What’s luck got to do with it?
WE pride ourselves on being the land of a fair go, a more egalitarian society than those of the old world ofÃ‚Â EuropeÃ‚Â and elsewhere.
But is this true? Peter Hartcher’s new book has something to say about all this and the subtitle contains a warning:Ã‚Â Ã¢â‚¬ËœHowÃ‚Â AustraliaÃ‚Â Made Its Own LuckÃ‚Â ,Ã‚Â And Could Now Throw It All AwayÃ¢â‚¬â„¢.
After readingÃ‚Â Ã¢â‚¬ËœThe Sweet SpotÃ¢â‚¬â„¢Ã‚Â I’m still unsureÃ‚Â that we are or ever have been a land of liberty, equality and fraternity.
Also I am far from convinced by Hartcher’s championing of Adam Smith. In his 1776 workÃ‚Â Ã¢â‚¬ËœAn Inquiry into the Nature and Causes of the Wealth of NationsÃ¢â‚¬â„¢,Ã‚Â Smith put it thusÃ‚Â about private enterprise: A manÃ‚Â “intends only his own gain, and he is in thisÃ‚Â Ã¢â‚¬Â¦led by an invisible hand to promote an end which was no part of his intention.
This mechanism allegedly turnsÃ‚Â “selfish pursuit of money into the greater good of the society, individual greed begetting a social good.Ã‚Â “Ã‚Â Admittedly though, Hartcher does see the need for some forms of government intervention, especially in times of economic crisis.
He reports that the United Nations and OECD rankÃ‚Â AustraliaÃ‚Â as having the world’s best living conditions. We are “the only developed nation that has not suffered a recession in the last two decades, with an unemployment rate at half that of Europe orÃ‚Â America, and a higher average income than theÃ‚Â USÃ‚Â orÃ‚Â UK.Ã‚Â Yet perversely, Australians don’t reward the prime ministers and treasurers who have helped bring about this sweet situation. In 2007 and 2010Ã‚Â ,Ã‚Â for the first time since 1949Ã‚Â , we voted out federal governments at a time of economic growth.
AlthoughÃ‚Â Ã¢â‚¬ËœThe Sweet SpotÃ¢â‚¬â„¢Ã‚Â boasts a helpful Index, there are neither maps, nor endnotes nor any bibliography. This is a shame, because there is no easy way of finding the sources for many of Hartcher’s claimsÃ‚Â in this contentious book.
For example, writing about cricket, he says that 1882Ã‚Â “was the first time that anyone had ever beaten the British at their own game.Ã‚Â Has Hartcher not heard, for example, of the Australian Aboriginal cricket team that touredÃ‚Â EnglandÃ‚Â in 1868? Inspired by Johnny Mullagh who scored 1,698 runs and took 245 wickets, the team won 14 matches, lost 14 and drew 19.
Hartcher uses an English-Australian Test Match played at the Sydney Cricket Ground in 2007 to illustrate what he regards as our entrenched egalitarianism.Ã‚Â A queue outside the MembersÃ¢â‚¬â„¢Ã‚Â Stand included Prime Minister John Howard; the then leader of the opposition Kevin Rudd; and the Catholic archbishop of Sydney, Cardinal George Pell. Ignoring the fact that entry to the MembersÃ¢â‚¬â„¢Ã‚Â Stand is quite exclusive, Hartcher states thatÃ‚Â “The three holders of high office took their places and waited patiently with the other patrons. None made any attempt to claim special privilege, pull rank, or send a security detail to clear a path. And none of the ordinary mortals in the line felt any obligation to step aside for their leaders.”
This example is typical of the strengths and weaknesses of Hartcher’s approach, which seems biased to characterizing us in the best possible light in terms of fairness, tolerance and egalitarianism – especially vis a vis other countries. Yes, the line forming outside theÃ‚Â MembersÃ¢â‚¬â„¢Ã‚Â StandÃ‚Â does make a point, but at the same time it ignores the fact that those in the queue are notÃ‚Â “ordinary mortals.Ã‚Â Indeed most Australians cannot afford to be members.
There is much to enjoy inÃ‚Â Ã¢â‚¬ËœThe Sweet Spot.Ã¢â‚¬â„¢Ã‚Â Early on, Hartcher explains that, two centuries before the British landed at Botany Bay, EuropeansÃ‚Â “speculated that the mysterious Great South Land might be the biblical OphirÃ‚Â ,Ã‚Â theÃ‚Â source of gold that had “been lavished on King Solomon’s temple in Jerusalem.
When in 1568 the Spanish “happened upon a group of tropical islands near the equator, believing that they had discovered this fabled source of gold, they named them theÃ‚Â Solomon Islands! How that impacts on Hartcher’s thesis I’m not sure, but it makes for fascinating reading.
Hartcher is certainly on the money when he explains that it was Bob Hawke and Paul Keating who, last century, opened our economy to the world and, in the process,Ã‚Â “delivered the start of the Australian-style Thatcher-Reagan revolution.Ã‚Â Then, Hartcher argues, the Liberal-National Party coalition largely continued Labor’s program, building anÃ‚Â “impregnable financial defenceÃ‚Â by paying off public debt and leaving us in the relatively favourable economic situation in which we still find ourselves.
In his penultimate chapterÃ‚Â “How To Blow It, Hartcher points out that we did not have success thrust upon us. We overcame ourÃ‚Â “inauspicious beginningsÃ‚Â as a penal colony and then, in 1901 as a nation founded on racial discrimination. Our seeming good fortune in 2011 is, he argues, not because of luck but is the result of thoughtful economic policies.
Even though Hartcher claims that the importance of mining in our economy is overrated, he maintains thatÃ‚Â “active and prudent management is urgently required.Ã‚Â While the mining boom cannot provide an enduring basis for our economic success, it hasÃ‚Â “the potential to be the basis for economic disaster.Ã‚Â This is because it brings big profits and huge risks, both of which need to be guided by politicians who demonstrate national leadership.
Like the economy in general, the mining boom and its consequences need to be managed intelligently. Put simply,Ã‚Â AustraliaÃ‚Â “needs to extract the maximum advantage from the surge, minimize the harm and prepare for its ending.
Review of the week by Ross Fitzgerald” The Sweet Spot by Peter Hartcher, Black Inc, pp 289, $29.95. Spectrum Christmas Edition, pp 22- 23. Sydney Morning Herald, December 23-25, 2011.
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