Your typical Australian Leftie knows for an obvious and self-evident fact that capitalism sucks. This fervently held belief somehow fails to explain why the oppressed masses of Balmain and Brunswick are not packing their carbon-fibre bicycles into shipping containers and re-locating to Pyongyang. He or she (or whatever this week’s “gender identity” might be) argue that money, power and quality of life are hoovered up by capitalist pigs, leaving the poor worker with no prospect of advancement, rest or real happiness.
Each time the proverbial hits the fan, as it does whenever the boom-bust cycle bottoms out, your ardent leftoid will exclaim that the worker is ceding more of the little power he has to the barons of capital. We’ve heard it so often there is a mantra-like drone to the whining: labour loses wage-brokering muscle. Pensions, unemployment benefits, education budgets and healthcare are cut. The portion of the economy controlled by class enemies of the loathed and hated “one percent” rises. Everyone except the filthy rich gets royally screwed.
Here the real world insists on arguing otherwise. Beijing and Hanoi have allowed their peoples to indulge in the vagaries of capitalism over the last thirty years. And, yes, their rich are getting richer. And, yes, provision of care to the poor and working classes remains substandard (by our standards). Yet — and here’s the rub — the vast majority of working Chinese or Vietnamese have seen their standards of living rise, their quality of life improve, and their material happiness increase. Almost all boats in these communist harbours have been lifted by capitalism’s incoming tide.
What about capitalism’s boom-bust cycles? Yes, it’s true that the downswings always hurt the little guy. Once the GFC hit Middle America, there were manyAaverage Joes and Joannes who found he market prices of their their sub-prime-mortgaged homes had dropped below what they had paid for them. Nevertheless, nine years later, those little guys are making their way forward and upward again. And they are doing so on a wave of newly invested capital, not just on the strength of a brief flurry of (borrowed) government bail-outs. When the GFC hit, their 401K plans — Americans’ version of superannuation — took a beating. Today, paradoxically, it is those same funds that are helping to provide the capital fuelling the next upward cycle. After winter comes the spring.
Paul Keating once said that he would always back a horse called Self Interest. At least he’d know it was trying, he explained. In command economies — the prospect of which has the typical Leftie drooling with delight — self-interest gets loaded down, at best, with punitive weights; at worst it is scratched on starters’ orders. Oh, and while the handicappers are hobbling the one horse with form, the rest of the field heads off on a hay ride. Minus self-interest, when it’s Wednesday of a wet, cold week at the 17th Workers’ Tractor Factory, what tends to flag is dedication and productivity.
A command economy’s self-chosen elite — a much smaller demographic than capitalism’s fabled 1% — will come up with superbly crafted and centralised five-year plans to maximise collective food production, harness natural resources that “belong to us all”, develop intensive industry to reduce the amount of back-breaking work workers need do, house and de-louse the ever-grateful proletariat, and educate any of their (non-aborted) offspring. Yet as Lenin, Stalin and Mao all discovered, the best-laid plans and favoured theories inevitably founder on the rock of grim reality.
Meanwhile, while the commissars demanded the masses’ compliance, in San Francisco, Atlanta and Los Angeles the invisdible hand so obvious to Adam Smith was busy sewing Levi’s Jeans, bottling Coke, and cranking the cameras that filmed Disney’s Fantasia (which Khrushchev loved). And guess what? The very same Russians who approved of what their Soviet leaders were trying to do also yearned for what Levi, Coke and Disney were making. Those capitalist-system pleasures and diversions, as they knew and understood, would have made those cold, wet Wednesdays at the 17th Workers’ Tractor Factory somewhat more bearable.
It’s not capitalism that sucks, but command economies. This brings us to the doctrine that seems to have infected the minds of our political class — minds that, in many cases, should know better.
Almost every time Australian politicians are asked what will replace the much-need revenue generated by the mining/resources boom, they cite a purported transition to a service-based economy. At its most basic, this envisions millions of Aussies taking barista courses and making high-priced coffees topped with cute patterns. Trouble is, with a service-based economy, over time the only people buying the coffee you serve are other baristas. In old-fashioned terms, a service-based economy is about taking in other people’s washing. There are only so many people who want and can afford to have their washing done.
The flaw in this thinking is deeper than that, however. Even in a service-based economy we need to import stuff: coffee beans. espresso machines, the canvas umbrella to shade the outside table where you sit and sip. In return for these goodies, as the Dutch and Native Americans found when bartering Manhattan for beads and blankets, you need to be able to offer some “export-quality” beads yourself.
OK, so our shift to a service economy will see us provide tertiary education to much of Asia, plus some food, and tourism. Why, if every Chinese person over 50 aspires to visit Australia someday, we can’t lose on this tourism “export” gig! Or so the theory goes. Yet the reality is rather different. If Chinese fly here in their own planes, stay in their own hotels, eat their own foods and visit their own shops and attractions, the net benefit to Australia may be small: jobs for a relative few air traffic controllers, bus drivers, bell-boys and shop assistants. (But perhaps Mandarin-speaking shop assistants will be flown in on contract, clutching 457 visas in their white-gloved hands.) Unless we are very canny about re-investing the purchase price we receive in profitable export industries, this isn’t a sound way to grow the Australian economy
Unless Australia further develops its export industries to pay for the manufactured goods it needs to buy overseas, any “service-based” economy here can only shrink. After buying the fourth coffee of the morning, I might have acquired a caffeine buzz but I’ll definitely still be broke.
Towering above all the other planks in the green-left agenda is a single economic pillar (an odd way to keep up a roof, unless you live in a tent, which some Greens would undoubtedly prefer): we should move to a “sustainable” economy. The gospel seems to be that this would entail full employment in static, service-based or renewables-resourced businesses, plus many more public servants crafting, implementing and enforcing said policies and initiatives. On top of this, migration must be restricted almost solely to refugees. And Gaia-friendly one-child policies are vital, must not forget that.
Penalising fossil-fuel use in a huge country like Australia would rapidly shrink our economy’s most productive parts. We still make vast mountains of export dollars from fossil fuels: gas, coal and oil. Do we just drop these and the money that flows from them, money used to underwrite, amongst other things, government programs dear to greenish hearts (such as supporting refugees)? You would need to match the dim-bulbitude of Sarah Hanson-Young not to grasp that this would plunge the entire country and its economy into permanent recession.
While Australian agriculture is renowned for its efficiency, the vast distances involved require fossil fuels. Becoming “sustainable” would mean asking Australia’s farmers to abandon productive farms that feed not only Australians but also many millions overseas. (Not to worry, Greens voters are concentrated in inner cities, where they can walk to their unproductive work or, for a little variation, impede productive commuters in their cars and trucks with plagues of bicycles.)
Assuming Australia were to follow Greens advice and abandoned its fossil fuel-based economy, what next? It seems highly unlikely that new and productive economic activities could be grown fast enough to allow our overall level of economic activity, eventually, to be sustained. Like woollen jumpers, economies that have been shrunk won’t readily re-expand.
How the Greens (and many on the ALP’s Left) would deal with adverse social consequences of destroying Australia’s economy in fervent pursuit of “sustainability” is unclear. But, according to another of their Party’s policies, voluntary euthanasia might be an option for any Australian finding sudden loss of living standards, employment and government-funded health and welfare too much.
If you want to sustain your economy, you need to go for growth.