Thursday, September 5, 2013

Economics at the Edge - Reflections on the Economics 'Q and A'


Last Tuesday night I was fortunate enough to attend the Economics Student Society of Australia’s Economics ‘Q and A’ night at the Deakin Edge. The event, held in the style of the ABC's 'Q and A', fielded questions from the audience for a top notch panel comprising of Tom Elliot, Judith Sloan, Ian Harper, John Daley and Lynne Williams, with Stephen Koukoulas acting as the moderator.

To kick-start the evening the panel had two prepared topics: ‘The End of the Mining Boom’ and ‘The Economics of Asylum Seekers’.
While these subjects are obviously quite topical, their popularity made it a bit hard for the panel to offer some truly original thoughts. This was particularly true of the discussion about the mining boom. A lot of what was said echoed much of the recent commentary on the matter (e.g. What will fill the gap left by mining? Is manufacturing really dead? What should the AUD do in response? Surely we should be saving more with budget surpluses?).1 Perhaps a non-economist would have found the discussion more novel and educational, but if you are someone who reads about these issues on a daily basis it perhaps wasn’t quite as informative.

One notable exception was Ian Harper’s hypothesis that the rise of 3D printing would revive Australian manufacturing. He claimed that 3D printing will transform the manufacturing industry from one centred on large-scale plants which use lots of low-cost labour, to being dominated by small-scale ‘printers’ with a premium on innovative industrial design. Australia’s skilled workforce is well placed to supply this high-end design work and that Harper was upbeat about manufacturing’s long-term future in Australia. It was certainly an idea I’d hadn’t heard before and sounds plausible – though if 3D printing does reinvigorate the manufacturing sector it will certainly look very different to the industry we have today.

The discussion on asylum seekers was more interesting, though it got a bit muddled with immigration more broadly, which is quite a different issue. It also confirmed my belief that while economist’s opinions may vary widely about issues of dollars and cents, they are almost unanimously liberal on social issues. Most of the panel agreed that economics wasn’t the best framework in which to discuss the issue, and that economists need to be able to engage with social issues, such as human rights, outside of a cost-benefit analysis. Judith Sloan in particular raised an interesting point that while refugees have always had a lower level of workforce participation, today’s wave of refugees (from Iraq and Afghanistan) have particularly low participation rates compared with the refugees of yesteryear (from Vietnam). One possible explanation for this is the increasing importance of basic numeracy and literacy skills in the Australian labour market, and that perhaps we need to invest more in education for refugees if want to fully integrated them into Australian society.

The third and final part of the evening (and probably the best in my opinion), was an open set of questions from the audience, which in large part focused on economic policy under an Abbott government. Direct action and the various northern “food bowel” projects were given big thumbs down, and the panel was generally pessimistic about the quality of the campaign so far. However, there was some optimism for the future, in particular from Ian Harper who said that although the political arena often seems bleak, if economists keep pushing the right policies they well eventually get up (or in his words the ‘policy train’ will eventually leave the station). The importance of bipartisanship was also cited as key to future policy reform, with Sloan claiming that Abbott has stymied much of the government’s reform agenda with his never ending campaign of “No!” (though whether she thought this was a good or bad thing was a bit unclear).

The most interesting panellist, in my opinion, was probably Ian Harper, closely followed by John Daley and (exceeding my low expectations) Judith Sloan. Lynne Williams was agreeable, but unmemorable, while Tom Elliot added very little to the evening, much of which was factually wrong (it was a good idea to add diversity by getting someone who isn’t an academic/policy maker, but there should be better financial commentators out there then him). Stephen Koukoulas was also a great moderator, taking a lot of questions from the floor and from twitter (including one of my own!), he even managed to restrain himself to only one or two jabs about his former sparring partner Judith Sloan. Overall, I thought it was a great night, and the (very enthusiastic) organisers of the ESSA should be congratulated. Hopefully next year’s will be just as good!

Did anyone else attend? What were your thoughts on the night?

1 For those that a curious the answers were:  
  • Nobody really knows for sure but with proper economic managment something will fill the gap
  • Niche high-skilled manufacturing may well survive but beyond that it's looking grim
  • The AUD should and probably will fall as commodity prices drop
  •  And yes, the government should of saved more of the boom

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