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Economics might be known as the dismal science, but journalist Hartcher argues that Australia almost alone in the developed world is doing pretty well. The odd thing is that many Australians seem to be unaware of it, preferring to believe the glass is, at best, less than half‑full and leaking.
Even when Australians accept that the country is doing well, they often ascribe it to luck or the mining boom. As Hartcher sees it, Australia has developed a middle course between the social inequities of US-style capitalism and the economic inefficiencies of European-style welfarism, allowing it to avoid the worst of a string of global crises including the 1997 Asian meltdown and the global financial crisis (GFC).
Historically, Australia’s development has been a dialectic between open market competition and industrial/ labour market protection essentially, between efficiency and equity. It eventually became clear the pendulum had swung too far, and the reforms undertaken by Bob Hawke and Paul Keating in 1983 and continued by John Howard and Peter Costello injected much-needed competition and energy. The election of the Rudd government (subsequently morphing into the Gillard government) and the rolling back of competitive labour market reforms signalled a policy return to equity over efficiency.
Hartcher is a long way from a laissez-faire capitalist, but he argues that the end of the reform imperative threatens Australia’s prosperity. He feels the country’s broad economic success will be dissipated through indifference to its origins. Unfortunately, he does not canvass the policy actions that might be needed, preferring to discuss future directions only in general terms.
Even when Australians accept that the country is doing well, they often ascribe it to luck.
Hartcher makes many thought-provoking points and he offers a useful historical methodology. However, the book is not always convincing. It is not clear that Australians are as insular, ignorant and pessimistic as he makes them out to be; with different examples from those chosen by Hartcher one could reach a quite different conclusion. Nevertheless, The Sweet Spot is an interesting book and its (mainly) optimistic tone is refreshing. It has its flaws, but it is a good contribution to an important debate.