EDITORIAL: by Peter WestmoreNews Weekly
An idea whose time has come
, June 13, 1998
Most Australians approach the last year of the 20th century with a growing sense of foreboding. Despite the glowing rhetoric of politicians and economists that Australians have never had it so good, many people are conscious of growing disparities in wealth; an escalation of the foreign debt; the sliding value of the Australian dollar against its benchmark, the greenback; the sell-off of many Australian icons to foreign corporations; apparently insoluble unemployment; and indicators of social decay evident in the depopulation of rural Australia, growing crime rates and family breakdown.
The National Civic Council’s original mission was clear, understandable and with a easily definable strategy — to destroy the communist influence in the unions and the ALP. It was a questions of who would run the government, the Labor Party elected by the people, or the Communist Party controlling the Labor Party with orders taken from Moscow. The fight was for the sovereignty of the nation.
Today the challenge is again to defend Australia’s sovereignty, but the challenge is very different in appearance, coming from a different direction and demanding a far different strategy to the communist fight. The question today is, “who will run the country, the elected parliament or the financial markets”.
Nobody is better suited to describe this challenge than Fred Argy, the former head of the Federal Government’s Campbell Committee Inquiry:
“The benefits of financial deregulation are not what they were expected to be, or what they are made out to be. Financial markets have become increasingly perverse, erratic, inconsistent and arrogant. They think they should be dictating policy to governments …
“You have to ask yourself whether it isn’t the lesser of two evils to have the guts to stand up to them. They can put governments in a terrible corner but provided the government has the economic fundamentals and the social priorities right, they can tell the financial markets to go to hell”. (ABC’s 7.30 Report April 25, 1996).
We only have to look at how the Asian bubble burst to see the power of the markets. Despite their impressive performances over the past 20 years, the Asian economies did have inherent weaknesses. However, the difficulties they currently face are attributable in large part to the actions of foreign lenders who panicked, withdrew their money, causing the value of local currencies to plummet, and destroying overnight the economic gains of a decade.
Indonesia, Australia’s nearest neighbour with nearly 200 million people crowded onto an island archipelago to our near north, faces economic and perhaps political turmoil. The violence which surrounded the collapse of the Suharto regime — just two months after the former President was elected to a new five year term — is unlikely to be the last.
Much of the responsibility for all this can be sheeted home to the economic ideology which has dominated the world for almost 20 years, particularly since the collapse of the Soviet Union in 1990.
Since the early 1980s, Australia, with other countries of the Western World, has embraced a new economic agenda designed to dismantle 80 years of state intervention in the economic life of the nation.
The origins of the new orthodoxy were laid many years before. The first large-scale laboratory test was conducted in Chile in the mid-1970s, when the leading free market economist of the Chicago school, Milton Friedman, was brought in to transform a moribund economy.
The Friedman agenda was adopted by Margaret Thatcher, elected Prime Minister of Britain in 1979, then by Ronald Reagan, who became President of the United States in 1981. From that time onward, free market economics became a tidal wave.
The deregulationist model began in Australia and New Zealand in the early 1980s.
While aspects of the new economic policy undoubtedly were positive in dismantling hidden subsidies which had been accumulated by powerful vested interests over decades, the benefits were largely accumulated by wealthy financial institutions and foreign corporations, who swooped on the small and vulnerable Australian economy.
While stock market prices have boomed, profits seem to have been generated largely by a process of corporate down-sizing, as many tens of thousands of jobs have been cut in the banking, finance and communications industries. Over 400,000 jobs have been lost in manufacturing industry and, each week, more than 50 farmers leave the land.
Despite all this, the National Civic Council is convinced that the economic malaise can be addressed.
The ideas and policies contained in this Special Edition of News Weekly have been developed over a period of nearly 15 years. They are not a knee-jerk reaction to current difficulties, nor are they based on an incipient hostility to the free market or multinational corporations. In fact, many have been applied successfully by other countries in addressing problems similar to those facing Australia today.
Our view is that such policies will enable Australian industry to grow and prosper, real jobs to be created, and the foundations be laid for the development of Australia into the next century.