I think this article about Australia and the Great Depression might open up another chapter on that economic tragedy. It reveals that contrary to the standard view Australia in fact suffered a near monetary collapse and it was this massive deflation that sent the Australian economy into depression. It is a known fact that manufacturing led the recovery. What is revealed here is that though real wages (nominal wages divided by the price level) remained stable during the depression the real factory wage in terms of output fell by 43 per cent! It comes to the remarkable conclusion that Australia recovered not because of the Premiers’ Plan but because the Plan did so little while allowing prices to do their work.
Continue reading Australia and the Great Depression: What you don’t know but should
I emailed Gerry Jackson’s article The Real Classical Theory of the Trade Cycle to the Executive Director of the Institute of Public Affairs John Roskam, IPA Review editor Chris Berg, Quadrant editor Keith Windshuttle and On Line Opinion editor Graham Young — and, of course, Steve Kates. For those of you have not read Gerry Jackson’s article it is a complete refutation of Steve Kates presentation of his so-called classical theory of the trade cycle. Continue reading The Institute of Public Affairs Negative Response to the Real Classical Theory of the Trade Cycle
by Greg Byrne
Gerry Jackson kindly allowed me to write this introduction. At first, I thought I would just write a basic outline. It was then that I realised the full import of what Gerry had written. For years Australia’s establishment right has promoted Steve Kates’ argument that the classical economists believed that booms and busts were an unavoidable and natural product of capitalism and that we must learn to live with them. This is totally at variance with the historical facts. Continue reading The Real Classical School Theory of the Trade Cycle