Two lesser-known economic good news stories provide a revealing perspective on the mainstream economic paradigm, and on Australias current state.
The first economic miracle is Mauritius, brought to our notice by Joseph Stiglitz in the Guardian. Mauritius gained independence from Britain in 1968, and with few natural resources in its Indian-Ocean archipelago its economic prospects were rated as pretty dismal. Bucking the usual prescriptions of economists (sell your soul and your land to overseas investors and tourists), and despite per capita income of less than $400, Mauritius decided to invest in its one major asset – its people.
Today Mauritius offers free education through university for all of its citizens, transport for school children and free healthcare including heart surgery for all. 87% of Mauritians own their own homes and they accomplished this without fuelling a housing bubble. Mauritius has a diverse economy, a democratic political system and a strong social safety net. Per capita income is more than $6,700. The country has progressed from the sugar-based monoculture of 50 years ago to a diversified economy that includes tourism, finance, textiles, and, if current plans bear fruit, advanced technology.
Stiglitz identifies three key choices that have made a difference.
First, Mauritius recognised that without natural resources, its people were its only asset. With potential for religious, ethnic, and political differences, education for all was crucial to social unity. So was a strong commitment to democratic institutions and co-operation between workers, government, and employers precisely the opposite of the kind of dissension and division being engendered by conservatives in the anglophone world today.
Second, Mauritius has decided that most military spending is a waste.
Third, the question is not whether we can afford to provide healthcare or education for all, or ensure widespread home ownership. If Mauritius can afford these things, we certainly can. The question, rather, is how to organise society. Mauritians have chosen a path that leads to higher levels of social cohesion, welfare and economic growth and to a lower level of inequality.
The second economic miracle is Australia – in the nineteenth century. Thomas Barlows The Australian Miracle – An innovative nation revisited (Picador 2006) does not deserve its obscurity. Although it is pitched as much towards science policy as local history, it tells an amazing story.
Between about 1820 and 1870 Australia transformed itself from a barely subsistence-level economy to the country with (it is claimed) the highest per capita income in the world. Over this long period the economic growth rate averaged about 4 per cent, around three times the global average for the period.
Barlow argues that the transformation was not just due to the gold rush of the 1850s. Wheat and wool were more important. However wheat and wool did not automatically yield riches. The real story is the innovation performed by many Australians, and the innovation took the form of importing breeds, technology and ideas and adapting them to Australian conditions. Only after a great many innovations in basic agriculture, breeding, machinery and so on did wheat and wool become the great wealth generators.
Through the twentieth century Australias place in the league table of wealth gradually slipped. Still, we enjoyed a relatively high level of wealth despite our work hours decreasing to less than 40 hours a week. However since 1983 there has been a big increase in work hours, so that in the twenty first century we work longer hours than Japanese and Americans. Thus although our economy has allegedly boomed, it has been at the cost of our formerly easy-going life style.
I draw different lessons from Barlow, who exhibits fairly mainstream attitudes to political economy. I think three central factors are important. They are mining, finance and a colonial mentality.
We have what someone has called the curse of natural resources. We have become dependent on digging stuff up and shipping it, unprocessed, overseas. Although we are clearly still innovative people, our dominant economic players are not very interested, because they can make a lot of money running a quarry. Thus our industrial diversity stumbles along, occasionally putting on a spurt but then being undermined by those vested interests and the misguided free-trade ideology.
Financial markets focus on making money – by any means. You invest in something and wait for the rewards to roll in. That something can be a scheme to exploit natural resources at rates far above sustainable levels, or wage slavery in a poor country, or a housing bubble or other such pyramid scheme. People who deal in finance typically lose sight of the real world, where actual wealth creation, or extraction, takes place. Thus financiers are, to a large degree, parasitic. So productive innovation is neglected or undermined.
I lived and worked in the United States for fifteen years. One thing I learnt is that when Americans decide to do something, they dont ask for anyones approval. They just go and do it. I might detest what they do, but I acknowledge that when they threw off the colonial shackles in the Revolutionary War they grew up and learnt to stand on their own feet. We have never done that.
When I returned to Australia (in 1983) I was assured Australia had overcome its cultural cringe. That may have been true in some parts of the arts, but it was not and is not true in foreign policy or industry policy. Our approach to both is dominated by a colonial mentality. We only do something if it has been proven or approved in another country. We are afraid to step out into new territory, to follow our own path. In the minority of situations where we do, the first thing our media report is how the rest of the world views us – do they approve, are they impressed? It is childish.
The people who were powerful in 1901 had mostly got that way by serving overseas interests, mainly British financial interests back then. Since then we have put our allegiance up for sale to a succession of other powers, political and financial. The same mentality has persisted for a century in our power establishments. They do very well for themselves by reflexively looking for who they can serve, via overseas investment and such. Our country remains a financial and corporate colony. Most of us are sold down the river.
Thus are we undermined and diminished as a society by mining, finance and the colonial mentality.
Economic growth is not an end in itself. The early growth during these two miracles was appropriate because it lifted people from subsistence to a comfortable living. After that we should focus on quality of life, not quantity of production, and we badly need to make that shift before we destroy the living planet.
Thus I do not think Australia should be the wealthiest country in material terms. However we should be a leader in quality of life. Yes, we have lots of sunshine and so on, but we are stressed, our health is declining, and our politics is dominated by fear. We should be doing much better. We could be living well while working 35, 30, 25 hours a week, ceasing our assault on the environment of our fragile continent, and enjoying fulfilling lives.
Australia has everything going for it. Large land and ocean areas, many natural resources, innovative, educated people, people who speak every major language in the world, secure borders (despite the current paranoia), a strong, relatively tolerant culture (despite recent assaults on it), and so on. That we struggle and complain when we have such advantages must bemuse many other people.
I think the leadership we have had for a century has been of very poor quality. I think we have been childish to put up with it. Its time we grew up.
“Our country remains a financial and corporate colony. Most of us are sold down the river.”
Excellent article with which I agree. I also notice that very response in Australia is “NO!” They teach “No” at home and school and now it appears to be hard-wired into the very psyche of every Australian.
At the same time everything appears to be a scam from telephone, Internet, broadband, electricity, gas, electrical goods, furniture, food, etc. Now I notice that prices are holding their own but the contents are being repackaged substantially smaller. I now see no difference between the Organ Grinder or his Monkey and everybody is a used car salesman – has to be to survive.
Invasive, and money hungry at all levels of government -it’s heartbreaking and soul destroying.
“Leadership” just downright dirt-poor; this is poverty. Chinese Asians call Australians’ “lup sup gwei” which effectively means “poor white trash’ as they are always trying to screw everyone they touch out of a few cents.
As you say, it’s the Colonial mentality arising out of a genetically inherited pool of Stockholm Syndrome. A visit to parliament House certainly proves beyond any doubt that Australia is one big UK Colony and treated as a Penal Colony and cannot do anything without UK prior approval.
Australia needs to become and Independent Republic with some mature adults with a little courage heading up the government. It would be a change; a damned good change.
Let’s be clear: There is no “leadership” in Australia or on the event horizon.
Makes me ill!
Peter, if I let pessimism overwhelm me I wouldn’t be writing this blog, or my books. I do think things will get considerably worse before they get better, but we can still make a contribution by limiting the damage, to whatever small degree. Similarly I think the chances of averting catastrophic global warming are now slim, but while there’s any chance it is worth trying to get some real action.
If we all believe it can’t be done, we’ll certainly be right.
There are many good things in the world, and it’s important to keep in touch with those.
… to which I respond that I am the most optimistic person that I know of – and to Kevin, I know damned well we can rid ourself of these hungry ghosts that haunt our very existence with their inadequacies and incompetences. “S” is for Stupid; it’s a disease that hath no boundaries, of race, colour or creed; borders and or associations.
Throughout Australia there are people, real people who can contribute to the future of humanity but are hesitant due to the repulsive creatures of the night that inhabit the halls of hell aka government. we need to evoke these people now to contribute through asymmetric government aka “anarchy”. We need Australia’s like Julian Assange; we need open societies, we need dedication, respect and courage as well as compassion.
We don’t need to be taxed beyond the grave; we don’t need traitorous relationships with foreign powers; we don’t need military occupation by any foreign power – and or the USA despite what Mark Arbib and Julia Gillard warms their loins.
We don’t need government run on the advice of Bankers who hold all our assets as their assets while sucking at our pap while feeding off our labour.
We need honesty and integrity in a paradigm of Truth; The Spirit of Truth which exists pervasively and ubiquitously. We need to throw out “denial” and welcome optimistic in a belief of the physics of Risk and adventure and above all, we need to seek the valour and values of experiences. We are pioneers and not “pot-rattling-camp-followers” of Alexander’s Army” and we are above all, al, individuals.
Yes Geoff, I am bursting with optimism and am ready, with you and Kevin, et al, to lead the charge for change and dump the “status quo” out with the rest of the garbage.
“More from me: politically, Australia is being haunted by the ghosts of our former penal colony prison guards and days and we seem to love it. No need to think and x3 squares a day and any problems, out come the Cat. Australia has become or still is, a masochistic society.”
Peter, some friends once suggested that if I was having a good time I should let my face know, so everyone could share. It was good advice, and I have more fun now.
I would not have known, from your words, that you are an optimist.
Another way to put it: if we focus on negativity, then that is what we create. I struggle with it myself.
I agree with the thesis and you know what I think we need to do – and can easily do. It is the same as Mauritius. We concentrate on investment in people and on providing the people with capital to turn their knowledge into productive assets.
I agree also with you Kevin, but can you really seeing this happen in Australia? I don’t.
Only just stumbled across this blog and have already had a look through a few posts. Fantastic reading. Thanks Geoff.
As for this post regarding the state of Australia and where we are at right now – I read an interesting article in the smh at the beginning of this year that described us as a nation in need of catharsis (link below). This is surely what the people of NSW were looking for when they voted in the state election on the weekend. And that we were so desperate for an alternative but could only go as far as to elect the conservative O’Farrell shows that while we want change, we don’t know what that change should be.
So it’s the same old game of one step forward, two steps back, or at the very least, no further steps.
Federally there was so much promise only a few years ago with the PM’s apology to the stolen generation, moves on ETS, dismantling offshore processing in Nauru, tax reform in resource sectors, fiscal stimulus to get us through the GFC, etc etc… positive steps yet now it feels like we made no progress, squabbling over budget deficits, indecision and misinformation on pricing carbon, more “boat people” fear.
And in NSW… well let’s face it, there hasn’t been much ado about anything really, which is the point. Australians aren’t content, we know we can do better – but it’s leadership that’s been leading us astray at each juncture. While we’re an intelligent, compassionate, tolerant people, collectively we’re vulnerable to the indecision that plagues our leaders, which churns in us doubt, and then inevitably fear.
Politically, we’re asleep.
As Geoff hinted at in his post on Jan 4th, I’m yet to see any leader who can take down every bit of irrational, archaic, or plain incorrect, armed simply with information and some wit. I’m convinced that that is all it would take, and I’m convinced it shouldn’t be so difficult a task.
Adit – thanks for the link to Hugh Mackay’s article, a useful perspective
I agree, a decent leader with a bit of gumption should storm the field. I have felt that for about 15 years now. It’s there to be done.
@ Geoff Davies | March 29, 2011 at 9:37 am | Reply
“I would not have known, from your words, that you are an optimist.”
There are three x3 ways of intellectually looking at phenomena:
1. via -Positive acceptance – emotional
2. via – Negative disenchantment – emotional
3. via -Critical analysis – unemotional
My approach has been of core critical analysis but, to sell the need to become concordant with “change” one must evoke in readers, those Risk issues that will adversely impact them if they do not soon become aware.
Geoff, you cannot comprehensively act upon a dynamic but subtle phenomena such as the currents of humanity unless you comprehensively understand that particular filament of phenomena and its conglomeration of Causes at the root core (Paraphrased from Clausewitz’s On War ) – this is strategy – the fyssion of phenomenal consciousnesses, as opposed to crude and crasse ‘tactics’ aka politics.
In Australia item #1 is dominant whereas in the South West Asia Regions (Middle East) #2 is predominant.
Australia and Australian’s must move to #3 – and interestingly so, that is where we are going. The dangers are a believe in our current “leadership” and a belief in US “leadership” where those beliefs will drive the US Military Occupation of Australia and the bad end of another US War – Nuclear – with China and maybe Japan – eventually.
I fear nothing except Nuclear War where the decisions for same are held in the hands of our intellectually challenged “leadership” and fanger crazed blood lusting madmen aka “Zionist neocons” or as once the Pentagon publically called them, the “f&^%ing crazies”.
Me? I prefer to die looking tat what is coming that dreaming of fair tales, in my comfortable bed
If you have a turntable that is revolving dynamically eg a LP record player, try placing your hand palm down on the centre of the plate. This is what politicians do to express *their” ideological Policies – it is called “status quo” and as you will experience, it doesn’t turn out too well. Natural physics.
In case no body has read a book, Socialism, Democracy, Stalinism, Communism, Marxism, and all other ideologies are fundamentally flawed because they, all “leadership”, a priori, demand that the ‘status quo’ remains a constant variable. This is not paradoxical, it is an impossibility while also being just plain stupid.
Sorry, but if we can’t get past this, we are doomed!
Change by Sheryl Crow
This is about the USA but it is more relevant to Australia:
The ‘recursive scam’ as Australian Government Policy must end – through increasing the awareness of the sentient public: it has already started but it needs to go much further and much deeper right into the schools through the education system as popular elitism is not a trustworthy proxy for human rights and well being, au contraire.
Excellent article and my point – Government inhibits growth, a priori.
Peter, It is indeed a good article. But the problem is foolish government, not government. You won’t get any support for libertarianism from me.
I am not looking for any support from you at all – and I have really no idea what you mean by “libertarianism” or what it implies or politically infers. And, I don’t care either.
The problem is clearly “we the people” because we cannot reason, but embellish our cravings in lies and wants and believe any lie that promises anything that we don’t have to earn through productivity.
And of course, we believe in receiving something for nothing. The problem is clearly us because we are obviously being ripped off by governments (not the plural ‘s’) and bankers alike and in collaboration. And, we just relish these injustices.
Ok… this is too much so I ask you a simple question, if I may?:
Is Australia a Colony of the United Kingdom?
Common response: NO!
Let me inform you that there is no Law or Policy that passes through our government and / or Parliamentary system without the written consent of the Queen and for all She stands. None.
If you wish to know where I stand – then I say unto you: I stand for scientific maxims where all theories, any theory, must stand the subjection of independent and repeatable proof by demonstration, before final submission under principles of negation. This means socio-economic theories, Economic Theory, political theory, governance, etc., etc. No exceptions.
Of course, if this were so, our whole global system would crash immediately as it is all strung together via superstition, propaganda and sophistry.
So if you wish to accept that we cannot do any better than our Senator Mark Arbib carrying the banner of the USA so as to stab our previous Prime Minister – for all that he was worth (?) – in the back to favour M’s Julia Gillard, a lawyer, who seems to have forgotten the basic tenets of Law, so that a foreign power can begin /continue its military occupation of Australia, then what can I say? Carry on, as you say it so nicely and there really isn’t any way to change it , is there? Where, I wonder will the smile on your face be as they drag your relatives off in the middle of the night or just shoot you in the street?
Have you no idea of history? even recent history? Are you so gullible that you will gamble the lives of your family for a whim?
If you don’t like my message that Australia comes first, and I warn you that I am 6th. Generation Australian – then just ignore me because I will not stop being in favour of a better Australia – where today, Australia sucks – and will soon suffer the consequences of its misplaced trust in those fools in Canberra that we call “leadership”. Foolish Australians suck, not Australia, sic.
Methinks that your life in Canberra has been a sheltered life, where as mine has been of the cesspools of political and corporate corruptions on the global scale.
If you don’t like what I am saying you could go over to – http://verbewarp.blogspot.com/2011/03/operation-death-star-australis.html
… which is my Blog, and point out the weaknesses of my argument for the US intentions to use Australia as its base to attack China in a Nuclear War – and or whatever wlse you might like to say…
Good analysis, Geoff. I also recently read Economia and very much enjoyed it.
Although a symptom, I don’t see our current instinctive feelings about the behaviours of our political structures as driven by maintaining the (as one comment said) “status quo”, these problems appear to have a deeper seed.
There appears to be a strong distinction between political doctrine (in the form of any ideological tradition) and the actual dynamics of any political system. The political doctrine and the macrosocial behaviours seem fundamentally disconnected. Kind of like neoclassicism as doctrine and complexity as reality in the discussions of Economia.
Currently, at least most of us, do not consciously make this distinction, we assume the headline branding is in some way ‘correct’. Consequently, most people take a political party’s intent to be based on it’s tradition. Neoliberalism has clearly changed that and is almost ubiquitous in the major parties, and increasingly in some smaller ones. It suggests an alternative causal relation. On top of this, we now have a whole generation with no experience other than neoliberalism.
From historical review, it would appear no post feudal Anglo/American/European ideological systems (democracy, social democracy, socialism, communism, etc) appear to function with the original intent particularly as they develop after a couple of generations, but instead we see a dynamic shift in political process toward pathocracy, although in Australia we are in relatively early stages of this process, the US appears somewhat further. This is alarming as the great tyrannies of the world were all based on pathocracies.
It appears very few actors in our current political system have a clear coherent and deep ideological core of any form to arrest this situation and are instead contributing to the process.
We may find our current dilemma is based significantly on our personal macrosocial misconceptions about just why the levers of power no longer seem responsive. As a function of our inherent optimism, we actually still want to believe the decision making process and those active in it is based on some notion of the national interest.
I believe that most of us have an optimistic core (although typically a much lesser skill for critical analysis in the same proportion to act as a filter) and are capable of and would undertake what we intuitively feel will preserve society, but the dissimulation of our political structures is hampering that process. The difficulty is this will take decades to play through natural macrosocial processes unless we get a better understanding of the nature of this condition.
The basis for pathocracy rests in science:
Thanks for the link: Often termed as “reptilians” these types of persona, occupy the political arena in high density as well as those political appointees to bureaucratic positions. In commerce they thrive mainly in public companies and government enterprises.
Only critical analysis is competent in the identification of their destructive activities.
Tone – interesting thoughts, and I see the parallel you are making between economic “thought” and political “thought”.
Peter – Good grief Peter, all I did was indicate my disagreement with “government” being The Problem (as Reagan famously said). We can agree to disagree here. Libertarianism is a mostly American notion that government should be reduced to the absolute minimum so we can all be “free”. Sort of an endless frontier society. And a small step away from anarchy. I want an independent Oz just as much as you do. And uninformed comments about a stereotyped “Canberra” are not helpful.
Let me tell you of a conversation I had with a senior official, well dressed, obviously well educated – with the Justice Department, Canberra, I paraphrase but the words and ideas are accurate:
‘The main problem of the Western World today is the Muslims and the only solution is to round up every one from here in Australia and the rest of the World and send them to Iraq, where with the assistance of our allies, the Americans, we can them until the country turns to glass and it is a proposal that I fully and urgently support.’ This is informed and first hand Geoff.
As regards the US Military occupation which is under-way in Australia, it is a matter of public record in the media; TV, etc., but without comment – as far as I have been able to determine, from yourself and 2 other bloggers (one being myself). Why? While Hillary Clinton was last in Australia visiting M’s Gillard, the head of the US Pacific Command Admiral Bob Willard, and an extensive team of high level US experts toured Australia making book of the necessary assets on the ground for base designs installations and security; the normal requirements. The point being that this is no three sailors and a row-boat naval yard but in WA alone, a shore base requiring ~100,000 US personnel – or so it was over-heard.
M’s Gillard and indeed Mr. Rudd have made no bones about not trusting China and M’s Gillard indeed stated the purpose being a ‘joint military confrontation of China… ‘ publically. The Neocons have been calling for a nuclear way for years now and there is nothing new, so do you really think that the US under is current war driven craving – will not utilize Australia to attack China?
Anarchy is defined not chaos and total disorder but of a higher intellectual achievement from that of today, and where Murray Rothbard, of economics accomplishment, the man credited with having coined the term anarcho-capitalism, expressed in Society and the State, stated – “I define anarchist society as one where there is no legal possibility for coercive aggression against the person or property of any individual. Anarchists oppose the State because it has its very being in such aggression, namely, the expropriation of private property through taxation, the coercive exclusion of other providers of defense service from its territory, and all of the other depredations and coercions that are built upon these twin foci of invasions of individual rights.”
Obviously a state to which we must direct ourselves with some determination.
Tone makes the point of a reliance on cultural and traditional values – trust – being disconnected with reality of political intent and the risk of being highly influences by the psychopaths amongst us.
Take Tone’s message as a warning and these people exist pervasively – I know as I have met many of their ilk.
Correction to the above post:
‘we can them until the country turns to glass and it is a proposal that I fully and urgently support.’
we can then nuke them until the country turns to glass and it is a proposal that I fully and urgently support.’
US “nuke ’em” historical insight:
If the USA carries out a Nuclear war from Australia, any radiation released in Australia will – due to the nature of the planet’s hemispherics, remain in the southern Hemisphere and will not impact the USA.
Presumably, the US would release their safe bombs onto China while China would be forced to retaliate by launching full force nukes at Australia. IOW, Australian would pay the bill – as suggested elsewhere.
C’mon guys…no need to get so ‘touchy’…remember, we have an opposition leader waiting in the wings who can sway the voters with his one-liners at some time in the near future and become the Prime Minister of this nation and his answer to all this talk about war and killing and our soldiers dying in battle is……….”shit happens”.
My lifelong observations have taught me that, after reading the current “blogs” on this page is that….most comments/opinions can unfortunately result in “re-inforcing” the opposing position of the “other” bloggers and strengthening their beliefs. Why we choose to see things in a ‘particular way’ and insist on defending it so aggressively is interesting and may be a product of past experiences and disappointments…and that can be unhelpful and sad. If a mind is a “closed-book” the pages inside will remain blank and ignorant. I will defend every persons right to an opinion even though will not necesarily agree with it…..So, “Blog-on” nicely guys, I am appreciating the cleverness and deeper thinking aspects of this site as it is a far-cry from the blathering of the popular media efforts.
I have been away for the weekend, having a stimulating time with other people, celebrating the life of a poet and activist, and contemplating how to lead the world, by example, to a better place. I recommend time away from the screen.
I have disallowed your comment from Sunday . If you want to comment here, you will observe some ground rules: treat other commenters with respect; keep comments relevant to the topic and don’t use this blog as a platform for your topics; keep it concise; don’t post “naked links”: use them to amplify your comment, for those who might want more, not as a substitute for comment.
Your comment from this morning is also disallowed, as a naked link.
Also, I find some of your views to be extreme, and I may choose to disallow them so others won’t be put off. Ditto very long comments, I have better things to do than to vet every word you might want to post here.
And Peter, there is a town called Canberra where a lot of good people live and work. If you mean the government, or the public service then say that, and don’t use the nasty shorthand beloved of media and Canberra bashers. You know, the people nominally in charge of that “Canberra” don’t live here, they were sent here by others, from other places. Put your blaming where it belongs, instead of playing along with politicians who want to shift the blame off themselves, and who hurt a lot of good people in the process.
I respect your position and shall refrain from commenting. I hope that you read that “open link” I posted this morning.
A little reminder before I delete your url from my list of bookmarks –
… deleted because of unacceptable slur on a national group …
I don’t apologise for my opposition to fascism and all that hangs of it, for the results are a matter of written history and sadly, we don’t appear to give it a second thought. My Father’s life, if we accept what is now happening, as well as the lives of the many thousand of Australians that did not return at the end of WWII, was then given needlessly as we are in Australia, well on the road to identical perdition – leaving me to ask, why do we humans worship organized genocide.
Good bye Geoff, I hope that you can impose your desired static state on everybody in Canberra so that you can feel happy and your sensibilities don’t get unduly ruffled.
I will let some of Peter’s comment above stand, but only as an example of what is not acceptable here.
I deleted an earlier comment of Peter’s because he implied that another commenter was comparable to Stalin. Now Peter is comparing me to Hitler, implying that I am not opposed to fascism and genocide and (horror of horrors) that I wish to impose my will on Canberra and render it static. One version of Godwin’s law is that the first to compare an adversary to Hitler loses.
Peter doesn’t seem to know the meaning of the words “I respect your position”.
In its early years of independence Botswana was another great success story.