Month: October 2010

The problem with Keynesians like Krugman and Stiglitz is that they are theoretically committed to balanced budgets, but only in the long run. But as no other than Keynes taught us, in the long run we are all dead. In the meantime, his disciples will never tire to explain why the right time to cut spending is never.

When we are looking at Australia today, we can be pleased that we have so far avoided many of Europe’s problems. Our debt still looks manageable. Our demography is still healthy. Our society is still united. But Australia could end up like Europe – under different stars, but with the same destiny.

For months, the French republic has been shaken by growing resistance to president Nicolas Sarkozy and his plan to increase the retirement age from 60 to 62 years. Whether the new pension system is eventually implemented or not, the tumultuous scenes in the streets of Paris, Marseille and other big cities leave only one conclusion: France is an unreformable country.

Germans are also learning the hard way that some groups are more willing to integrate into Western society than others. The debate is now about Islam for a reason. No integration issues are reported with respect to Danes, Poles or Vietnamese, all of whom live in Germany in great numbers.

The Nobel Prize in economics left me somewhat puzzled. To be sure, the recipients Peter Diamond, Dale Mortensen, and Christopher Pissarides are all highly respected economists. In another sense, too, the choice of the three labour market specialists is hardly revolutionary. Though their models are elegant, what they are actually saying is very much common sense.

In the beginning of the financial crisis, with all its G8, IMF and G20 meetings, there was a glimmer of hope that it would not lead to a replay of the distortions of the Great Depression. In hindsight, this was too optimistic.

Even tragedies like the Great Depression have their pluses. One of them is Monopoly. If a certain Charles Darrow had not lost his job at a sales company, he would never have had the time to develop the famous game that Parker Brothers started selling in 1935. Today, 75 years and a few economic crises after its original launch, it is time to update Monopoly to the new realities.

It is appropriate for the society’s international members to visit Australia. Its position of economic strength owes a lot to Hayekian ideas of freedom, competition and discovery. Australia remains one of the best case studies on the power of market-based reforms.