return to speeches list

PRIVATE ENTERPRISE

Talk given October 21 to Kew Rotary

Full copy available as downloadable PDF

Available here is a slightly longer version of a talk on Private Enterprise I gave today to Kew Rotary. This is similar to the talk I gave about 5 weeks ago to Heidleberg Rotary but is updated to take account of some recent developments. One is the copy-cat developments following the Occupy Wall St group, whose action does not seem important in itself but which has served to highlight serious on-going problems with governance. Those governance problems include the continued failure of political leaders to acknowledge that governments and/or their agencies have been primarily responsible for allowing the GFC to occur and to continue. Rather, the blame is said to lie with our capitalist structure and there is no indication as to why the stimulatory action (fiscal and monetary) has failed to bring about a timely recovery. Nor is there any recognition that it takes time to unwind past mistakes. Note that the winners of the 2011 Nobel Prize for economics are said to have “destroyed the false certainty of an older Keynesian orthodoxy”.

Bad governance is also reflected in various critical statements by political leaders about those directly involved in the GFC (greedy bankers and CEOs, fat cats, etc) in an attempt to shift the blame. President Obama, who should be reminding the world of the virtues of the private enterprise system, has been most active (to his own detriment) in pursuing this course. Our own Prime Minister and Treasurer have been uttering meaningless statements about the need for the Europeans to take action to overcome the crisis of confidence there, but without saying what they think should be done. But trying to put the blame on Wall St et al is acting as a deterrent to risk takers and consumers and hence is keeping growth at a slow pace.

One prominent US economist, Robert Samuelson, has even suggested that there may already have started the “excess saving” problem that Keynes highlighted in his analysis of the 1930s. In Australia there has certainly been a remarkably large (and unpredicted) increase in the household saving ratio since 2007-08 (from 2.2% to 10.3% of household income) and, despite the strong growth in our exports, we are experiencing relatively low levels of business and consumer confidence.

Des Moore

Full copy available as downloadable PDF

return to speeches list