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Editorial Advisory Council
Professor James Allan, Professor Ray Ball,
Professor Jeff Bennett, Professor Geoffrey Brennan,
Professor Lauchlan Chipman, Professor Kenneth
Clements, Professor Sinclair Davidson, Professor David
Emanuel, Professor Ian Harper, Professor Wolfgang
Kasper, Professor Chandran Kukathas, Professor Tony
Makin, Professor R.R. Officer, Professor Suri Ratnapala,
Professor David Robertson, Professor Razeen Sally,
Professor Steven Schwartz, Professor Judith Sloan,
Professor Peter Swan, Professor Geoffrey de Q. Walker.
Policy is a quarterly publication of The Centre for
Independent Studies in Australia and New Zealand. Views
expressed are those of the authors and do not necessarily reflect
the views of the Centre’s staff, advisers, directors, or officers.
Australia is locked into a debt and deficit trajectory that the IMF recently dubbed the ‘new
mediocrity’ in fiscal governance. Canberra fiddles while the balance sheet burns. In the
United States, debt and deficits are just the tip of the iceberg: unfunded liabilities—
spending on entitlements—are the real fiscal challenge. If added to official estimates of public debt
these liabilities would raise the debt considerably, as Vito Tanzi warns in our opening feature.
Tanzi discusses how attitudes to public debt have changed since the Global Financial Crisis, with
some economists seeing higher borrowing and spending as a kind of miracle cure that would
increase economic growth in the long run and therefore melt the debt. This ‘new-Keynesian’ view,
he argues, assumes that we are living in a different fiscal world where the old rules no longer apply.
In our cover story, Wolfgang Kasper recounts how free trade and economic freedom have led
to unprecedented global prosperity since 1945, before asking why the inspiring lessons from
such liberalisation are now so widely ignored or even rejected. The conventional answer—that
globalisation has caused structural changes with winners and losers—is simplistic and largely
wrong, he argues.
Western democracies are locked into what he dubs an ‘Olsonian trajectory’ of political ossification,
economic sclerosis and citizen disenfranchisement. Multilateral trade liberalisation reflected these
domestic developments, with the postwar free trade era now giving way to a new protectionism that
threatens to reshape the global economic order.
The rise of unconventional political actors who challenge the status quo, recalling the Hobbesian
character puer robustus, could disrupt business-as -usual—for better or worse. US President Donald
Trump is a case in point. Much depends on which type of puer robustus becomes dominant. Much
also depends on whether the simplistic explanation of what went wrong is generally accepted or a
more comprehensive explication gains currency.
David Martin Jones and Nicholas Khoo discuss the key features of the Jacksonian school of
thought in American politics that Trump has so effectively articulated, and how this has informed a
return to realism in US foreign policy. They argue that the lineaments of a more realpolitik game plan
are already apparent in a new ‘America First’ unilateralism and retreat from the Wilsonian promotion
of abstract values and international norms, and consider what this means for the Asia Pacific.
Elsewhere, Tom Switzer talks to (now redundant) British Conservative member of the European
Parliament, Dan Hannan, about the differences between Brexit and Trump, why some people
still insist that Brexit was a triumph of xenophobia, and the roots of popular anger in Western
On the domestic front, Steven Schwartz examines the failings of our welfare system in which there
is no link between contributions and benefits. This lack of reciprocity is the root cause of negative
attitudes to welfare, he argues, and has led to a corrosive ‘us’ and ‘them’ climate that will only get
worse. He discusses several ways we could restore reciprocity, before suggesting a HECS-style
scheme in lieu of the current system.
Meanwhile, Kara Thomas argues that Australia is in breach of its obligations under the United
Nations Convention on the Rights of the Child because of an entrenched policy mindset that
continues to prioritise family preservation over child protection. She recommends timely and open
adoption as the answer to our escalating child welfare crisis. Elsewhere, Gene Tunny dissects the
standard arguments for film industry subsidies, and shows that the purported jobs and multiplier
benefits, as well as film-induced tourism, have not really materialised.
Also in this issue, William Coleman replies to David Alexander’s review of Only in Australia: The
History, Politics and Economics of Australian Exceptionalism by picking apart his unquestioning
reliance on our high ranking in a recent Economic Freedom Index. Stephen Kirchner passes
judgement on the latest biography of former US central banker Alan Greenspan, a ‘definitive
treatment’ of his life and career that at times succumbs to the pull of a morality play narrative, whilst
Sara Hudson wrestles with the wide range of views on constitutional recognition of Indigenous
Australians contained in two recent compilations, The Forgotten People and It’s Our Country.
Finally, I venture into the world of animal welfare versus animal rights in considering a new book on
market-driven changes that help minimise cruelty to animals. (Yes, I eat meat—in moderation—and
no, I am not joining PETA.)
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