Could Australia have prospered post-GFC by ignoring the fashionable economic nostrums. While the chief retailers of high economic couture here in Australia urge us to abandon producing things for service industries (or worse green industries), Joel Kotkin points out that the opposite strategy has prospered best in recent years.
Something strange happened on the road to our much-celebrated post-industrial utopia. The real winners of the global economy have turned out to be not the creative types or the data junkies, but the material boys: countries, states and companies that have perfected the art of physical production in agriculture, energy and, remarkably, manufacturing.
And who are these winners?
The strongest economies of the high-income world (Norway, Canada, Australia, some Persian Gulf countries) produce oil and gas, coal, industrial minerals or food for the expanding global marketplace. The greatest success story, China, has based its rise largely on manufacturing. Brazil has been powered by a trifecta of higher energy production, a strong industrial sector and the highest volume of agricultural exports after the United States.
And when you examine large countries, like the USA, in regional terms?
Things are really looking up for the material boys here in North America. Over the past decade, the strongest regional economies (as measured by GDP, job and wage growth) have overwhelmingly been those that produces material goods. This includes large swaths of the Great Plains, the Gulf Coast and the Intermountain West, three regions that, as I point out in a recent Manhattan Institute study, have withstood the great recession far better than the rest of the country.
By contrast, the pin-up boy of the green energy crowd California, is broke and has a, mediocre economic track record.
So it wasn’t the world’s best treasurer who did it at all, but industries that have always been Australia’s strength and which, via the measures like the ill-conceived mining and carbon taxes, he has done his best to strangle.