May 26, 2019
Menzies, an Australian precursor of Trump
To this day it is widely accepted in Australia that R.G. (Bob) Menzies (later Sir Robert Menzies) was our greatest Prime Minister. He was the Prime Minister of Australia from 1939 to 1941 and again from 1949 to 1966. He is Australia's longest-serving prime minister, serving over 18 years in total. He ran Australia in the '50s and most of the '60s in what many now look back upon as a golden age. (I do. I was there). There was great embarrassment if unemployment exceeded 2% and life was generally tranquil, though Communist unions did their best to make trouble.
Doing nothing can be a good policy
But when people say what a great man Bob was, a common response was: "But what did he DO?" And that is a hard question to answer. Whenever people came to Bob and suggested something that the government should do, Bob would reply: "But if we do that, that will create another problem here". So Bob would send the suggestions away, saying that the best thing to do was nothing.
People are always calling on the politicians to do something so it takes great political talent to do nothing. And doing nothing means that the size of the government stays pretty small -- unlike what mostly happens today when the government never ceases to expand.
So Bob's talent was to let the people of the nation create any change they desired, with little or no government interference. If enough people backed the change it would happen. If it had little backing it would not happen. So prosperity and quality of life increased almost entirely through private initiatives.
So the torrent of legislation to which all governments subject us was a comparative trickle under Menzies. He generally resisted the urge to meddle. And under him Australia was peaceful, calm and secure -- with unemployment negligible and living standards steadily rising. Contracts were enforced, criminals were punished and taxation was a fraction of what it is now. There was welfare for those who really needed it
Bob was however of Scottish origins and he inherited the great Scottish reverence for education. So he saw it as a real problem that poor families could not send their children to university. So, for once, he DID something about that. He instituted a scheme where the Federal government would send to university all children from poor families who had scored in the top third of High School grades. The government not only paid the tuition fees but even gave the kid a living allowance. It was called the Commonwealth Scholarship Scheme and I was one of its beneficiaries.
So Australian conservatives today only have to remember the world of Menzies in the 1950s and 1960s to realize that their ideal of a much smaller and fairer government is far from an impossible dream.
Menzies and tariffs
Australia was very autarkic in the 1950s. It made its own cars and kitchen appliances plus much else. Some goods were imported, chiefly from Britain, but Australian manufacturers were encouraged and were readily given tariff protection. If you made toasters in Australia you did not have to worry about overseas competition. A nice little tariff would protect you.
So businesses and their employees could relax. Their factory would just keep running year after year. The workers could plan their savings and their holidays with no fear that their job would suddenly vanish due to a new competitor entering the market and selling the product at a cheaper price.
And under that system there was very little unemployment. Anyone who wanted one could get a job. Unemployment was always under 2%. It was a crisis if it seemed likely to rise to 2%. There is nowhere like that in the world today.
So Australia at that time was a capitalistic economy with some socialistic characteristics. Despite its tariffs, Australia was in the '50s one of the most prosperous places in the world.
Australia is a major primary producer so there was often steak on the dinner table, most houses had a substantial backyard where you could grow most of your fruit and vegetables if you were so inclined, you could get on a steam train and go interstate to visit family and friends at vacation time, there was always the family car for local trips, the newspapers had lots of interesting news, particularly from overseas, you could hear all the latest songs on the radio, the ladies had pretty dresses and even in small towns there were several bars where one could drink cold beer after a hard day's work. What else is there?
So the lesson is clear: Maximum jobs requires some protection of industry. Both Trump and Menzies have demonstrated that. It could be called the "Trump Rule". And the Australian precedent says that we can even hope for 2% unemployment. How good is that?
So WHY is an actively protectionist administration needed for businessmen to be maximally enterprising? It's dead simple. It gives businessmen throughout the country the feeling that government has got their back. It gives them the feeling that government will at least be on their side if there is a push for change of any sort.
But that is lost today. Australia is now a normal nation with few tariffs and unemployment around 5%. And you can buy things for pocket change that once would have been a serious hit on the budget.
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