Catallaxy Files

polymathic pontification, bleeding heart economic rationalism and liberal secularist contrarianism

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    Saturday, November 29, 2003
    Libertarian for Latham II
    Reader 'Fergo' points me to Mark Latham's Maiden Speech. Here are some impressive snippets that sound like he understands the market economy better than some Howard government hacks:

    This government's basic reform of the economy is now entrenched. There is no way back to the subsidies, regulation and sheltered markets of old Australia. The only meaningful debate is about the pace of reform, not its direction. There is always a temptation for politicians wanting to exercise their power to regard industry regulation and intervention as a way to remake the market. In truth, no government can knock the market out of the ring.

    The government's greatest achievement has been to kill off the last remnants of the Australian settlement; that is, the laws and institutions on which Australian politics founded a consensus in the first decade of federation — centralised wage fixing, industry protection all round and White Australia. The settlement was designed to institutionalise Australia's standard of living — then among the highest in the world. This enshrined the ethos of a lucky country, sheltering from the demands and competition of the international economy while enjoying national wealth out of agriculture and mining. This government has been about restoring the competitive edge Australia lost in the postwar period and putting back some of the luck. Hence the ethos of an open and competitive economy.

    The competitive advantage of nations comes from industrial upgrading to the new investment technology and managerial capacity which give companies an edge on world markets. Firms which remain static are imitated by competitors and soon lose their market advantage. Ultimately, nations succeed in certain environments because their corporate environment is dynamic and challenging, pressuring firms to upgrade and widen their advantages on domestic and international markets.

    The more companies rely on government assistance, the less likely they are to upgrade their competitive position. The role of government is to stimulate market competition, not smother it with tariffs, subsidies and central planning. This illustrates a very important point about how to best judge the success of economic policy.

    Competition of any kind is never static — not between firms and not between nations. In an isolated and closed economy, international comparisons count for little; in an open and competitive economy, however, they are the only test of national success. Australia can have no room or reason for complacency. If we wish to trade successfully in our region, among the fastest growing and changing economies in the world, our pace of adjustment must be just as rapid. Quite simply, nations with competitive weaknesses cannot move fast enough to rejuvenate and restructure their economies. The longer politicians avoid reform, the greater the decline in productivity and competitive advantage.

    The Howard government has grown stale and complacent. It's time for it to go. It is conservative in the worst i.e. generic sense of the word, as well as reactive, and our Prime Minister has gone back to his old bad habits of telling lies for the cause of 'border protection'. Labor under Kim Beazley would arguably be no better as Beazley is also a conservative in the worst sense of the word - a generic and temperamental conservative. Stuff poll results and worries about alienating dyspeptic blue rinse readers of New Idea because of a few apt comments about the British Royal Family. It's better to go down fighting than die with a whimper.

    Friday, November 28, 2003
    Generation Y OK

    After recent gloom about Generation Y's prospects, the Sydney Morning Herald today reports that they are quite happy with their lot, with 80% of 18 to 24 year olds saying they are 'delighted, pleased or mostly satisfied' with their quality of life. Subjective well-being researchers will not find this result surprising, as this is in the normal range for Western countries. Looking at the report on which the article was based, there is however one noteworthy aspect, which is that males are significantly more likely to give a positive answer to the quality of life question, 83% to 77.4%. International surveys typically find no or trivial gender differences, and the Australian Unity survey has found that across all the age groups women are happier. Looking at an age breakdown of the Australian Unity survey, however, males are happier, though by a tiny margin, in only one group - the 18 to 25 year olds. In the Australian Unity survey the sample for that age is quite small (177), and the other survey does not give sample size.

    If this result is real, and not just some problem in the surveys, it will be interesting to work out whether we have a cohort that for some reason has happier males than females, or if this is a life cycle effect, with men being more content in their youth but growing relatively less happy over time.
    Libertarian for Latham
    As readers might have noticed, I've dropped out of the blogging world temporarily. Various other issues have occupied my attention lately but I'll be back soon if things turn out well. However, distracted as I have been, I can't help but register my enthusiasm that Crean has given up the ALP leadership and Mark Latham is contesting it. Despite all the criticisms I've made of Latham in the past, I'm quite excited by the prospect of an ALP led by Mark Latham. So excited that for the purpose of proper disclosure, I should note that I am seriously considering re-joining the ALP (which I was a member of from ages 18 to 21) if Latham wins the leadership challenge.

    Monday, November 24, 2003
    Reverend Tim to the rescue:)

    Osama, watch out! The newly appointed CEO of World Vision, Tim Costello, tells us that "a war on poverty is the only way to actually win a war on terror". It seems the Reverend Tim's naivety is going global. As this excellent article from The New Republic shows, it has proved to be very difficult to find the link between poverty and terrorism. Many terrorists are in fact well-off and educated. There are however links between poverty and civil war. Perhaps Costello's God knows why he bothers making claims like this. Third world poverty kills more people than terrorists are ever likely to slaughter. Why add this spurious and unnecessary justification for reducing poverty?

    Cultural protectionism

    Last Friday's AFI awards had the luvvies doing what they enjoy most, after (presumably) acting and self-congratulation, which is offering us their political opinions. This time, it was on the free trade negotiations with the US, which they claim threaten our 'national identity' (and of course their pay packets). Here's David Williamson on the subject in this morning's issue of The Age. I can't claim to be an expert on this issue, though my free trade instincts and my own TV-viewing habits both make me very sceptical of the luvvies' arguments. For a more developed critique of the cultural protectionist case take a look at this 1999 article by Imre Salusinszky.

    Tuesday update: Most of The Sydney Morning Herald opinion page is devoted to the low quality of the luvvies' films, opinions, and awards night.

    Sunday, November 23, 2003
    Made in England

    After giving batty Germaine Greer a run a few months ago, the Quarterly Essay has returned to sense with David Malouf's Made in England: Australia's British Inheritance. Indeed, Australia's inheritance of British common sense and pragmatism is one of Malouf's themes, something that has helped protect us against the political madness that has afflicted so many other countries (Greer is in the tradition of the British eccentric).

    One of Malouf's interesting points, though not one developed in great detail, is that American and Australian language is affected by the different arrival times of their first British immigrants. In the 17th century, America was founded by evangelical and utopian colonists, and its language reflects that today, with its emphasis on grand, abstract ideas. In the 18th century, Australia was founded under the influence of the sober Scottish and English enlightenments, producing a much more moderate form of language. Compare the US and Australian Constitutions, or the major speeches of US Presidents and Australian Prime Ministers.

    One of the strengths of Malouf's essay is that he says little about the republic issue. He does not fall into the trap of seeing that remaining legal tie as an important symbol of the Australia-England relationship (for good or bad). It is very minor compared to the influence of institutions, ideas and language, his major themes. England's direct influence is much reduced today, of course. Malouf lucidly describes how pervasive it once was, with affection but without nostalgia. It's well worth reading.




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