A confession. Pyrmonter is a member of the Economics Society. He is a member because, at its best, the Economics Society presents challenging speakers away from the increasingly tribal outfits like the CIS: he re-joined to attend a talk given by Deirdre McCloskey.
The Society is, in part, the professional guild of Australian economists; in Pyrmonter’s now remote recollection of university, most of the academic staff and a good many public sector practitioners were members; it always struggled to gain traction with people from the professions or commerce.
Maybe it is that public sector ‘identity’ that explains the outcome of the society’s most recent poll of a selection of its more eminent members. Happily, those members are agreed that Australian banks can do better.
Unhappily, when asked to explain why, the overwhelming majority consider more, invariably ‘better’ regulation (especially of ‘culture’) is the answer. Several advocated the re-establishment of some form of state banking. One, at least, of them might not have been in Australia in the late 1980s, but how quickly we forget. Only one recommended increasing competition.
No doubt these same luminaries instruct their students about the importance of ‘nudging’ and the limits of homo economicus. The reader has to wonder whether they’ve ever read much Smith; or have the insights most of Pyrmonter’s contemporaries gleaned from their studies about the way competitive markets operate. Let us recall:
It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own self-interest.