What happens when people are appointed to leadership roles in organisations such as the World Economic Forum and the Australian Chamber of Commerce and Industry? Ostensibly, these organisations should favour free markets over regulated, free enterprise over Government-sponsored monopolies (and monopsonies) and have faith in the individual consumer to know best what they want rather than a bureaucrat or a political insider. Yet these leaders make speeches that call for action exactly in opposition to normal perceptions of free markets.
Case 1: the World Economic Forum. Here’s today’s report in the Australian citing the key points made by the WEF:
Yes, capitalism does need reforming, but not in the way envisaged by the WEF. We need fewer constraints on economic activity, not more. Inequality, specifically rising CEO pay, is the biggest driver in global affairs over the next 10 years? I doubt that. We may have passed the stage where economic growth would remedy fractures in society? What does that mean? What new controls is the WEF calling for? Perhaps the WEF should consider the alternatives to economic growth. Consider those countries that have gone down the path of greater Government intervention and control over the production process. Consider how the former USSR, Cuba, Venezuela, North Korea and South Australia all fared with mending their fractures in society. (OK, that last one is an exaggeration – South Australia is not a country.)
Case 2: the Australian Chamber of Commerce and Industry.
Here is an opinion piece by James Pearson, the CEO of the ACCI.
When James says “we need to commit to transport infrastructure” and that “Record low funding costs mean that now is an ideal time to invest in infrastructure” I think he is expressing dissatisfaction that ordinary savers and entrepreneurs have not invested accordingly already. Get ready for a call to require superannuation funds to direct part of their assets to an infrastructure bond, or similar. That is, use political power to force the investment.
By the way, James, the low level of interest rates does not mean that this is an ideal time to invest in infrastructure. The absolute level of rates is irrelevant. What matters is that given the funding costs, what alternatives are there for making the best use of savings? A scheme that pays the unemployed to dig holes in the ground then fill them back in again is no more sensible today when interest rates are low, than 10 years ago when they were higher.
These two organisations should be arguing that economic freedom (ie capitalism) is the only proven means of lifting the human condition above subsistence. As a concept, capitalism needs to be revered, not denigrated as being past its use-by date.