Recently, I had the tremendous honour of meeting Australia’s minister for Finance, Mathias Cormann. Cormann delivered a great speech to a crowd, and in particular I found 2 aspects of his speech endearing, as to why Capitalist policies are the superior approach.
Cormann gave the great example of Berlin, in comparing the economic outcomes for a Socialist society against a Capitalist one. There are many arguments, ranging from the Soviet Union to Cuba, which Marxists employ to excuse the failings of these countries, both in terms of economic as well as political freedoms attained. However, in Berlin in 1945, both the Western and the Eastern parts of the city faced the same challenges. The city was destroyed, and had virtually identical demographic, economic, cultural, linguistic and geographic elements when comparing the West and the East. However, as the years progressed, West Berlin grew increasingly wealthy and affluent, whilst the East stagnated under Socialism’s failures. Naturally, the people of East Berlin fled for the higher standards of living that had been attained in the West. This brain drain from East Berlin, culminated in the construction of the Berlin Wall, in order to prevent the East German citizens fleeing into West Berlin, perhaps the most symbolic representation of the success associated with free markets and individualism.
Moreover, the need for Australia to maintain responsible levels of debt was emphasized. This is particularly important in Australia, a country with a smaller terms of trade, in comparison to larger North American or European economies. It is crucial for Australia, through responsible and controlled spending, to maintain relatively low levels of debt. For when Australia cannot purely rely on Iron ore to emerge successfully from economic crises’, this country will be hit particularly hard along with debt levels. The saying ‘When Wall Street sneezes, the rest of the world catches a cold’ is especially important in Australia’s case, and is why Capitalism and fiscal conservatism must be pursued.