Australia SOLVED

By Champion, Rafe | Review - Institute of Public Affairs, April 2006 | Go to article overview

Australia SOLVED


Champion, Rafe, Review - Institute of Public Affairs


Australia SOLVED Rafe Champion reviews Australia Fair Hugh Stretton UNSW Press, 2005, 294 pages

For a mere $75 billion per year, Hugh Stretton knows how an Australian government can easily provide large doses of addictive social engineering. Stretton proposes a suite of policies to do 'whatever it takes in our changing historical conditions, by old and new means, to keep Australia fair. Contrive full and shared employment ... Continue women's progress to genuine equality at home and at work ... reduce the scale of our inequalities'.

The first chapter in Stretton's book is 'Leaders', with a fulsome tribute to 'Nugget' Coombs in his capacity as Keynesian social engineer and benefactor of the Aborigines. This conveniently sums up a number of the problems with the book.

As far as economic policy goes, his solutions are massively out of date. The bubble of Keynesian demand management has collapsed, leaving the problem of explaining how anyone ever thought that inflation could be traded off against unemployment, without addressing the fundamentals of productivity and the abuse of trade union power.

Underpinning Stretton's policy proposals is the assumption that the role of government is to channel resources from one group to another group according to the preferences of the policy-maker-instead of allowing the maximum scope for choice by people to make their own plans to achieve their desired lifestyles.

Stretton is so captivated by the idea of fairness (usually called 'social justice') that he has been blinded to the most obvious dangers of the unintended consequences that arise from the perverse incentives generated by schemes such as the proposed parent wage (a minimum wage for anyone who stays home to look after a child up to the age of seven). One can envisage communities of single parents, suffering from the same collapse that has occurred in tribal communities-circumstances which presumably inspired this book to be written in the first place.

The arguments for this massive programme appear at first sight to be well organized and backed by a prodigious display of statistics. Stretton has been reading and writing for over 60 years of professional life and the bold sweep of his vision tends to distract attention from the errors and muddled thinking in the details.

Stretton projects an image of fairness with a chapter 'How not to argue' (refrain from parody when presenting the arguments of opponents), but he is too committed to his agenda to be diverted even to consider small government or deregulatory options. His policy prescriptions veer off in the direction of big government interventions like a heavily biased bowling ball. For example, his section on the environment would be improved by a realization of the way that property rights and market forces can promote conservation, rather then the reverse as he appears to believe. This tendency to selective vision is exemplified by his uncritical acceptance of the deeply-flawed research of Michael Pusey.

The chapter on 'National Objectives' urges essentially Scandinavian levels of intervention and cradle-to-grave welfare, then a chapter on 'Work' demands full employment. 'Every consideration of economy and humanity should drive us to see that there is paid work for everyone who wants it'.

Stretton's attitude toward labour policy is particularly blind. Instead of engaging with the free-market case for the elimination of minimum wages, he simply dismisses such policies out of hand. '[Some] oppose most minimum wage requirements, claiming falsely that they always reduce employment and economic growth (opposite effects are just as frequent).' No evidence is cited and he proceeds to consider the array of interventions that might 'retain particular industries or limit foreign ownership of them'.

He writes that we have 'long had the world's best institutions for debating and determining the wages and conditions of paid work' (p. …

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