Deakin Speaking

We need competition in supply and funding of individuals not institutions Julia Gillard wisely remarked last month that competition with Asia could “make us the runt of the litter” in terms of our educational performance. This provocative remark should trigger urgent application to government policy, given that increasingly unlike much of Asia, ours is a state-owned tertiary model. Our university communities are not offered the diversity of choice as in the USA, or indeed as in our own secondary and primary schools. New technology and social networks allow leapfrog in terms of ways of sharing information. All universities could jump ahead by using such remote devices to augment teaching, writing and research frameworks across broader international markets. However Socratic face-to-face “tutorial” and live lecture modes remain vitally important – the “getting of wisdom” is too important to be on iPads or lonely PCs.

Auctions of “property rights” are a valid way of governments extracting value for the community from public assets, such as minerals, bandwidth and oceans. A recent example is Senator Conroy’s Dec 2011 proposal to auction the 800MHz bandwidth used by Telstra and Vodafone should they not agree to the $1.4 billion fees proposed by the Minister to be paid by the two companies for renewal of their licenses in 2013.

The Germany that engaged in the successful 1973 float of the DM, now seems to be missing the main point of that decision. That monetary autonomy is valuable.
Also odd is German backing of currency areas across very differing economies, in tandem with federal fiscal rules absent a federal government.

Inflation and threats to currencies loom large in German history and so German activism on such matters is no surprise. But what is a surprise is the evident failure to get the core issue of monetary autonomy right.

The rise of Hitler was a cataclysmic response to hyperinflation that destroyed German savings of the 1920s. German Marks traded at 67 billion to the US dollar in 1923. Notes were carried in increasing numbers of wheelbarrows, as people desperately sought scapegoats and new leadership.

Few economic challenges are as potentially destabilising as threats to currencies – or exchange rates. German history, including the rise of Hitler, was a shattering response to the hyperinflation that destroyed savings in the 1920s.  Assets had been destroyed by a currency that in Nov 1923 traded at 67 billion to the US dollar. Inflation that meant money was carried in wheelbarrows; and one needed more and more barrows.
Ever since that time, German unions, businesses and households have been inflation averse to a very marked degree – which made the 1999 Euro decision understandable in non-inflationary times, but unwise given widely divergent economic conditions across Euro nations and an uneven level of fiscal discipline across many European countries.