Capitalism at the tipping point

The overriding challenge will be of course to reverse fundamentally American-style policies which have governed so much of the global economy during recent decades. Those policies have gutted American - and Australian - industry, especially manufacturing; but the flip side is that they have achieved unprecedented growth in the economies of China, India and other countries of East and South Asia.

These latter gains cannot - and will not - be abandoned lightly. To reverse policies abruptly would provoke highly disturbing social, political and perhaps strategic fallouts. So a wisely calculated return to sane global economic management will take time, as well as care, patience and understanding.

In 1949, when we feared a serious downturn in the American economy, the United Nations appointed an expert group chaired by a distinguished Australian economist, Dr E. Ronald Walker, with whom, as a young diplomat, I was then working in Paris and Geneva. Expeditiously, the group produced a brilliant report on National and International Measures for Full Employment. It still remains a valuable work of reference.

Australians - and others - might well consider advocating much the same multilateral process now. We would be on firmer ground in our financial and economic policies if we did. We might even help to create a more disciplined, sustainable capitalism - and a more acceptable liberal democracy. If, on the contrary, we leave a perhaps mortally battered capitalism - and anything else we value - in the hands of those who have led us into this pickle - we might suffer the devastating denouement which some might say we richly deserve.