On why Albo needs to go hard and fast on our future and why the economists are wrong

While Tanya Plibersek our environment minister got hammered by the mining industry to pull back on the nature agenda, the economists were doing their part to pull down the Prime Minister’s Future Made In Australia policy.

Why the hysterical pile-on?

Gotta say we were gobsmacked.

PM Anthony Albanese’s announcement was that the government would invest heavily in the green industries that would make this country great – and green.

And at the same time it would create linked up policies that would give certainty to industry on green energy, the circular economy and sustainability. Exactly, in fact, what so many people have been calling for ….ever.

The rationale on the timing was the US massive Inflation Reduction Act, a misnomer for a big Green New Deal, which was drawing massive investment funds for green energy and technology to the US from all around the world.

Treasurer Jim Chalmers, in a calm engaging manner that just keeps getting better, told ABC radio that the investment from the Feds would be a “sliver” of what the private sector would put in. Later he said it might be quite a lot which we hopefully took to mean the private sector would put in even more.

But the economists in unison slammed the idea, saying it was protectionism again with the evil hint of socialism (code for favours to the people instead of the oligarchs).

The most recent blast was an historical retrospective from The Financial Review, which claimed much of the glory for pushing through an agenda during its early years to get rid of tariffs and prioritise productivity and efficiency in the economy.

Protectionism kept the Australian economy weak and uncompetitive on the world stage, was the argument.

Fair enough and all good in its day and in its context (though we dispute that globalisation has been good for the planet; it might have brought us cheap cars and consumer goods but it also unleashed rampant trade in plastics, chemicals and excess carbon emissions.)

The point is the world is not the same as it was in the 50s the 60s, the 70s or even the 80s.

What The AFR absolutely failed to acknowledge in its vainglorious analysis of how influential it was with prime ministers and economists is that in those days the prime objectives of this economic policy was prosperity and economic value.

Today the world is a dramatically different place.

We face mass extinction and an unliveable planet.

In the past the big belief system was in the market: let the market would rule and it would take care of us all (like Mother).

But the bald truth is that the market is why we’re in this mess in the first place.

The market in fact does not care for the welfare of the people it cares for the winners.

In fact it hasn’t even been a market. as it’s been purported to be.

This so called market has obscured obscene protectionism for those who have the loudest voices.

In all the attacks on Future Made in Australia policy – and the near hysteria – has there been one mention of the protectionism that’s been handed out to the fossil fuel industry.

The thing that kills us.

The latest figures from the Australia Institute show there’s been more than $11 billion from federal and state government in spending and tax breaks in just one year, 2022-23. And on top of that are subsidies of $57.1 billion.

So, what exactly are the free market, free trade absolutists talking about when they rail against an aligned government policy that links up the dots between the various sectors to create valuable and potentially highly lucrative pathways for industries that benefit most of us?

The attacks are delivered of course by the most intelligent, talented political lobbyists that money can buy, all dedicated to keeping our coal, oil and gas industries fat and active as long as possible.

This lot is powerful enough to buy entire governments. And they have. Peter Dutton had the temerity to last week cite the huge rollout of solar panels on Australian roofs as some kind of evidence that the former Coalition government had a hand in it. But it was in spite of his political party, not because of it.

Today we have an entirely different world, one that cannot wait for the market to deliver a polite evolution to green in an orderly manner that nice middle class dinner parties would prefer to hear about.

Yes, the market might voluntarily get us to green. The gods might rain down manna from heaven too. But can we count on this?

If free trade and markets were going to deliver because that’s the rational and economic sensible thing to do it would have already done so.

The problem is that the market is not made up of a squillion entities that are equal in power and influence as Adam Smith conjured up. It’s skewed to the oligarchs who are killing us.

You gotta feel sorry for economists though. They are so often wrong. We suspect it’s because they suffer from the hubris of thinking of themselves as somehow scientific.

But economics is not about sequential points on a piece of paper. It’s about people and the strange and sometimes entirely unexpected things that happens when animal spirits take hold.

Albanese is trying to get Australia at least on an equal footing with the animal spirits in America Europe and other parts of the world that are funding the transition to green as fast as possible because they see the existential threat. And because they see the rewards.

We too need speed, clear new thinking and loads of money.

Albo, do not falter. Go fast and go hard.