid, dismal, without hope for this world or the next" and in 1894 he described economics as: 'quite abject and distressing... dismal science... led by the sacred cause of Black Emancipation.'  The label has stuck ever since.

This 'dismal' reputation has not been helped by repeated economic recessions and a Great Depression, together with continuously erroneous forecasts and contradictory solutions fuelled by opposing theories.  

This article reviews some of those competing paradigms and their effect on the economic progress of Australia.


 

In Australia economic thought took a couple of U-turns last century

For its first one hundred and seventy years the economy of New South Wales (and then Australia as a whole after 1901) was extraordinarily vulnerable to climate and agricultural trade cycles.

 fluctuations

 

Phil Ruthven IBIS: ‘The chart shows Australia’s economic progress over 140 years... ‘The volatility was enormous both before and during the Industrial Age (1865-1964) largely due to weather. Agriculture remained over 15% of our GDP for most of that period…  ‘a 25% fall or more in output would slice 4% off the economy by itself - with a domino effect through the food & fibre input-output chain - causing a recession. We had 27 such years or one every 3-4 years...

 

During the 20th century Australian governments experimented with the full spectrum of government interventions to develop manufacturing; both to reduce our dependency on agriculture and to increase Australia’s military resilience.  To grow and protect manufacturing Australia applied, then abandoned: selective tariffs; publicly owned businesses; and enforced government purchasing preferences.  

Until the start of the 20thcentury the political differences in pre-federation Australia were polarised around the issue of ‘free trade’ verses protection (NSW versus Victoria).

The electoral success of the Australian Labor Party (in 1910) (following the Marxist social analysis in the mid 19thcentury, and English Fabianism) led to a new polarisation around worker’s rights and the socialist alternative to capitalism; retaining a strong protectionist sentiment. With the split in the Labor party, at the start of the ‘Great Depression’, a new ‘United Australia Party’ (in government from 1932 to 1941) formed around ex Labor Treasurer Lyons and Labor splinter groups, together with the older establishment dominated parties (both free traders and protectionists).

Thus by the middle of the century, both major parties had elements combining the older protectionist movements, as well as elements supporting socialism and public ownership. Protection and government owned enterprise became an accepted reality on both sides of politics, reinforced by industrial mobilisation during two world wars.

By the mid 1960’s, under the protection of import tariffs and direct government involvement in economic production, manufacturing in Australia had grown to become the largest and most productive sector in the economy, long supplanting agriculture, services and mining.

But as the Menzies/ McEwen era drew to an end in the late 1960’s it was already apparent that much of this manufacturing and government enterprise was inefficient and unable to compete internationally.  Within the new Universities, post-war academic sentiment was swinging towards Neo-Keynesian (eg Samuelson) or Monetarist (eg Friedman) economics together with a strong belief that freer markets would deliver greater economic efficiency and administrative simplicity.  The intellectual climate had changed. 

Free trade and free market arguments prevailed, in both major political parties, and the progressive withdrawal of protection followed, along with the disposal of government owned businesses and local buying requirements.

 

Add comment


Security code
Refresh


    Have you read this???     -  this content changes with each opening of a menu item


Travel

Malaysia

 

 

In February 2011 we travelled to Malaysia.  I was surprised to see modern housing estates in substantial numbers during our first cab ride from the Airport to Kuala Lumpur.  It seemed more reminiscent of the United Arab Emirates than of the poorer Middle East or of other developing countries in SE Asia.  Our hotel was similarly well appointed.

 

Read more ...

Fiction, Recollections & News

My car owning philosophies

 

 

I have owned well over a dozen cars and driven a lot more, in numerous countries. 

It seems to me that there are a limited number of reasons to own a car:

  1. As a tool of business where time is critical and tools of trade need to be carried about in a dedicated vehicle.
  2. Convenient, fast, comfortable, transport particularly to difficult to get to places not easily accessible by public transport or cabs or in unpleasant weather conditions, when cabs may be hard to get.
  3. Like clothes, a car can help define you to others and perhaps to yourself, as an extension of your personality.
  4. A car can make a statement about one's success in life.
  5. A car can be a work of art, something re-created as an aesthetic project.
  6. A car is essential equipment in the sport of driving.
Read more ...

Opinions and Philosophy

Frederick Sanger - a life well spent

 

 

I have reached a point in my life when the death of a valued colleague seems to be a monthly occurrence.  I remember my parents saying the same thing. 

We go thought phases.  First it is the arrival of adulthood when all one's friends are reaching 21 or 18, as the case may be.  Then they are all getting married.  Then the babies arrive.  Then it is our children's turn and we see them entering the same cycle.  And now the Grim Reaper appears regularly. 

As I have repeatedly affirmed elsewhere on this website, each of us has a profound impact on the future.  Often without our awareness or deliberate choice, we are by commission or omission, continuously taking actions that change our life's path and therefore the lives of others.  Thus our every decision has an impact on the very existence of those yet to be born. 

Read more ...

Terms of Use                                           Copyright