We can't escape a carbon tax, which is good news, not bad

When economists are at their best, they speak truth to power. And that’s just what two of our best economists, Professor Ross Garnaut and Rod Sims, did this week. In their own polite way, they spoke out against the blatant self-interest of our (largely foreign-owned) fossil fuel industry.They sought to counter the decade of damage done by the former federal Liberal government which, for short-sighted political gain, engaged in...

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Why populism hasn't taken off in Australia

One good thing about taking a break from work is that it gives you time to let your mind wander from all the pressing concerns of our fast-moving world – the preoccupation with this “crisis” and that “crisis” – to less immediate but more important problems. And it helps if you’ve used the time to read a good book or two.On my recent long break – soon to be followed, I fear, by my summer holiday – I read The Crisis of Democratic...

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How economists got it wrong for so long

Most economists are great believers in the need for "reform" – for other people, not themselves. Over the past 30 or 40 years, no profession has had more influence over the policies governments have pursued, but the results have hardly been flash.Even the lightning speed at which an epidemic in part of China became a pandemic reaching every corner of the globe can be blamed in large part on the globalisation that economists long...

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Lure of globalisation battles our instinctive tribalism

What has caused the rise in populism that's threatening the mainstream political parties around the developed world, including here? Economists tend to explain it essentially in economic terms – the bottom has been given a rough deal for years, and finally is rising up – but other scholars see it much more in social and cultural terms: people objecting to being overrun by incomers. Immigrants, asylum seekers, Mexicans, Muslims,...

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How economic neglect has fed the populist revolt

Recent political shocks – Brexit, Trump and the failure of Theresa May – are prompting much soul-searching and rethinking among the world's leading economists. Last week, for instance, Ben Bernanke, former chairman of the US Federal Reserve, gave a speech to a forum of the European Central Bank in which he admitted that "recent political events" had "cast a bright light on some disturbing economic and social trends in the United...

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Too many stuff-ups about to put economic reform into reverse

I have bad news and worse for advocates of micro-economic reform. First, the jig is up. There'll be few if any further major reforms. Second, the backlash against mounting wreckage from failed reforms is about to begin. Since the reform push has degenerated into little more than business rent-seeking – let's cut tax on business and increase it on consumers; let's push the legislated balance of power in industrial relations further...

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Our politicians go populist at their peril

If I were an Australian politician I'd think hard about the ascension of Donald Trump before I drew conclusions for local consumption. When someone so unattractive surprises us by winning, it's tempting to conclude he must have done so because of a massive surge of anger over immigrants, Muslims and jobs lost through trade agreements. We connect this with the Brexit surprise and the resurrection of One Nation and conclude we're...

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