e-PreCIS
August 2010 e-PreCIS
The two weeks starting July 20, was, for CIS, our busiest period of the year in terms of events. Nothing in recent years however has come close to those two weeks in 2010.
Starting with the 2010 Acton Lecture Constitutional Conservatism with Dr Peter Berkowitz on July 20 (see video here) and finishing with a lecture by Professor Frank Furedi on tolerance on August 2, it was truly an intellectual feast. In between were Niall Ferguson’s John Bonython Lecture, Empires on the Edge of Chaos (see video here), Consilium, our Big Ideas Forum on Europe and a public forum at CIS on Freedom of Speech featuring Janet Albrechtsen and Ayaan Hirsi Ali (see video here). Of course there were many smaller events too and masses of coverage in the media. These types of events showcase the CIS and its ideas to the public.
While all this was happening, Australia was in the middle of a federal election campaign. It’s not the nature of CIS to comment on issues that arise in election campaigns, but our ongoing work, because of its currency, inevitably is part of the debate. At Consilium for instance, the first session dealt with population policy. This programme was developed before the end of 2009 and proved to be remarkably prescient. Jessica Brown and Oliver Hartwich at CIS are working on a comprehensive set of studies on the issue which will cover, in due course, related matters such as housing, transport and infrastructure.
Here’s a taste. Jessica Brown in The Business Spectator of August 12:
‘Even under the most restrictive assumptions of zero net migration and falling fertility, we will need an extra three million houses by the middle of the century . . . If governments don’t lift some of the constraints on building immediately, our existing housing shortage is going to get much worse in the very near future, regardless of what happens with migration and the birth rate . . . There is a very real danger that the debate at the federal level about limiting population growth will translate into excuses at the state level for not doing enough to prepare for the inevitable challenges ahead . . . Issues like housing and transport require urgent policy reform and should be at the centre of our population debate.’
And then there’s the debate about the effects of fiscal stimulus.
The federal government for instance prides itself in ‘saving Australia from the recession’. They also claim they created hundreds of thousands of jobs, though the exact numbers change, often by the day and depending on who is speaking. We should expect better.
It would be scandalous if the government’s stimulus binge had not saved any jobs. But even on their own account, the outcome is pitiful. If you spend $52bn to ‘save’ 200,000 jobs, then each job saved comes with a hefty price tag. And saving jobs where perhaps they were no longer needed is not the same as creating jobs where they are needed. That’s the role of markets in a dynamic economy.
The whole rhetoric around ‘stimulus spending’, ‘saving jobs’ and the like reveals just too much poor economic thinking. The Australian government is not alone of course and it's typically not a matter of partisan politics. It was blind activism where cool-headed economic analysis would have been more appropriate. The insulation disaster, the school halls waste and the green loans fiasco for instance were not accidental but the direct result of this fundamental disregard for good policy making.
We at the CIS have been consistently critical over the past couple of years of misguided stimulus policies. As the numbers begin now to be scrutinised, we are pleased to see that more and more experts, from economic historian and 2010 John Bonython Lecturer Niall Ferguson, to RBA director and economist Warwick McKibbin, have presented similar assessments of this recent revival of vulgar Keynesianism. Perhaps Ferguson had the best line though when he said:
‘Stimulus? Yes, sure, Labor has stimulated the Australian economy, in the same way that Ned Kelly used to stimulate the economy of Victoria’.
Once the election is out of the way, whoever wins, we should all expect better in the way policy is discussed and formed.
In e-PreCIS a little while back, I mentioned that the 2010 General Meeting of the Mont Pelerin Society will be held in Sydney in October this year. This prestigious Society will mourn three of its past Presidents who have died since the last General Meeting in Tokyo in 2008. Max Hartwell, I have already talked about, but the last month saw the passing of Germany’s Professor Herbert Giersch, a CIS author, (see here) and Guatemala’s Dr Manuel Ayau (see here) . These men were both giants on the stage of liberal ideas and their contributions will stand the test of time.
