Like what you've read?

On Line Opinion is the only Australian site where you get all sides of the story. We don't
charge, but we need your support. Here�s how you can help.

  • Advertise

    We have a monthly audience of 70,000 and advertising packages from $200 a month.

  • Volunteer

    We always need commissioning editors and sub-editors.

  • Contribute

    Got something to say? Submit an essay.

 The National Forum   Donate   Your Account   On Line Opinion   Forum   Blogs   Polling   About   
On Line Opinion logo ON LINE OPINION - Australia's e-journal of social and political debate


On Line Opinion is a not-for-profit publication and relies on the generosity of its sponsors, editors and contributors. If you would like to help, contact us.


RSS 2.0

Global realist economics

By Syd Hickman - posted Thursday, 14 November 2013

As the new Parliament opens it is clear that the Government intends to correct some of the worst errors of its predecessor but shows little recognition of the huge changes going on in the real world. The ALP retains its commitment to tokenism. The Greens have learnt nothing from their disastrous election result and continue to advocate a return to some idyllic dreamtime.

This is unfortunate, as we need someone to advocate global realist economics.

Global realist economics is about dealing with specific issues to achieve clear goals, as opposed to having faith in theoretical purity and only acting to "get the settings right".


We live in revolutionary times and fiddling with interest rates, government spending limits and other broad parameters is not enough.

There are new realities driving fundamental change. Those who ignore the pressure in the belief that the market will sort things out as we go along will be the economic losers. Those with governments committed to being first-movers will win. So far the Chinese are well out in front.

Here are three of many challenges requiring economic adaptation.

1. Huge expansion of the global economic system.

Over the last thirty years nearly two billion workers, mostly from former communist nations but also from other former state-managed national economies, have joined the global marketplace. Many of them are skilled and educated. They are cheaper than similar workers in the rich countries. Roughly 30 million more join the global labour force every year. The rich nations have a combined workforce of 720 million people. China alone has 950 million eager to work. In our efficient global system many jobs will go to where the cheap workers are.

In the same period trillions of dollars of new capital has been accumulated by the savings of these new players, and created by rich-nation governments trying to maintain living standards while their industries lose global competitiveness.


In 1998 China had a GDP of $1 trillion and $390 billion in gross savings. In 2011 GDP passed $7 trillion and savings sat at nearly $4 trillion. Other Asian nations, Saudi Arabia, Germany, Russia and others all massively build up reserves. The US creates around an extra trillion dollars every year to keep itself afloat.

As a result there is now an extreme oversupply of labour and capital within the global marketplace. Theoretically market forces will sort this out and achieve a new equilibrium, but that would take decades and mean everyone in nations that are currently rich would become much poorer. There will be great pressure for some other solution. If sane people fail to lead we can expect the extreme right to dominate.

2. Intellectual property is now critical to economic success and is overwhelmingly generated and controlled by a small number of global firms.

  1. Pages:
  2. Page 1
  3. 2
  4. All

Discuss in our Forums

See what other readers are saying about this article!

Click here to read & post comments.

3 posts so far.

Share this:
reddit this reddit thisbookmark with Del.icio.usdigg thisseed newsvineSeed NewsvineStumbleUpon StumbleUponsubmit to propellerkwoff it

About the Author

Syd Hickman has worked as a school teacher, soldier, Commonwealth and State public servant, on the staff of a Premier, as chief of Staff to a Federal Minister and leader of the Opposition, and has survived for more than a decade in the small business world.

Other articles by this Author

All articles by Syd Hickman

Creative Commons LicenseThis work is licensed under a Creative Commons License.

Article Tools
Comment 3 comments
Print Printable version
Subscribe Subscribe
Email Email a friend

About Us Search Discuss Feedback Legals Privacy