DOES AUSTRALIA HAVE A FUTURE?
Australia as a nation is a legal entity and living process as well as a place, comprised of people, assets, liabilities, potentials, and situations. That said, things are never going to be that simple ever again, because nations are changing. Nations are also other, more abstracted, things, that don’t have to be fixed entities. Nations are also jurisdictions, separate and mutually reactive, with varying degrees of capital, industrial capacity, technological capability, and clout. The interaction of nations has never been a meeting of equals, and interests are as likely to clash as to mesh.
History has been brutal to many nations. History doesn’t come with painkillers. There are few nations on Earth, if any, which haven’t been transformed beyond recognition since the industrial revolution, both geographically, physically, socially and in their role in the world. Current changes to social life and industry will make that process look like a baby’s first birthday party. It’s quite possible that changes to capital usage alone will make “nations” redundant. That’s already happening. Of the twenty or so biggest economic entities on Earth, less than half are nations. The others are corporations.
Equity in nations is long since a thing of the past. Ownership of national resources is a relic of the economic Stone Age, about 80 years ago. The Rothschilds pioneered the modern version of this pan-national thing in the 19th century. Borders became quite irrelevant except as convenient filters between governments and legal jurisdictions. Money and ownership move. Today there is no good reason for money to be lying about where it doesn’t want to be. Money also tends to like to dictate how it gets spent. The craze for cheap labor, and the resulting turmoil, comes from that endearing little habit. National interest was never an issue.
Big capital of itself isn’t good or bad. That perception is based largely on self interest, depending on who’s doing the talking. The big corporation that employs you can’t be a bad guy. The big corporation that fires you or costs you money must be. Morality aside, without capital there’s no job, no assets. There’s an economic heirloom of an idea, and nobody’s ever really argued with it effectively.
Australia is the result of capital growth. Originally most of the capital in Australia was foreign, or state-based. Despite ourselves, we have grown into a much larger capital intensive entity, far beyond Little Australia of the 60s. We’re also now one of the net investor nations in the world. There’s a certain irony in that. We invest, but we don’t always invest “here”. We can thus assume that capital isn’t being invested in Australia on national sentiment. Whatever the reason, capital works to make capital, and investment can’t usually be based on reasons like that.
Simultaneously we’ve managed to score an own goal of colossal proportions by virtue of the fact that so many of our useful people work offshore, mainly because the money’s better. About 5% of the entire population of the country, a million or so people, to be exact, which is a larger percentage of the total workforce. This is nothing new. As long ago as the 1970s the most dangerous place to stand in Australia was between a PhD and the plane out.[1] More than a bit of an indictment. It’s people that produce. If you don’t have them, you don’t have a product. Anyone need a map of that?
The joke is now that you can’t invest in any major industry overseas without tripping over an Australian or several. Presumably their career-locale choices aren’t based on national sentiment either. Now that physical location isn’t the problem it was, that situation will modify, but talent, strangely, likes to be paid. So we have a situation where we pay to educate people to go elsewhere and then pay foreign prices to get the benefit of their expertise, which they learnt here.
A lot of our income is derived from overseas. We need to pull in money from outside. This isn’t a “national” thing; it’s business. Business is by nature individual, and subjective. The tide of economic generalizations with which we are saturated preaching parochialism or globalism doesn’t alter that the fact that sinking or swimming is done personally. National involvement happens at trade level, not at bank statement level. National interest isn’t really the business bottom line, anyway. Nobody could operate their business as a flag waving exercise.
Capital creates issues. Foreign debt is another national issue. Debt is normal business, and while we’re making money, borrowing is a reasonable growth methodology. It only becomes suicide if we aren’t making money. Undercapitalized as we are, not ensuring debt cover is just stupid. You borrow on the basis of what you can cover, or you risk losing both capital and assets. It’s a really effective way of compromising assets, under those conditions. There are many arguments favoring and against foreign debt. Argument, however, always tends to be before the payoffs. A lot of verbiage has resolved very little about foreign debt. The foreign loan that creates a local industry is a friend, the foreign loan that scuttles a big company is a form of treason….exactly how bloody simple-minded are we?
This is for kindergarten kids. If you can’t manage debt, don’t borrow. If your calculator is smarter than you are, hire it and fire yourself. If the share market is taking one look at your company’s balance sheet and baling out, it might mean something. The market makes as many wrong calls as anyone, but debt-wariness is a well-learned lesson to investors. Debt’s always been dangerous if allowed to dictate business. For further information read any newspaper in the last 20 years or so. Also please notice that even government, that famous wellspring of economic innovation, is busily clearing out debt. If you’re in debt, and it’s a burden and/or a stymie to growth, don’t spend decades doing nothing about it. That lesson’s been paid for, many times.
We have more than a few things going for us as a nation. There’s not much wrong with our general ability to produce, or our actual production. We are fairly efficient, very much so in some areas. We are capable of top level science, despite our half-witted yokel-esque approach to R&D and intellectual property which is routinely worth billions annually to the rest of the world, even despite piracy and outright theft. (Want an extra billion or so a year, mate? ……Ah…um….no thanks, mate….. Bloody idiots).
Foreign trade, conceptually, tends to range from Lewis Carroll to Ayn Rand: From a two dimensional person running around trying to have peoples’ heads cut off to a sort of torch song to capitalism. Cute, but dated, and conceptual profits aren’t bankable, despite the 1980s. Money is either made or it isn’t. There is a pitiful litany of some sectors being endlessly “surprised” by changes to foreign trade, to the point of embarrassment in some cases. There is no “level playing field” and never has been. Free trade, good or bad, is a lot less level, depending on your competitive capacity. Business works in its own interest because it has to, and anything else is just rhetoric. Expensive rhetoric, if profits fail. The maxim is “Compete Or Die”, and may all relevant deities help anyone that doesn’t understand that. To be uncompetitive is suicide.[2]
There are plenty of cultural/political situations that can seriously affect business at all levels. These can and do seriously affect our ability to compete. Things get a bit matey, far too much so in some cases, and we also have our own delightful supply of fossils hanging on to hopelessly outdated positions in the womb of any sort of economic future; they fester merrily in industry, education and employment, verbosely helping make essential functions more expensive and far less productive. The structural wombats are not extinct; they’re institutions, and if anyone can show me a useful result any of these decayed roadkills have achieved in the last 50 years I’d be interested to see it.
Worse by far, though, are the strange species of pests who infest policy. “Whatever the subject, we have a fix for it, whether we need it or not”. Every useful facet of Australian social support, from free education to sane health care to infrastructure has been utterly destroyed by cretinous “policies” and the mindless procedural belief in adding costs to them for the utterly ludicrous reason of balancing costs. Who’s paying for it? You are.
Just for the information of those who think this eternal adding of zeroes to prices is normal, one of the criteria for cost-effective production over any period of time is that production costs go down. This is called “efficiency”. It’s not actually illegal. Raising prices because of production costs means you can’t figure out any other way of staying profitable. It can also cost you money. If you produce a box of matches retailing at 10 cents, why do you want to institute a production methodology that means they cost you 10c to make? You also incur the costs of the new plant and equipment, etc., just in case you thought you knew what you were doing. See anything vaguely profitable forthcoming from this? See any likely multiple barn door sized opportunities for your competitors? Production design is a science, and needs to be treated like one. Training the producers, ditto.
This isn’t just business. Apply this pleasant little theory to something like producing a general practitioner, and you get a doctor you can’t afford to use. You also get a health system which has reached overload, entirely due to rampaging costs and chronic undersupply of trained people to deal with real workloads. The original capital structure of Australia wasn’t so much socialism as realism. We didn’t have the capital to do “user-pays” for what we needed in services, so the load was shared. It worked, too. Nobody dreamed there was private money available to pay for these services.
The whole idiom of eternal cost hikes equates to cutting our own throats on a daily basis. The fact is that it drives the cost of everything else up. There’s a limit to how far that can go before the entire economy turns into a credit card. We’re seeing a version of this in the early 2000s, and if it goes wrong, it’s not going to be pretty. A boom based on credit has to be funded somehow. This is procedural inflation. Just to add spice to this mouldy dish, each increase reduces available capital, as per the earlier rave about Life’s Work. A truly dazzling way of making daily life and business unworkable. Budgets can be hit with increases from any source. Personal capital can be torpedoed. Business capital can be gutted.
My points are these;
(a) If price hikes reduce the ability to produce profitably, we’ve been machine gunning ourselves in the feet for the last 20 years. Kindly note that we spent the Little Australia period in a version of this sort of economic denial, sheltered from any requirement for capital efficiency, and it left us very vulnerable. It also massacred the insular industries en masse when it ended. They were never going to be competitive. They didn’t know how. Depending on cost structures is now more a symptom of a need for medication than a policy.
(b) Capitalism presupposes the availability of capital to pay for services, education, etc., which are the life support mechanisms for any economy. This evaporation of capital into charges and overheads therefore cannot be the way to go. Why is something like a school or a hospital a kind of journey of eternal discovery in terms of costs? Who benefits? Definitely not the public. Certainly not government budgets. Business gets an even worse deal, having to take whatever infrastructural or human results this parsimonious system deigns to produce. Also note that industries aren’t charities.
Time lags in business are also expensive. We have yet to get any sort of reputation for picking up new things quickly. It’s a little unfair in some areas, but unfortunately there’s some justification. We were tagged as an Old Economy, and the tag has taken a bit of effort to remove. It seems to have taken us forever to get anything done about product development, value adding, etc., and a lot of the result has been rhetoric[3]. The initial idea of value adding in resources eventually produced a few rolls of coated wire, years later. Things have picked up since, but we still lost a decade or so of profits while the dinosaurs tried to understand the idea. Rhetoric and profit are very distant acquaintances.
Unfortunately we’re also suffering from the degree of comprehension which can be brought to bear by those managing capital. There’s a degree of antiquity fluttering about in the Jacuzzis Of Power. They just weren’t trained to deal with this world; they were trained to run things as they were in 1970. In the course of the staggeringly slow shift to modern business practices, we’ve imported a few bad habits in management/administration/business culture. This culture has its own problems, notably a toxic motif which is also miraculously applied in the form of driving costs through the roof on principle. Everything, and everyone, however worthless, costs a fortune, apparently because somebody thinks they should. Have a look at expenditures on what costs what, on any balance sheet you care to name, and see how much of it stacks up as value. (No, it’s not just a generalization; you can have some very interesting conversations, item by item.)
Call me a cynic, but I don’t believe on average about half of any expenditure I see. One of the reasons for this wholehearted and sincere lack of credulity is the people involved. Do you get any impression of incredible competence dripping from every pore of our presiding idiot savants? Bear in mind that all this bloodsucking is happening against the backdrop of the new whiz bang super-efficient technology in which nothing but pregnancy takes more than a few seconds. Dazzling new production methods can produce x times more product, in a quarter of the time…… and costs ten times as much. Remember all that drivel about technology making life easier? It’s supposed to, in case anyone was wondering.
Granted that our own cowardly refusal to develop any of our own methods and cost structures for operating things in this country to suit our own needs is largely responsible for the Euro-American systems we’ve imposed on ourselves. It also represents the extraordinary degree of input outside influence has on our economic culture. We’ll take up some corporate practice, not because we’ve ever seen any need for it, but because they do it over there. Does that, in any sense whatsoever, seem to you to indicate any concept of independent objective thought? Does it give the impression of a strong-minded, innovative, competitive ethos?
Globalization has been here for years in management. We as a nation have never had a local, home grown, management style, except in rare individuals some of whom have been very successful. Ditto economic management. What a surprise. The result is performance way below what it can be. We should be trading like a Kangaroo tour, leaving a lot of bruised bodies and egos in our wake. Instead, we’re attaching ourselves to whatever flyblown useless dung cart of a commercial methodology happens to be in vogue and wondering why we don’t make billions.
With this inspiring second hand motif firmly entrenched, we try to compete. Not bloody good enough. Never was, never will be. It makes us very predictable and thus very vulnerable. Our competitors can be certain we’re not going to come up with anything original. Worse, we use the same methods as they do, and then mutter about “level playing fields” and the WTO, like Hansel and Gretel looking at a gingerbread house for the first time.
We have also taken up the global corporate cultural grail of “management by meetings”, that invaluable Recidivists’ Anonymous process. People are employed to perform functions, not spend their entire working lives talking about them. To this spectacle is added a banal supply of Executive Self Help, management at all levels employing an interminable supply of self-serving bullshit at staggering costs, which has a less flattering description as Executive Masturbation. That’s a normal daily attack of macro-middle-class-ism, seen globally, and is the equivalent of inept hairdressing as an occupational hazard. Unfortunately it also dictates how people and governments run economies and it costs billions. It’s a corporate culture, and corporate globalism shows how it spreads, and what it does. Just for the record, it’s not compulsory.
Most corporate culture is usually as ephemeral as the endearingly mobile management. Culture buffs should note that the executive meeting syndrome, the epitome of “modern” management of anything, has much the same general degree of actual credibility in Australia as psychobabble has at its worst, especially among those who know better. Nobody believes in it, and nobody ever has. With good reason. Yet we still do it. Most of our most embarrassing corporate failures have involved people fluttering about verbosely in the blue sky like lost shopping bags. At a national level it is loathed, despised, has no credibility to any degree, and we pay for it. The sick thing is that we don’t trash it like we should. Decisions, not décor, are needed. Yet we continue to imitate, and then expect to compete. Clever, aren’t we?[4]
I used the corporate culture metaphor to illustrate a real and very unreliable mechanism which is running trade and industry worldwide. Nations live or die on it. Business culture is important here, in the same sense that US corporate culture is important globally. It’s a form of social structure, it affects how capital works or doesn’t work, and it effectively operates the real time economy. Enchanting thought, isn’t it? It was exactly the same sort of culture that did more thousands of times more damage to the US in dollar terms than September 11. Literally, it overall cost the US eight trillion dollars in share capital alone by 2002. That’s a lot of antidepressants.
How business operates and how it thinks is now a matter of extreme global concern; it can make or break economies. There is now such a thing as a global corporate culture, and it’s sickeningly familiar; post-economic rationalism incarnate. Doctrines abound, enthusiasms fester, and it all winds up as a demand for a better profit at any cost to third parties. “Foreign investment will….” “The cheap labor costs in ……will…” Insert something nice, then mention things like “mutual benefits”. Then wonder when it’s going to happen.
Nations suffer for this sort of airhead Nirvana-in-oratorical-form. It’s crap and it’s dangerous crap. The lucky recipients of all this profitable benevolence, last estimated at about 60% of the human race, don’t seem to be doing too well. Fortunately for us in Australia, the damage has been relative chicken feed, but it’s hard to like the chickens, and impossible to trust them. The US has taken some severe domestic economic knocks from this mentality. The local dislocations are rough, and ongoing. I’d be prepared to bet that at any given time, a meaningful percentage of US unemployed are purely the waste demographic left over from the movement of capital. That’s very big money, and it does an equivalent amount of harm. Damage at the same dollar level, here, would have put us in the IMF too-bad basket. I trust I’ve made the point that having a pack of uninspired self-servers running things in the corporate/government sphere doesn’t exactly help. In future it could be fatal.
Fortunately our efforts at self-obliteration haven’t been terribly enthusiastic, although the ongoing mob rule in the policy area isn’t yet an endangered species. There has always been resistance to entrenched unemployment, and loss of industrial capacity and product. It has happened, but not too many have remained convinced of the logic after the event. Even the most strident global capitalists expect more than a cosmetic effect from going offshore. Things have changed. Management has changed for the better in some important ways. A sure-fire old corporate grovel like employee-hating isn’t the icon it once was. Trade is a bit more realistic, and a lot better informed than it was. (That wasn’t a learning curve, it was a learning parabola.) There’s some reason to think that competing with overseas business has finally opened eyes and proved that they aren’t unbeatable, or anything like it.
Just as well. If everyone in business in Australia was that stupid we’d have gone broke years ago. Somebody must be doing something right, somewhere. We may still be far too insular, and hideously naïve about some elements of the way things work, but we’ve managed pretty well despite that. It’s just as well we’re not a particularly neurotic nation. That’s one corporate advantage, ironically, in being Australian. If you’re among people that don’t go nuts every five seconds it makes things a lot more bearable. It’s a conspicuous fact that a lot of our corporate failures have had that sickly, neurotic tinge to them, the unworldly irrationality that leads to a company like Ansett “not knowing” it was losing a million a day.
In fact, we tootle along quite happily, with our big/little businesses and economic toys. Winnie The Pooh was a relative anarchist compared to our love of the Urban Mundane as an economic reality. Every now and then one of the kids falls flat on his face and has to be cleaned up, usually requiring a Royal Commission and/or thousands of hours of court time, but that’s normal. A normal economic childhood in a normal Western nation. And lollies rain from the sky.
Meanwhile, turmoil, globally, daily, and billions of dollars wandering around like sheep trying to find an abattoir. This is no longer a world where “smug” is a useful qualification for doing business. Like anything else, the time to get worried is when things are going well. If lightning hasn’t struck, that’s when to start wondering why it hasn’t. Afterwards is usually a bit late. We’ve got into the habit of trying to make things work like they do on TV. Things are done at certain times, and the economic TV guide, like indices, trade deficits, quarterlies, etc., is all you need to run your business and keep track of your sector. This illusion of stability is potentially lethal. Like a TV show, your career and income can be canceled overnight. Demand can disappear. Clients can disappear. Margins can kill. Overheads can beggar you and turn profitability into a memory.
Nothing is ever again going to be as simple as it was in the past. What’s wrong with this delightful excursion into assumed predictability is that it’s entirely misleading. Wanna make a bet on what you’ll be doing this time next year? How about ten years from now? Expecting any early warnings about what happens next in your sector? How about the nation as a whole? Out of any 100 people, you’d be lucky to meet one person who’d risk any real money on a bet.
A lot of our production offshore to lower costs in the latter part of the 20th century. Half-witted though some of it was, there was a logic to it. Like water, production seeks the lowest cost level. So does business. So does capital. Workplace employment policies and industrial rationalization[5] have decimated whole industries. In fairness, some of the changes, like in the steel industry, were brought about by retaining fossils long after their use-by date. A lot of it, however, is pure business.
Every transaction has an effect. Nations, economically, are to some extent just that; masses of transactions. If the trade’s going the other way, and the country’s losing out on a regular basis, where does that leave the nation? It’s too cute by far to assume that something with massive capital dynamics, like the banking or mining sectors, say, is just going to sit about keeping unprofitable operations going. Whatever you think of Australian banks, (and don’t we) they’ve had to adjust to new trading situations. That, alone, has affected the whole country drastically in the last 20 years, and things aren’t about to get any less complex. The mining sector went through boom bust and boom and wound up being largely owned by somebody else. Any visible effect, would you say?
Even nationalistic paranoia is a bit passé on this subject. It’s a complete fallacy that any kind of conspiracy is required to achieve some of the sector-wide autopsies we’ve been seeing for the last few decades or so. Anyway, conspiracy implies objectivity. Rightly or wrongly, averaging about equal, the endless downsizing and job losses are part of an ongoing pattern which is more normal than not. Even without the large spectre of globalization, which is as much myth as monster, this social butchery was already well under way. National interest? Where did that get a mention?
What’s driving it is a form of very basic profit motive. Unfortunately for national sentiment, that’s what works. It’s also the only consistently viable rationale for doing things in a commercial context. The CEO isn’t employed to be an idealist. However patriotic, that’s not in the job description either, and wouldn’t make of lot of business sense to the overseas shareholders. That person is there to make money, and is under contract to do so.
The use of the word “liquidity” in relation to money is no accident. Money is now more liquid than ever, and whole economies can get up and leave for the price of an email. In Australia, one of the better known descriptions of lack of liquidity is “drought”. We’re not immune to drought, and we’re also not immune to lack of liquidity. Ask anyone who’s tried to get a capital project or some research happening recently. The drought analogy wasn’t accidental. This variety of drought can happen in seconds and last indefinitely. Sounds like fun, doesn’t it?
Whether we like it or not, the state of the nation is pretty much defined by the state of capital. The future is capital. As long as we’re doing the things that make money, we have the capital. No capital = no future. The qualifier to that is that what’s done can always be done better. It’s like a horse race. You can’t just stop in the middle for a few years, applauding yourself, and expect to win a 1000m sprint. If things can get done better/cheaper somewhere else, where’s the capital likely to go? (Some trainers and even one or two jockeys will agree that occasionally checking whether a horse is still alive is also helpful when intending to compete).
This may sound like a very materialistic view of the world, but unfortunately it isn’t. Capital is now more than just dollars. It represents the social functions of a nation in abstract. Economies equal capital. No capital = no nation. The abstraction of capital has created primitive synthetic economic states based on investment. These will evolve into far more complex entities whose holdings and functions will operate large parts of the global economy. The Japanese produced some of the early versions of this sort of investment and economic control, and the fallout was pretty messy.
It’s a potential stranglehold position. It’s capital that dictates what nations do, far more so than governments. The economies have to function relative to where the money is invested. Nations are secondary considerations at best. The US is a pan-global capital entity, but so is foreign equity ownership in the US. In terms of property it’s a seminal moment. This is “who owns whom” at its least compromising, and it decides who does what economically. Life at whatever Ghz and a lot of zeroes in every transaction.
The old view of static capital is dead, and should have been buried academically and politically decades ago, along with the absurd idea that money respects borders. The EU is a comparatively material entity. It has its components, resources, etc., and is a clearly defined thing. Capital, however, by definition, is free form. It is also the driver behind national and supra-national functions. These are power functions, and if you throw a switch something is definitely going to happen. Wanna stop burning down Brazil? Convince capital you’ve got something more profitable to do with the place. The problem with this setup is that if capital doesn’t understand what the idea is, or the benefits, valuable product and science can be completely lost. I also think becoming the world’s biggest mud slide will be less of a benefit to Brazil than people believe.
The mechanism is such that capital can do what governments can’t. Australia, in global terms, was/is a severely under-capitalized nation. We bitch about foreign investment, often with good reason, but we couldn’t have done what we have without it. We simply did not have the money. That situation still applies, but now in a far deadlier context. Under-capitalization means you can’t offer the same deals your bigger competitors can. It also means you can’t buy and sell at the same rates. In an environment where quite literal trillions of dollars are flying about every second, that’s not a good position. You simultaneously don’t have the money to operate your nation or your trade effectively, and lose both ways. Vae Victis, again.
All this also means that “nation” is now a very relative term. Before too long, there’s a healthy possibility it will equate to a local government area. National status tends to reflect the functional range of a national entity. It’s not at all unlikely, or unreasonable, that groups of nations will take up joint entities as much in self defence as for economic real politick and better trading deals. That’s just the beginning. Jurisdictions in close association have to be able to work together. So laws change. Trade policies do somersaults. Multiple citizenship. Migration. The whole zoo. For the nations, this is like a social earthquake. You build on the ruins, if you survive.
Given what we’ve been able to do to ourselves in the process of a bit of local spring cleaning in the industries, guess what could happen in a large joint economy? Effectively, no nation, in the sense we now understand it. Australia does have a choice. Either we maintain an entity or we don’t. We are positioned almost exactly on the balance. Globalists will make a not entirely unreasonable point that nations are like the Greek city states; that the lack of unity was their greatest weakness. They can say that trade suffers from obstacle courses created by nations. They can also say that national governments are generally not the most reliable economic mechanisms, and that external oversight is one of the best ways of ensuring human rights, democracy, and other useful social machinery are performing up to standard.
True enough, as far as it goes. It leaves out who makes the decisions, and from what perspectives, though. Due to our own experience, as a nation, we Aussies start from generally higher expectations. World standards aren’t necessarily up to ours. Despite the residue of backward, culturally-cringing, fully qualified, idiots we seem to have accumulated, and other conceptual sediments, Australia is normally in the top few of any nation on Earth in any survey of standards of living. Most of this book is criticism, and not gentle criticism, either, but it’s Australian-standard based criticism of Australia, using an Australian level of expectations. The future views are also based on an Australian perspective. The world could do worse.
As a sidelight, there is one further factor in national functions, in relation to global. Sometimes being outside the jurisdictions of the world’s trading and revenue regimes is a very profitable option. There’s some historical evidence that Romans and ancient Chinese found it very useful to be doing business outside their respective empires when it suited them. At least one Roman citizen had both the time and the money to build a villa in Ireland[6], well outside Roman control, in a supposedly hostile land. That’s roughly the equivalent of building Buckingham Palace in Ethiopia as your country shack.
Business must have been good. Modern tax havens are a bit less conspicuous, but the principle still applies. Whatever systems the globalized world adopts, you can bet that a lot of people will find ways round them. That’s a further factor in national survival; the state of play of the dual systems of money and asset movement. There has to be a reason for the money to be here, rather than somewhere else. Reasons for investment change, from idiosyncrasy to inspiration, but always contain some sort of logic. Being twenty or fifty years behind in our economic logic is not likely to help retain investment capital.
If Australia as a nation has a future, it will be because we survived such massive change, and profited from it, not because we merely followed it like a lost dog. The lowest common denominator is usually the worst. We have to go for something better, not just some dismal global average. Nations, trying to survive in the environment this global monster-factory will bring, will have to be able to deal with it and beat it. There are few if any reliable bases for prediction, and none for unfounded optimism, however dangerous.
It’s an interesting point that nation states might cease to exist as economic entities. Capital might come up with economic entities that are effectively nations. The “corporate town” is well known, and one-big-industry nations are pretty normal even now. What if we wind up with a sort of mega-mall nation? There’s not much except getting born and dying that you can’t pay somebody else to do for you. Say your bank took care of your birth, education, accommodation, food, entertainment, aged care, funeral expenses, as a package deal? It’s not that big a step from financial management to life management. $X per month, see it all in the statements. Say the bank was based in Greenland? Point being, what would you need a nation for, apart from a passport? It is physically possible.
There’s one other functional issue that might rate a mention. Capital isn’t the only game in town. There’s another; the human race, (that old thing) most of which is on the garbage heap and making economics a demanding subject for those trying to get it right. Nations are a fact of current history. So is the state of their people. Not many capital handlers want to invest in war zones or famine areas. Nations are like quarantine zones when they fail. Money avoids them. Other nations use their borders to keep problems out. That’s one practical function of a nation. One of the reasons for the greatest mass migration in human history, underway at the time of writing, is economics. Many nations are just not viable, for whatever reason. The economies simply don’t work. The politics are self destructive. This is the overweight albatross around the global neck.
Those who dwell on global economic principles might like to remember that it was once the intention to develop those economies, and thus grow the world economy, and it just didn’t happen. They got saddled with debts comprised of gigantic amounts of money, compounded in the form of interest, that could never exist, based on those countries’ ability to pay. Nobody won. They got a series of lemons, the banks got a lot of write-offs. Capital was lost in huge quantities. Capital doesn’t like losing, and when bitten is not at all shy about avoiding encores of the experience. A very dangerous and very reliable precedent. History hasn’t finished demolishing those failures yet. Whatever capital does about them in future will have to be of a much higher standard. Achilles had his heel, and globalization has the Third World.
A further possibility of the emergence of more complex synthetic economic entities, basically corporate trade entities, dictating their common trade and resources, sort of super OPECs, rather than E.U., but never related to national governments. That has the potential to be rather messy, obstructive, and largely immune to regulation. Another description would be feral markets. De facto regulation of economic activity by cost alone, or just whim. Prices rejoicing in the dictum of blind faith in market forces……how inspiring…..
To raise the human race above its current abysmal level the global goal has to be a lot higher than anything in existence today, socially, economically or structurally. Only the advanced nations of the world can contribute that. “Globalization” is a word for a mechanism which can either improve the world beyond recognition or destroy it, depending on the quality of life it creates.
History doesn’t give second chances. I’m trying, hard, not to imply that there are any simple solutions. In this case the simplest answer is probably wrong. All the previous social and economic turmoil is an illustration of much bigger waves to come. Nobody can afford to assume that they’ll be OK in the conceptual lifeboat. You want a future, Australia, you make one. You might as well; you’ll have to live in it anyway.
[1] In fairness, given my earlier and later comments, someone must be achieving something worthwhile in Australian universities, despite everything. Perhaps we might take the hint that our academic product might have some uses here, too? As distinct from a surefire way of turning it into a suspiciously expensive and ridiculously exclusive, talent-ignoring, farce?
[2] Kindly note the obvious at work. “Profit” isn’t exactly an obscure term.
[3] Yeah, I know, some people have done a lot of work. Unfortunately this is a generalization which still has practical applications.
[4] Just to make a point; the idea of The Clever Country, arguably the most un-saleable bit of English usage in Australian public policy history, (that ain’t good), is a pretty reliable example of what happens when you get a lot of Aussies trying to run things as if they were American jingle writers. You wind up with something awkward, expensive, usually embarrassing, and always ineffective. All I can say in our defence is that it’s out of character, and with luck will remain that way.
[5] Ha! What, if the industry no longer exists, you’ve rationalized enough? Move over, Socrates.
[6] Recent discovery, quite beyond any previous estimate of Roman settlement. History is never as simple as it looks. Nor is the present.