If you believe in free markets and freedom, and are not familiar with the work of Thomas Sowell, then drop everything now, and Google his name.
And if you have time, watch some YouTube videos of him. I guarantee that you will not be disappointed.
If you have more time, read one of his books. My personal favourite is A Conflict of Visions.
Very quickly, Sowell is an economist and social commentator. He was born in 1930 to a very poor family in North Carolina in the US. When he was quite young, his father died and he was sent to live with family in Harlem, New York. A smart and precious youth, he saw the metaphorical light when he was introduced to the public library.
Moving forward, Sowell had a stint in the US military during the Korean war. And because of this, he was a late starter at university – in his mid-20s. But he did his Bachelors at Harvard, then his Masters at Columbia and finally his Doctorate at the University of Chicago under the supervision of Nobel Laureate Milton Friedman.
All along the way, Sowell was a self-declared Marxist. This was true even while working with George Stigler and Milton Friedman. And then it all changed.
He became a titan of free markets and liberty.
What happened?
He went to work for the government!
When asked in an interview what changed his mind, Sowell replied: “Facts”. See for yourself here.
I bring up Sowell because one of his most important observations was that “Much of the social history of the Western world over the past three decades has involved replacing what worked with what sounded good.”
Which brings me to Australia.
While the Albanese government is getting much of the blame for our current inflation and interest rate ills, they are not entirely at fault. They aren’t helping matters, but they aren’t entirely at fault.
Much of the fault lies at the feet of the Liberal-National Coalition Government of Scott Morrison. They could not have timed their election eviction any better.
As I recently wrote in The Australian newspaper:
Decades of economic history have shown that private property, rule of law, free and competitive markets, and limited government drive prosperity anywhere and everywhere.
And anywhere and everywhere includes Australia.
Nowhere has a nation improved its lot through expanded government. You can’t tax, spend or regulate a country into prosperity, much as the Morrison Government tried really, really hard. When it came to increasing taxes, increasing government spending, and increasing regulation, the Morrison Government was Whitlamesque.
Our current inflation ills are a problem of supply, of constricted supply. Constricted by too much government spending, too much taxation and too much regulation. We won’t spend or save our way out of this.
What is required is a supply side revolution
to get the foot of government off the throat of Australians.
How many more sales can a business owner make if he did not need to fill in the ATO, ABS, Austrac, ASIC, and other forms designed by people to keep themselves busy? Who do you think is paying for Scott Morrison’s bank tax? Certainly not the bank shareholders. How much would your cost of living pressures ease if your groceries were cheaper because your supermarket did not need to employ a battalion of compliance officers.
Yes. Some of our inflation problems are imported. Much of them are home grown.
The inflation of the 1980s and 1990s was not just vanquished through high interest rates. Governments all around the world, from Ronald Reagan in the US to Margaret Thatcher in the UK to Bob Hawke in Australia all led major economic programs to deregulate, to liberate, to reform. This is the opposite of what the last 20 years of Australian government has done. To regulate, to subjugate, to deform.
As Zhuangzi wrote in 369 BC: “Good economic order results spontaneously when things are left alone”.
We will not escape from our economic problems with business as usual. Treasurer Jim Chalmers has a window of opportunity to redirect the national economy. But he must change direction, because otherwise we will end up where we are headed … Venezuela … where everyone is a trillionaire. But a trillionaire who still can’t afford to feed themselves or their family.
Dimitri Burshtein is a Principal at Eminence Advisory and a former government policy analyst. He is also a periodic contributor to The Australian newspaper.
