Inside this Issue Volume 49 • Number16 4 The • July Links 1997 between Economic Freedom and Social Cohesion Enemies of economic freedom argue that it damages the ARTICLES REGULAR FEATURES fabric of society, as the rich get richer and the poor get poorer. But what holds society together? And do the poor 1 Editorial really get poorer? Winton Bates The Governments policy-free zone is not only bad policy, 19 Economic Freedom as a Good in Itself but bad politics too Tony Rutherford Classical political freedom and economic freedom tend 3 From the Executive Director to go hand in hand. Not surprisingly, they have a lot in Globalization is not just a buzzword. Its a real and growing force common—not least their subversive tendencies Padraic that might just help rein in the excesses of government spending McGuinness Mike Nahan 4 Muddying the Waters... Most of us gain our information about the natural environment 21 The `R Files from the media. But what happens when they dont get it right? A close examination of the recent dealings of the WA A Perth-based geological consultant examines a recent case in Government over the proposed sale of its major gas pipeline The West Australian Peter Purcell shows just why governments shouldnt get involved in 6 The Pyrrhonist commerce Alan Moran Much as he appreciatesAunty. Brian Tucker has suffered the 23 Black and White slings and arrows of outrageous ABC misrepresentation at first Not many of us have read the Independent Member for hand. Perhaps fair reporting for fair resourcing might hold the Oxleysutterances on Aboriginal cannibalism. But it would answer Brian Tucker appear that many academics have difficulty in trusting us to 10 Bonus of Full Employment for United States cope with the truth of the matter Ron Brunton The US economy seems close to attaining what the rest of the 24 Freedom in the New Zealand Labour Market world only dreams abot—f employment. If they can do it, Six years after the NZ Employment Contracts Act was introduced, why cant Europe? (And why cant we?) David Hale the results are fairly clear. On the whole, the story is good, but 11 Dont Mention the Waterfront there is still room for improvement. In this extract from a So you think here have been great gains on the waterfront major speech, the head of the New Zealand Business lately? Think again! As a nation for whom exports are vital, Roundtable reviews the evidence and points to some of the our performance in shipping is abysmal—and everyone remaining obstacles to full employment Roger Kerr seems content to sit on their hands rather than do something 27 Free_Enterprise.com about it Robert Skeffington WWW for the (computer) workers of the world! In this issue, Spamming (read it and find out), Laissez Faire books, Project Gutenberg. an email mailing list devoted to Friedrich Hayek, SPECIAL FEATURES and Friedman the Youngers home page Stephen Dawson Focus on Economic Freedom BOOK REVIEWS 13 Economic Freedom and the Wealth of Nations 29 • More Equal Than Others • Mad Feminism The Fraser Institute (with the help of numerous think-tanks across Roger Kimball reviews Bruce Frohnens The New the world, including the IPA) has recently released its latest global Communitarionism and the Crisis of Modern Liberalism and notes assessment of economic freedom. How well did Australia do and that many communitarians yearn for the fruits of old-fashioned what are the implications for the future? Mike Nahan morals and religion—but without theirtedious commitments: Antonia Lehn parades some truly loopygynocentric feminist 15 Economic Freedom of the World: International utterances and looks at their implications for our important Rankings social and educational institutions in her review of Christina The league ladder is out. Hong Kong is still top of the table Hoff Sommers Who State Feminism? How Women Have Betrayed (although who knows for how long). But where is Australia? Women And who came 115th? 000000 Editor: Tony Rutherford. Publisher Executive Director: Mike Nahan. Production Manager: Chris Ulyatt. Editorial and Production Office•. 2nd Floor, 46 Kings Park Road, West Perth WA 6005. Phone: (08) 9321 1420. Fax: (08) 9321 1479. Email: [email protected] m.au Designed by: Colin Norris, Kingdom Artruom. Printed by: Print Hotline, 47 Milligan Street, Perth, WA 6000. Published by: The Institute of Public Affairs Ltd (Incorporated in the ACT) ACN 008 627 727. 128. 136 Jolimont Road, Jolimonr, VIC 3002. Phone: (03) 9654 7499. Fax: (03) 9650 7627. Email: ipahayek@o:online.cotn.au Cover Photograph: Bureau of Meteorology imagery from the Japan Meteorological Agency geostationary satellite. Unsolicited manuscripts welcomed. However, p<rtential contributors are advised to discuss proposals fur articles with the Editor. Views expressed in this publication are those of the authors and do not necessarily reflect the views of the IPA. Reproduction: The IPA welcomes reproduction of material from the Review, but for copyright reasons the Editors permission must first he sought. From the Editor TONY RUTHERFORD S Roger Kerr points out All of this begins to explain our in his article later in this focus in this issue of the IPA Review. issue, economic reforms economic freedom. Our three pass through three stages: authors—Padraic McGuinness, resistance, grudging acknowledgement Winton Bates and Mike Nahan- and final acceptance. That is, I think, concentrate sharply on three central true of individual economic reforms; issues: on how economic freedom and but is it true of economic reform as a the classical freedom of the individual general phenomenon? are intimately related; on how economic freedom makes for a better PERCEPTIONS OF ECONOMIC society; and on the relationship REFORM between economic freedom and The evidence from Australia is mixed prosperity. All three make an and at best anecdotal. Reform fatigue irrefutable case for freedom. is an ailment commonly diagnosed in This is, after all, the positive side of voters and politicians alike. The the continued existence of the welfare reform, the side that gets lost in the lower-middle-class swing to John state as we know it is clearly thought doom-laden discussion accompanying Howard in the last election is—rightly to be in doubt. And, of course, there each step forward in the micro- or wrongly—now commonly ascribed is the simple desire for a quiet life to economic reform agenda which now to just that sort of fatigue. be taken into account. characterises so many polities. In the Many factors play a role in this. Whatever the reasons, economic long run, indeed, and tritely enough, Simple fear of losing ones job is a reform in the broad sense has largely the silver lining turns out to be powerful one—even though, had a bad press in Australia. considerably bigger and more statistically speaking. the fear is more Each successive reform comes important and durable than the cloud. significant than the reality. In post- with a cloud of potential bad news— Thatcher Britain, for instance, despite loss of income, loss of benefit, loss of A POLICY-FREE ZONE? all the reform, job tenure tended to job security, the simple necessity of With that in mind, we can tentatively be more, not less, secure than before. having to compete where competition propose a rough-and-ready law of Simple statistical fallacy is never prevailed—which hangs around reform: To the extent that reforming important here: with the help of the even after the reform in question is politicians believe that economic media, we register the loss of 5,000 completed and accepted. freedom is an important good in itself, jobs if a single large enterprise closes, Hypothetical gains—X per cent then the task of reform will be both but not the creation of 5,000 increase in exports or in GDP lower more easily and more thoroughly individual jobs in thousands of inflation, better allocation of scarce carried out. With Ronald Reagan, individual enterprises in the rest of resources, better investment patterns, Margaret Thatcher and Roger Douglas the economy. A residual sense of even lower levels of taxation—are as star witnesses for the proposition, economic nationalism is also an rarely of a kind that most people can we can nearly rest our case for the important factor: thus the very real perceive. This is, after all, what we validity of the dictum. gains from the progressive integration would expect from public choice The proposition may, in any case, of our economy into the global theory: the political process enable us to try putting our finger on economy are accompanied by a great traditionally yields significant gains to just what is wrong with the Howard deal of out-and-out chauvinism the concentrated few, while the Government. Although some mingled with curiously defeatist diffused many will reap only individual ministers—David Kemp, conspiracy theory. imperceptible gains. McLachlan, Newman and Vanstone, for A good deal of anxiety is focused It has to be observed, too, that instance—are clearly doing their best on life after work: a secure and much of the actual pain of reform in to do the right thing (and deserve all relatively early retirement is a highly Australia has been borne by members support for that), they are in a valued goal in most lives, and the of former elites--especially minority, and their efforts suffer the knowledge that, for whatever reason, bureaucrats and formerly powerful more for that. that may soon be a thing of the past is unions—who still tend to have ready In the sense of having a compelling a powerful unsettling agent. Indeed, access to the media. underlying mission, of making sure 0©OQ©© JULY 1997 that all policy initiatives point the right many useful public supporters left.