By Jim McGarvin
The slight improvement in Australia's current unemployment rate masks the deeper problem that both Labor and Liberal still are wedded to the false god of economic rationalism.
"The market should decide", decree the economic rationalists. How strange that "the market" always "decides" in favour of the privileged!
Economic rationalism results in increased unemployment, lower wages and compounded economic inequality. Every time, the false god of unbridled market forces fails workers and compassionate humanity.
For the past decade Thatcherism, Reaganomics and economic rationalism have cast their dark shadows across England, the United States and Australia.
Thatcherism (1979-1990) increased unemployment from 1.1 million to 3 million. This increase occurred despite tightening of the official definition of "unemployed" 29 times. Once, Mrs Thatcher actually broadened the definition!
Reaganomics (1980-1988) had the highest unemployment for 40 years and the second highest unemployment in the history of the United States.
The United States national debt trebled. All government debts increased from $959 billion (1980) to $3.5 trillion (1988).
The economic rationalists have been equally devastating in Australia. Dr Hewson was employed as an official economic adviser to treasurers Phillip Lynch and John Howard. Unemployment increased from 334,800 (1975) to 695,300 (1983).
Labor's traditional policy was against laissez faire economics, and for regulation of the banking and financial sectors. Paul Keating, Treasurer 1983-1990, abandoned traditional Labor policy, and applied the economic rationalism of deregulated banking and finance. The results on the national debt and Australian living standards were disastrous.
From 1983 to 1990 Australia's capitalised interest and international trade net debts rose from $29.8 billion to $137.2 billion. Gross domestic product per capita income rankings for 1950-1990 show that Australia's standard of living plummeted from 8th highest in 1983 to 18th in 1990 (World Bank, World Tables, 1992, Washington, DC). Australia's GDP per capita in 1985 was 2% below the average for OECD countries; by 1990 it had fallen to 6% below the OECD average.
One group gains from labor's economic rationalism. n Australian 1983-1989 the richest 1% have doubled their wealth, whilst wages have been reduced by 10% of the national income. How strange that "the market" always "decides" in favour of the privileged!
In the 11 years of the federal Labor government, the poorest 40%'s share of the national wealth dropped from 22.3% to 9.6%, while the richest 40%'s share increased from 59.6% to 73.8% (Melbourne Herald-Sun, October 11, 1993).
Thus, in England, the United States and Australia, economic rationalism has cast millions of innocent men, women and children into misery.
Australia will return to high standards of living and full employment only when economic rationalism is abandoned.
We must be rid of economic rationalism, or still it will destroy us.