In January 2023, the Governor-General of Australia awarded the Order of Australia Medal to free-market champion, John Hyde, for service to the community in a range of roles. Hyde is an author, former politician and farmer, and recently retired think-tank director.
Hyde’s intellectual rigour saw him challenging Australia’s many prevailing restrictive and protectionist policies and the accepted economic status quo of the 1970s. He observed that in the early 1950s Australia had been among the richest nations on earth. But, he noted, by the late 1970s its living standards were 20% below those of Western Europe.
High levels of regulation
Hyde ascribed that relative decay to the fact that Australia experienced high levels of regulation of trade, labour, transport, and agriculture.
Hyde also ascribed the decay to the fact that Australia experienced high levels of public ownership of utilities offering electricity generation and other services. In every sector, state institutions enjoyed protection from competition, in many cases to the point of having an outright monopoly.
He observed that economic theory encouraged the expectation that such circumstances would be associated with excessive costs, poor productivity, poor economic growth, and capture by organised workers and other vested interests. He found that this theory was conspicuously borne out by events.
Hyde fervently argued against rent-seeking – the manipulation of the political environment for the benefit of a favoured few vested interests – which results in misallocation of resources, reduced wealth creation, and heightened income inequality.
A capitalist economy would not deliver prosperity with an overextended government, Hyde believed, and with such a government, no society could deliver opportunity, security, and justice.
Parliament
In 1974, Hyde was elected to the Australian Parliament as a member of the Liberal Party.
As a member of Parliament, Hyde fought against government involvement in the economy in general, and in particular against statutory monopolies, government subsidies, state ownership of business undertakings, and protection of favoured industries.
He believed that good policy should transcend party lines.
But his opinions were, ironically, rejected by the centre-right Liberal governments of prime ministers Malcolm Fraser and John Howard.
Hyde’s beliefs were eventually implemented by the centre-left Labor Party governments of prime ministers Bob Hawke and Paul Keating. They introduced the necessary reforms which led to a golden age in Australia’s economic growth. Hawke argued to the party caucus that Labor’s spending priorities had to be education, health and welfare, rather than capital injections for government-owned businesses.
The economic reforms which Hyde championed paved the way for far-reaching economic improvements.
After Hyde’s political career, he became executive director of a number of free-enterprise think tanks.
Hyde also championed free trade and believed that a competitive market was the essential condition for economic efficiency. He also believed that private ownership was a necessary condition of a competitive market, but not a sufficient one. To privatise state-owned utilities and undertakings without also stripping them of their statutory monopolies would be to deny to the public most of the potential benefit of denationalisation. It is just as important to recognise the potential rights of alternative suppliers and of buyers, including final consumers. Deregulation is at least as important as privatising ownership, he declared.
Dries
Hyde identified as an Australian ‘Dry’. The original Dries were those members of the cabinet in Margaret Thatcher’s government of the United Kingdom in the 1980s who unwaveringly supported her radical free-market policies. In contrast, the British ‘Wets’ were those cabinet members who were so-called ‘moderates’ in that they opposed her policies as being too extreme. Hyde authored the 2002 book, Dry: In Defence of Economic Freedom. The saga of how the Dries changed the Australian economy for the Better.
Hyde is a racy, straightforward and prescient writer. In his book he wrote, ‘Much of the world is still horrible, but during the final quarter of the 20th Century lifespans greatly increased almost everywhere, especially in the once-poor countries of East Asia. The economic order that achieved these momentous gains is now threatened by “anti-globalisation”.’
Order of Australia
The formal citation which accompanied the 2023 award of the Order of Australia Medal to Hyde expressly recounted all his accomplishments, including the fact that he won the Australian Libertarian Society lifetime achievement award.
In South Africa, the President can confer honours similar to the Order of Australia awards.
The President can award the Order of the Baobab to recognise a person’s service in the field of business or the economy. He can also confer the Order of Luthuli to recognise a person’s contribution in the field of human rights or nation-building.
It seems unlikely that any such South African honour will be conferred on a champion of free markets.
It is also unlikely that such an honour will be awarded to a promoter of privatisation and competition in the field of electricity generation, until after Eskom is privatised, the electricity-generation market is deregulated, and the inevitable benefits materialise.
South Africans and Australians have always had a friendly rivalry, but we can also learn from our friends across the Indian Ocean. We should look at how Hyde’s ideas helped transform Australia and helped make it prosperous and a magnet for people across the world. South Africa can do the same but we cannot stay on our current path.
The views of the writer are not necessarily the views of the Daily Friend or the IRR.
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Image by RobertDychto from Pixabay