Mangled Thoughts

The real problem, to correct any false impressions that might have been conveyed in the item on McKnight and Rudd, is not any leftist attacking free markets and classical liberalism. It is those who claim to be advancing them and defending them who are the problem. Rudd and McKnight only underscore this because of their central claim:

Free markets and economic theory are ideological beliefs.

That is completely false. The ‘right wing’ has not defended economic theory, because they are as illiterate as Rudd and McKnight are in economics.

Laissez faire

HR Nicholls Society mentioning laissez faire, state that it is an ideology, established by Adam Smith. In short, they don’t know the origins of “laissez faire”, and have completely misrepresented it. More than that:

Des Moore was sent a letter attacking him for defending laissez faire, and on his website, published a reply saying he didn’t. Des Moore is supposed to be an economist, engaged in advance and defence of free markets, and he cowered when challenged.

Why is it, the HR Nicholls Society, the IPA, CIS, and Liberal politicians in Australia cannot defend laissez faire but one man can and does, Gerard Jackson. Unions don’t mention Jackson openly on this, just as they don’t on many other matters besides and the reason is, they know he would eviscerate their assertions. Just to check, here are a few examples:

Oysters, the ABC and so-called market failure, BrookesNews.Com,3 May 2004.

Market economics, fundamentalism and Australia’s ‘free-market club’

(I was one puzzled and surprised when I heard John Stone dismiss economic theory and “fundamentalists”, and for the same reasons Jackson pungently relates.)

US economy: the Great Depression and interest rates

An ideological war?

The left is engaged in ideological warfare, against Liberalism. The country at stake is Australians, and that is the point;the left realise victory is through convincing Australians of their ideas. The ‘defenders’ of liberalism who dominate the liberal party, the media, and ‘think tanks’, don’t recognize that ideas count.

It is not simply whether ideas are bad or might contain a germ of truth n them. The 19th century to the present has been a battle over a range of ideas that, loose and ill founded as they are, come under the ideology of socialism, and classical liberalism.

The counter is:

Sound economic theory, articulation of Liberal principles, and only they, in the end, skewer socialist and, for that matter, neo-con authoritarian claims.

Thus we have why Liberal Party and ‘think tanks’ have failed, rather badly, exemplified by:

The fiasco of the campaign for labour market reform.

The Unions didn’t run an economic case against reform; they ran a propaganda campaign
The reason for the propaganda campaign: The ACTU bosses were well apprised of why their claims are false, and that if confronted out in the open, they faced a public hiding; they read Mr. Jackson for those reasons. It was their lucky day; they only faced the “clowns” of the HR Nicholls Society.

Why the failure:

1.Liberal politicians have long boasted of being practical men and women, concentrated on ‘pragmatic’ ‘policies’ and not ‘theoretical’ ‘will-o-the-wisps’. This, as they constantly claim in Parliament, is what sets them apart from the ALP:

The practical man is an ignorant man, he eschews theory, and remains content in his ignorance.

Since they are ‘practical’ men and women, illustration is best:

Medicine – you don’t go to a witch doctor, or an ‘alternative healer’, you go to someone who is thoroughly grounded in science, and that means fundamental theory.

Contrast Julia Bishop, when she was Federal Minister of (de-) Education, she stated in public; there is a need for more school pupils to acquire “scientific skills”. Skills, that doesn’t make young Sally or Jim a physicist. Does Julia Bishop have any clue about science at all? I only ask the question because her notion is suggestive.

What about flight, mechanics, construction, pharmaceuticals, development of new materials, hydraulics, factory production lines, electricity? Why bother with mathematics, just add up on the fingers?

According to Liberal politicians, since they pride themselves on being practical, theory is an intellectual indulgence. Why don’t they test that odd notion,and, say, ask Bob the home builder raise a 30 story tower. Or, tell Grollo to sack his engineers for he doesn’t need ‘theorists’. Then, inhabit the result.

Lastly, without theory, there is only mysticism and superstition, a retreat to the narrow, pre-critical, closed beliefs of the primitive man – and that is what is notable about, say, the Greens. (Environmentalism is corrupting science and the impartation of science to school pupils, and it is transparent).

So, do Liberals really wish to maintain, theory, explanation, is a trivial intellectual indulgence, and an ideological fixation -:

That is what Rudd holds, as McKnight proudly asserted – Rudd demolished the intellectual foundations of economics”, though Rudd is already reeling from economic punches, “Help, help me burn the Kyoto treaty”.

2. Peter Costello is not an economist, it showed:

Costello once boasted in Parliament, due to his brilliant ‘economic management’ inflation had fallen. His evidence: the price of bananas had fallen. Never mind that it was due to increasing supply, as produicers came back into production.

Yet, it is a theory, a false one, price rises are inflation.

What is worse is the grave ramifications of such failure in economics.

Economic theory is not a trivial entertainment called ideological musical chairs. We are talking about men and women, politicians and bureaucrats, and not just leftists and neo-con “think tankers”, who, due to falsehoods, have induced wreak havoc repeatedly.

They don’t hurt themselves, they hurt all those Australians who, because of coercive force, have no choice but to bear whatever burdens and crises the “know it alls’ inflict on them.

Keating used the colourful metaphor, ‘economic management’, “pulling the levers”. That sums things up, certain types pretending to be gods.

The failure of Liberal politicians, their advisers and think tanks in economics caused great political damage.

They conveyed a completely distorted picture shot with falsehoods to the public. Thus, they made leftists attacks and claims credible. They have done so, because they never armed themselves nor were they given the bullets to fire. We know that, because that is what they did to labour market reform.

The Disaster

Hugh Morgan, Des Moore and Ray Evans got the economics so entirely wrong that they made false claims. Those claims were the same made by the ACTU against reform. Worse, they still don’t realise that they had conceded it.

The damage is greater than electoral defeat.

They undermined the capacity to mount liberal reforms for some time into the future. No point in evading it, they poisoned the well, not the ACTU, not the ALP, not leftist ‘think tanks’, they did.

Economics, to re-iterate, is not an ideology, laissey faire is not an ideology, the theory of capital is not an ideology (as conveyed in that term capitalism) free trade is not an ideology, free markets is not an ideology.

Yet, the so-called defenders of Liberty have, because of their incompetence and illiteracy, have only helped to generate and reinforce the contrary impression. The ACTU exploited this in their campaign, with devastating effect:

They successfully presented reform as a neo-con plot to impoverish Australians, and to make themselves wealthy, by driving down wages. (There is an economic falsehood in that too, bye the bye).

The ACTU didn’t have to work hard to distil the lie; the HR Nicholls Society did the job for them. No ACTU argument and appeal was so effective as Hugh Morgan’s appearance on ABC TV, 2005, and told Australians they were paid too much. Unbelievable; the ACTU could barely believe it either.

It is why the ALP won the Federal election, in 2005.