Feature
Issue No. 36 - August/September 2007
Real impact of economics
by Pamela Brombal
Most people are interested in economic matters, whether global, national or local. Why are so many of our goods manufactured in China? Should super contributions by the employer be taxed? Will South Australian house prices collapse?
The wide range of issues affecting our daily lives often comes down to one driving force in our society: economics. Yet there is little respect for economists - especially in Australia.
The truth is, not only does economics play an important role in our society, so do economic advisers and academics. The influence of economists in shaping the growth and development of entire nations means that millions - even billions - of people's lives can be impacted upon by economic decisions.
In the 1970s, economists specialising in economic development were almost unanimous that the preferred 'protectionist' policies of the 1950s and ླྀs had been wrong. Countries that heeded their advice became the success stories of the 1980s and ྖs - such as Thailand (the fastest growing economy in the world from 1981-97), Mexico (now the world's 10th largest economy) and Brazil (a serial underperformer for most of its history, now a global leader in a number of export markets).
Countries that have refused to open up to trade run into economic problems and stagnation. Even huge economies like the Soviet Union or China ran into economic stagnation after a couple of decades of autarchy - for smaller economies like North Korea, Myanmar or Zimbabwe, the costs of shutting off from trade have been swifter and more disastrous.
Australia is part of the global trend to opening the economy, driven by economists' ideas. The Whitlam government made the first steps to reduce trade barriers, but the big change came after 1983 when the Hawke-Keating governments began a dramatic program of tariff cuts that would take Australian tariffs from one of the highest to one of the lowest levels in the OECD. This was acc...
