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The Forum > Article Comments > Reining markets in > Comments

Reining markets in : Comments

By Geoff Davies, published 11/12/2013

The free market mantra is not about to disappear from the Australian political landscape - far from it - but really it's time some logic was brought to bear on this brutal ideology.

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Geoff Davies
sorry, but the article is ridiculous. You've absurdly muddled periods of free and directed markets - alleging that the decades after the war involved a lot of government involvement which supposedly switched off in the 1980s with neoliberalism.

The height of absurdity is reached when you claim that Australian growth was inhibited because Hawke-Keating chucked away much of the financial regulation and started cutting tariffs.. Bbbbbbwwwwhahahah! You are virtually alone in claiming this.. so I don't know how you managed to rig the figures and don't have time to work it out, but I'd suggest you look again.

About the only economist with any reputation I know who might even begin to agree with you on markets is a Prof John Quiggin at Uni of Q. He had some book out recently..
Posted by Curmudgeon, Wednesday, 11 December 2013 10:02:57 AM
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Much of what is written by those opposed to the views of the author of this article ignore the advice of more competent writers.

In 1998 the then Governor of the Australian Reserve Bank, Ian MacFarlane wrote, "More and more people are asking whether the international financial system, as it has operated for most of the 1990s, is basically unstable. By now I think the majority of observers have come to the conclusion that it is..."

"The intellectual underpinning of the free market position ...The Efficient Markets Hypothesis - is very weak. In all the exchange rate tests of which I am aware, the hypothesis has been contradicted by facts."

"We need to devise a system for maximizing the benefits to be gained from international capital while limiting the risks." "It is simplistic to insist on the totally free movement of capital in all countries and in all circumstances."

Howard and Costello for ten years operated the Australian in the sector of the fiscal space that in known to be unstable in the long term. See Slide 49 of Prof Stephanie Kelton's paper at the Field Institute.

The GFC was caused by criminal activity in the USA speculative market that drove any honest operators in the banking system out of the market through the Gresham dynamic. Please read former regulator W K Black at neweconomicperspectives on this subject.
Reading Professor Mariana Mazzucato's book "The Entrepreneurial State" might improve the understanding of some of the free-marketeers.
Posted by Foyle, Wednesday, 11 December 2013 10:14:08 AM
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Three very loud cheers for Geoff Davies who is of course a geophysicist and not an armchair bound pointy-headed academic or public servant who does not "get out in the 'real' world". Geophysics is of course a hugely important branch of science.

Geoff's book Economia is one of the best books published any where in the world on economics/politics/sociology/history, and yes science too.It makes all of the books and essays etc written by all of the usual suspects that associate with the IPA, Catallaxy Files, and benighted scribblers such as Ludwig von Mises appear very simplistic and tacky.
Speaking of von Mises and similar "free" market libertarians I quite like this assessment of the devastating cultural consequences of their applied politics. I do not share the authors naive Christian religiosity.
http://www.chroniclesmagazine.org/2010/02/22/abuse-your-illusion
Posted by Daffy Duck, Wednesday, 11 December 2013 10:30:02 AM
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...The housing market, in it’s current form, debunks both schools of thought. It has Government intervention on every conceivable level, which distorts “Real Value” of the housing stock, to the point where market forces are increasingly available, exclusively to a narrow cohort of the global wealthy; and the banks with a willingness to allow investors to take a risk in the housing market with borrowed capital.

...The social cost of this mix and match of failed systems is plain: Ballooning household debt, little to no control over property rents, homelessness and increasing despair and anxiety directed towards survival of the family unit!
Posted by diver dan, Wednesday, 11 December 2013 11:10:43 AM
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Notice how Foyle, Geoff and Daffy do not advocate any particular governmental action? All they’re standing for is the right of some people to attack innocent people and kill, enslave or steal from them.

Obviously government will not be able to manage the economy better, even in your own terms, unless its advocates can answer the following questions:
• At what stage, short of actually shooting people, do you renounce the initiation of force to enforce the policies you advocate?
• By what criterion do you know the difference between the market price and the just price in any given transaction?
• How do you know what the correct rate of depletion of depletable resources is?
• How do you know what is the correct discount for futurity for everyone in the world?
• How do you know whether government is providing too much, too little, or the right amount of any given service?
• If your assumptions of governmental omniscience are right, then why don’t you agree with full socialism?
• Why don’t the same problems inhere in the partial socialism you advocate?

Let’s face it. None of the apologists for government will answer any of these questions, because they can’t. But instead of having the intellectual honesty to come out and say that they can’t answer them because they’re beliefs are wrong, they’ll just try any diversionary tactic in the book, like
a) Geoff: trying to send us on an errand to construct his own argument which he can’t defend: alleging that there are more options when EVERY option Geoff offers, that is not libertarian, is simply the government forcing people to sacrifice their liberty and property:
b) referring to absent authority AGAIN after going silent and running away from a thread in which his own argument was totally demolished: Foyle
c) referring to works that he hasn’t read: Daffy’s drivel about Mises.

Thanks for proving that there is no answer to the arguments for liberty but layers of fallacies trying, but failing, to cover up your tedious dysfunctional failed slave philosophy of socialism.
Posted by Jardine K. Jardine, Wednesday, 11 December 2013 11:11:03 AM
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Onya One Under God...A timely reminder from one of your links!

...South African conditions today remain deplorable. Neoliberal harshness works this way. Business as usual is policy. Disadvantaged millions are ruthlessly exploited...(Or ignored (my words))!

And a not so muted point; why only sixty thousand turn out in a stadium with a ninety thousand capacity...!! speaks volumes!

...The truth rules in SA...Neoliberalism breeds traitors to a Nation and its people and presents them as winners!
Posted by diver dan, Wednesday, 11 December 2013 11:28:22 AM
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