Probity and economic liberalism

Coming out of the utegate/emailgate fiasco, I’ve seen a lot of variants on the claim that interventionist policies, like OzCar, are conducive to corruption, while economic liberalism reduces the scope for wrongdoing. I’ll just offer a few observations (readers with access to Google can fill in the details).

* If the standard of behavior implicit in criticism of Wayne Swan were applied to the Howard government, hardly any minister in that government could have remained in office. That particularly includes Howard and Turnbull.

* The Howard government breached standards of public probity on a scale never before seen with an Australian government, and approached only by the later years of Hawke-Keating and the worst of state governments. Not only did numerous ministers engage in activity that personally enriched them, and would have been regarded as corrupt in any preceding government, but the government consistently undermined the integrity of the public service, engaged in cronyism to an unprecedented extent and (Howard in particular) lied consistently and shamelessly. With relatively few exceptions, economic liberals didn’t complain about this.

* The Thatcher-Major, Reagan and Bush II governments were among the most sleazy and corrupt in the modern history of the UK and US (Clinton, Bush I and Blair were marginally better).*

In summary, the idea that economic liberalism goes with high standards of public probity doesn’t pass the laugh test.

* Defenders of economic liberalism may wish to disclaim one or more of these. But I’m not going to respond, except with derision, to anyone who tries to dodge the issue by any of the standard excuses familiar from apologists for the failure of Communism: never really tried, the fault of the individuals not the theory, etc.Meet the Browns film

Kruistocht in spijkerbroek psp

159 thoughts on “Probity and economic liberalism

  1. And Andy dont tempt me to get nasty and call in ABOM.

    For an economic liberal to turn a blind eye to the sheer dollar value of government subsidies that go to the Coal industry in this country is like asking someone to ignore the fact that a nanny is changing their nappies. Like one quarter of our entire GDP in government subsidies to the Coal industry? Get real – they can wear the tax on their machinery and its hardly what any sane person would call “impeded”.

    Its quite clear its the only value we have as a country left …is digging the damn stuff out and pouring it into global warming. Nauru here we come – thanks to the “nanny state” you economic liberals so dislike (but some of you, like Andy, like it less than you like benefits for the big end of town no matter who they are and where the benefits come from.

    Hypocrisy rules.

  2. The problem for the Liberals is that when people vote they prefer elected representatives who have a little compassion, are prepared to listen and are half way competent.

    Economic liberalism is not about compassion or listening to others and competence is distant.

    The Liberals have been sloppy. There are now three tangible instances of Liberals using dodgy documents to try and stitch up the Labor Party or its members. It is not the look of an honest group of people and saying that the other side is as bad is no excuse for getting caught out. The question is which system will keep corrupt practices lowest.

    Andrew Reynolds @ 42 & 47. Your responses are surely a joke. It is a big call to state that taxation policies, ipso facto, are corrupt. Not “”All” Power tends to corrupt”. There are a number of societies where power is not corrupted because it is not absolute or absent.

    It is for this reason alone that we need to have some form of Human Rights Legislation.The liberals could gain some credibility through support for this individual benefit, consistent with their stated philosophy of individual freedom. The problem for them is that they have long ago left ethical behaviour behind.

  3. boconnor Says:

    Interesting points concerning those government agencies which use private contractors and salaried public servants. However I don’t think that goes to the core reason for corrupt behaviour or a lack of probity.

    Actually, it does go to the core. You were the one who brought up Railcorp, and in fact the Commissioner of ICAC has said that Railcorp should not be contracting out a lot of the stuff that it does, because it leads directly to corruption.

  4. SJ said: “Actually, it does go to the core. You were the one who brought up Railcorp, and in fact the Commissioner of ICAC has said that Railcorp should not be contracting out a lot of the stuff that it does, because it leads directly to corruption.”

    Well, there are usually multiple reasons why corruption happens. Its not just because a government agency contracts out services, else all contracted out services would suffer corruption and clearly they don’t.

    It’s important to not over simplify things – they are many reasons for corrupt practices, which is clear from the many ICAC reports and one reason they have an educative function to alert managers to the different ways corruption can happen.

    Remember that poor management and leadership can occur in any function and lead to a lack of probity. The key driver is appropriate moral leadership by managers, not whether or not a service is outsourced. Otherwise we run the risk of giving poor leaders an excuse for their ineptitude.

  5. JQ says “(ii) people who believe that governments are inherently corrupt (as indicated by the point at issue here) are more likely to participate in, or at least tolerate as inevitable, corruption when they are in office.”

    I can see the argument here, and in some cases it may well be the case that people who see all government as inherently corrupt, wasteful or unnecessary are more likely to be agnostic or ambivalent about corruption that favours them.

    Incidentally, I think the same principle is at work when some socialist-inclined people who believe that free enterprise is bad are more inclined to engage in shonky practices in private dealings. That is, they don’t respect the integrity of the system or they assume that is how it is supposed to operate.

    The problem is that even if you accept the argument that conservative governments would tend to be more corrupt than social democratic governments of the same size, it still doesn’t answer the question of whether smaller governments would generally be less corrupt than bigger governments (of either persuasion).

    Incidentally, if big spending conservative governments are the worst type of administration then social democrats should be demanding spending cuts whenever conservatives are in power (they seldom do).

  6. Sj says “the Commissioner of ICAC has said that Railcorp should not be contracting out a lot of the stuff that it does, because it leads directly to corruption.”
    and BOconnor obviously acknowledges weaknesses in the “outsourcing and tendering processes” now used widely by government departments (thanks to uncritical application of competition policy philosophies of “where possible” shunting public service provision to private providers) but a few years ago I was amazed to find that the costs of running the whole community sector (parks, halls, sportsgrounds amongst other things) were higher since the the government had commenced tendering services out to private providers in this sector early this decade or last (ever wondered why toilet blocks on soccer fields are locked all weekend when they get peak usage?). The costs were up between 20 and 30% on prior years and in the ABS notes it was
    due to “higher costs of monitoring and supervising tender processes and tender compliance”. Well does that makes it more efficient to outsource to private providers? I suppose the response of Govt will be “oh that sportsground costs us too much – we can bulldoze the toilets and let private developers develop the sportsfield”. Problem solved sort of – reduction of costs.

    Im agree with the ICAC commissioners comments on Railcorp – the tender process in many public depts opens the door to corruption and the manager of the dept may not even smell it on the wind. So why tender out if its less costly to do it in house? Why not dump the assumption behind competition policy that private trumps public every time – it doesnt. (Although that does not absolve the manager either – cross checks and balances – where are they?).

  7. Jill Rush,
    Please do not misrepresent what I said – I trust you did it through error rather than malice. I did not say the use of the taxation power is ipso facto corrupt. What I did say is that the the power to tax and spend can be employed corruptly.
    As an hypothetical – say a PM had a dinner with a big donor from the motor trade where the donor gave the PM’s party $1m in donations. The next day moved in Cabinet to have the tariff on imported cars raised to 50%. Would you consider this had at least some appearance of corrupt behaviour? Tariffs hurt us all and advantage only certain industries. As such I believe they can be employed in ways that could indicate corruption.
    Call in ABOM all you want – I believe from the conclusion to our last discussion that he agrees with me on most subjects, we just disagree on how to get where we believe we should be going, not the destination. In any case, he is wrong on FRB as I have shown.
    On the more general point – of course I am aware of the subsidies paid to those industries, both now and in the past. I was (I thought – I used words like “historically” ,”was”, and “had”) clearly talking about what happened in Australia up until Hawke and Keating (one of the more liberal governments we have had) actually started to fix the problems in the 1980s. Once the tariffs are taken off the import costs for those businesses then all the subsidies shold be removed. You will get absolutely no argument from me on that one. Contrary to your crude attempts to smear me, I have no interest in supporting any tariff or subsidy – I thought you would have understood that by now, but obvously the message takes a while to get through. I will repeat – and use bold as it seems to take a while to sink in. I support no tariff or subsidy or, indeed, any other interference in industry beyond, obviously, the basics like the enforcement of the criminal law and minimal taxation. Do you understand that yet? No more crude attacks, please. Like ABOM, they merely weaken your argument.
    Have a look at your history books, though guys – the reasons for the subsidies paid to the primary sector were perfectly plain. The high and increasing rates of tariffs hammered the industries that were actually able to export from Australia from about 1907 onwards. The subsidies (paid, notably, to the coal industry which was another notably unionised industry) only partially made up for the effects of the tariffs. Personally, I would argue that most of those tariffs were imposed not out of concern for the general well-being (tariffs very rarey do so, if ever) but to support favourites. If that is not corruption then you seem to have a rather screwy definition of it.

  8. Andrew, you are right about the history of rural subsidies. Basically, primary producers got sick of having to pay the costs of high tariffs to prop up manufacturing. This largely led to the formation of the Country Party.

    So farmers were essentially bought off through subsidies and marketing boards and the like.

    This is a good illustration of how government tends to work. The more that policies are introduced to favour one section of the community, the more that other sectors start clammering for their share.

  9. It’s true that corruption is more likely to occur if the role of government is greater, simply because government has the power to compulsorily redistribute resources through taxation and regulation. While this power is not necessarily corrupt in itself, it will often be misused for questionable public benefit.

    Corruption occurs in private markets, but is not as great simply because this power is lacking. If I work as a salesman, I may be able to con a gullible person into buying a shoddy product. But I cannot force them to do so. The government can force people to buy the shoddy product.

    The government has the power of both persuasion and force at its disposal.

  10. Andy
    You say
    “clearly talking about what happened in Australia up until Hawke and Keating (one of the more liberal governments we have had) actually started to fix the problems in the 1980s.”

    Strange but I see the rot started just about there or a bit before with Fraser’s government. How have things been fixed actually? Inequality up, people deterred from having kids by financial imposts on the young such as hecs debts, outrageously high effective marginal tax rates on low and single income families despite lower taxes, liberalised labour market reforms and GST that causes low to average income families less in their pockets to get by with and less bargaining power?

    Economic liberalism allowed banks to get out of servicing businesses in neighbourhood suburbs and into the global economy Monte Carlo casinos.

    As for ABOM. Like him? I love him! And I agree with restraining banks lending abilities and activities and they need to be re-regulated not de-regulated and they should all stay home (more in sync with ABOMs views on banks than yours Andy).

    Andy – Liberalism didnt fix anything – it made it worse in Australia likely because it was taken way too far without examination of consequences and there are now fewer true believers likely to rely on the “wait… will happen….if we just keep de-regulating…have faith…not far to go…no rules utopia is just around the corner…so we kept de-regulating… even though the sand is getting hotter, the people are getting thinner, the babies are getting fewer, and and the landscape more devoid of edible vegetation.” But some of those who valiantly marched forward into the great ecoliberal unknown are turning back.

    However Andy, I do note that you can duck and weave erroneous statements in your arguments with a certain finesse and you do manage to stay pleasant (which frankly, amazes me!). Ive decided to award you the artful dodger award.

  11. Alice,
    Things are getting better as we deregulate. No need to wait. I remember the Australia of my childhood and speaking with my parents about the difficult times they had growing up. Things are better now – or would you rather go back to the time when women were effectively not allowed to work after marriage and the native Australians were not even regarded (at law at least) as people? Or is that not the type of inequality you mean?
    Economic positon? Vastly better than in the 1950s. Leisure time? More all round. I am trying to see what has got worse. Ummmm. Nope – can’t think of much. Average house block size is down – but the average home size is up. Not sure that counts.
    As for ABOM’s views – check out his last comment on the previous thread and see if you agree. Somehow I doubt it.

  12. Alice,

    I love you too.

    Andrew, my views are clear: revoke legal tender laws and I’m OK with lower tariffs, lower regulation of all kinds (including no central bank).

    If you keep monopoly legal tender laws and FRB and central banking – you MUST have strong (very strong!) regulation of bwanking, and (I humbly suggest) some protective tariffs for high-value (high labour input) industries, some degree of unionism and some degree of “control” over capital inflows (and outflows).

    Check out Elaine Meinel Supkis’s website (Money Matters) for an incredibly intelligent nuanced view of markets and neo-liberalism. She is also for gold coming back to “balance” the madness of unregulated FRB, but wants strong protection, an end to the high-leverage Jap carry trade that ends up raping vulnerable countries through speculation and high volatility. She also HATES Sacks of Gold, so I know from that she’s on the right track.

    Alice and Elaine would get on famously I’m sure.

    Andrew, you constantly distorted reality, misrepresent people’s views and keep on with you zombie-like “deregulate at all costs” attitude. You. Scare. Me. You. Freak.

    Alice, you’re the only real human I’ve met with knowledge of finance and economics.

    If we had kids they’d be geniuses!

  13. I’m also ALL FOR strongly progressive taxes where there is central banking/FRB and legal tender laws and a clampdown on tax havens and free capital laws.

    Cage the financial child rapists (bwankers) or neuter the greedy pigs with gold.

  14. That should be:

    I’m also ALL FOR strongly progressive taxes where central banking/FRB and legal tender laws exist, and I support a clampdown on tax havens and free capital flows (capital accounts should be carefully controlled to reduce volatility). A Tobin tax would also be a good idea if a gold standard is too far away to be feasible.

    Cage the financial child rapists (bwankers) or neuter the greedy pigs with gold.

    I need to remove all typos and errors just in case Andrew uses them against me later (he’ll use any trick to misrepresent my views!)

  15. By the way, in a recent post, Elaine admitted on her website that she was raped when “she was quite young”, so is very sensitive to isses of coercion and male aggression.

    This is probably why she is so acutely aware of the dangerous of FRB, financial speculation and exploitation.

    She intimately understands the mind of barbaric male rapists.

  16. “issues” and “dangers”. Apologies. I was probably nervous typing this, as it is a very personal subject. But I really believe FRB is financial child rape. So it has to be written. Someone has to bear witness to what is happening to our lives.

  17. Errr…just to clarify – I’ve never been raped myself and wasn’t trying to give the impression that I have personally been involved. The point is that the whole topic of financial coercion and financial theft (and rape) are very sensitive issues and (based on Ellen Hodgson Brown’s book) has resulted in Mafia-style attacks on people in the past.

    Hence my desire to keep a very low profile in Australia. I’ll only reveal myself if Alice promises to marry me.

  18. OK Andy – so things are better since we started trekking down the de-regulation pathway are they?

    Lets start comparing the early 1970s to the early 1990 ie the first two decades (it gets worse believe me). In 1973 only 0.5% of working age people received unemployment benefits …fastrack to 1993 and it rises to 8%.

    We have had three major recessions (no…wait 4) since the early 1970s compared to no major recession between the end of the great depression to the early 1970s. Wait, thats 30 years with no major recession post war (fancy that – despite all those old fashioned regulations) and since the 1970s we have had 4 major recessions!!! People get up, dust themselves off and keep working you hope… but do you know how many years a recession can set people and households back, really?

    Cummulative residual effect into the future?

    The proportion of the population relying on social security payments rises (from 15% to 23%) between 1973 and the early 1990s – that is sole parent pension, disability pension, unemployment pension and aged pensions.

    The percentage of retired who rely on the aged pension as their main source of income increased over the same time period. The earnings distribution became significantly more unequal …oh and earnings overall devalued over the 1980s such that in real terms people in 1993 were really only earning 1983 wages (9th decile) or below in the case of lower deciles.

    Between 1973 and 1993 most of the growth in jobs was in part time jobs. By 1993 a quarter of all employed people worked part time, the underemployment rate was 7% of the labour force (wanted more work) and 12% of those were underemployed because they had been stood down from full time positions.

    Women filled 75% of those part time jobs (so there is most of your liberal flexible labour force – achieved primarily through the bullying of females). Oh and part time jobs grew 164% in the two decades since the experiment started whilst full time jobs only grew a measly 14% to satisfy the population growth (any trickle was nothing but a thin trickle).

    Average hours worked rose by two hours a week (more leisure eh Andy??? Another error….ask Dad who is always later home and Mum who now has a double load?). Oh and our bottom ranking as OECD public spenders means Dad doesnt have good public transport and you can add another two hours for traffic jams.

    Fertility rates declined, and first time Mums get older because they cant stand the thought of bringing baby into the world while they are still paying back hecs. Despite the ageing boomers needing replacements, there arent many incentives to produce one for mum, one for dad and one for the country. In fact more are saying no thanks.

    So you thought you were earning more and working less and things were wonderful as a result of Fraser…Hawke Keatings and all those eco liberal deregulations experiments…uh uh..?.

    You have been badly conned Andy. We all have.

  19. Alice,
    Any one can get an economy growing from a low base (after a major depression and really destructive war, for example) for years without major problems. Heck, even the economically incompetant Chinese government can do it just by interfering less. Discovering major oil, gas and iron resources helps too.
    As for the reliance on benefits – I would agree. They should be scaled back heavily and the eligibility criteria reduced to what they were 30 to 40 years ago. The pension should also be contracted to cover only the 30% (or so) of the population that actually lived to pensionable age – or is that not what you meant?
    Perhaps (and I would disagree) that women should be removed from the effective labour force. Perhaps you think that this will make more jobs for the men (and you could be right) but surely some women would object to having to retire when they get pregnant. OTOH you could be right and women should be barefoot and pregnant at home. Back to the 1950s!
    Working hours may have (marginally) increased – but the amount we all do at home has dropped considerably. Again – perhaps we should stop using the dishwasher, washing machine and other such new-fangled and obviously time-wasting inventions. They have not made up for the 2 hours a week we have gained in paid work.
    BTW – I have never said that Fraser was anything more than a waste of space adn Howard as his Treasurer was terrible. Old school conservatives the both of them. But you seem to agree with them that things were better in the 1950s. Sad.

  20. I give up Andy – now you want to remove women from the labour force to correct unemployment (God forbid that employers be regulated to use labour in a less exploitative way – the only reason employers got away with using people so casually in the first place is because the accord and labour market de-regulation allowed them to).

    Removing women from the Labour force? I said NO SUCH THING. Do not twist what I said Artful Andy. You have clearly mistaken me for John Howard (oh horror – Im not that mean and tricky).

    Its about jobs Andy. Your liberal economy isnt delivering….and you can only get so much “competitiveness” (splutter, cough) by screwing labour and families down. They got their competitiveness, now where are the jobs?

  21. I guess you never considered the fact Andy, that when jobs are plentiful people may actually buy more goodies with their working incomes? But hey – unemployment and underemployment way higher than the post war years and far more recessions and far more powerful gambling banks (and Im not getting into gender arguments with you – more jobs for all – no discrimination!) and things start to look very wobbly for your (very very) economic liberal views. Your type make old style conservatives like Fraser and Menzies look very sound and healthy Andy.

  22. Alice says “I give up Andy – now you want to remove women from the labour force to correct unemployment”

    Alice, it is clear that this is not what Andrew is advocating. He was merely alluding to the fact that you are comparing unemployment rates more recently with those of previous times, while conveniently ignoring the fact that one of the reasons unemployment was lower was simply that there were fewer women in the labour market back then and so this meant the notional unemployment rate was lower.

    “Removing women from the Labour force? I said NO SUCH THING.”

    No-one said that you specifically advocated such a thing. All Andrew is saying is that you would presumably have to support such a measure for your approach to be consistent.

    You need an irony alert on your computer.

  23. Alice, the main reason why dependence on welfare has increased is simply that societal attitudes have changed over recent decades. A traditional belief in self-reliance has declined, and there is more of an attitude that the government should look after people.

    What this has to do with the triumph of economic liberalism I don’t know. If anything, if economic liberalism had dominated public policy to the extent that is claimed, one would have expected more to be done to reduce welfare dependence.

  24. Monkeys Uncle – yes there were less women working in the 1950s!

    Why do I have to support a measure of less women in the labour force so that unemployment is lower. Utter nonsense. More women in the labour force should generate more income to spend which should generate higher GDP and higher output and more investment. A larger labour force should increase the level of full employment output – so why arent we there and why do they keep shifting the goalposts on what the actual natural rate if unemployment is (4% ?? Now possibly 6% and in a few years what? 8% or 10% Even 4% is 4 times as large as the 30 years after the great depression).

    You two act as if women gaining employment is at the expense of men losing employment. Rubbish.

    Its not just that one glaringly sexist assumption that bothers me. Both of you are ignoring the fundamentals in my previous post. The Australian people OVERALL are doing worse since your economic liberalism and de-regulation reared its head a some sort of magical policy approach, than before (post great depression to the 1970s). Worse off.

  25. MU

    “Alice, the main reason why dependence on welfare has increased is simply that societal attitudes have changed over recent decades. A traditional belief in self-reliance has declined, and there is more of an attitude that the government should look after people.”

    You know I find these so called insights into people’s so called behavioural shifts rather amusing – what? Did someone stand outside centrelink and survey people to find out why they were now claiming the dole instead of working and they said “well – I just got tired of working and decided to change my attitute to accepting welfare. I had a transformation nd one day I just quit and I decided it was OK for me to be this way?”

    Sure Monkeys Uncle – blame it on people’s attitudes if you like but you are wrong. Behavioural shifts? Any sources? References? Its so easy to say “oh well people changed their attitudes to welfare in that time” with no evidence whatsoever. Thats also why women arent having babies or getting divorced or are only working casually a few days or choose to work casually when they have kids as single mothers…. its all a personal choice is it? It may be in a few cases but its not in the majority.

    Like being run over is a personal choice. People changed their attitudes to looking both ways before they crossed the road. Thats why there are more people getting run over. Its a personal choice.

    Economic resources has more to do with these decisions that your behavioural shifts MU.

  26. John, you may be right that economic liberalism (as you have defined it) has increased corruption, although personally I don’t find the evidence conclusive. But, that doesn’t mean that substantially reducing government intervention (either across the economy or in specific markets) would increase corruption. Sure, it’s certainly plausiable that reducing intervention by contracting out the supply of governnment services could increase corruption, perhaps substantially. (The problem here is that the government is spending other people’s money.) But surely there are areas, such as industy policy, where liberalisation (abolishing the role of government entirely) would unambigously reduce corrpution. Don’t we have to assess this on a case by case basis? If we are to make these judgments at the macro level, do we have reliable macroeconomic data on the extent of government intervention (as opposed to economic liberalism, as you have defined it) and the extent of corruption (as opposed to notable political scandals)?

  27. Let’s look at the truly large scale financial implosions, where the lit fuse is corruption. Enron, WorldCom, Madoff, Milken (Junk bonds), Bond, Skase, Pyramid, Estate Mortgage, etc. How many publicly owned and run large scale bodies have imploded due to corruption? The Snowy Mountains? Nope. PMG/Telecom Australia? Nope. Australia Post? Nope.
    The Army? Nope. CSIRO? Not on your nelly! Various water utilities? Not that I’m aware. AWB? Yes, with bells on! But let’s look into AWB a little: it was a farmers’ monopoly single desk, for the purpose of extracting the highest price for their wheat (and other grain), in overseas markets. AWB Limited, is a company in its own right, separate from the government, IIANM. BankSA? Nope, not while under government jurisdiction – just very lousy loans. Of course, once they “privatised”, Marcus Clark had a field day – before hot-footing it to a less stressful country (presumably with no extradition treaty with Australia). Remember the farmers getting “cheap” loans that turned out to be based on foreign currencies, like the Swiss franc, for instance? Several registered private banks engaged in this. What about the ABC? Nope.

    Of course, these are just individual cases – of themselves they do not prove that neo-Liberalism is worse for corruption than a democracy with public institutions like the Australian Post, ABC, CSIRO, etc. No doubt someone trying to argue the opposite viewpoint to me could find several cases which cast some doubt. However, these institutions and companies I’ve named are multi-million to multi-billion in size – they are not minnows! I reckon they provide good evidence (if circumstantial) that a democracy with institutions providing a service valued by society is not necessarily worse – in fact may be better – than a trimmed government reliant on a free market to propagate goods and services for the public good.

  28. Alice,
    I have no interest in having women leave the workforce – none at all – but your idealisation of a period where women had to do so can only lead to the conclusion that you either suffer from a cognitive dissonance or you do not realise that having around 40% of the workforce out of formal employment tends to reduce the unemployment figures of the rest of the workforce. I do accept that it is not 1 for 1, but it is hardly 2 for 0.
    The fact that large measures of underemployment also existed due to lower educational standards, lack of transport and many other factors also seems to have passed you by.
    The 1950s were no ideal time of racial harmony, sexual equality and full employment as you seem to think. Most families could not afford more than a weatherboard 3 by 1 house (possibly with the dunny out the back), an old FJ or something pre-war and British and certainly no TV.
    Deal with it, Alice – liberalisation has brought us all much. It has cost in some way, sure – but no change is cost free. As it is I think we have done very well out of the last 40 to 50 years. Of course, if you want to go back to 1950s style living today, you can always get a house way out in the suburbs, give up your car and TV, eat only food that was around then (no lattes) wear second hand clothes and darn your old socks – but you may find it hard to find someone to empty your night soil.
    Give me liberalism and all it has brought, even if I am unemployed from time to time.

  29. Andy – I havent idealised that post war period for the reason that Less women were in the workforce. That is a nonsensne. The economic inicators were better and the economy was doing better since all round – nothing to do with less women working – nothing at all. An economy should generate jobs for those that want them. It isnt happening now. In fact its not just mildly worse now its a damn lot worse than the pos war decades. It was happening post war. Not since the great neo liberal experiemnts started in the 1970s. Blind Freddy can see it only someone needs to look and compare more and get off the faulty computer models.

    There was nothing wrong with dunnies out the back – not nearly as much as you think. Half the labour saving decvices we have these days dont work for long anyway. In fact most of it is a pile of rubbish and adds to global landfills because its cheap and made of plastic (just like liberal economists?)

  30. The simple fact is that real wages in the post-war period (relative to housing prices) was far greater than today, giving families the CHOICE as to whether the mum went into the workforce or not. Childcare was virtually non-existent in the 1950s because the family had sufficient non-marketable time to take care of kids on their own.

    With unregulated financial markets making “credit” (or debt money) more readily accessible, real wages have declined SUBSTANTIALLY (relative to house prices), making it virtually impossible for one partner to stay at home raising children.

    The “women’s lib” movement was a scam. Women ended up having to juggle raising the kids AND working to pay off the mortgage.

    They were screwed by the “free market” and have been the worst victims of de-regulation.

    The figures on housing price growth relative to average earnings growth don’t lie. We all know about them.

    The simple reality is that the non-financial sector is working longer hours than ever before, with worse conditions, on lower real wages (relative to house prices)than at any time in the post-war period. The housing afforability statistics bear this out.

    Rising house prices has the mechanism to bring back wage slavery. It obvious to everyone – even the dumbest banker or government bureaucrat on a stipend and a nice super package (insulated from the brutality of the “market”.

    B.A. Santamaria is turning in his grave.

  31. Donald, that’s not a good test of corruption. Corruption is another cost for businesses/agencies. Businesses that are exposed to competition fail if their costs blow out. The same is not true of government agencies. That fact that government agencies don’t implode doesn’t mean they run better than businesses that do. Indeed, removing the threat of failure could lead to more corruption.

  32. There are so many typos in what I wrote it’s not funny – but I don’t care because NOTHING I’ve written in the last decade on modern wage slavery and the evils of fractional reserve banking or central banking has EVER been published or even made a slight difference.

    So why worry about grammar on a blog that 5 people read and where NO ONE understands me?

  33. James at post 25. – excellent points.

    I also don’t find the evidence for increased corruption from economic liberalism conclusive. And even if, as you say, “it’s certainly plausible that reducing intervention by contracting out the supply of government services could increase corruption”, there are well known methods to reduce the possibility of corruption happening. These have been known for some time, and are routinely applied in high performing organisations.

    The reluctance to apply them is more a damnation of poor leadership than any evidence for inherent problems with economic structures.

  34. Alice says “Why do I have to support a measure of less women in the labour force so that unemployment is lower.”

    Because you were comparing unemployment rates across time, while conveniently ignoring the fact that the only reason unemployment rates were lower in the past is that fewer women were in the labour force. So when you say things were better back then, it is not unreasonable to think that perhaps you believe fewer women in the workforce is a good thing.

    Also, when you make comments like “Women filled 75% of those part time jobs (so there is most of your liberal flexible labour force – achieved primarily through the bullying of females).” people may well think you believe fewer women should be in the workforce.

    “More women in the labour force should generate more income to spend which should generate higher GDP and higher output and more investment.”

    This is true, but it completely misses the point being made. The point is not whether or not taking women out of the workforce creates more jobs for men or anyone else (and I generally think the notion that removing one section of the population from the labour market will lead to more work elsewhere is pretty dubious economics). The point is that if women are not in the labour market or looking for work, they will not show up on unemployment figures and so the official unemployment rate will be lower.

    If you reduce by half the share of the population in the labour market or looking for work, it means the official unemployment rate may be lower even if the economy is generating fewer jobs. Get it.

  35. ABOM,
    Two of the major reasons why housing (as a share of income) is more expensive than it was in the 1950s are very simple.
    1. There are many more people now than there were then, making land close to major centres of population more expensive. This much, I would have thought, would be non-controversial.
    2. Our houses are simply much better than they were and we put more in them. A 1950s housing commission house in Perth, for example, had two bedrooms, a sleepout on the back verandah, one living room a kitchen and a bathroom, with a toilet out the back and was made of weatherboard. Communications consisted of a Bakelite telephone – and that spec was for families of between 5 and 10 people. Now the normal base specification for a Homeswest home is a 4 bedroom, 2 bathroom home with at least two living rooms, a carport, data cabling and all in brick and tile.
    An equivalent house in the 1950s would have been considered a wealthy middle class home. There is simply no comparison.
    If you are going to try to look to the past for your inspiration at least make your attempt to idealise it one that is not so easy to demolish.
    As for “[t]he economic inicators were better and the economy was doing better since all round” this claim is simply risible. MU and I have demolished you on unemployment and on the rest of the indicators the only one that was noticebly better was GDP growth. Now you may think that growth is a good thing (and I would agree with you) but perhaps the use of one of my favourite metaphors will help – modified for the occasion. An FJ Holden will accelerate from 10 kmh to 20 kmh faster than a 2009 model VE Commodore will go from 100 to 200. The simple fact that it will double its speed from a much lower base, however, does not make it the more desirable car – or the one I would choose for safety’s sake.
    You may wish to go back to the 1950s, Alice – but really there is no comparison. Things are vastly better now and, I hope, will continue to get better in the future. The important thing is to try to ensure we do not make the same mistakes our parents and grandparents made – and that what mistakes we do make we learn from. You seem determined to repeat not only the mistakes of our ancestors, but to make new ones as well.

  36. Then there was the PPP for the Sydney cross-city tunnel. Someone (as a member of the big Mac) thought 81,000 cars per day was a reasonable estimate for initial traffic. The rivers of filthy lucre depended upon a high throughput. The plan called for side streets be closed, so as to funnel cars towards the XCT.

    Then they built it and opened it, the government believing the estimates. Trouble is, it quite quickly became apparent that the estimates were so completely wrong that the profitability of the XCT was called into question. They were so utterly inaccurate that the lingering scent of a fix was detectable.

    The government has to wear this nonsense.

  37. Andrew,

    Housing quality has arguably declined (check out Meriton Apartments) and massive land releases and high density housing in most suburbs have (to some extent) addressed the second issue.

    I would agree with you if I could buy and sell in gold. Given that I KNOW huge distortions are occurring due to “crazy” FRB, your arguments are peripheral and go no where close to explaining the explosion in house prices.

    I assume you also believe that housing prices in the US were rational, there was noo bubble in housing, that sub-prime debt was not overpriced, and that 30 year US bonds are a good investment?

    The market is always rational, right?

  38. No ABOM, the market is not always rational. The old rule covers it nicely – “the market can stay irrational for longer than you can stay solvent”. Of course, you spotted the problem and made a mint out of it. Well done.
    I just trust the collective wisdom of the people in the market to be right more often than a governmetn will be. In general that is right.

  39. Agreed. Especially on what should be “money”. The market has always chosen gold and silver if left to its own devices.

    I wonder why?

  40. ABOM,
    Because it is difficult to print gold or silver.
    Gold and silver are difficult to carry around, though, which is why notes are popular if you trust the issuer to be able to redeem them in specie when you demand. Once that trust is there, it then becomes unnecessary to keep all of the gold and silver actually on hand, so that is why the market has also always chosen FRB over any full reserve system.

  41. Agreed again. So how many times has a fully fiat system (like the one we have today) been tried and what is the average lifespan and what happened at the end of each lifespan.

    If you don’t know your monetary history I’ll give you a few hints: Ponzi John Law’s France, Yugoslavia, post-Soviet Russia, Manchu China (and about five attempts before that dating back to the Middle Ages), Zimbabwe, Weimar Republic, Angola, Civil War greenbacks….

    You get the pretty picture.

  42. I do know my monetary history and you missed a few – but why quibble. Quick question back – how many of them were started in a democracy that was not under extreme stress?
    The system has its limitations, but it is much cheaper not to have to have a mountain of gold or other commodity just sitting there on the off chance it is needed. While I am by habit very suspicious of government I do recognize it has a role and if it can manage to keep a reasonably stable money supply so that we do not have to hoard gold, all the better.
    That said I would prefer that other money was also allowed to compete against it.

  43. ABOM – dont worry… I understand you!

    “The simple fact is that real wages in the post-war period (relative to housing prices) was far greater than today, giving families the CHOICE as to whether the mum went into the workforce or not. Childcare was virtually non-existent in the 1950s because the family had sufficient non-marketable time to take care of kids on their own.”

    Yes I would like the choice back! I think we need ton look closer at the whole impetus for womens lib – sure we had the cultural revolution of the 60s. Men were dodging the draft and it was big young boomer gen – and there was the pill giving women the choice not to get married (ooops….quite so young!)

    But what else? Maybe just maybe that damn inflation in the 1970s started eating up their household budgets – add the unemployment and it might have need an extra worker offered on a plate to the labour force (if you cant get an inflation matching wage rise, and inflation is running wild – you feed the labour force an extra worker in order to maintain the households real wage).

    Necessity is the mother of invention, and the mother of many women working – and hey when they got there (into the labour force – what did they find – they got angry because they needed to work and they were getting treated like garbage when they did get jobs -womens lib wasnt a con ABOM – it was as much a response to a deterioration in the health of the economy from the post war decades, as is the rest of it (declining after housing real incomes).

    You are right and I would have liked the choice and I think a lot of women would if the truth be known. Working harder, longer for less, and spending less time with their kids.

  44. “Reasonably stable money supply”??????


    That was the biggest laugh all day!

    Thanks, Andrew. I needed that.

    And Alice, yes I think you understand me. But not everything about me.

    I’m a bad, bad nasty boy underneath this frightened psychotic persona. Really bad.

  45. MU

    Youi and Andy bioth regularly misinterpret my state and Ill edit with my comments

    ““More women in the labour force should generate more income to spend which should generate higher GDP and higher output and more investment.This is true, but it completely misses the point being made.”

    How so???

    “The point is not whether or not taking women out of the workforce creates more jobs for men or anyone else (and I generally think the notion that removing one section of the population from the labour market will lead to more work elsewhere is pretty dubious economics).”

    I didnt make that point at any stage. The economy should generate sufficient jobs for both and it generated sufficient jobs in the post war decades for, as ABOM noted, families to get by and buy a house on one wage ie women had more choices. Many women still worked even in the 1950s. 23 percent of all taxable income earners were female!!

    “The point is that if women are not in the labour market or looking for work, they will not show up on unemployment figures and so the official unemployment rate will be lower.”

    I know that MU. But more women working is not an acceptable excuse for any policy maker or any excuse for a poor performing economy, for a higher unemployment rate. More women working should generate a higher labour force and higher participation rate and higher GDP (more income, more investment) as I said.

  46. ABOM.
    I dont care how bad you are – you make me laugh BUT NOW Im getting more worried by the day – when I go to work and someone out of the blue starts saying China is putting pressure on the US and the US is suggesting it needs a devaluation of the US to pay back its trillions of dollar deficit and …..AND…..AND….AND….someone in the US (Goldman Sacks and big banks? most likely) is suggesting a global currency is required so the US can get its deficit in order – that means spread the losses AROUND the globe ABOM – Im not an idiot!.
    Is this where they steal from us.? The ordinary person is made to cop the losses by the gambling banks?

    Physical delivery of gold required!…where the hell do you hide it so you dont get robbed? The delivery man could be working for the mafia.
    Im serious.

    I also made a lot of spelling mistakes above. We have a lot in common ABOM.

  47. Andy says
    “MU and I have demolished you on unemployment”
    This was comparing the post war decades to the 1970s to the decades after….

    MU and you (Andy) have done nothing of the sort (demoslished me on unemployment). Now I think MU and you are both taking something that really has you in cloud cuckoo land – the only explanation you even mooted at was “more women working raises the unemployment rate…..?” Just to recap unemployment rate averaged 1% in the three decades post war. Hello? Anyone at home? Its heading towards 8 times that (and ewas 8 times that in the early 1990s). 8 times as large psot 1970s as postwar decades? Are you and MU in total denial? What was you explanation again? refresh me? More women working post 1970s – I get the general drift of your line of thought …those dames stole de boyz jobs?? Hence more boyz outta work = higher unemployment = only so many jobs to go around??

    Wrong. Wrong. Wrong again.

    Truly myopic and belongs to no known economic theory…boys!!.

    More women (in addition to men) working = larger labour force = more expenditure = more GDP = higher employment and higher investment = should grow the economy.

    Or it should??? No one is tealing anyones jobs here. More in the labour force should equal more output.

    BUT the output thingy not happening because – do I have to spell it out? The liberal experiements of the 70s post period FAILED.


    De – regulation of labour and lower taxes poured more money into the hands of the already rich. There was only so much production they could generate with the extra riches…so to save themsleves time and effort they gave their riches to the biggest banks to invest for them (the biggest banks could only take so much money so they started to “malinvest”…ie invent things to invest in…financially creative derivatives which only they understood, so could make money on….there are only so many people doing so much production and there were too many banks with too much money chasing those too few genuinely productive firms (credit to Milton).. = rise in share price above real value = stock market boom = stock market bubble = stock market crash).

    Now I know you too are not silly BUT you need to see that the balance between labour and capital is out of whack and needs to correct – hence biggie banks fail because there is no underlying support base (labour has been stripped of wherewithall to buy goods due to excessive deregulation and imposts).

    Now when the workers stop buying and borrowing to buy shares or realestate ….your free market de-regulations and liberalisations all start to come undone…

    Sorry – but you (Andy) and MU need to see the error of your too liberal ways.
    A good start would be to clamp down on the financial system (ABOMs suggestions and now mine). A financial system should grease the wheels of real production not gamble. A second suggestion would be to make sure the workers can keep spending. You can keep your de-regulation for small business (it helps them grow to become productive).

    My solution is a cross bred Keynesian Rothbardian solution but I have a gut feeling it just might work.

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