Why Australia Prospered – A book review

Why Australia Prospered is the lifes work of Associate Professor Ian McLean and took him “some 20 years” to complete. In the book he does not ask outright Why Australia Prospered but rather asks two questions “Why was Australia so rich by the second half of the 19th Century” (McLean, 2013); and “how has Australia managed to maintain its position among the richest group of countries over the subsequent 150 years” (McLean, 2013).

The book compares the Australian economic experience against that of other settler economies such as New Zealand, USA, Canada and a close comparator Argentina given at times we shared events/phases of growth, but not always outcomes; it also compares against the heart of the Empire – Britain; and in more recent analysis against countries such as Sweden and Norway in ‘league tables’.

McLean takes into consideration errors with GDP calculations in the 19th century and notes alternative measures such as the HDI (Human Development Index) often provides a clearer picture of this time along with his historical analysis. He also notes the statistical mis-match that occurred between Australia and other nations which was often due to a lack of data collected from comparators as they did not face the same conditions.

Using an historical approach to perform his analysis of events over time he provides succinctly a beautifully choreographed point-counterpoint with prior economic theory or conjecture. This debate like rebuttal rarely dismisses out-of-hand the contribution made to the discussion by other theorists/economists/historians but rather puts them into a context using models that he reasons provide more accuracy and are less prone to interpretation.

McLean is respectful in his rebuttals but also in ideas he presents to the reader. For example when speaking of the Aboriginal contribution to the early economy he notes the contribution of their human capital to early pastoralists and explorers. Seamlessly and without stepping into any area of highly charged argument, he articulates his points of note for this community, such as that of the dispossession of land that occurred at the hands of the colonial government being “rarely done by mutual agreement” (McLean, 2013) and provides balanced opinion on other key events in this early transitory period.

McLean’s book is a champion of the comparative advantage endowed on Australia by way of the resource-rich continent, a chance thing on the outset but, as he outlines, it’s the use of these resources which speaks to much of the economic success experienced in the early to late 19th century. He outlines that favourable connections with the Empire (Britain) for immigration, trade and finance as well as the “bloodless” arrival of self-government in most of the colonies, among other events, led to much of the 19th century’s prosperity. Indeed, as he points out, Australia again received good fortune since Britain had learned from experience with the USA that it had to manage the colony much differently to avoid conflict.

Australia has, over the years, proven to be the exception to the rule in some cases when theory/measures are applied. The typically observed slow growth that comes from resource-rich nations – we did not face; the tyranny of distance indicating difficulties faced by economies which are remote – our most significant trading partner was the UK on the opposite side of the world; or the real drive and attitude of the convicts who were somewhat selectively chosen to settle this country and who eventually built Sydney and Melbourne; It’s almost as if Australia stubbornly takes pride in being the outlier.

The considered review of a multitude of employment, immigration, political, financial and other data along with historical accounts make up the bulk of the book and the outlining of the major and minor booms, shocks and significant events appear reasonably analysed and presented to the reader in such a way that these dates stick in the mind long after finishing the book.

It is a sensible, considered and often wordy approach to the practice of critical thinking and is a nod to economists and Australia as she is today. This is a book about how we are substantially more than just a lucky country – because indeed we are.

– C

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