Like most, I believe in democracy. But I also believe in capitalism, and though the two have usually been seen in the West as a good fit, of late I'm having doubts.
Every society has to use some system for organising production and consumption, and I know of none better than leaving it largely to private enterprise.
For the most part, markets work well in bringing buyers and sellers together and satisfying their respective...
Wednesday, February 6, 2013
Monday, February 4, 2013
Why voters seen the economy as in bad shape
Despite last week's excitement, Julia Gillard's early announcement of the election date is unlikely to change much. It's certainly unlikely to change many voters' perceptions on a key election issue: her ability as an economic manager.
It's long been clear from polling that the electorate doesn't regard the government as good at managing the economy.
Why this should be so is a puzzle. As Gillard rightly claimed last week: "As...
Saturday, February 2, 2013
Gillard talks tough in election year
THIS is shaping up as an unusual election year - and not because Julia Gillard has announced the election's date eight months in advance. With luck it won't be the trip to fantasyland the politicians on both sides usually take us on, in which they pretend to be able to solve all our problems without pain and we suspend disbelief.
Predictably, Gillard's unprecedented step in naming the date in her speech to the National Press...
Wednesday, January 30, 2013
Outlook for economy not bright
As far as the economy's concerned, 2013 will be the year when many people's dreams come true. For at least the past two years, many of us - business people and consumers alike - have been convinced the economy is slowing and generally in bad shape.
Trouble is, until recently the hard statistics on the state of the economy have persistently refused to confirm this pessimism.
But now there's good news for the fearful. The nation's...
Monday, December 31, 2012
The four business gangs that run America
IF YOU'VE ever suspected politics is increasingly being run in the interests of big business, I have news: Jeffrey Sachs, a highly respected economist from Columbia University, agrees with you - at least in respect of the United States.
In his book, The Price of Civilisation, he says the US economy is caught in a feedback loop. "Corporate wealth translates into political power through campaign financing, corporate lobbying and...
Saturday, December 29, 2012
Behavioural economists smarten up government
SINCE it's the summer hols, let me ask you a few personal questions. Do you sometimes fail to read every word of the official letters you get? Do you put off filling in forms or delay paying parking fines or taxes? Are you ever less than scrupulously honest on government forms?
If so, I have news: the economists are on to you. Actually, it's the behavioural economists, and their thing isn't to punish you but just make it easier...
Wednesday, December 26, 2012
Exertion, not avoiding it, makes us happy
Forgive me for saying so, but don't you think you'd be better off going for a run - or even a brisk walk - than reaching for another mince pie? (The ones my wife made this year were irresistible.)
Chances are you don't think it. Or maybe you think it, but you don't intend to act on it. If you can't take a day off on Boxing Day, when can you?
I hate to say it, but humans have a slothful streak. We want to live comfortable, enjoyable...
Monday, December 24, 2012
Workers attacked because of economy's success
THE most despicable behaviour of 2012 must surely be the return of big business people trying to make Australia's employees feel guilty about their high wage rates. Chief executives aren't overpaid but ordinary workers are? Yeah, sure.
It makes you wonder whether our business people are knaves or fools: are they knowingly talking nonsense or are they simply economically illiterate?
I'm genuinely not sure. I realised long ago...
Saturday, December 22, 2012
Adding the environment to the national accounts
Over the eight years to 2010-11, gross domestic product increased by 28 per cent, whereas Australia's net energy use increased by 18 per cent. So our "energy intensity" - energy used per $1 of GDP - is falling at the rate of 1 per cent a year.
In 2010-11 we produced 89 per cent of our total energy supply domestically, with the remaining 11 per cent being mainly imported oil. This took our total annual supply of energy to almost...
Wednesday, December 19, 2012
Making sense of the budget surplus saga
I hate to burden you with a topic as earnest as the budget deficit so close to the holidays - I had hoped to write about the idea of giving someone a goat for Christmas - but the saga of whether the Gillard government will manage to get its budget into surplus this financial year has reached farcical proportions.
A few weeks ago we learnt from the national accounts that the economy's rate of growth slowed to 0.5 per cent in...
Monday, December 17, 2012
Executives put their salaries ahead of shareholders
For almost as long as big business has been crusading for a lower rate of company tax, I've been puzzling over its motives. Why are these people fighting for something of little or no benefit to their domestic shareholders and likely to be quite unpopular?
The willingness with which our economic establishment has gone along with the calls for lower company taxes is one of the great mysteries of the year. . Now the Organisation...
Saturday, December 15, 2012
The case against a lower company tax rate
One of big business's greatest disappointments this year was its failure to persuade the Gillard government to cut the 30 per cent rate of company tax. On business's economic reform wish-list, cutting company tax is second only to getting more anti-union provisions back into industrial relations law.
So you can be sure business will be campaigning for lower company tax in the months leading up to next year's federal election.
I'm...
Wednesday, December 12, 2012
Poverty rises as you move from the centre
In Bill Bryson's fascinating book, Shakespeare, he says we know remarkably little about the man, and most of what we think we know has been dreamt up by overenthusiastic scholars. But of at least one point he was sure: in Shakespeare's London, rich and poor lived side by side. A case, I guess, of the rich man in his castle, the poor man at his gate.
They don't make cities like that anymore. Or rather, modern cities seem to be...
Tuesday, December 11, 2012
Economics and wellbeing: beyond GDP
Economic Society, Sydney, Tuesday, December 11, 2012
We had been hoping to have a speaker willing to argue that GDP was good enough to guide our policy decisions without need for modification or supplementation, but he’s unable to attend - which is a pity because I would have been interested to hear his arguments. In the absence of someone in the audience willing to argue that position, I think there’s a lot we can agree on....
Monday, December 10, 2012
The hidden truth about interest rates
The prize for journalistic innovation of 2012 must surely go to whoever thought of a way to turn a cut in the official interest rate from good news to (the much more valuable) bad news: abandon the media's eternal assumption that everyone's a borrower and let the grey-power lobby bang on about the evils of lower deposit rates.
It's such an improvement on the standard good-into-bad transformation: bleating about the greedy banks...
Saturday, December 8, 2012
Economy slowing, not dying
To hear many people talk, the economy is in really terrible shape. Trouble is, we've been waiting ages for this to show up in the official figures, but it hasn't. This week's national accounts for the September quarter are no exception.
You could be forgiven for not realising this, however, because some parts of the media weren't able resist the temptation to represent the figures as much gloomier than they were.
One prominent...
Wellbeing index gives better picture of mining boom
DON'T believe the doomsayers.This week's national accounts indicate the economy is slowing to something a bit below trend but the critics of the great god gross domestic product are right: it is a quite inadequate and often misleading measure of the nation's progress.
This is why, for more than a year, the Herald has commissioned Dr Nicholas Gruen, principal of Lateral Economics, to calculate a broader index of wellbeing, which...
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