RickyRobinson.id.au

Rhys has written a long response to my essay about the free market economy, presumably from his room at the Sheraton Imperial in Kuala Lumpur. I think it’s a really great read. He even reveals the names of the "intelligent people" at university I used to have debates with. It seems that Rhys and I are more or less in the same ball court, and playing on the same team for the most part, except that we might argue about what the team’s name is. I’d just like to say a few things in my defence.

First, whilst it’s true that my economic views may have shifted back towards the "right" (the Political Compass certainly suggests this), this does not necessarily equate to a shift in political allegiance from the traditional "left" parties to the Liberals. I think this point is most clearly demonstrated by using British politics as an example. In Britain, the Labour party is traditionally classified as left, but under Tony Blair the party has moved in a decidedly Thatcherite direction. This is more or less what Rhys was getting at when speaking about shades of grey and when he says we’re all in the middle. I don’t think my essay said that the current ALP are advocates of big left government, and Rhys perhaps needn’t have jumped to the ALP’s defence quite so swiftly. Indeed, I’m not even saying that the Liberals are a good exponent of "small" government. Far from it. I totally, one hundred percent agree with Rhys when he questions the Liberals’ commitment to free trade. And yes, it was the Hawke/Keating government that made by far the largest steps in the direction of free trade. It was also the Hawke/Keating government that moved us away from an unruly and uncompetitive system of awards to a much better enterprise bargaining system, though I don’t think that goes quite far enough. The Liberals are set to reform industrial relations even further. So my article was definitely not about Liberal versus Labor, but rather about economic philosophies in general. Anyway Rhys, you can rest assurred that the Liberals have certainly not captured my vote!

Second are the notions of "big" and "small" government. I agree that these terms can sometimes be a bit vague, but I think they are used fairly consistently in the media and literature and have pretty well understood meanings attached to them. I concede that I could have this wrong, and that not everybody understands the same thing by these terms, so here’s what I mean. Big government is one which taxes highly, subsidises heavily, often intervenes and implements generous welfare schemes. Small government is one that taxes minimally, subsidises rarely (if ever), never or only occasionally intervenes, and believes that overly generous welfare schemes serve to harm society in the long term. Rhys and others might argue that I’ve still used relative terms here such as "highly", "heavily" and so forth. That’s true. But at any given time and place, these terms are resolved by comparing the different policies on offer. Other than this, my only recourse here, I fear, is to wave my hands and say it might be more meaningful to look at the reasons for setting taxation rates at a particular level. That is, what will the tax dollars actually be spent on? Maybe some people might have something further to add here (or not).

Finally, like I said in my original post, I’ve decided nothing. One thing is definite, and that is whatever my point of view on economics is, it certainly will not translate into a vote for any particular political party at the next election. Besides, I figure that being a paying member of a certain "far left" party (whose members would probably hate me now if they read my essay) obliges me to vote for them in the next election. I can live quite comfortably with this seeming contradiction for now. Hopefully I’ll have ample time in the future to resolve this issue.

Upon entering university, I was a staunch economic rationalist. I was as firm in my beliefs about the virtues of the free market as any wet-behind-the-ears eighteen year old could be. I attribute this largely to my year 11 and 12 economics teacher (Mr. Hutchinson). By degrees, partly because of the left-leaning environment I found myself in at university and due to the highly intelligent people who were telling me that my position was the wrong one – you all know who you are ;-) – I was persuaded to see that free markets were not the solution to the world’s problems. I was, and still am to some degree, impressionable, though hopefully I’m a bit more capable of thinking for myself these days. My friends began to refer to me as a "bleeding heart lefty". However, during the course of my postgraduate studies, which introduced me to complex systems theory, I was once again forced to re-evaluate my position, and at this point in time, I’m not sure where I stand. The idea of small government and the free market economy has once again become appealing to me. So much of my reading highlighted the ideas of structure emerging from the bottom up, of the resilience and robustness of systems in which there is no top down or central point of control. Furthermore, I now begin to understand why staunch free market economists such as Milton Friedman argue that the free market is morally unassailable (this is something I hadn’t thought about in my first incarnation as an economic rationalist).

If a natural disaster of Hurricane Katrina’s proportions occurred somewhere in Australia, would authorities face an outbreak of lawlessness similar to that being experienced in New Orleans? My gut feeling is "I don’t think so". What’s happening over in Louisiana is insane. Looting is bad enough, but taking pot shots at rescue helicopters, how low is that?