Well Fred thats an interesting question. Surely the answer lies on who you are in society. If you are well off looking to increase your profit take, the answer is a resounding NO. However if you are a young unskilled worker being kicked off welfare into working for the former, with no rights or protection, the answer is an emphatic YES.

These surveys falsely imply that economic policy, as set down by the goverment, is the main driver of future prosperity. Most of the countries in (4) have numerous social differences to countries like Austalia, not least of which is a) a high regard for science, technology and engineering, at both a practical and educational level (look at the TIMS survey); b) Money has been invested in productive industries versus unproductive fixed assets like housing; c) culturally insulated such that their smart people do not move overseas as much; d) etc.

These surveys therefore fail to recognize the contribution of the people, irresepective of the government. It may well be that the types of social systems different countries have are the best for those particular cultures, and therefore these are false comparisons, or it may be that government policy only has a weak influence on economic conditions.

Perhaps a better way to understand this is to look at other countries that have been successful of late that don't have such economic systems. Why has China been so successful of late ? Is it because of thoughtful planning by the government, or is it because once the people are left to do what they want to even a small degree, they are innovative and entrepernerial ?

The same is true of many of the other Asian countries that are succesful, like Singpaore, Taiwan, Hong Kong, Korea, and Japan. None of these countries have particularily strong social systems provided by their goverment, and indeed what their respective goverments do varies a lot. Yet all are rich countries. Is the common demoninator here government policy, or is it something that government policy can only change a small amount, like hard working and innovative ?

RC I agree. Economic policy (and all policy) can only be framed within the context of the culture that it applies to. While the Scandavian model as outlined in the article may produce the best results across the board, would the high levels of taxation that go with it really be accepted here? And should they be accepted here? People might generally consider that having freedom to choose how they spend their money even outweighs the benefits of having a more equitable society. I think culture is the x-factor is a debate such as this.

RC and Dick. Can i take it that you therefore agree that there was no imperative for Howard to provide for laws that enable the stripping of wages and conditions from Austalian workers?

It's nice that four models produce different four results. Are these computer models? Do they have any correlation with reality? Where can we view the source code?

And with only two policy imputs how do we know the result in each country has anything at all to do with policy.

The USA is racially mixed with a difficult history (eg slavery, civil war etc). Most of Norway and Sweden is all white. Maybe it is the high level of gun ownership in Sweden that leads to equality.

The USA spends a lot on the military with a lot of this expenditure treated like a social program with cities competing to be hosts for military bases.

The USA is no less taxed than Australia. Its just that less of their taxes are by central government and more by the states. And they spend more on soldiers than single mums.

Fred, you rightly say that increased productivity is not the only goal of society and ask "Has Australia taken the wrong turn?" with its recent IR reforms. Your comparisons suggest that in other settings, a different policy mix has had superior results. However, as others have pointed out, there are many differences between countries and government policies are only one element in determining economic and other outcomes, rendering comparison difficult without a much more detailed analysis. We have embarked on a particular path. Perhaps its impact, if any, can be assessed prior to the next-but-one Federal election in terms of changes within Australia. I don't think an alternative approach will be adopted before then.