Welcome to the electronic edition of Australia’s Economy in its International Context: The Joseph Fisher Lectures, Volume 2. The book opens with the bookmark panel and you will see the contents page. Click on this anytime to return to the contents. You can also add your own bookmarks. Each chapter heading in the contents table is clickable and will take you direct to the chapter. Return using the contents link in the bookmarks. The whole document is fully searchable. Enjoy. Australia’s Economy in its International Context Cover photos published with kind permission of Peter Morris/Courtesy of Fairfaxphotos.com, Nicholas Gruen, ANU ePress, Butlin Archives ANU, The University of Melbourne Archives, World Bank, wikicommons. L-R: Robert Menzies, Peter Petri, Peter Phillips, Fred Gruen, Anne Krueger, Paul Krugman. Australia’s Economy in its International Context VOlume 2: 1956 - 2012 Edited by Kym Anderson Published in Adelaide by University of Adelaide Press Level 1, 254 North Terrace The University of Adelaide South Australia 5005 [email protected] www.adelaide.edu.au/press The University of Adelaide Press publishes externally refereed scholarly books by staff of the University of Adelaide. It aims to maximise the accessibility to its best research by publishing works through the internet as free downloads and as high quality printed volumes on demand. Electronic Index: this book is available from the website as a downloadable PDF with fully searchable text. Please use the electronic version to complement the index. Originally published April 2001 by the Centre for International Economic Studies, University of Adelaide, and republished by the University of Adelaide Press in 2009 with 5 additional lectures. This revised edition includes a further 3 new lectures. © The University of Adelaide 2001, 2009, 2012 This work is licenced under the Creative Commons Attribution 3.0 Unported License. To view a copy of this licence, visit http://creativecommons.org/licenses/by/3.0/ or send a letter to Creative Commons, 444 Castro Street, Suite 900, Mountain View, California, 94041, USA. This licence allows for copying any part of the work for personal and commercial use, providing author attribution is clearly stated. Subject Keywords International economic relations - Australia Economic conditions 20th century - Australia Economic conditions 21st century - Australia Economic policy 20th century - Australia Economic policy 21st century - Australia Foreign Economic relations - Australia Commercial policy For the full Cataloguing-in-Publication data please contact National Library of Australia: [email protected] ISBN 978-1-922064-42-4 (paperback) ISBN 978-1-922064-43-1 (ebook) Cover design: Fiona Cameron and Emma Spoehr Text: Céline Lawrence and Zoë Stokes Paperback copy printed and bound by Griffin Press, South Australia Contents Volume 2 (1956 - 2012) Preface ix List of lectures in volume 1 (1904-1954) xi Contributors to opening chapters xiii The benefactor osephJ Fisher Extract from Joseph Fisher – A Pioneer Colonist by F. R. Fisher xv The Lectures by Kym Anderson xxv The lecturers by Kym Anderson and Keith Hancock xxxi 27 1956 – Japan and the General Agreement on Tariffs and Trade by James E. Meade 1 28 1958 – National superannuation: Means test or contributions? by Richard I. Downing 25 29 1960 – Mass entertainment: The origins of a modern industry by Asa Briggs 49 30 1962 – Industrial research and economic growth in Australia by Bruce R. Williams 77 31 1964 – Australian foreign aid policy by Heinz W. Arndt 95 32 1967 – Australian tariff policy by W. Max Corden 115 33 1969 – Balancing external payments by adjusting domestic income by E. H. Phelps Brown 143 34 1971 – Income inflation in Australia by Ronald F. Henderson 157 35 1974 – Political economy and the problems of our times: In defence of general economics by John Vaizey 167 36 1976 – Comparing the Industries Assistance Commission and Jackson Committee approaches to industrial development by G. Alf Rattigan 187 37 1978 – Australian economics, 1967 to 1977 by Fred H. Gruen 213 38 1981 – Work and welfare in the years ahead by Robert G. Gregory 243 39 1985 – Japan faces affluence by Martin Bronfenbrenner 277 40 1986 – What do we really know about monetary policy? by David Laidler 299 41 1988 – Pacific challenges to the United States by Paul R. Krugman 323 42 1993 – How convincing is the evidence linking education and income? by Orley Ashenfelter 337 43 1994 – The role of the NAFTA debate in US trade policy by Anne O. Krueger 347 44 1995 – Protection and liberalization in Australia and abroad by W. Max Corden 365 45 1996 – Population, food and trade by D. Gale Johnson 389 46 1997 – Strengthening intellectual property rights in Asia: Implications for Australia by Keith E. Maskus 409 47 1999 – Human behaviour and the transmission of infectious disease: An economist’s perspective by Mark Gersovitz 433 48 2001– Public policy and higher education by Peter H. Karmel 457 49 2002 – The role of natural resources in economic development by Edward B. Barbier 487 50 2003 – Globalization by Mike Moore 517 51 2006 – Paying for the past: Economics, cultural heritage, and public policy by C. David Throsby 527 52 2008 – Globalization and the Great Divergence in the long run by Jeffrey G. Williamson 541 53 2009 – Globalization and the environment by Brian R. Copeland 575 54 2010 – Exploring the mysteries of trends and bubbles by Peter C. B. Phillips 599 55 2011 – Can Asia grow fast on its own? The economics of the dynamic middle by Peter A. Petri 617 56 2012 – Multinational corporations and development: Changing perceptions by Jagdish N. Bhagwati 651 Preface This two-volume collection brings together the first 56 Joseph Fisher Lectures in economics and commerce, presented at the Adelaide University every other year since 1904. Funds for the Lectures, together with a medal for the top accounting student each year, were kindly provided by a £1,000 endowment to the University by the prominent Adelaide businessman Joseph Fisher in 1903 - before his death, to avoid 10 per cent going to the government! (Since the average adult male wage is now well over 200 times greater than it was in 1903 in nominal dollar terms, that endowment represents more than $0.5 million in terms of today’s spending power.) An additional sum of $10,500 was donated to the Adelaide University Centenary Appeal in 1974 by Trustees of Settlements made by Joseph Fisher. The Lectures, which are free and open to the public, have been published by the University as stand-alone booklets, and copies distributed at the fund’s expense. The Lectures are mostly on economic issues and reflect Fisher’s interests in liberal markets and non-interventionist government. They have stood the test of time extremely well, while also providing a reminder of the events and concerns that were prominent at different times during the past century. That, plus the fact that many of the earlier Lectures are now out of print and only a small subset of them were reprinted in scholarly journals, justifies putting them together in this collection for posterity. The timing of this collection’s first publication, in 2001, celebrated the centenary of economics teaching at Adelaide, which began with the Federation of Australia in 1901. It also celebrated the fact that it was 50 years since the 2001 Joseph Fisher Lecturer, Peter Karmel, took the Chair of Economics at the University of Adelaide and built the department to an outstanding level (before Peter moved on in the mid-1960s to establish the Flinders University of South Australia). Since 2001, five more Lectures have been added to this second edition of the collection. (See List of lectures in volume 1, 1904-1954 following this Preface.) The Centre for International Economic Studies (CIES) at the University of Adelaide is proud to be the publisher of the collection, particularly since so many of the Lectures deal with international economic issues or Australian issues that were influenced by major international events. ix Preface The lectures have been reproduced fully, preserving the spelling, punctuation and citation forms of the day, with reproduction of figures wherever possible. This collection would not have been published had it not been for the thorough bibliographical research and editorial assistance including copy-editing and typesetting provided by Jane Russell. Our thanks go to her, and to Bob Fisher and Keith Hancock in providing material for the opening chapters. Finally, to the descendents of Joseph Fisher, we thank them for their on-going support to the University of Adelaide. Kym Anderson October 2012 x List of lectures in volume 1 (1904 - 1954) 1 1904 – Commercial education by Henry G. Turner 2 1906 – Commercial character by Lewis A. Jessop 3 1908 – The influence of commerce on civilization by J. Currie Elles 4. 1910 – Banking as a factor in the development of trade and commerce by J. Russell French 5 1912 – Australian company law, and some sidelights on modern commerce by Henry Y. Braddon 6 1914 – Problems of transportation, and their relation to Australian trade and commerce by David J. Gordon 7 1917 – War finance: Loans, paper money and taxation by Robert F. Irvine 8 1919 – The humanizing of commerce and industry by Gerald Mussen 9 1921 – Currency and prices in Australia by Douglas B. Copland 10 1923 – Money, credit and exchange by J. Russell Butchart 11 1925 – The Guilds by Henry Y. Braddon 12 1927 – The financial and economic position of Australia by Stanley M. Bruce 13 1929 – Public finance in relation to commerce by Richard C. Mills 14 1930 – Current problems in international finance by Theodore E. G. Gregory 15 1932 – Australia’s share in international recovery by Alfred C. Davidson 16 1934 – Gold standard or goods standard by Leslie G.