Re: What's wrong with the Oz economy?

[(Peter Kriesler) <P.Kriesler@xxxxxxxxxxx>]

It seems to me that both Clive and Bill have, if I have understood them
correct, grabbed the wrong end of the stick. Both seem to find the reasons
for Australia's high unemplyoment either in past problems with the labour
market or with present ones.  I think that this is looking in the wrong
place. Unemplyoment is Australia is a response to international fatcors,
particularily our foreign debt, and worries about the current account. The
main problem lies with a failure to change the structure of the economy to
one compatible to a modern industrialised economy. Australia's import/
export profile is one of a devloping country, but our life style is one of
a developed economy. Until we change the nature of our exports and imports
high unempolyoment, and an extreme dependancy on the level of overseas
activity will be the norm. What is needed is serious microeconomic reform
leading to structural change. Instead, we get free market economic
rationalism, which means that the government can abdicate all
responsibility for these problems, and equate microeconomiuc reform with
privatisation and deregulation. Their reliance on the level playing field
argument is a load of nonsense. As anyone whoi has ever played any sport
knows, level playing fields just allow the powerful players to get more
powerful. What is needed is a tilted playing field, so that the small
players internationally can gain something!
To argue that, in this context, wages somehow influence emplyoment by the
neoclassical mechanism just seems to miss the point.
Peter Kriesler
Department of Economics
U.N.S.W.
Sydney, N.S.W. 2052
Australia

Ph: (02) 385 3373
Fax: (02) 313 9337