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Tr JI ^i S l 1 r 17;Ps;t, JFr, 4^[ s , j ,, f !Y J y ,T•^• t ra f^^.l • • s I` laZ ° rf S f • r I i ^ , ^' /, "^y, 3 ^»^J ^^ S AS r^ Jl l,_ ^1,{ ^fcF- rr r- ^i..^^i. .. s j JCL / H J r ^ ^, r 5 • r.^ . •Ji^f"jF,.t.,^^JJ^^TjSt^S" h ^^ d r,. .1:. •:•:ir.a rte• ^ r^:y.;:5• JF + ♦:•^••.^?„ Y F t J=1^J1 .^^ fJ ^.^y jr r R r .^ /.^F^lJftrlr.^ J^.,; :}?ra.^T^^/ , •^.• . ..; ^. : {i/..,• t^},q :. •err: z i-.•-`•i . ,u.{;sr y^F :^J^:., n Flt^.r±• .^ F1^^^ .,.,3:. T1: INSTITUTE OF PUBLIC AFFAIRS LTD (incorporated in the ACT) IPA REWEW ISSN 1030 4177 Vol 43 No. 3 Autumn 1990 Poor, but Green 56 Father Fox and the Cosmic Christ Hot air is getting politicians into trouble. Hal Colebatch A New Age guru tours Australia. 1® Parliament Degraded Anthony D. Smith Governments are becoming less accountable. Editorials as How to Increase National Output by 2 $75 billion Better economic relations with the Eastern John Hicks BIoc depends on securing property rights. Microeconomic reform could unleash Dismantling our own corporatist state. Australias potential for growth. 6 Debate: Should we reintroduce the 19 Cargo Cult Economics death penalty? Tom Quirk, Tim Duncan, Richard de Pro and contra capital punishment. Lautour 8 Indicators Governments directing university research Australia leads the world in interest rates. will not generate sunrise industries. 22 Moore Economics 26 Union Amalgamations: The ACTUs Des Moore Grab for Power The Accord is the problem, not the solution. Joe Thompson A former union leader blows the whistle. 24 Strange Times Ken Baker 34 According to the Stars Inverted images. Anton Hermann Failed predictions from the press corps. 30 A Unionists View Laurie Short 37 Australian Telecommunications: the Victoria remains an outpost of the Far Left. Wasted Years Richard Alston 31 Map: World Population Growth Australia has the highest local call charges in By 2020 world population will be 8.3 billion, the world. but in the West birth rates are shrinking. 41 Ideas for What? 42 Defending Australia Greg Melleuish Harry Gelber Intellectuals are not immune to the lure of Gorbachev and German unification. power. 55 Issues in Education 45 Is There Life After Marx? Leonie Kramer Bill Muehlenberg How devolution of financial responsibility Intellectual exhaustion on the Left. works in the UK 48 My Generation, Baby 58 Youth Affairs William Kerley Alan Cocks Campuses in the late60s were political train- The trend towards expanding choice in the ing grounds. curriculum should be reversed. Slack Laws Weaken Investor 61 Letters 5 a P. Cook, J. N. Confidence from Daly, Goldie, D. Minchin, E. W. Bennett and R. J. Pearson. R. J. Fynmore A top executive says its time to clamp down 63 IPA News on rule breakers. The IPA has a new director. Editor: Ken Baker Design: Bob Caswell Associates Review Office Unsolicited manuscripts are welcomed. However, potential con- tributors are advised to discuss proposals for articles with the Production Assistance: Tracey Seto 6th Floor Editor. Advertising: David Parker 83 William Street Printing: Wilke Color Melbourne, 3000 Letters to the Editor for publication should normally be kept to 37 Browns Road, Clayton, 3168 no more than 300 words. Phone:03Phone:(03) 614 2029 Views expressed in the publications of the IPA are those of the Circulation: Loreen Noakes Facsimile: (03) 629 4444 authors and do not necessarily reflect the views of the Institute. IPA Review was established in 1947 by Charles Kemp, founding Director of the IPA. EDITORIALS very highly regulated society to a more deregulated one, unless it can also increase its exports — and countries where individuals and enterprises make more decisions that continue with highly regulated economic systems and the State fewer. Australia and most other Western that are not responsive to price signals are likely to economies have, of course, been experiencing various remain limited exporters. China, so often painted as the forms of deregulation over recent years, albeit from a potential saviour of Australias trade problems, has ex- starting point that was much less dirigisle. While our ports that are even now not much larger than Australias general experience with deregulation has been own inadequate efforts. The potential Chinese market favourable, it has clearly thrown up problems. When is enormous but that potential can only be realized if the the reins are loosened there are some who, first up, do right economic system is put in place. The same applies not know how to handle the new won freedoms. These to Eastern Europe. initial transitional problems have caused some to argue There is a parallel point to be made about political that we should reimpose regulation, or at least move no relationships between East and West. Just as the scope further down the deregulation path. for closer economic relationships will be limited until In Australia and most Western economies property rights are improved, so too will there be a need deregulation has been taking place in the context of for caution in political relationships until some sort of democratic political frameworks and economic systems track record on democracy is established. Gorbachev that recognize (within limits) property rights. But in the himself continues to assert that he is a communist, Eastern Bloc new legal, political and economic whatever that now means. But it is by no means far frameworks and systems have to be established, more or fetched to postulate that the Gorbachev attempt to less from scratch. Indeed in the Soviet Union in reform will fail and that he will be replaced at least in particular there is no history of democracy and most the short term by a hard-line military/political regime. historians argue that the Russian tradition is essentially (In the longer term any replacement would have to one of centralized decision making. Moreover, revert to policies similar to those of Gorbachev.) Equal- according to one report President Bush told NATO in ly, the process of decolonizing the Soviet empire may December that Gorbachev "is very weak in economic well create a period of instability in international rela- understanding and abysmal in his understanding of a tions, with a risk of internal conflict spreading to inter- market economy." Mrs Thatcher added that "They have national conflict as new countries and centres of power no idea about cost or price. The difficulties are seek to establish themselves. enormous." Australia is fortunate in being geographically dis- It is easy to see, therefore, how moves away from tant from possible areas ofconflict. Trade opportunities planning and central administration in the Eastern with the Soviet Union and Eastern Europe are unlikely Bloc could result in the first instance in a serious to increase as some commentators are suggesting. But deterioration of economic conditions. This could, in the four per cent of our exports that goes to the Soviet turn, lead to demands for curbs on new won freedoms Union and Eastern Europe — mainly rural and mineral and a return to greater central control. Indeed, some products --- should not be seriously at risk. Australia reports indicate that a substantial deterioration has al- cannot expect to be a major source of capital investment ready occurred in the Soviet Union and that Gorbachev (let alone aid). is under considerable pressure to slow, if not reverse, the As for our defence expenditure, it is so small that process of change. there can be no case for following any cutting lead set by An important reality, overlooked in much com- the USA and the Soviet Union. Indeed, while the ment, is that until sufficient recognition is given by the prospect of global conflict is much reduced, the poten- Soviet and East European governments to property tial for regional conflict is scarcely changed and could rights and the necessary associated legal and business even be increased if a regional power vacuum were to procedures, private investment (whether domestic or emerge. For Australia even to contemplate a defence foreign) will be tentative and little economic progress is effort below its present minimal level would require a Iikely. The opportunities for increased trade will also far greater degree of regional stability. be limited. Equally, without a pricing system that ade- The appropriate reaction to perestroika and glas- quately responds to changes in market demand and nost is, then, both a tremendous sigh of relief and a supply, resources will remain misallocated and living rather perplexed "Well, where do we go from here?" standards will suffer.
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