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Why Australia Prospered: The Shifting Sources of Economic Growth

by Ian McLean Princeton University Press
Pub Date:
06/2016
ISBN:
9780691171333
Format:
Pbk 312 pages
Price:
AU$52.99 NZ$54.78
Product Status: In Stock Now
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How did Australia attain the world's highest living standards within a few decades of European settlement? And how has the nation sustained an enviable level of income to the present? Beginning with the Aboriginal economy at the end of the eighteenth century, Ian McLean reveals the striking elements of continuity that have underpinned the evolution of the country's economy since the nineteenth century.


 


In this comprehensive account, McLean argues that Australia's prosperity was reached and maintained through several shifting factors, including British imperial policies, abundant natural resources, and strategic growth-enhancing responses to major economic shocks such as war and depression. Even the country's proximity to Asia and notorious origins as a convict settlement positively influenced Australia's remarkable development. Why Australia Prospered is a fascinating historical examination of how Australia cultivated and sustained economic growth and success.


    


 


 


List of Figures ix
List of Tables xi
Preface and Acknowledgments xiii
Map xvi

Chapter 1 Introduction: Weaving Analysis and Narrative 1

Chapter 2 What Is to Be Explained, and How 11

  • Comparative Levels of GDP Per Capita 11
  • Booms, Busts, and Stagnation in Domestic Prosperity 15
  • Other Indicators of Economic Prosperity 19
  • From Evidence to Analysis 25
  • Extensive Growth and Factor Accumulation 27
  • Growth Theory and Australian Economic Historiography 29
  • Recent Themes in Growth Economics 32

Chapter 3 Origins: An Economy Built from Scratch? 37

  • The Pre-1788 Economy of the Aborigines 38
  • The Aboriginal Contribution to the Post-1788 Economy 42
  • The Convict Economy and Its Peculiar Labor Market 44
  • Further Features of the Economy Relevant to Later Prosperity 50
  • British Subsidies and Australian Living Standards 53

Chapter 4 Squatting, Colonial Autocracy, and Imperial Policies 57

  • Why the Wool Industry Was So Efficient 58
  • Evolution of Political Institutions: From Autocracy to Responsible Government 63
  • The Labor Market: Ending Transportation, Preventing Coolie Immigration 67
  • Thwarting the Squatters: Land Policies to 1847 69
  • Other Determinants of Early Colonial Prosperity 73
  • The Argentine Road Not Taken 76

Chapter 5 Becoming Very Rich 80

  • The Economic Effects of Gold: Avoiding the Resource Curse 84
  • Sustaining Economic Prosperity Following the Rushes 90
  • Consolidating Democracy and Resolving the Squatter- Selector Conflict 96
  • Openness and Growth 100
  • Rural Productivity and Its Sources 108

Chapter 6 Depression, Drought, and Federation 113

  • Explaining Relative Incomes 113
  • Eating the Seed Corn? 116
  • Boom, Bubble, and Bust: A Classic Debt Crisis 119
  • Why Was Recovery So Slow? Comparison with Other Settler Economies 125
  • Tropics, Crops, and Melanesians: Another Road Not Taken 132
  • Economic Effects of Federation 135
  • Accounting for the Loss of the "Top Spot" in Income Per Capita 139

Chapter 7 A Succession of Negative Shocks 144

  • Why Was the Economic Impact of World War I So Severe? 147
  • Why No Return to Normalcy? 148
  • Pursuing Rural Development--A Field of Dreams? 154
  • Growth in Other Settler Economies 157
  • Debt Crisis, Then Depression-- Policy Responses and Constraints 160
  • Imperial Economic Links-- Declining Net Benefi ts 165
  • Could the Post-1960 Mineral Boom Have Occurred Earlier? 170
  • The Debate over Stagnant Living Standards 173

Chapter 8 The Pacific War and the Second Golden Age 176

  • Why the Pacific War Fostered Domestic Growth 177
  • The Golden Age Was Not Uniquely Australian 183
  • Export Growth, Factor Inflows, and the Korean War Wool Boom 186
  • Macroeconomic Theory and Policies--What Role? 191
  • Location Advantage: Asian Industrialization and Changing Trade Partners 193
  • High Tide for Australian Industrialization 196
  • Underinvestment in Human Capital? 199
  • The Debate over Postwar Growth Performance 205

Chapter 9 Shocks, Policy Shift s, and Another Long Boom 210

  • Why Did the Postwar Economic Boom End? 212
  • The Reemergence of a Booming Mining Sector 215
  • Macroeconomic Management in the 1970s 217
  • Economic Policy Shift s in the 1980s 219
  • Reevaluations 224
  • The Quarry Economy: The Return of Resources-Based Prosperity 228
  • The Contribution of Economic Reforms to Productivity 235
  • Sustaining Prosperity through Boom and Bubble--A Historical Perspective 241

Chapter 10 The Shifting Bases of Prosperity 246

Appendix Note on Statistics and Sources 257
References 259
Index 277

"Australian economic history is undergoing something of a minor revival . . . and this book is a welcome addition to the literature on the history of Australia in the global economy, stressing as it does both continuity and change."--David Meredith, English Historical Review


 
Ian W. McLean is a visiting research fellow in economics at the University of Adelaide, where he taught for many years.