Bert Kelly, the first economic rationalist

You may think politics is about values but I can tell you from over 40 years of experience that politics is all about economics. First, you must understand  that the task of economics is the management of scarcity. There is never enough of anything to go around. Take the pensioners -- is  'enough is enough', would  they  knock back a $10 rise? What about organs -- could we get more commitments for organ donations if we sent people door to door seeking them? Of course. Are class sizes too small? Any teacher can tell you they are too large. They are never too small. For car makers, tariffs are never too high.

I am not very much in favour of the term 'economic rationalist' simply because it has pejorative connotations. I think that reason should be applied to economics,  as it should be applied to everything else. I do happily confess, however, that I am in total agreement with 'economic rationalist' policies and I always have been.

Hal Colebatch, one of Australia's finest and more versatile writers, is nearing the end of a commission to write the biography of the first economic rationalist, Bert Kelly. Bert Kelly first came to my attention as the 'Modest Member' in the Australian Financial Review. His column was witty, informative --- and rational.  Kelly held a South Australian seat for the Liberal Party. He was no fool and had been a Nuffield Scholar.

Kelly won. The tariff wall came down. A key result was that the poor people, for whom the supporters of  the quota and tariff regime professed to have such undying love, could now buy essentials like underpants and singlets for less than half their previous prices. A rare meeting of minds between the Liberal Dries and Labor rationalists, including Peter Walsh and Paul Keating, transformed Bert Kelly's principles into policy.

The trend now is to roll back thirty years of economic freedom -- everyone wants a handout. And they are getting them. Handouts are great while trade is surging and the economy is growing but when the grave train derails -- and it will -- there are going to be some very loud squeals. Very soon.