Guest essay by Viv Forbes
To compete in today’s world we need to score well on resource availability, capital assets, energy costs, tax burden and workforce/management. It also helps to have secure property rights and a sound currency. Today’s Australia scores poorly on all counts.
In 1901, the year of Federation, Australia was the richest country in the world per capita.
The Pioneer generations, with freedom to explore and invest, had developed valuable mineral assets – gold, silver, lead, zinc, copper, coal, tin and iron. And they had bred up large numbers of sheep and cattle on our native grasslands.
Energy was abundant – wood, horse power, kerosene, gas, hydro and coal powered electricity – we were among world leaders in cheap energy. Sydney had gas lights in its streets as far back as 1820.
The Pioneering innovators also invented game-changers such as the stump jump plough, the Ridley-Sunshine Harvester and froth flotation of minerals, and they developed better Australian versions of Leviathan coaches, Southern Cross windmills, Merino sheep, Shorthorn cattle, Federation wheat, Kelpies and Blue Heeler dogs.
The Builder generations who followed the pioneers invested heavily in productive capital assets like flour mills and wool sheds, mines and collieries, smelters and saw mills, power stations and electric trams, trans-continental railways and overland telegraph lines, orchards and plantations, stockyards and abattoirs, breweries and vineyards, dams and artesian bores, factories and universities, exploration and research, pipelines and harbours, railways and roads. There were no “Lock-the-Gate” signs.
Governments were decentralised with minimal taxes and red tape, creating new business was easy and union power was minimal and generally beneficial for workers.
But then the Termite generations took over, and for much of the last forty years taxes, handouts and green tape have been smothering new enterprise. We are sponging on the ageing assets created by past generations and building little to support future Australians. The monuments left by this generation are typified by casinos, sports arenas, wind-energy prayer wheels, sit-down money and debt.
The trendy war on carbon has already inflated our electricity costs – this will hasten the closure of more processing and manufacturing industries. Green tape is shutting-the-gate on new investments in exploration, grassland protection, dams, power stations, fishing, forestry and coastal development. Taxes are weakening existing industry and the savings that could build new industries are being wasted on bureaucracy, delays, legalism, subsidies, climate tomfoolery and green energy toys. Finally, union featherbedding is crippling any large survivors.
Australia’s future prosperity demands cheap energy, more investment in productive assets, reduced government costs, more productive labour and the freedom to explore and innovate.
We must change, or more jobs will follow Holden.
More at carbon-sense.com
I think it started well before that. The strikes during WWII where the unions refused to load the ships bound to fight the Japanese were a definite indication of a people who were losing their integrity and moral stature.
Everything Viv said also applies to the USA and goes double for those in the EU.
Only one quibble I have. Termites is too nice a term I prefers raiders and parasites like Haemonchus Contortus, a blood-sucking parasite that pierces the lining of the sheep’s fourth or “true” stomach, causing anemia often leading to death if untreated.
Thanks Viv. Good article.
I can only hope Australia will soon start removing the termites from government positions, we should do the same all over the world.
Thanks to Viv Forbes for that essay, and to Anthony for posting it. It was very informative and a pleasure to read tonight.
As a follower von Mises and the Austrian School of economics, all of this is all too predictable and understandable. Far too many people don’t understand that wealth comes from innovation, investment, forecasting and risk taking. The people themselves are the best at these things since they are the ones whose “boots are on the ground” whilst bureaucrats in some far away office can never do anything but get in the way of progress and destroy accumulated wealth.
It is said that the greatest trick Satan ever pulled off was convincing mankind that he did not exist. Well, the greatest trick the State has pulled off is convincing people that it is necessary and that it does good things for the masses.
The Nature of the State: http://mises.org/daily/4227/
Nicely put, Viv.
As a 60+ 5th. iteration Australian I share your concerns. Hayek and others have called for an alternative, loud and consistent opposing voice if we are to stem the galloping growth of arbitrary authority pouring out of our bulging bureaucracies.
I have a strong sense that Abbott places a high value on service and his opportunity to be a servant to Australia will bring on some reforms and revisions of the socialists plans.
Cheers,
Dave
Narrogin WA
This article is truly bizarre.
The thing is this: Australia has, over the past couple of decades, climbed UP the ladder of the world’s largest economies.
According to Forbes this would simply not be impossible because Australia is not competitive in all the ways that count, including in energy costs.
The other bizarre element is that there is not the slightest skerrick of an attempt at balance: how does Forbes account for our mass extinction event, the trashing of our soils, and the utter degradation of our largest river systems?
They must not matter, right?
“climateace” can’t really help himself, he’s just another govwonk in Canberra that likely never had to actually produce anything of substance. Other than reports I doubt he has anything tangible.
BarryW says: @ur momisugly December 26, 2013 at 5:29 pm
I think it started well before that….
>>>>>>>>>>>>>>>>>>>
You can trace it back to the 1800s (Carroll Quigley was President Bill Clinton’s Mentor)
The Anglo-American Establishment
by Carroll Quigley
Tragedy and Hope: A History of the World in Our Time
by Carroll Quigley
Now think of the 2008-2009 ‘Bank Bailouts’ and financial crisis….
Apparently John Galt lived there too.
BarryW says: @ur momisugly December 26, 2013 at 5:29 pm…
I should add, despite what the propogandists try to tell us, Capitalism does not work without law. There must be respect for and protection of property rights from the thugs, raiders and parasites, whether lawless or sanctioned by government. Fractional reserve banking is government sanctioned raids on everyones property (wealth)
Sen. Daniel Webster, during the debate over the reauthorization of the Second National Bank of the U.S. in 1832, summed up my view on bank issued fiat currency and fractional reserve banking.
Woodrow Wilson is the president who signed the Federal Reserve act of 1913.
The New Freedom
a book by Woodrow Wilson, 1961
We are seeing the culmination of plans that were made generations ago. Yes it sounds like a “Conspiracy’ which is why I use so many direct quotes, but there is too darn much evidence from sources like president Wilson. Heck the former Director-General of the World Trade Organization came right out and stated it very bluntly.
Pascal Lamy: Whither Globalization?
Democracy? What Democracy? We, the little people were shut out of the conversation before we were even born!
Most of the other large economies have also been committing suicide with fruitcake anti-plant food policies, and at a much faster rate than Australia.
What mass extinction event? Name 1,000 species that have gone extinct world-wide (or 100 in Australia, as you prefer) since 1901 – and then show how, if it did happen, it has any relevance to the article, or why Forbes, of all the people in the world, is beholden to provide an “account”. What has the trashing of the soils got to do with the article? Ditto for the “utter degradation” of our largest river systems. (Hint: to be relevant, you must show that they have a concrete relation to the matters under discussion, and, since the article is comparative, not absolute, that matters here differ materially and relevantly from matters in other countries.)
Frankly, I think you’re a troll. Any fool can throw factoids into a discussion without explanation and then leave it up to the reader to thrash about trying to work out what the heck you mean. Get relevant, make your point, or leave the discussion to the big boys.
climateace says: @ur momisugly December 26, 2013 at 5:37 pm
This article is truly bizarre.
The thing is this: Australia has, over the past couple of decades, climbed UP the ladder of the world’s largest economies….
That is because the rot is world wide. Most if not all countries have fractional reserve banking. Fractional reserve banking as Webster so colorfully stated in my above quote siphons money out of your pocket and into the pockets of the bankers and his friends.
For those who can not understand Webster here is “[s]ome of the most frank evidence on banking practices… given by Graham F. Towers, Governor of the Central Bank of Canada (from 1934 to 1955), before the Canadian Government’s Committee on Banking and Commerce, in 1939.”
Money Is Created by Banks Evidence Given by Graham Towers
And yet despite this very frank evidence nothing changed and nations such as Greece, and Iceland are going bankrupt because of bankers…
More on money and how the bankers transfer wealth to themselves and their buddies.
I think after the trendy war against carbon…in the future people will see the light, and all this green stuff will be pushed aside and we will return to carbon for all the good it does.
@ur momisugly climateace
December 26, 2013 at 5:37 pm
Oh, yes? What “mass extinction event” would that be?
What “trashing of our soils”?
And as for “the utter degradation of our largest river systems” – try that one on the many flood victims of the past few years.
Gail Combs, the social good that banks do is help individuals and companies manage risk.
Say an exporter wants to export goods from America to Australia. The chances are their clients want to buy in Australian dollars, so the exporter carries the can for the currency risk – if the value of the Australian dollar drops substantially after the deal is signed, it can wipe out their profit – when they convert the Australian dollars back into American dollars, the number of American dollars they get will be less than they need to cover costs.
Say an exporter in Australia wants to send goods to America. They are carrying the same risk, but in reverse – if the value of American dollar drops, their profit could be wiped out.
Banks help both parties, by putting them together. They set up a fixed exchange rate deal, to eliminate the risk for both the American and the Australian exporter. The bank charges a fee, and the Australian and American exporters lock in their profit – everyone is happy.
Without the bank, the Australian and American exporters would be at the mercy of the markets – they could go bust.
This is why banks charge so much for what they do, and why clients are willing to pay their exorbitant fees.
Of course, its unlikely that the Australian export will be an exact match in terms of value to the American export – if you could always match people exactly, nobody would need the bank. This is where the bank’s skill at managing risk counts – banking in this case is a continuous effort to track the imbalances and try to cancel them out against each other, to avoid taking on too much cumulative risk, to lock in risk free profit for the bank.
The system is imperfect – if the bank scr*ws up their risk management, they go bust. But its better than nothing.
Gail Combs says: December 26, 2013 at 5:38 pm
Dang, Gail hits the nail right on the head with this line she quoted:
“…..the advice given to governments by bankers, like the advice they gave to industrialists, was consistently good for bankers, but was often disastrous for governments, businessmen, and the people generally….”
Then in her next comment follows up with another great truth: Capitalism is a wonderful thing, but it only functions because of a myriad of laws and regulations.
Countries and governments should be investing in infrastructure within their own shores. If you think government can’t run it (very likely the case) then set up a sovereign wealth fund (Singapore and China style), and let that buy the companies and their assets, and run them exactly like normal companies.
Note that many power assets in Australia were privatized and sold off. Who bought them? Singaporean and Chinese companies owned by their sovereign wealth funds. Someone must be wrong and made an awful economic decision there, and I suspect it was not the foreigners.
Thanks, Viv! The more I learn about Australians, the more this Yank likes them! You gave great insight into the remarkable inventiveness and entrepreneurship of the Aussies.
Thanks also to Gail for her excellent contributions, as always.
The tide seems to be turning against the hockey team, let’s hope for more ice-bound Antarctic tourist ships in 2014! Happy New Year if we don’t speak before then. Cheers, Charles the DrPH
The way of things throughout the times of boom and bust!
The founders build the empire with a spirit of creation and hard work, usually out of dire necessity. The next generation builds more extravagantly and creates great wealth. The generation after is where the decline begins, for they sit back and enjoy the fruits of their wiser forefathers and use up the wealth in decadence that is needed to sustain the empire. The fourth generation either rebuilds or endures the collapse. (The question is which generation are we?)
This pattern is true almost universally from family businesses to major trading empires: and generally takes from 50 to 200 years throughout history. In the future, people will speak of the “golden age” when men dared touch the face of the moon and after that it will be merely fable.
Ahh, but I shouldn’t wax maudlin at our decline.
The world economy is being slowly being destroyed by statist governments’ EXCESSIVE: rules, regulation, mandates, greenmail, public sector union extortion, taxes, government debt and insane monetary policies necessary to feed the Leviathan and create economic bubbles.
The malinvestments, economic distortions, debt and economic inefficiencies created by statist governments will eventually cause one of the worst worldwide economic collapses in human history. After the collapse, the world will have two choices: 1) do citizens run into the arms of the Leviathan for protection from the devastation ironically caused by the Levianthian itself, or 2) do people cage the Leviathan with the bars of limited Constitutional enumerated powers, balanced budget restrictions, government spending limits to just 10% of GDP, implementing massive deregulation, tax reform, abandonment of CAGW greenmail policies, etc.
Australia is slowly moving in the right direction by repealing its destructive greenmail silliness and hopefully this return to sanity will be followed by other countries while there is still time.
Coalition projects surge hits $400bn
The Australian December 27, 2013 12:00AM
RESOURCES, infrastructure and road projects worth a total of $400 billion have been given the green light as the Abbott government demolishes objections from the Greens and moves to reverse a predicted fall in mining investment that could drag down the economy for two years. Environment Minister Greg Hunt has taken decisions on 125 projects in the Coalition’s first three months in office, including approving 29 major projects, which the government estimates are worth $400bn.
http://www.theaustralian.com.au/national-affairs/coalition-projects-surge-hits-400bn/story-fn59niix-1226790338185 (paywalled)
Excellent article, Viv – hits many of the point concerning what is wrong with our world today.
Observing all that has happened around the world these last few years, I have developed a very hard view of what needs to be done to prevent recurrences of the bad developments we’ve seen, not only in Australia and the US but in the EU and other advanced nations.
First of all, there needs to be extremely tight controls over the conduct of officials. This consists on the following:
* limited terms in office for all officialdom from presidents to the lowest-level government employee (6 years for elective office, shorter terms for appointed officials and employees);;
* personal accountability (every act of government attributable to specific individual[s[) and broad criminal liability for misconduct, including making false statements to the public punishable as perjury; (all functionaries at all level shall be bound by oath to tell the truth),
* strict and very low limits on the amount of money all levels of government can take in all types of taxes (I’d recommend a maximum of 10 percent of GDP on local, state/province, national combined); structure insurance and pensions through personal contributions (in the US, if the average person had contributed to a fund consisting of the Dow-Jones Index stocks, instead of paying Social security tax, over a 40-year period, he/she would be able to retire on an income comparable to what he/she was earning at his last job);
* drastic reduction of government employment to fit the 10 percent tax limit, and government salaries limited to 75 percent of pay for comparable responsibility in the private sector;
* Absolute prohibition of wealth redistribution schemes, however devised, including prohibition of progressive taxation, progressive insurance premiums, progressive college tuition and other such devices;
* Absolute prohibition of government funding for scientific or other research except for medical advances;
* Requiriing legislative approval of ALL laws, regulations, or other acts having the force of law, delegating NONE of this to the bureaucrats;
* Requiring an impartial in-depth cost-benefit analysis and determination of necessity with assessment of possible unintended consequences, of any new law, regulation or act before it goes to the legislature;
* Placing limits on the lengths of laws and regulations, and requiring them to be readily understandable by laypeople (I do NOT accept the argument that this is impossible in today’s complex society);
* Replacing existing law codes with new, very short codes, eliminating duplicative and catch-22 provisions form the law ( rule might be that the entire law code of a governmental entity be limited to 1,000 6″ x 9″ pages in type no smaller than 10 point; again I REJECT the argument that this is impossible in today’s complex society);
* licensing procedures should require approval by ONE agency only to be final, and documents required shall not exceed TWO pages in ” x 9″ 10-point type.
* Draconian penalties for usurpation of legislative authority by the executive or judiciary, up to and including the death penalty;
* Draconian penalties for rights violations by officials, up to and including the death penalty;
– this may be a start to fix what ails us.
Our current leadership tells us we didn’t build our businesses – we didn’t build our forges and mills and foundries, our great engineering marvels that placed us time and again at the top of the heap. We didn’t build our factories that turn out designs we surely didn’t create. We are told we had help and that help deserves, has a right to, a share of our hard work’s produce. We are not told who helped us so all comers expect their fair share of our pie. Our leadership doesn’t understand. Can’t or won’t, doesn’t matter. The understanding isn’t there. And our pie is no more – it has gone to China where it is out of reach of our leadership’s absurd self loathing, and it is thriving.
Climate ace is a sad reminder of what happens if the younger generations aren’t taught where and how the comforts of their lives are produced. what we get is a generation of parasites who vigorously consume and at the same time work to destroy the infrastructure that keeps them comfortable.
Subordination of nations to self-selected experts is the wet dream of leftism. “A republic, ma’am, if you can keep it.” She is failing.
Ah Money, the most misunderstood of all things on this planet. Money is not a physical thing, you cannot have a money.
Show me what a money is… No, that stuff in your pocket is currency, just a convenient form of money.
There are infinite forms of money and types of money, but no such physical thing as a money.
Money is a process, it can be best described as any thing used as the counterparty in any transaction. When one wishes to acquire a thing in a transaction, one offers a form of money to the owner of said thing, hoping to acquire the good or service.
Any form of wealth may be used as money, precious metals, bonds, paper currencies, camels, sheep, poetry, singing, food etc. Any form of wealth will do, it is just that some forms are more convenient than others. Wealth may be described as anything physical or infomational that may be possesed.
Any wealth that you may have in you possesion or that may be borrowed can be used as money to complete a tranaction, barter is a beautiful thing. Capitalism is free and honest trade, also a good thing. Currency is just a very handy form of easily recognized wealth, lightweight, denominated, accepted. The only thing not to like about currencies is that they are 100% counterfeit, The printer gains all the spoils and ownership of other’s sweat equity for free, ( or nearly so) and currencies are produced by the boatload.
The problem is that we are so used to the ubiquity of paper and plastic we cannot see and will not see the problems with them. Our desire to see only what we want to see is comparable to the desire of scientists to confirm their personal beliefs and biases. Truth may be ugly.
We are living in a mire of fiscal fraud, and since all living souls have never lived otherwise we cannot see the problem.
All the issues I have seen on this site boil down to the exposure of different frauds, and the beautiful search through many slings and arrows for the truth.
The truth is that the financial systems of this planet are all frauds, made legal by fraudulant laws.
This is the reason for the failure of our economies.
climateace says:
December 26, 2013 at 5:37 pm
This article is truly bizarre. The thing is this: Australia has, over the past couple of decades, climbed UP the ladder of the world’s largest economies.
============
Norway has $ 71,870,000,000 in the bank, while Australia, in very distinct contrast, owes $57,140,000,000.
The thing is, over the past couple of decades, The Commonwealth of Australia Corporation has climbed UP the status ladder to rank #6 on the list of the world’s largest debtors:
https://www.cia.gov/library/publications/the-world-factbook/rankorder/2187rank.html
And we flaunt our debt proudly, as if it were wealth.