Oznomics

If publisher Random House’s poorly-maintained website is a guide, Andrew Charlton‘s book Oznomics: Inside the myth of Australia’s economic superheroes, was going to be more humorously titled Does My Boom Look Big In This?: The truth behind Oznomics. But with the precedent of the best-selling Freakonomics and the local Gittinomics Random House must have thought another nomics neologism was more likely to sell books.

Oznomics is a textbook-polemic hybrid. It’s part of a welcome trend of books trying to simplify and popularise economics, taking us through some fairly orthodox micro and macro-economic ideas in the Australian context. But it mixes this with more partisan goals and and a more aggressive tone than the other pop economics books of the last few years.

So along with explanations of why protectionism is bad, we get the protectionists continually referred to as ‘sandbaggers’, because when the ‘tidal wave’ of competition arrives, their first instinct is to ‘stack sandbags on the beach to protect their territory’. The metaphor doesn’t really work as it relies too much on us remembering his original tidal wave metaphor (and how often do Australians sandbag beaches?), and ends up looking like a shot that is a cheap as the Chinese goods that the protectionists are trying to keep out. I’m as against protectionism as Charlton, but the insult was irritating me, and I expect it would be more off-putting for others less used to free trade ideas than I am. People need to be taken gently through counter-intuitive ideas.

And anyone who has ever dreamt of voting Liberal – and there are plenty of protectionists among that group who need to hear Charlton’s message – will quickly be at least bored if not annoyed with his constant sniping at the Howard government. The sub-title of the book explains its main political purpose, which is to argue that Howard and Costello can claim only modest credit for Australia’s long period of prosperity.

Charlton is right that Hawke and Keating did much of the hard microeconomic work that laid the foundation for our current prosperity, but this is hardly a novel or controversial claim (the story is well told by John Edwards). Even Howard pretty much agrees:

this [reversing economic decline] has been the work of both sides of politics in government. Unfortunately, it hasn’t been the work of both sides of politics in opposition. Looking back, broad consensus surrounded the need for five great structural reforms to give Australia a shot at prosperity in the 21st Century. They were financial deregulation, tariff reform, privatisation, tax reform and workplace relations reform. And I’ve always paid credit to the former Labor government for its reforms in the area of financial deregulation and tariffs.

The higher-level political issue has been less what Hawke and Keating did than what their successors might (or might not) do, and this is where Howard and Charlton part company:

where the Coalition supported all of the big reforms undertaken by the Hawke and Keating government’s, the Labor Party, regrettably in opposition, has fought every major reform we have taken to strengthen our economy, they fought getting the budget back into balance, they fought waterfront reform, they fought tax reform, they fought workplace relations reform, they fought the privatisation of business agencies, even though they had supported a similar policy in relation to both Qantas and the Commonwealth Bank when they were in government.

On what Rudd-led Labor might do Charlton goes quiet – perhaps because when he was finishing off his book the newly elected Rudd team had very few policies (Rudd is only mentioned in passing, on IR). But you’d have to say that the last week hasn’t been overly encouraging. Today Wayne Swan is talking about delaying tariff cuts to the car industry. And during the week we’ve populist campaigns on ‘mortgage stress’ and grocery prices. It’s all a long, long way from Keating’s careful explanations of why hard decisions are necessary.

For as long as the public is still gullible enough to believe the implicit economic ideology behind this week’s politicking we still need pop economics books. In that respect, I like half the idea behind Oznomics more than I like the book it turned into.