Boyer boy

The Boyer Lectures are a series of talks by prominent Australians, presenting ideas on major social, scientific or cultural issues, and broadcast on the Australian Broadcasting Corporation’s (ABC) Radio National. The lectures began in 1959 and a couple of years later were named after Richard Boyer, the ABC board chairman who suggested them. The lectures are delivered between September and December by prominent Australians selected by the ABC board and are intended to stimulate discussion and debate on a wide range of topics¹.

This year (2025), there are five lectures delivered by Justin Wolfers, John Anderson, Larissa Behrendt, Amelia Lester and James Curran². The overarching topic is ‘Australia as a radical experiment in democracy’¹. Here, I will be dealing with the lecture by Justin Wolfers who is a professor of economics and public policy from the University of Michigan and a visiting professor at the University of NSW². The title of his talk is ‘Australia is freaking amazing’¹.

As he states in the introduction it is not about the weather, beaches, natural beauty, our lifestyle, mateship, “and the rest of that well-worn list”³. His premise is that our democratic and economic institutions are not just world class but are the world’s best. By institutions he means “the rules of the game”, with our political institutions govern who we elect, how we elect them and what they can and cannot do. Those political institutions determine our economicinstitutions, which govern how we do business with each other. Among the institutions to which he refers are include those that are formal, such as the constitution, common law, and legislation, while others are informal and include norms, traditions and culture³. All that does is make me think that the rest of the world must be in pretty poor shape. However, parts of it are not; some of their institutions seem better than ours.

Wolfers’ argument is that our institutions are the foundation of our prosperity and Australia is a wealthy country and that gets us better health, longer lives, a social safety net, freedom from fear, poverty and hunger. He then says that he made his mark showing that richer countries are also happier countries and “Australia is no exception”³. It is good to know that he obliquely recognises there are exceptions, although he does not list them. Currently, Australia is ranked 11th richest nation on a nominal GDP per capita scale⁴, but Wolfers does not give any other metric to measure our wealth. He then asks: “what drives Australia’s prosperity? He states this is a question asked too rarely, but it begs the further question: “what drives prosperity? Why are some countries rich, and others poor?” After an annoying, simplistic baking analogy, he come to the point in stating that the proximal causes of prosperity are: “people, machines, education, and most importantly recipes”. By ‘recipes’, he means how inputs are transformed into outputs. Then he asks: “Why are people more willing in some countries than others to invest in developing, adapting and adopting new recipes? He answers that it is because of institutions³.

By way of natural experiments, he refers to the work of Douglass North in understanding why North Korea lives in poverty³, while South Korea is now the world’s thirteenth largest economy. Wolfers puts it down to institutions, but the story is much more complex than that, with some of the growth happening during two military dictatorships⁵. Then he asks what institutions matter? He answers with: “Strong property rights ensure that you’ll get to enjoy whatever cake you bake. Contracts make it easier to do business. Trust helps”³. Property rights are something I have never had a problem with, nor have I ever been done over by a contract, having been party to a few over the last 5 years or so. He included: “Checks on power keep elites in line”³. To state this is so far out of touch with reality, it is astonishing. The corruption and pork barrelling by politicians demonstrates they are not being kept ‘in line’ at all^6-17. While compiling all of these instances of corruption, I looked at Transparency International’s Corruption Perception Index and found that between 2010 and 2017, Australia had dropped from the 8th least corrupt country to 13^thin the list¹⁸. We are now ranked 10th, for the first time in a decade. This improvement has been attributed to the Labor Federal Government’s integrity reforms over the last few years, including new foreign bribery and anti-money laundering laws¹⁹. However, these have some distance to go.

Wolfers says “Education expands what’s possible”³. And yet education is made more difficult unless you are born into a wealthy family. To date, only about 2% of public schools receive the amount they are entitled to, based on the federal schooling resources standard. This is largely because state and territory governments, other than the ACT, do not contribute their full share. This means the vast majority of public schools are therefore “underfunded”. The most recent national school funding agreement has set out a timeline to make sure all schools are eventually fully funded. In some schools, this may not be until the 2030s. On the other hand, many non-government schools are “overfunded” because they are receiving more than the amount specified by the schooling resources standard. This is because they charge fees in excess of the schooling resource standard and therefore will be “overfunded”. Even moderate-fee schools may be “overfunded” because of the public funding they receive on top of the private funding paid by parents²⁰.

Universities are in a state of flux currently. Under the present system, funding of universities is allocated in dollars rather than places, except for medical courses and Indigenous students. Each public university has a maximum public funding grant through an agreement with the federal government. How many student places this grant supports depends on which courses students do. This is because the public subsidy per student varies between courses. Universities choose how to allocate student places between disciplines, except in medicine. For example, under the current contribution system, universities get a subsidy of only $1,236 a year for each Commonwealth supported place in business, law and most arts disciplines. So, one million dollars from a university’s grant supports more than 800 student places in these disciplines. Most of the university’s funding comes from the student contribution, which is $16,323. By comparison, in engineering, the Commonwealth contribution is $18,292. One million dollars supports just 55 engineering places²¹. Whatever course you do, you end up with a huge debt, which you have to repay if your income reaches above a certain level. Allocations based on required skills is a roundabout way of picking winners based on the what the current system says it wants. This is a system based on unsustainable perpetual growth on a finite planet. In our current predicament, more should be allocated to not only attempting to engineer our way out of it, but also trying to understand what we can do to preserve what we have.

Wolfers then goes on to state that financial systems fund growth and innovation, and adds that research and innovation are critical. If you look at the bald statistics of research and development funding, you see that business contributes about $24.4 billion annually, while the government and non-profit organisations contribute about $5.9 billion. However, a large proportion of the R & D from corporations is in such fields as professional, scientific and technical services (e.g. consulting services), manufacturing, and financial and insurance services, all of which make up nearly three quarters of corporate expenditure on R & D²². These are mostly fields of development rather than research and are designed to increase profits or decrease costs. The government and non-profit expenditure on R & D go to real research areas, the top ten of which include: agriculture, veterinary and food science ($640 m), biomedical and clinical science ($550 m), engineering ($480 m), information and computing science ($440 m), biological science ($430m), environmental science ($410m), earth science ($280m), physical science ($280m), health science ($190m), and mathematical science ($190m)²³.

Wolfers explains the two types of institutions: inclusive and extractive

“Inclusive institutions” like the rule of law, contracts, and open competition ensure that if you invest, you’ll reap the rewards. “Extractive institutions” are how the wealthy siphon state revenues, seize assets, block competition, smother innovation, centralise power, exploit labour, and silence dissent. The result is more money for powerful insiders³. The latter is a perfect description of how the current political and business system operates. The wealthy can donate to political parties and employ lobbyists to whisper in the ear of politicians to get what they want.

Despite all the stuff I disagree with above, when Wolfers gets to our electoral system, he is mostly spot on. He states: Our elections are “held on the weekend, so everyone can vote. By contrast, the Brits picked Thursdays, the Yanks chose Tuesdays, and Canadians do it on Mondays”³. These weekday elections are designed to discourage workers (who are less likely to vote conservative) from voting. In addition, we are the only anglophone democracy with compulsory voting, which according to Wolfers, “takes turnout off the table. That makes it harder for money to sway votes. Australian politicians don’t fire up the base to goose [increase] turnout. Instead, they try to persuade, which is the productive side of democratic discourse. And voter intimidation doesn’t work when you have to vote.” And you vote in a private booth so “your boss can’t tell you how to vote … [and] a crooked politician can’t buy your vote, because they can’t verify you’ll deliver”³.

Then Wolfers rightly goes on to extoll the virtues of having the independent Australian Electoral Commission decide the boundaries of electorates and run the election³. So, there can be no gerrymandering as in the US with Wolfers perceptively noting that the “payoff is that Australian voters pick their politicians, while gerrymandering lets American politicians pick their voters”³. He also notes that preferential voting was first adopted in Australia, and that it is the epitome of “one vote, one value” and vastly superior to the first past the post system. He also states that the Mango Mussolini would never have been elected in Australia³. Indeed, this is true because, when the Coalition tried some Trumpian idiocy in their election campaign, they were hammered such that it was their worst federal election result since the 1940s²⁴.

Wolfers note our politicians are organised “into parties, and within those, into factions”. They then “decide who does what, including who gets to be prime minister. … He “is chosen by folks who’ve spent hundreds of hours with them, and whose own futures rise or fall with the government’s success. … Our politicians almost always vote the party line, and inside the party, the factional line. This actually makes our institutions more responsive because there are fewer veto players and hence less gridlock”³. That is probably some of the worst drivel Wolfers included in his speech. The government and its institutions are anything but responsive. Why? Because they have been purchased by the wealthy and their corporations, and because, in Australia, the media is owned by the wealthy. As a consequence they rarely do anything that the oligarchs or their media are against; such as raising the minimum wage; defeating homelessness; decreasing the price of housing; increasing funding for public schools; getting rid of HECS debt; increasing taxes on the wealthy; decriminalising drugs; taking climate change more seriously; increasing services to indigenous communities; getting rid of the Pacific solution in dealing with asylum-seekers; calling out Israel’s actions in Gaza for what they are, a genocide; sanctioning Israel, its institutions and its politicians; breaking up media organisations; making the National Anti-Corruption Commission more effective; making lying in politics illegal; making lying in all media illegal; preventing pork barrelling by politicians; making all conversations with lobbyists public; making donations to political parties from anyone other than individual members of those parties illegal; making the membership of political parties public; limiting the size of individual political donations; capping annual political donations from individuals; making all donations visible in real time; strengthening protections for whistleblowers; strengthening freedom of information laws; having significant employee representation on all corporate boards; just to name a few (!).

While Australia may have a better political and economic system than many other countries, a couple of those with whom Wolfers compares us (i.e. US and UK) are relative basket cases. However, we should not be smug, as we have a long way to go to make the system serve all Australians, not just the wealthy and their corporations. If we do not move toward that end, the corrosive efforts of the wealthy and their corporations will continue, and we will end up looking more like the UK and US basket cases and that will be disastrous.

Sources

Boyer boy

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