They say if you still believe at 50 what you believed when you were 15,
you haven't lived. Just this week I've now worked at Fairfax Media as an
economics journalist for 40 years. Those ages don't quite fit, but my
views today are certainly very different from what they were when I
started.
When, disillusioned with life as a chartered accountant, I
began at Fairfax, most of my effort went into relearning the economics I
was supposed to have learnt at university. There it didn't make much
sense to me and I had trouble remembering enough of it to pass exams.
Once passed, it was promptly forgotten.
A lot of my re-education
came at the hands of the nation's most high-powered econocrats, who are
remarkably generous with the telephone tutorials they're willing to give
journos who seem genuine.
So at first most of my effort went into
mastering and then propagating economic orthodoxy. I still see it as an
important part of my job to help readers understand what it is that
leads economists to do and say the things they do.
Newspaper
economics tends to be pretty basic. Doing the job year after year is
like answering the eternal year 12 economics essay question: "From your
knowledge of economic theory, comment on ..." Joe Hockey's budget
preparations, cabinet's decision not to give SPC Ardmona a $25 million
subsidy, the government's inquiry into the financial system.
But
one ambition has been to introduce something a little more
sophisticated, to lift the level of analysis from introductory to
intermediate. To this end I've devoted a fair bit of my free time to
reading the latest books about developments in economics and,
increasingly, psychology.
Though Australian academic economists
write books that seem intended to impress by being incomprehensible,
leading American academics write (carefully footnoted) books that
explain their findings to the average intelligent person. Sometimes they
even make the best-seller lists.
I've been looking for stuff that
would interest readers, but also trying to deepen - and broaden - my
understanding of the topic. It's this broadening that's done most to
change my views about economics and how I should do my job.
Economics
is the study of "the daily business of life" - earning money and
spending it, buying and selling assets such as homes and shares,
borrowing to finance the purchase of assets and saving to repay debts.
Macro-economics is the study of how whole economies work and how
governments can "manage" them, seeking to limit inflation and
unemployment and promote growth.
So, contrary to my conclusions at
uni, economics has a lot of practical application. There's always
plenty of interest in the topic and plenty of coverage in the media.
But
as I've got older and read more widely I've realised that, if anything,
we tend to take economics too seriously. It deals only with the
material side of life - getting and spending - and in this more
materialist age we run a great risk of focusing excessively on getting
and spending at the expense of other, equally important aspects of our
lives. I've concluded there's more to life than economics.
Our
heightened materialism means we take economists far more seriously today
than we did 40 years ago. Their message is that we're not trying hard
enough: not doing enough to change ("reform") our economic arrangements
to foster faster growth in the economy and hence a more rapidly
increasing material standard of living.
But I've concluded
economists suffer from the same failing as other specialists. In their
enthusiasm for their topic they want to take over your life. The
economists' union wants to make becoming more prosperous the nation's
central objective. And these guys urge us on with little thought about
what trying harder and doing more may imply for the other dimensions of
our lives.
You and I know most of the satisfaction in our lives
comes from our personal relationships. But relationships aren't part of
the economists' model, so they urge particular "reforms" without any
thought about the implications for our relationships. Politicians act on
their advice without such thought, either.
So, to borrow a
cliche, economists need to be kept on tap but not on top. These days I
try to explain the rationale for economic policies - what they're trying
to achieve and how they're supposed to work - but also play the role of
a sort of economics theatre critic, adding a critique of economics,
economic policies and economists.
I've learnt there's little
correlation between being a successful business person and having a good
understanding of economics. They seize on an argument that seems to
support the line they're pushing. Whether it's logical they seem not to
know or care.
Economists study and advocate efficiency in the way
we combine economic resources - land, labour and capital - to produce
goods and services. This is supposed to maximise material prosperity.
The position I've come to is that we should strive for efficiency unless
we've got a good enough reason to be inefficient.
For instance,
it's inefficient to have government rules specifying minimum levels of
local content on television. It would be much cheaper to buy not just
most but all our TV programs from America. But I agree it's better to
force our TV channels to produce a bit of Aussie drama. Culture matters.
Even
so, knowing where to draw the line on inefficiency ain't easy. It's too
short-sighted to expect that those industries, interest groups or
regions that have managed to extract assistance from government in the
past retain their privileges forever, or that industries adversely
affected by overseas developments be given ever-growing government
assistance so nothing needs to change and all pain is avoided.
Life's
a bit tougher than that. Change is unrelenting. It's our continuously
changing circumstances - and, I hope, our improving understanding of how
to respond to challenges - that keeps me going.
