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Deirdre McCloskey explains what makes Australia great

By Gary Johns - posted Friday, 22 September 2017

Who owns (the intellectual property of) Australia?

The quaint idea that the intellectual property of Australia, how we came to be the superb country that we are, was somehow created by Aborigines, Anglos and (mostly) European postwar settlers misrepresents the truth. It is tantamount to theft.

Had Australia started with a blank sheet of paper, with no people occupying the continent, in the middle of nowhere, it still would have become the successful nation that it is today. James Cook's was a voyage of discovery, he and his crew carried ideas with them. They were both rewarded and rewarding.


Later additions helped, but only to the extent that they conformed to the basis set down in the template, the same as for every European and settler nation in the world, the same as in those nations, such as China and India, that have latterly made the biggest inroads into poverty and ignorance.

Deirdre McCloskey is a magnificent historian and economist. She has significantly increased the understanding of how nations and peoples succeed. She reflects on what she calls the Great Fact: the takeoff in modern economic growth since 1700. In McCloskey's thesis, all material and non-material progress is attributable to ­innovation backed by liberal economic ideas.

The many places that have succeeded have nothing in common in terms of their indigenous history, race, geography, climate or resources. Any claims to ownership of Australian IP - that is, how it became the Australia of today - that rests on the landscape and peoples that existed before the coming of the liberal English is as barren as the outback. Sorry, that's just the way it is.

McCloskey's quest is to answer the question how average income in the world moved from $3 a day to $30 a day across the past few hundred years. She says economics cannot explain the Great Fact. The key is that "talk, ethics and ideas" caused innovation.

For McCloskey, economics is something that happens in the mind: "Valuations, opinions, talk on the street, imagination, expectations, hope are what drive an economy."

The Australia that we know today started three centuries ago in places such as Holland and England, where talk and thought about the middle class began to alter. "Ordinary conversation about innovation and markets became more approving."


This was the anti-Marxist route, not the sneering jealousy of the left playing the working-class card, or indeed the censoriousness and moralising of the right in support of inherited wealth. The revolution that set much of the world on the road to the great lift-off was permission to be bourgeois.

Those who sneer at this explanation for Australia today deny their heritage. They purloin Australia's IP, they stand accused of being enemies of Australia.

Let's say McCloskey over-eggs her pet theory. The integrity of her approach is that she works through every other contender to explain the great economic takeoff, of which we are beneficiaries. That is, if we want to be.

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This article was first published in The Australian.

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About the Author

Gary Johns is a former federal member of Parliament and served as a minister in the Keating Government. Since December 2017 he has been the commissioner of the Australian Charities and Not-for-profits Commission.

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