A Future Made in Australia challenges liberal economic theory

A Future Made in Australia

As soon as I read Anthony Albanese’s Made in Australia speech, I knew it would trouble some liberal economists.

For years we’ve been told that government shouldn’t interfere in markets. That picking winners carried too much risk, and our obligations to the World Trade Organisation or our free trade partners would be compromised.

While other countries actively sought out successful companies, we’ve done little to keep manufacturing in Australia or prevent tech start-ups from leaving our shores. As a result, our living standards have become increasingly dependent on the production and export of bulk commodities.

Recognising the strategic importance of being players in the clean energy transition, many countries are doing everything they can to attract investment in critical minerals extraction and downstream processing – ranging from cheap coal-fired power and lax regulation in Indonesia, to big investment attraction initiatives in the United States, EU and Japan.

The perfect market envisaged by liberal economists is distorted for critical minerals by differing environmental, social and governance standards across jurisdictions, as well as the decoupling of Chinese and U.S. value chains.

As the Prime Minister fleshes out his Made in Australia vision, our liberal economists have a choice. Do they want Australia to have sovereign capability throughout the clean energy value chain, or for us to be dependent on other nations in an increasingly fractious world.

This article also appeared in The West Australian newspaper.


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