Thursday, June 12, 2014

Joe Hockey and THAT budget

This morning's SMH reports that Joe Hockey has resorted to his three key themes in a speech selling his Budget at the Sydney Institute (which is of course the wrong audience, they would mostly already be convinced.)

The first is to call opposition to the budget "class warfare." The second is to say criticism of the budget is all political, or it is politics not economics.  The third is to say it is not the job of government to pursue equality if outcomes but equality of opportunities.  

In reverse order, how does one measure equality if opportunity except by measuring the equity of outcomes? Surely if there were genuine equality of opportunity there would be equality of outcome. The only deviation could be from differential effort or dumb luck in terms of natural endowment, inherited endowment or simply being in the right place at the right time. 

If equality of opportunity were genuinely achieved then there would be no differential effort as each person would equally be aware of the opportunity before them. The opposite is the equivalent of blaming the unemployed because they haven't found a job, rather than blaming society for there being no job to find.

The variability of endowment is not something within the individual's control. Gina Rhienhart was doubly lucky, first to be born of Lang Hancock and secondly that Hancock was the one who discovered the Pilbara ore.  Many prospectors gather on a goldfield, only some find big nuggets.

The distinction between politics and economics is a false one. To the extent that economics is positive - a description of what is - it is no guide to action. To the extent that economics is normative - it describes what ought to be done - it is better known by its original name, political economy.

And to stand up for ordinary Australians, the Australians who make their living by what they do rather than by what they own, is not class warfare. The Labor Party makes no apologies for this, we do not represent the interests of capital. That does not mean we are the enemies of capital. Just that the design of markets and the distribution of surplus value must treat those who work for a living fairly.

Surely it is not too much to ask that the Treasurer resort to selling the budget on its merits rather than on slogans.

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