The head of Australia's Productivity Commission defends the economics profession, saying it will have valuable contributions to make to the big problems of the 21st century.
The head of Australia's Productivity Commission has defended the economics profession, saying it will have valuable contributions to make to the big public policy problems of the 21st century.
"It is clear that economists still wield a lot of power in key debates, but there is a greater contestability and also a greater degree of scepticism of economic prescriptions. A Nobel Prize-winning economist has criticised the foundations of mainstream economics, writes Gareth Hutchens. She said other reasons why economic advice was routinely contested these days was because so many modern problems cut across multiple areas of life.
But then, she said another reason why people rejected economic advice in policy making was less justified and "should concern us." She said the Albanese government's Future Made in Australia policy, which has been criticised by some economists for the inefficiencies it could introduce into the economy, could be understood in its global context.
"But for comparative advantage to be sustainable, the industry will need to be based on Australia’s key resources of high-skill labour, good universities, mineral and/or renewable energy resources.
"However, it is unlikely that Australia can simply free-ride on the costly efforts of others, and no doubt there will be pressure on us to 'do our bit' by seeking to diversify those supply chains where we have an obvious advantage. Critical minerals, where we have large endowments, is a frequently cited as an example.
But on Wednesday, she said there were some reasons to be optimistic about the way in which Treasury officials were handling this space. She said economists would have valuable things to say in plenty of areas of public policy in coming decades.
Danielle Wood Treasury Industry Policy Future Made In Australia Albanese Government Energy Transition Economists
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