In Spite of or Because of Government

Posted by Mike Kaaks

08 July 2019

Thrive in spite of Government not because of it.

I just heard these words as I watched (for the umpteenth time) Chimamanda Ngozi Adiche delivering her Ted Talk about the power of the single story. Her inner and outer beauty combined with eloquence and good story telling make it great watching. These words (Thrive in spite of…)came near the end of her talk. They resonated with me for so many reasons. Most significantly because one of my stories, probably told too often, is of Italy and it’s government mayhem. I may not be completely accurate but it is directionally true that Italy had 50 governments in the fifty years following WWII. Italy today has the eighth largest economy in the world whilst it has the 23rd largest population. If ever there was a compelling argument for a country’s condition to be in spite of and not because of government there it is.

I’m sure there are moments along the way where government acts had impact. Look at the floating of the currency in Australia. But events with a direct cause and effect like this are not so easy to find. Governments walk too close to the centre all the time, fearful that bold action in the long term interest of the country will see them loose power.

As imagery can help portray your thoughts and help communicate them to others,I often use a yachting story to to symbolise what happens to the Government of a democracy. Imagine a yacht tacking into the breeze. Each time there is a change of governing party, we tack. After a term or two of tacking 45 degrees to the left, we then tack 45 degrees to the right. The result is that we cover a lot of distance but make little forward progress. Add to this the current practice of undoing or reversing legislated commitments of governments made "with a mandate" on our behalf and sometimes we are actually going backwards.That is the government contribution or lack thereof.

In the meantime the people get on with their lives. They buy stuff, sell stuff, consume stuff in ways that Thaler, Khaneman, and other behavioural economists have shown bear little resemblance to economic principles; the principles guiding the decisions of our governments. At this point I find myself thinking of Reagan and trickle-down economics. We still hear it espoused today in support of tax cuts at the high end and yet we are still waiting all these years later for some of that money tipped in at the top show up at the bottom. In spite of that we succeed. But of course not as well as we might.

The implications of climate change and over consumption are even more of concern than budget to budget financial issues. We are likely to leave a disaster for the following generations. This is where governments can step up and reverse my view of the phrase I opened with. what is required is that they think big and invest heavily in creating a sustainable future. Stop wasting money on regime change wars. Stop wasting money on defence generally.

In summary, these experiences tell me that government is not for Econs and Economics, it is for Humans and their wellbeing. You might enjoy this piece around the subject of a Behavioural Approach to regulation (Thaler).

Time to Make a Difference