Lee Rhiannon says capitalism isn’t working but we’ve found at least five ways it’s made your life better

Greens Senator Lee Rhiannon yesterday told ABC Insiders that “capitalism isn’t working”.

https://twitter.com/InsidersABC/status/881295065397592064

Say what, Lee? We beg to differ.

Here are just five ways capitalism has worked a treat around the world.

  1. It has dramatically reduced the share of people living in absolute poverty

Ourworldindata.org notes that “As more and more countries industrialised and increased the productivity of work, their economies started to grow and poverty began to decline.”

Absolute poverty has plummeted.

 

2. It has led to us living longer

You need to login to view the rest of the content. Please . Not a Member? Join Us

DISCUSSION FORUM: Is laissez-faire still fair?

In one of the first articles contributed to this site, small business council CEO Peter Strong argued that we should “put laissez-faire economics…in with the dirty laundry and be a community of action, support, reward, understanding and common sense”.

His argument was based on the idea that laissez-faire economics has led to “government inaction and policy domination by powerful vested interests” which get away with it under the banner of ‘letting the market decide’.

Many readers have disagreed with Peter’s article, so I’d like to open it up to debate below.

But first some context.

The concept of laissez-faire has been used in a number of different ways since it was first popularised in the 18th century. It means “allow to do” – essentially, if you don’t interfere in markets they will find their own way based on the aggregate of each individual’s personal decisions. As a simple example, the price of a coffee is a combination of what the cafe is willing and able to sell it for and what buyers are willing to pay for it. If it’s not worth the cafe’s while to buy equipment, set up shop and pay a barista, there will be no cup of coffee to buy; if the coffee is too expensive, there won’t be enough buyers to make the café’s existence viable, as consumers choose another way to get caffeinated.

Adam Smith described these supply and demand forces as the work of an “invisible hand”. The concept underlies the idea of a moral market, in which the social good is promoted by each attending to his or her own interests. The principle has become fundamental to the way we understand the workings of a decentralised economy.

But Adam Smith also recognised that, at least in his time, most nations (and especially colonies) were mercantilist, that is, made up of monopolies controlled by the monarchy. Where these monopolies were not actually owned by the government, the government had considerable interest in maintaining them for a range of reasons, including to preserve employment and ensure provision of a service that might otherwise not be available. He was also very concerned with anticompetitive behaviour, especially price collusion, arguing that “people of the same trade seldom meet together, even for merriment or diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices”.

Now it is open to debate whether the Australian economy, born of colonialism, has evolved far enough from the nationalised or quasi-nationalised institution to genuinely have the conditions for a functional laissez-faire approach. Certainly, the existence of Australian Consumer Law and the Australian Competition and Consumer Commission (ACCC) is an acknowledgement that we do have problems that require ongoing monitoring.

Peter’s argument is that big businesses represent a significant enough portion of the economy that many believe are “too big to fail” and that together with big unions they have developed a powerful alliance, often through secret deals, which has put small business at a disadvantage.

And so I would invite our readers to discuss a few questions here over the weekend:

  • Do you agree with Peter? Why, or why not?
  • Does Australia have a free market?
  • If not, where are the distortions?
  • Should we be seeking to correct distortions?
  • If so, how can these be corrected as gently as possible, that is, without causing undue misery due by way of unemployment?
  • What are the most important industrial relations reforms to pursue today?

Leave your comments below or here on our Facebook page.

I would also emphasise that this shouldn’t be a discussion as to what we should ideally be – utopias rely on the idea of human perfectibility. We’ve never achieved this kind of divinity in history and it seems foolhardy to hope we’ll suddenly develop it. I believe we should accept that humanity will always be a mix of good, bad and indifferent moral characters and that the “ideal” outcome is one which achieves a satisfactory equilibrium among these that results in civilised behaviour, tolerance and the ongoing goal of individual and social improvement.

But I’d like to hear what you think.

I look forward to a lively and intelligent debate!

You need to login to view the rest of the content. Please . Not a Member? Join Us

The greatest gift of a nation – intergenerational fairness

Geoffrey Winters

No generation should be less well off than the one before” is an old adage of decreasing relevance to Australian millennials.  Forget the near impossible task of entering the housing market, attempting to save in a half-decade of no real wage growth or the escalating cost of living – the biggest challenge facing our generation is the structural high cost base and aging society.  For example, there are 4.5 working taxpayers currently paying for the healthcare and pensions of every Australian over the age of 65.

By 2050 the taxpayer to old age pensioner ratio is anticipated to drop to 2.7:1, while the cost of those services per person is expected to increase at the same time.  My generation will be left worse off than generations before us, thanks to a culture of entitlement among those who can afford to take care of themselves.

You need to login to view the rest of the content. Please . Not a Member? Join Us

JIM MOLAN EXCLUSIVE SERIES: Freedom is won by each generation afresh

Major General Andrew James “Jim” Molan AO, DSC

Jim Molan 

Most would agree Australia is a fantastic place to live. If like me, you are at the end of your working life or if are well off and in a privileged position, then Australia is gold. If you are not well off, if you are young and only just starting out, if you are a migrant making a new life, if you are sick or if you are handicapped, then in Australia you have the best chance of succeeding of any country in the world. Bar none.

For a variety of reasons, Australia has been like this for at least 75 years. We should hope that it goes on for many years to come, and that the blight of internal or external conflict does not occur in this country as it has in too many nations in the world.

There are a few different kinds of security that impact Australia.

First there is the security which allows nations to trade with others across the globe, and so makes all of us better off without taking from one another.

You need to login to view the rest of the content. Please . Not a Member? Join Us

New growth jobs WA – from timber to truffles

ABC News Photo by Robert Koneig-Luck
Sky News Commentator and former adviser to Liberal Prime Ministers and Premiers

I grew up in a small town, deep in the forest of the south-west of Western Australia, when the wine country of Margaret River was still too out of reach for many average Australians, truffles were yet to be found in the hills of Manjimup and everyone’s dad worked logging timber.

Here, politics isn’t high-brow social engineering. It’s about having a job, putting food on your table, a roof over your family’s head and helping your kids do better in life than you did. It’s a long way from Potts Point or Toorak and the opinions of those here are often crowded out when it comes to policy making. But where I’m from is an example of people benefitting from trade, investment and tourism policy decisions that will shape a generation of regional Australians for the better.

You need to login to view the rest of the content. Please . Not a Member? Join Us