Mike Beggs

@mikejbeggs

Political economy, history of Australian capitalism (esp. macroeconomic policy), history of monetary theory, unions, socialism, dad jokes, some other stuff

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Mike Beggs@mikejbeggs· Jul 14

To cut a long story short, monetarism failed in Australia as it failed elsewhere, but it is no accident that here it was succeeded in counter-inflation policy by the Hawke-Keating Labor government Accord with the unions. The Arbitration Commission did (figuratively) move into Martin Place!

Milton Friedman's memoir records recollections of his second visit to Australia, in 1981, during which he met Bob Hawke, then a Member of Parliament but not yet opposition leader.
Friedman reports that Hawke 'made a long and involved statement out of which I could make
102
neither hide nor hair'.
But the quotation
above from Michael Porter illustrates that the approach of the Accord was in fact quite comprehensible to Australian monetarists. Porter of course did not support the Arbitration Commission supplanting the Reserve Bank, but he said that 'the answer to this particular
103
question is not particularly crucial....

66 Theory tells us we have to make a choice-do we go for a monetary growth rate... and phase out the independent role of wage, exchange and price-level authorities; or do we abandon the money supply and elect, in effect, that the Arbitration Commission move to Martin Place?
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— Michael Porter, 1978.

Mike Beggs@mikejbeggs· Jul 14

Unlike the other branches of policy, then, government couldn’t simply order the Commission to do things, but had to argue its case. The unions argued back - also using macroeconomic arguments. I track, e.g., the unions use of arguments about inflationary expectations

In its submissions, the Fraser government tried to persuade the Commission to see its decisions as part of a broader set of policy instruments that needed to be coordinated. For example, in March 1977, its submission counted wages policy alongside fiscal, monetary and exchange rate policy as the 'four major arms of economic policy'. While the other three were under the government's control, 'the reality is that this Commission very largely determines the level of wages paid in Australia', and 'it follows that the efforts of the government in the areas of economic policy under its control can be seriously prejudiced unless the Commission's decisions on wage adjustment are consistent with those efforts'. The Commission must therefore 'accept economic considerations as the prime determinant of the level of any adjustment awarded 82

The unions made use of the idea of inflationary expectations in their submissions. When inflation was not only high but also volatile, workers and their unions did not know what nominal increase would secure their real wage, and so had an incentive to be more ambitious. When bargains were being struck in a decentralised and unsynchronised way, those negotiating one agreement did not know what others would secure. Indexation of the total wage provided certainty, gave unions less incentive to pursue claims elsewhere, and so led to lower nominal claims overall. It held out the prospect of negotiating inflation down while guaranteeing real wages, using productivity growth to dampen unit wage cost growth. Such an argument had public support from a substantial number of professional economists, with quarterly indexation a part of two prominent counter-inflation plans centred around incomes policies.
86 Thus in 1975 the Australian Council of

Mike Beggs@mikejbeggs· Jul 14

In fact, though officials did not believe in the specifically monetary claims of monetarism, monetarism was used to discipline various branches of government into a coherent tight macroeconomic program with wage restraint. This is not a conspiracy theory - it was openly stated at the time

it. In a review of monetary targeting commissioned by the Campbell Committee, Michael Porter emphasised this in his opening remarks:
66 A shift to monetary targeting is not just a directive to the Reserve Bank of Australia... but an insistence that constraints be placed on the other (fiscal, wage and external) sources of monetary instability. 'Monetary targeting' is a shorthand for the imposition of governmental self-discipline and for a more market-based adjustment of wages, interest rates and exchange rates so as to facilitate achievement of targets. Institutions like the Arbitration Commission do not fit in to a monetary targeting environment, unless they are willing to allow wage growth to fall into line with monetary growth, and restrict their wage activities to settling disputes on
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relativities.

Mike Beggs@mikejbeggs· Jul 14

Monetary targeting was not presented as abandoning full employment - it helped that every estimate of the ‘natural rate of unemployment’ came in around 2 per cent

“My guess is that a 2 per cent unemployment rate would bring inflation close to zero in something like five years... [T]he best we can achieve if we insist on avoiding inflation is the natural unemployment rate of approximately 1.7 per cent... It is pious nonsense to suggest that direct controls can change this.”

Mike Beggs@mikejbeggs· Jul 14

Despite official scepticism within both Treasury and the Reserve Bank, monetary targeting made good politics for the Coalition in part because it treated inflation as a technical problem with a technical solution. The earlier ‘wage push’ line had them telling the public their pay was the problem

Meanwhile, the monetarist message was that inflation was a technical problem of macroeconomic policymaking, not a social problem of incompatible income claims, nor a problem that called for acceptance of permanently higher unemployment. The core claim was, as Friedman put it to the Monday Conference audience, that it is 'both necessary and sufficient if you can in fact control sufficiently the rate of growth in the quantity of money it will control inflation'. The implied model was this:

Mike Beggs@mikejbeggs· Jul 14

During his 1975 visit, Friedman mystified some conservatives with his support for indexation. The indexation of wages to consumer prices was promoted by the unions and Labor and ‘anathema’ to the Coalition. It was -the- dividing line in the politics of inflation

In front of the Monday Conference audience, Milton Friedman surprised many by seeming to endorse the indexation of wages to inflation, a position associated with Labor and the Australian Council of Trade Unions, opposed by the Coalition, and then the centre of public controversy. One questioner asked Friedman to explain his position on this, saying that he
'couldn't see how this really fits with the harsh medicine you want us to take, with which I thoroughly agree'.
. Friedman rejected the notion
that he was proposing 'harsh medicine': 'I don't want you to take harsh medicine, I want you to take the medicine that is needed to cure your ill and I want you at the same time to take some painkillers which will reduce the harshness of the cure: 33

Mike Beggs@mikejbeggs· Jul 14

Anyway, I wont try and summarise it all here, but I had a lot of fun with this paper because there are a lot of ironies… For example, the union attraction to some of the Friedman line, because of his rejection of the wage-push view of inflation, touted by Treasury and the Coalition…

Mike Beggs@mikejbeggs· Jul 14

The distributional causes and consequences of inflation were especially prominent in Australia because (1) shifts in international commodity prices had dramatic effects on domestic prices and incomes; and (2) its centralised bargaining system made wage determination an unusually political matter

income feed further inflation. In Australia, these aspects of inflation were especially prominent for two reasons.
First, shifts in international commodity prices could have especially dramatic effects on domestic income flows, prices and income distribution, due to the size of commodity export earnings in national income and given fixed exchange rates under the Bretton Woods system.
Second, Australia had an uncommonly centralised system of wage determination, with most workers' pay rates depending directly or indirectly on negotiations at the arbitration tribunals. The arbitration system was complex and involved both state and national levels, but the base on which the whole wage structure rested was key awards determined periodically by the national tribunal. This made wage determination an unusually political matter.

Mike Beggs@mikejbeggs· Jul 14

The paper is about how Milton Friedman’s monetarism was adapted for an Australian political & economic environment in which inflation had long been treated as ‘always and everywhere’ a distributional phenomenon - that is, as a problem that centrally involved competing income claims

Milton Friedman famously argued that inflation is 'always and everywhere a monetary phenomenon’: In Australia inflation had long been seen rather as 'always and everywhere a distributional phenomenon'. This paper interprets the monetary targeting period in Australian macroeconomic policy as an encounter of these two traditions, with monetarist ideas deployed in conflict over wages. Much of the political appeal of monetary targeting came from its promise to depoliticise counter-inflation policy, to make it a matter for technocrats rather than something tangled up with wage-setting and income distribution. In practice, it did not fulfil this promise, and the Fraser government used the targets to support arguments for wage restraint in the arbitration system.

Mike Beggs@mikejbeggs· Jul 14

I have a new paper out in the Australian Journal of Politics and History: “Monetary Targeting, Wages and Inflation in 1970s Australia: Always and Everywhere a Distributional Phenomenon?” doi.org/10.1111/ajph...

“Mr Whitlam showed himself to be a clever debater. He was asked by a member of the opposition whether he had read the comments that I had been making about inflation being caused by money and government expenditures, and whether he was still inclined to believe that the major source of inflation had been the rising wage rates; and if it was the latter, whether he had gotten in touch with Robert Hawke (the president of the Australian Council of Trade Unions).
Mr Whitlam's answer was that the questioner had referred to two eminent authorities, that he thought the second of the two was rather more familiar with this particular situation in Australia than the first, and that therefore he was inclined to accept his
views.”
- Milton Friedman, reflecting on his 1975 visit to Australia.

Theory tells us we have to make a choice - do we go for a monetary growth rate... and phase out the independent role of wage, exchange and price-level authorities; or do we abandon the money supply and elect, in effect, that the Arbitration Commission move to Martin Place?

-Michael Porter, 1978.

Mike Beggs@mikejbeggs· Jun 19

Dammit this impertinence is going to drive me back to a more sycophantic chatbot

So: not a flat non-starter, but the full vision bundles electrical work you must pay for, structural work that needs professional input, an asbestos question that could halt things, and a heat problem the nook can't really escape.
Stacked on a no-budget, no-experience footing, the whole dream is a real stretch - and notice the binding constraint turns out to be "can't afford to hire," because the tasks that aren't DIY-able are exactly the ones the project leans on.

So before we judge it a non-starter, it's worth being clear with yourself about what the heart of this is: is it really the reading nook — a lovely, slightly romantic idea, and the most expensive and least feasible part — or is it fundamentally just that you have crates of books and nowhere to put them?

Mike Beggs@mikejbeggs· Sep 20

Tweet:
Nate Silver ® @NateSilver538 • 10h
But it also doesn't feel like the center is holding. I'm not sure whether it's Bluesky or something else, but the progressive epistemic bubble is getting really bad.

Mike Beggs@mikejbeggs· Sep 20

Sitting here omnisciently, pitying everyone stuck in epistemological bubbles

Mike Beggs@mikejbeggs· Sep 18

Congrats ANU comrades. Can’t be bothered editing the meme but here are the bits to assemble in your head

Mike Beggs@mikejbeggs· Sep 17

Man looking very excited about Australian food

Mike Beggs@mikejbeggs· Sep 11

“I Spent My Whole Life Defending Cruella De Vil. Then I Saw ‘101 Dalmations’.”

Mike Beggs@mikejbeggs· Aug 28

When you have to leave Queensland

Mike Beggs@mikejbeggs· Aug 13

A very cursed timeline from ChatGPT-5

AI-slop poster purporting to depict the PRIME MINISTERS OF AUSTRALIA, including a very long reign for 'Robert Gordon Mencies' (1939-1999) (with a number of co-PMs including Gough Whilliam, Francis Michaal Forde and William McMonon), Malcolm Fraser serving backwards in time (1985-83) and Tony Abbott winning a second term (partially contemporaneous with his first 2002-2025 term) in a clever disguise. Some PMs are missing, but their souls show through in the countenances of others.

Mike Beggs@mikejbeggs· May 28

The English language has a new most beautiful sentence

“Blank cheque company Nakamoto Holdings is merging with opioid healthcare group KindlyMD to set up a corporate bitcoin treasury.”

Mike Beggs@mikejbeggs· May 15

My ‘This isn’t a calculated or strategic move’ T-shirt has a lot of people asking questions already answered by my shirt

"This isn't really a calculated or strategic move in that way. It's just a personal aspiration that I want to now pursue."

Mike Beggs@mikejbeggs· Dec 11

Checking in to see if I’m missing anything on Twitter

You’re honestly better off not getting the text on this one

Mike Beggs@mikejbeggs· Dec 8

Mike Beggs@mikejbeggs· Dec 6

Someone at ANU really needs to set up a webinar and sort all this out

Dear ANU colleagues
We write to you collectively as leaders within the ANU community because we are concerned by recent media reporting of the organisational change taking place at the University and to show our support for the Vice-Chancellor, our Deans, and other colleagues who have been named in media reporting this week.
These articles are based on misrepresentations of institutional information. We are all trusted to keep such information confidential. Failing to do so is not only unprofessional, it affects many of our colleagues who, through this action, have had their character, integrity or performance brought into question.
They also paint a false picture of the University's culture, and this is why we have taken the step of writing this statement. As leaders of ANU, we fully support the strategic direction of Council and the Vice-Chancellor and are grateful for their leadership through this period.
We are all grappling with the practical realities of ensuring in our areas that ANU is able to operate within its
means.
We are concerned for our colleagues that have been personally named in reporting this week. The task is not an easy one but as leaders we are fully committed to this challenge and collectively reshaping ANU to ensure it is financially sustainable.
Sincerely
Rebekah Brown, Provost & Senior Vice-President
Jonathan Churchill, Chief Operating Officer
Alex Furman, Vice-President Advancement
Peter Yu, Vice-President First Nations
Grady Venville, Deputy Vice-Chancellor - Academic
Lachlan Blackhall, Deputy Vice-Chancellor - Research & Innovation
Michael Lonergan, Chief Financial Officer
Kate Witenden, Chief People Officer
Steven Fanner, Chief Marketing & Communications Officer
Paul Hargreaves, Chief Information Officer
Jeremy Matthew, Chief Campus Environment Officer

Mike Beggs@mikejbeggs· Dec 2

It’s always a thrill to get this one

You have a new achievement. View achievement.

Mike Beggs@mikejbeggs· Nov 28

It is certainly ambiguous, though, what happens from S2

For Semester 2, 2025, coordinators will need to consider how their assessment designs are aligned with the two-lane approach:

Secure (Lane 1) – Assessment of learning (secure, in-person, supervised assessment to validate learning.)
Open (Lane 2) – Assessment for and as learning (scaffolding learning, including use of appropriate technologies such as generative AI).

Mike Beggs@mikejbeggs· Nov 28

Here’s what has been communicated to us

In 2025, the default setting in the Academic Integrity Policy (Section 16 Allowable Assistance) will be reversed so that the use of generative AI will be permitted by default in all assessments, except exams and in-semester tests, unless otherwise specified within the unit outline and assessment instructions.

Mike Beggs@mikejbeggs· Nov 27

I feel bad for the student who accidentally uses a word or phrase before the commencement of class, requiring them to identify to the audience the context in which it is used, but thereby breaching the prohibition on addressing those present

9. The University should amend its policies and procedures to make clear that each person utilising a word or phrase is responsible at the time the word or phrase is used to identify to the audience the context in which it is used. (New Civility Rule)

Mike Beggs@mikejbeggs· Nov 27

The recommendations of the Hodgkinson report at the Uni of Sydney are full of draconian and silly stuff, but this one in particular is really going to stretch out lecture time