So we've got Jealousyne, Venusol, Torkall, Tito, Indeedy and the Bravery. Okay, so I think, I think, I think what we will do is we'll go to Cinderace, kind of would like to lead in Cinderall, but I don't know, we've got Trick Room anyway, we've got Trick Room Tailwind. Toxicity isn't a bad option here, it's just the Venusol like puts me off like leading without Incineroar, but then the Bravery kind of covers that which is nice for them for sure. Are they gonna lead it though? Are they gonna lead the bird? They probably will. Hmm, or they just got Torkall in the back, we're running out of time though. I mean I could bring Torkacus and then we got the redirection to get around the Sun Abuse and it gives Cinderace a little bit of room I guess, and then the Trick Room becomes a little bit of a problem for sure, but I think we'll go Torkacus, I think we'll go Umbrian and I think we'll go Toxicity. We're relying heavily on the Cinderace to deal that to Tito though, if that does come, which I would assume it will do. Let's see. And we'll just get Byte back and flinch them. We're going with a Byte Umbrian tonight with Zero Attack Investment and a Zero Attack IV. That's the way to do it. You know, I'm so disappointed in myself for not doing that last night when I was putting this team, like the finishing touches to the team together. Obviously having worked today I was like I'll get it ready last night for tonight and whatever happens will be good to sit down and go and then that happens. Okay, well we're gonna see Indeedy and Jellison, we're definitely seeing Trick Room come out. Is it worth even maxing at this point with Cinder? I mean I've got to fear, I definitely have to fear the water spout. I think what we'll do is switch into Umbrian and we'll just go for a Dazzle. I can't really stop the Trick Room if it's coming out. And Sick Dandy, thank you so much for joining us tonight and for that follow. My friend, I hope you enjoy the stream of this tonight. We are playing with a Yornless Umbrian. It's very sad. I'm very sad about that. I should have just spent the time actually breeding one instead of just like I pulled it from an old cart because I was like okay, I had a spare EV and that will do and it was kind of perfect IV but it wasn't exactly perfect. Okay, I think I don't think we see the bravery come in in all honesty. The issue would be if we see the Teto kind of come in on a dozen gleam, that wouldn't be great for us. But we don't really have any great options. Could just snarl. It's going to help against the jealous in for sure. And maybe we could max. If we see the Teto coming now, it's going to be really, yeah, I think it is coming in. Oh, it's not. Okay. I kind of don't mind this too much because we get the Defined Boost and then we've got the File Play to kind of help on top of that bravery. And we're definitely going to underspeed it in the Trick Room. It's just that the Follow Me is a little bit awkward. They're expecting the Yorn, which we don't have. Haha. Okay, we could File Play the Indeedy. I mean, no, we File Play the Bird and we may, is it worth following me just to protect Embrane here because slightly we could see a Max Knuckle. I don't think we see an Airstream. Okay, Indeedy going out.  No, it's going Big Bird. Okay, we should still do a good chunk to it with the File Play though. And if it goes Max Knuckle, then it means we definitely get it the next turn. What do you do, bravery? Wow. Okay, we're definitely getting that thing next turn. Steel Spike. Really deal with that Babery Berry, couldn't we? Well, the Steel Spike's fine. I mean, we're sitting in not a bad position right now with, I think we bring Cinderace in for sure right now. Nico T, thank you so much for the follow and for joining us tonight. I think we probably have to Max Cinderace. How many turns of trick room we got left? Okay, well this isn't too bad. File Play and I think we go for, we are G Max. So it might be worth, it might be worth going for the Fireball into Torko or the Airstream really. And then we get the Speed Boost. It's just the next turn then we kind of have to double protect. But that's kind of fine, I think. We just get damage into... Now, I'm going to go, I'm going to take advantage of the Sun and this ridiculous G Max move and we'll see what we can do. But the Bravery might Max Guard here, which could have been the opportunity for us to snarl potentially, but we don't really want to give this bravery any more boosts. The eruption, yep, okay, that's fine. There's the bird gone and it's not really done very much. I can't really understand the trick room and then bringing the bird in to be honest. You can kind of understand the trick room to get around Cinderace but at the same time I'm like, maybe, I don't know, does nothing. I mean at least Umbrian probably takes the eruption this next turn. But I mean there's no harm in us just double protecting here, to be honest. If we want, we always turn of our Max moves, but then what comes in I guess? It's a jelly. Big bad jelly. Yeah, I think we just double protect here, Max Guard. Oh, we can't Max Guard with Cinderace. We got no Max Guard. Okay, what are we gonna do? Probably airstream into jelly just to get some damage onto it, put it in range next turn. If we don't see it, we might see a SAP strength as well come out potentially as eruption. So Umbrian definitely would have taken that. Just in case we saw like maybe Heave or something, I think other than that. The crit's not super helpful. There's a strength SAP but that's still all right. I mean at this point we don't really worry about the the torque hold too much. Hopefully this still does a decent amount to this Jellicent. Yeah, that's super fine. That's super fine because we can just double that slot this next turn. Got the speed boost and that'll help us hopefully close this game out a little bit better. What's that? Is that a Citrus Berry? I still think doubling into the Jellicent this next turn will be fine. It's just what do we want to double into it with? Because I don't really want to be a steel type. I don't really want to be a fire type either. I think we definitely foul play and airstream is probably our best but we probably get knocked out by the torque call. I wonder if I think a Gmax fireball and a foul play will be enough to get the jelly. Yeah, there's a protect. They're going for the trick room. You just got to hope we get enough chip onto it. If you ever see Fan, how are you doing mate? I hope you're well. Thanks for joining the stream tonight dude. We are a little bit late. Wow. Okay, yeah that's more than enough. Okay, what are we worried about? Minus one. Jelly gone down. That's fine. Okay, we're sitting pretty happy right now. What's coming in is the last Pokemon though. That's going to be the thing. Is it Venus roll? Potentially. There's a safe god. Oh no, no, it's indeedy isn't it? It's deedy. Oh, we're fine. Luigi, how are you doing mate? I hope you're well. Oh and the deedy's like so weak right now. Okay, we're fine. We're super fine. The torque call just protected as well so we could potentially go for a high jump kick there even though it's quite risky. We could go for a bounce as well. Not really to show if I kind of like the cinderace without Ike's sucker punch. We could just pyro ball as well into torque call. I think whatever happens now. We're like we've got Toxriss at the end of the back. We're going to be super fine but for how the team kind of needs to run, we need to run bounce on it. So that's kind of the main premise behind the cinderace here. Yeah, the crit definitely helps close this out. The snarl should take the indeedy down. Not quite. Okay. Well, the next one will. But yeah, Toxriss is definitely picking up usage right now. It was kind of the main reason I wanted to play tonight but you can see why because of things like Corviknight, Bravery, Tolgacus, all these things that are like weak to electric and there's just not the kind of electric kind of Pokemon in the format to really support these roles because Rotom has such a hard job now. I mean Rotom Heat could be an option. Definitely, but I think Rotom Wash definitely struggles a lot more now with like Relaboo kicking around and Venusaur as well. It's just made super difficult. So another snarl and we'll just go overdrive. And there we go. And that should be a nice victory to kick us off with today. So very good game to my opponent. And even though we've not got the set that we wanted on Umbrian, Umbrian putting in some work. It was weird. I was speaking to Bebum yesterday and I was talking about, I was just telling him my love affair with Umbrian. I think it's such a great Pokemon and it was kind of one of the main reasons why I wanted to play it tonight. Okay, we've got David up next playing Dragapult, Butterfree, Porygon Z, Psymian, Magnazone and Tolgacus. So the Butterfree going to be pretty annoying. Psymian definitely going to, I don't think it's received. I think it's definitely defiant. Makes it again quite difficult to bring the Incineroar as a lead because of that Psymian. Although saying that we do have Cinderace that we can make use of and at least with Incineroar, Cinderace, that does make things a little bit easier. You know what? I feel like I want to go down that route. Yeah. Okay, we've got Cinderace. We'll go Incineroar. And then we will go, I think we want Umbrian. Probably not Toxriss of the, not 100% sure about Tolgacus. I mean Tolgacus is really good here to be honest. Outside of like the Magnazone, it's pretty decent. So we can get rid of the Magnazone. We do have two fire types. I think yeah, we'll be all right. We'll go with that Tolgacus. JB, how are you doing? I hope you're well, mate. It is going well, dude. We're a little bit late tonight, but we are here finally and underway. I'm playing a couple of like really niche Pokemon, I think. And two of my favorite Pokemon as well. Umbrian is definitely one of those sleeper Pokemon that you just never really think of, at least I never really think of. But it is a Pokemon that if you ever see it, it's always kind of the last thing on the field, always. It sticks around forever. And it's one of those Pokemon that you have. Like if you don't have like a specific way, I'll really dedicate yourself to taking that out early. It's really hard to get rid of. And just for that, I really do like it. I think it's very good. Okay, so we got Tolgacus and we got Dragapult coming up. For my opponent. I mean, we could just go Steel Spike. Like what was my opponent got on the back that can come in on a Steel Spike? I mean Magnazone, but do we really mind that too much? We have to worry about maybe weakness policy, but at the same time, I think you're more like, more likely to max the Dragapult really. Don't know. We could go Airstream here. No, I think we got Steel Spike. We got Steel Spike and we'll go for a parting shot out on that Tolgacus as well. See what my opponent does. They're not maxing, at least not that Dragapult. Biddy, how are you doing? I have to choose between you or James. Don't make the decision. I'll see you later then, dude. I'm only messing. I wonder what James is playing tonight.  I'm late. So it means I am cutting into like other people's schedules. So yeah, slightly frustrating. And you know what we're going to see? You know what we're going to see? We're going to see the yawn. The illustrious yawn. We could have just faked out the Tolgacus. It's going to yawn, Cinderace, for sure, I think. But you know what? I think it's going to be all right. We'll see what they do. There's the yawn. This isn't the worst thing in the world. We've got Protect. We've got Protect, for sure. To kind of switch out. Now, this is where, like, Toxricity coming in would have been incredibly good. Let's go for that Tolgacus, I think. We can just dazzle this next turn. I have to switch Cinderace out. I don't really want to keep it in. That's completely wasted on Max's turn. So we maybe should have thought a little bit more about that than we did. I think you protect the Tolgacus. Potentially protect it. Maybe not, though. It may go for the yawn into Tolgacus. But maybe not. Dubois, thank you, the team. Yeah, hopefully you guys enjoy it tonight. I feel like it's pretty solid. So we should be able to ladder up quite high with it tonight. He's doing his stream to number one. That's what I'd like to do next week, I think, before the end of the month. That is kind of the goal. I'd like to see if we can push number one. I feel like I've got the team to do it. So I think if we can kind of keep round about where we are right now, I think that that will be something we can definitely do. Yeah, they're just wasting, wasting all of that. We'll go for the fake out now. There's no way they max it on that low health. And we're bringing Cinderace or Umbrian. Umbrian is probably safer at this point. The kiss is minus one as well, so that's fine. Oh, we all tried to reach number one. We're all trying to get there. Yeah, but I mean, okay, there's a T wave. There could be worse things to Thunder Wave, for sure. That means we can't be yawned at least. All right. Well, I think now we just snarl and I think we just double snarl, to be honest. Hmm. No, I think what we'll do is we'll go flablets into the kiss and we'll snarl. That's what we'll do. My own teams are so trash. I only play with rental teams. Dude, it's just one of those things like it just takes. I don't know how long you've been playing, man, but it's just, oh, no. Oh, no, we've done it. We're going to boost that defiant. Just takes time, man. Like and playing with rental teams is a really good way to kind of get used to playing with certain teams, certain calls, and then building your own from that. It's like how every player does it, to be honest. And it's great that there's a lot of rental teams around at the minute that you can kind of play with. And there's nothing wrong with that at all. So yeah, just keep doing that, man. You'll get there. You'll get there. And then it will come a new format where it just all clicks and you'll be on fire the whole format. Trust me, it will happen. Just keep, keep going. Oh, PZ and Zymian. We've got ourselves into a right old spot here, haven't we? Um, okay. I think we have to, we have to try and get Togokis onto the field. The only worry would be, hmm, hmm, are they good? What are they? What are they attacking? Are they really worried about we can't? Yeah, I think we go parting shot into the Z, bring in Togokis. It's not ideal. As long as we can keep Cinderace around in the back and maybe get rid of one of these, then we should be all right. They've got no like speed control on their side. I feel like they can only lower our speed. Are they maxing? Is it a PZ? Imagine they target the Incineroar maybe here, you know? In close combat, potentially the kiss. Oh, they could predict the switch as well, for sure. And I had the kiss, like strike. If kiss can stick around, we're going to be all right. Break, break, perfect. That's, that's exactly what we want to see. Okay, so we go Cinderace. The high jump kick will get you PZ. It will definitely get you. Um, whether or not we go for it, or if we go for the bounce, maybe, and then we protect Togokis. And then the next turn we can follow me, get the bounce off, take hopefully down the Pesimian and then get ourselves in a nice position to get the PZ. Because I'd imagine it might max guard here, maybe. It's not max guarding. Okay, I still, this is all right if we waste a turn of their max moves. So as long as they're not targeting into the Togokis, that'd be great. King Kirby, thank you so much for joining us and for the follow tonight, my friend. Hope you enjoy the stream. Okay, well this might maybe, I don't know if this works in our advantage because I don't think Cinderace will be, well, definitely be slower than the PZ this next turn. So we're going to bounce off, depends what their last Pokemon is, to be honest. I kind of need the redirection more than I need, yeah, I'm going to bring an Umbrain. I need the redirection with Cinderace more than I need Umbrain at this point. And we're kind of banking on this bounce, taking down the Pesimian, I don't know if it will. There's a max strike, just about take it. Okay, we need the bounce, the bounce, come on. Wow, it's so weak. Does nothing. All right, right. I mean, we can just reset the speed on Cinderace now because we've got through the brutality of this PZ. Okay, let's see what we can do. Get Togokis in and protect, let's protect. Open, I think you go for the Hyper Beam into Togokis, really. What's that about predicting it? Okay, that's fine. That's fine. Kind of not fine, but it's still kind of fine. We've just got to, hmm, their reflect does well. That's why the bounce did nothing, the reflect and the light screen still up. Okay, okay, I think, like, I really want to high jump kick the PZ, but I feel like it's all going to go wrong. I feel like it's going to go so badly wrong. They could potentially switch PZ out to Dragapult to try and T-wave us, catch us with the high jump kick miss, and we could potentially just go for a bounce into that slot. And actually we could probably just go for an attack into Persimmon rather than going for the bounce. Let's go for the Pyro Ball into that slot and go for File Play. Predicting the Dragapult to come in. I think we've got to predict that it has to come in. Okay, we get it. We get it, Fam. We get it. Okay, here we go. So we need the Pyro Ball to take down this Persimmon. The File Play should take down the Dragapult, and then a high jump kick should be able to deal with this. I'm bringing, okay. Zack, sorry. Ze Kanecki. Ze Kanecki. Thank you so much for the follow, dude. And I'm sorry, brutalizing that user name there. So I do apologize, but thanks for joining us tonight. Hope you enjoy the stream. Okay. Well, hopefully now we can just do this. Because the PZ got, has the PZ got Protect. Blatantly has. Blatantly has. I just don't want to click this button. I really don't want to kick that high jump kick button. If you click that iron head button, that probably is a better idea. And then just snarl. Oh, we could Moonlight. Predict in the Protect. But snarl is probably, snarl is probably a better idea. You may get, there, there, there. It's going for that. It's going for the Protect. Okay. Next time we can click the high jump kick button. They must be thinking now, he's not got high jump kick. He mustn't have it. He mustn't have it. But we do have it. Secretly, sneakily. Okay, let's go for it now. And I think we Moonlight at this point. Because then if anything goes wrong, we've got a health back. So let's turn into that super, super fighting type and get this high jump kick. It does hit. And that is a good game to my opponent. That was a close one. That was a close one. But I'm pleased we managed to get ourselves through that.  Umbrian sitting on the field is one of those last Pokemon again. Doing all the work. verbatim up next with the Drogalgy, Bronson, Indidi, Toko, Ishfu, and Gyarados. So probably Dark Ishfu fighting Dark. And then you've got kind of the hard trick room mode with Indidi support with the psychic terrain, Toko, and then Drogalgy take advantage of that trick room. We know how deadly that is after playing on Monday. And then the Gyarados support outside of that mode and probably Intimidate, I would think. Toxicity, not bad. Not bad, but not great. Not great. There is a lot of, like it's good for the Gyarados pretty much. And do we bring it just for that? We definitely want Incineroar. Intimidates, really useful. Actually, we could, we could do this. We could do this. Oh, no. I wanted Umbrian in that last slot. It's actually since we stopped bringing Umbrian, isn't it? We stopped bringing Umbrian in the last few games and we've been losing. That's why. That's why. It's the Umbrian factor. I'm Bebham. I did on my Twitter through my Instagram account. I wish you could send some. Yeah, we need that. We need that to be invented right now. We need the internet to allow us to send and receive food from other people. How good would that be? Delivery through, like an insert on your desktop. That's what we need. Where is the timer in what? We were like four. Like I was looking after the stream. This is wrong. So we need like four. I'll post on Twitter after this what we need. But we're very close. We actually might have it now with the subs that we have tonight. I'm sure we've got it. I keep just looking down at Will's message. Pirate ball, bad move, run ember. That's all I keep staring at. Okay, we've got the Urshifu. We've got the Gyarados. I think what we'll do is we will switch to... Yeah, we'll switch to Amugus and we're going to go Max Airstream into Urshifu. It might go search and strikes. May do. But I don't know if it does. And there's the Indeedy. That's fine. I'm going to try and stop us faking out. But we're not going to fall for that trap this time. Well, that's why we're losing. It's literally here on my screen. All I can say it's like, yeah, Pirate ball, bad move. Don't click that move. I will definitely just check after the stream. But we're like very close. I mean, we were just missing out. That was like, yeah. I think we were like 44 or 46. And I was surprised because the bar was wrong, which is very sad. Yeah, it's not scarved. It's interesting. It is sash though. But again, this is all right. So what's it going to go for? Blue. Sgt. strikes. I know the guys on my YouTube were telling me all about how to identify it is with the block. How to identify, which ish of who it is. All right. Well, we can just go for the spore into Indeedy if you want. But we're going to get follow me, don't we? We're going to get follow me. Yeah, I'm going to get follow me. I think we still got a spore. I think we still got a spore. And I think we still got, yeah, we got a spore into this lot. And I think we've got a stream just to cover in case you don't see a follow me. Yeah. I'm expecting us to target the Indeedy. Oh, okay. Well, that's the other option. Well, don't mind that too much. So this turbo shroom now is sitting at a very cool 180 speed stat, which is very nice. Because I don't think my opponent's got anything that can come in now and outspeed this little old shroom. Here we go. Tissue the old spore. Please bring something like, okay, Gyarados coming in. Well, Gyarados can have a little old nap while we... Yeah, it's Moxi Gyarados. Do we just work on... Just go for another Airstream, I think, into Indeedy this time and just put the Gyarados asleep. And then we've got the fastest shroom in the land. Unless it is, of course, Lum Gyarados, which will be fine anyway. If it is, the Indeedy has to spend a turn to sleep right now. We're going to Airstream. So if it is Lum, we'll be able to put it to sleep the next turn. Unless you do see it following me, of course, come up from that Indeedy. It does wake up. It isn't waking up this turn. There's the Airstream. See, it's got to be Lum Gyarados. Might not be, though. May not be. Maybe a Solfest or something like that. No, Lum Berry. I always want to just go to the Y summary screen to see which Airstream it is. Oh, that's not a bad idea, mate. Let's go for a nice Tasty Pollenpuff into our Cinderace and go for an Iron Head into Indeedy, I think, here. Get some health back onto Cinderace. And hopefully the Gyarados stays asleep, at least another turn, which would be nice. But we'll be able to get this Pollenpuff. Get some health back onto Cinderace. There we go. Beautiful. Gyarados staying asleep. Perfect. This is exactly how we want Amungus to be played. This is like how it should be playing. Now, I'd imagine we'd probably see safety goggles potentially there on the Bronzong. There's no harm in going for a spore anyway, as well as one of those Pyro Balls. It should be Ember. But let's see. I'd imagine we'd probably see Lum or safety goggles on the Zong, maybe. Although, do you? Because you do have redirection to support to support your trick room setup. So you don't necessarily need to rely on it too much. Tea-proof. Let's see. It's not safety goggles. Is it Lum? No. No. And Gyarados staying asleep for another turn. Okay. Well, Gyarados definitely going to wake up this. Well, not guaranteed to wake up this next turn, but it's likely maybe going to wake up this next turn. Or is it guaranteed? Because is that three turns? It's been asleep. It's definitely going to wake up this next turn. Okay. I mean, we just got four Pollenpuff. Have we got, we've got Tox in the back? No, we've got Toacus. Okay. I think we're going to be all right. I think we just got Pyro Ball. Yeah, double up into the Bronzong. We'll get rid of it with this combination, unless it's got like a super berry. But the battles just cancelled. So, good game to my opponent. Turbo Shroom. Broom, broom. Putting in all the work there. And performing exactly like we want. Getting us back on track. So that's good. Right. There we go, friends. There is a cold. There is a team. Friends, thank you so much for coming out tonight. It's been an awesome stream. And I really appreciate each and every one of you coming out. I hope you come on Friday. We're going to push to see how high we can get on the ranked ladder. So hopefully you guys are around. We'll be kicking off at eight. And we'll probably do a bit of a longer one on Friday to see how far we can get. It's kind of a similar call to this, but a bit more serious than having Toxterity and Umbrian. Even though Umbrian is pretty amazing. Probably MVP of the evening. So yeah, have a great rest of your evening, friends. And I'll hopefully see you all Friday. Join in and jump in on James's stream because he is streaming now and I think he's pushing to number one. So go and give him a big support. If you guys are sticking around, so I'm just going to do it. And you guys can hop in. We can smash over to James's stream. But thanks so much for coming out again, friends. Have a great rest of your evening. And I'll see you all very soon. So until then, take care of yourselves. And bye-bye. Let's...


I'm going to say at the outset that the topic I've chosen is quite a challenging topic. And I've got a lot of words to get across to you this evening. So please bear with me. This will be something of a homily to some of my colleagues in the economics profession who have felt motivated to involve themselves in the task of economic reform. I hope the address will be of wider interest. Recently, one of those colleagues, Rick Symes, called for a clearer focus on ultimate objectives, much less focus on rhetoric. Similar views are being expressed by leaders of business. The Business Council of Australia recently launched a publication entitled Building Australia's Comparative Advantages. In the words of its President, Catherine Livingston, underscores the case for putting in place deliberate strategies to improve our competitiveness, fostering innovation and playing to our strengths. Catherine argues that it's time to confront our complacency and that we need to imagine and fashion our future and then we need to pursue a path of purposeful action. She argues that there's no point in pursuing growth that doesn't generate wealth and that so-called structural reform must assist in transforming the economy. In this address, I'm going to focus on two questions. How should one assess the wealth of a nation and what are its policy determinants? Well, these questions, of course, were the subject of Adam Smith's Wealth of Nations published in 1776. In that treatise, the Scottish moral philosopher mounted an assault on the dominant economic narrative at the time, which held that the wealth of a nation should be measured simply by its reserves of gold and those reserves of gold, of course, represented the accumulated bounty of its export activity. Prior to Adam Smith, if public policy had a purpose, it was to protect and to advance the mercantile activity that generated exports. Now, like Adam Smith, all economists know that mechanicalism is misguided. The idea that public policy should be organised to protect and advance the interests of exporters, believe it or not, has no support in economics. And yet, in Australia today, 238 years after the publication of The Wealth of Nations, the dominant economic narrative goes like this. Reforms that enhance productivity and cut costs build international competitiveness. International competitiveness drives exports. Exports drive growth. Growth drives jobs and jobs support living standards. Gold isn't mentioned in this narrative, but with its focus on exports as the foundation of living standards, this narrative is strongly relevant of the mechanicalism that Adam Smith set out to discredit 238 years ago. So I'm going to label this narrative Australian mechanicalism. Australian mechanicalism hasn't been all bad. The emergent public support for tariff reform in the late 1980s and early 1990s was welcome, even though the case that was being argued was classically mechanicalist. Tariffs on imported equipment had to be removed because they undermined the international competitiveness of exporters reliant upon imported equipment, especially of course agricultural exporters. And there were many other structural reforms in the two decades from 1983 for which Australian mechanicalism proved equally expedient. These include labour market deregulation, a national competition policy and indirect tax reform. But we're now paying a price for past expedience. The mechanicalist narrative is so deeply entrenched that it's crippling sensible attempts to deal with some of our biggest challenges. In this address I'm going to explore a more honest narrative of the wealth of nations. Along the way I'm going to attempt a reframing of the concept of international competitiveness and the need for such a reframing has been illustrated by recent commentary about the dangers of governments picking winners. But I will argue that the wealth of a nation should be assessed according to metrics that go well beyond international competitiveness. I'm going to illustrate some of the limitations of our mechanicalist narrative with three contemporary examples of policy underperformance. First, making the most of the so-called mining boom. Second, implementing a responsible climate change policy. And third, finding Australia's place in the Asian century. But first, a short refresher on some elementary economics. Our conventional measure of the international competitiveness of a business or of a country is not really very sophisticated. It's about as sophisticated as pre-Ricardian labour theory of value. We call this metric the real exchange rate. For Australia the real exchange rate is approximated by multiplying an index of domestic nominal unit labour costs, that's the term we use, multiplying that index by the trade-weighted index of nominal exchange rates. And then we take that product, product of nominal unit labour costs and the trade-weighted index of nominal exchange rates. And we compare that product with an average of the nominal unit labour costs in our major trading partners. Nominal unit labour costs importantly are obtained by dividing the average wage rate in the economy by average labour productivity. Now, if we observe that the Australian product, that is nominal unit labour costs multiplied by the trade-weighted index of exchange rates, has increased at a faster rate than the index of unit labour costs in our major trading partners, we say that Australia has experienced a real appreciation. And it has therefore lost international competitiveness. And of course, conversely, for a real depreciation. This is the language in which economists talk. Unit labour costs are a crude measure of the unit cost of production. More sophisticated concepts recognise other components of unit costs including the true opportunity cost of additional capital that has to be utilised to expand production, the costs of various intermediate and other inputs including transport costs and of course various taxes that might be embedded in production. All of these things too contribute to a country's level of international competitiveness as that concept is commonly understood. Now, in the case of a single Australian producer, the various core components of international competitiveness, that is wage rates, labour productivities and nominal exchange rates, these things might be regarded as independent and essentially exogenous to that single producer. But for a country, these things may not be regarded as either exogenous or independent. One influence on real exchange rates that's featured a lot in Australian commentary over the years is the stance of fiscal policy. And it goes like this, an expansionary fiscal policy pursued by one country in isolation will normally cause a real appreciation in that country with both the nominal exchange rates appreciating and unit costs of production increasing at a faster rate than in other countries. That is, we would have a higher rate of inflation than our trading partners. Accordingly, expansionary fiscal policy unless it occurs in a country's trading partners at the same time will usually weaken international competitiveness. That's the standard argument. Other shocks have their impacts muted or even completely offset by movements in the real exchange rate that they induce. For example, the Australian dollar normally depreciates if well the demand for our exports softens. Or even if capital markets anticipate a softening in the world demand for our commodities. Of course, this is precisely what happened in the wake of the Asian financial crisis of 1997-98 when the Australian dollar depreciated in trade-weighted terms by about 10%. It happened again following the United States tech wreck of 2000-2001 when the Australian dollar depreciated by almost 30% in trade-weighted terms. And it happened again during the so-called global financial crisis when the Australian dollar fell by about 20% over the two months following the collapse of Lehman Brothers. In each of these cases, the nominal depreciation compensated in macroeconomic terms to some extent for weaker demand for Australian exports by reducing the costs of our exports measured in the currencies of the consumers of our exports. As the terms have trade have fallen recently with declining iron ore prices, a nominal depreciation has once more been observed. As on earlier occasions, it's not been as large nor as it happened as quickly as some would want. Nominal exchange rate movements can also compensate to some extent for domestic cost shocks. For example, if Australia's nominal unit labour costs increase at a faster rate than our competitors, either because we have faster wages growth or because we have lower trend productivity growth, then there are good reasons in economic theory to expect a depreciation of our nominal exchange rate. And that depreciation would serve to restore our international competitiveness at least to some extent. Thus in a small trading economy like Australia, an economy that's subject to large and variable shocks, some of the components of the real exchange rate act as automatic stabilisers. And the real exchange rate, as I've already mentioned, also plays a useful, if somewhat highly simplified, pedagogic tool for describing the transmission mechanism for both monetary policy and fiscal policy. Well, that's the economics lesson. But how did this concept get to occupy such a prominent space in the Australian economic policy toolkit? Well, the answer to that question explains both the origins of Australian mechanicalism and why it should by now have been consigned to history. The Australian dollar was floated and capital controls were abolished way back in December of 1983. Ironically, the principal economic argument, that is amongst policy advisors at the time, principal economic argument for floating the currency was that it would disenfranchise a lazy rural constituency that had been able to persuade successive governments to pursue artificially low nominal exchange rates as an artificial source, that is, of international competitiveness. And with its shackles removed, the Australian dollar did indeed appreciate for a time before appearing to stabilise into 1984. But by the middle of 1985, with the terms of trade having fallen by six and a half percent, the Australian dollar had depreciated by nearly 20% from its high again in trade-weighted terms. And over the next 12 months, through to June 1986 associated with the further 6% fall in the terms of trade, the Australian dollar depreciated by a further 13%, having lost more than a quarter of its value from when the hawk government was elected in March 1983. And then in just one month in July 1986, the exchange rate depreciated by a further 12% in one month. These nominal depreciations provided a considerable boost to Australia's international competitiveness. But the problem was that much of the gain in international competitiveness was being eroded by strong increases in nominal unit labour costs. These were increasing at about 10% a year. The policy problems lay in two areas. First, Australia in those days had a centralised wages system characterised by a strong element of wage indexation according to which nominal wages were adjusted to compensate for increases in consumer prices. That was the first problem. And second, Australia's product markets were characterised by a distinct lack of competition. A lack of competition that allowed labour cost increases and increases in import prices due to currency depreciation to be passed straight on to domestic consumers. An economy with those institutional features will experience a permanent spiral of wage inflation, consumer price inflation and currency depreciation leading back into further wage inflation, consumer price inflation, further currency depreciation and so on. These dynamics are what characterised as a group of economies labelled banana republics. And that is how Australia's challenge was described by Treasurer Paul Keating in 1986. That Australia was at risk of becoming a banana republic. Treasurer Keating's challenge was to ensure that nominal currency depreciations became real currency depreciations and that required that wage indexation be abolished. It required that Australia's product markets be made more competitive through tariff cuts and through the introduction of robust domestic competition policies and institutions. And it required that microeconomic reforms be pursued to lift national productivity. Real wages had to fall except to the extent that they could be supported by gains in productivity. But how on earth do you persuade a sceptical electorate they need to accept lower real wages, a substantial lift in workplace productivity, that is produce more each hour, and embrace the chill winds of international competition? Well you convince them that their living standards are tied to the success of Australian exporting. That they will actually be made better off in due course if they accept the sacrifice of lower waging prices and large scale structural adjustment in the present. Because exports means growth and growth means jobs and jobs means higher living standards. Thus was born Australian mechanicalism and it was quite an achievement. And there was another complimentary piece of the narrative developed in Australia in the 1980s and it went like this. A tighter fiscal policy would improve the prospects of a real depreciation in precisely the way that I outlined earlier and that would provide a further boost to exports and export growth would cause the current account deficit to narrow and that would deal with the threat posed by ever increasing international indebtedness. Thus was born the sub-narrative of debt and deficits that we've heard so much about in recent years and this sub-narrative is part of the broader story of Australian mechanicalism. The narrative with the real exchange rate sitting at its core proved powerful in motivating action. Action to deregulate the labour market. Action to enhance product market competition. Action to implement a broad ranging set of microeconomic reforms to boost productivity and action in the pursuit of aggressive fiscal consolidation. The set of reforms implemented in the 1980s and the 1990s did indeed boost Australia's international competitiveness and exports did grow strongly. And while the Australian economy experienced a deep recession in the early 1990s, that turned out to be but a brief interruption to a very long period of strong economic growth and employment growth that has continued until very recently. Average living standards have also grown strongly. But for some time now Australian mechanicalism has been compromising policy development and I want to illustrate that point with just three examples. First, the mining boom. Policymakers in a country blessed with an abundance of mineral and energy resources should be asking themselves how those natural resources, those natural endowments might be transformed into higher value foundational investments that benefit future generations of Australians. Instead though, Australian policy has been preoccupied with the cost competitiveness of Australian exporters, notably Australian minerals and energy exporters. Over the decade commencing in late 2003, accelerating world prices of Australian minerals and energy exports caused a significant real appreciation. This real appreciation has been in the order of 50%. The real appreciation has damaged our international competitiveness. The fact that it's also played an important role in macroeconomic stabilisation and it had, and the fact also that it has provided the principal endogenous mechanism for redistributing to Australian households the benefits of higher world commodity prices, these two facts have turned out to be beside the point because according to Australian mechanicalism if our international competitiveness falls then governments have to do something about it. Thus successive Australian governments have had to respond to various proposals now designed to reverse the real currency appreciation caused by international commodity price inflation, proposals to cut business costs especially wages and taxes, proposals to boost productivity and proposals to cut government spending. That is what governments will be called on to do when the terms of trade were rising strongly from late 2003 through to 2011. Now that the terms of trade are weakening and amid growing concerns about declining aggregate real national income governments are being called on to do what? Well it should sound familiar. They're being called on to cut business costs especially wages and taxes. They're being called on to boost productivity and they're being called on to cut government spending. So no matter what the melody Australian mechanicalism will always prescribe the same treatment and of course it must because no volume of exports will ever satisfy a committed mechanicalist. And then there's the matter of tax. Taxes on minerals and energy provide a means of financing foundational investments in the nation's future. So why was the right government's mining tax unsuccessful? Myths are bound most of these myths frankly don't matter but some should be addressed. On my recall none of the tax reforms of the 1980s and 1990s other than tax cuts enjoyed bipartisan political support. Most were also deeply unpopular in the broader community. New taxes are not easy. But the task of legislating a new tax on mineral and energy resources faced headwinds that the GST and those other tax reforms did not. These headwinds came from Australian mechanicalism. If our mechanicalist narrative was having difficulty accepting what I've described as an endogenous loss of international competitiveness due to currency appreciation and wage inflation then none of us should have been surprised by that narrative's intolerance of higher taxes on mineral and energy products. Even a consummate communicator was going to have difficulty explaining why it made sense to apply a new tax to an accelerating export sector while at the same time promoting the narrative that the cost competitiveness of exports was the principal driver of growth, the principal driver of jobs, the principal driver of living standards.  My second example that illustrates the deficiencies of the mechanicalist narrative is climate change policy. Australian mechanicalism sees any domestic price on carbon as an unfair imposition on Australian producers who have to compete internationally. Exports will be weakened, imports will be encouraged, GDP will be damaged jobs will be destroyed and living standards will suffer. It really is that simple. My third example concerns Australia in the Asian Century. Now the white paper on Australia in the Asian Century was commissioned by Prime Minister Gillard because it had become obvious to at least a group of senior public servants and to the government that the Australian mechanicalist narrative could not support thinking about the requirements posed by the Asian Century. According to Australian mechanicalism, and this is what I recall from discussions particularly in the 1990s, our international competitiveness and our ability to compete in Asia was being damaged by the cost to Australian businesses of a set of national attributes developed over generations and these include such things as excellence and governance, believe it or not, incorruptibility, respect for the rule of law, safe working conditions, a concern with environmental sustainability and animal welfare, and institutions that support social harmony, economic and social opportunity and tolerance. These things were making us uncompetitive against Asian competitors. For good reason many Australian policy thinkers would rank these attributes as one of the greatest assets in doing business in Asia. But Australian mechanicalism maintains that all are costly to business, that Australia's international competitiveness could be improved by ditching any or all of them and indeed all of them are at risk. The failure of policy in these three areas, the mining boom climate change and the Asian Century should have had all of Australia's economists wondering about this narrative. All of us I would suggest should have been wondering whether the simple metrics we've been employing and thinking about Australia's international competitiveness. The notion of international competitiveness that's embedded in Australian mechanicalism as I've described it, whether any of these metrics really make any sense is international competitiveness really about nothing more than the real exchange rate? And is international competitiveness really what it should all be about anyway? Some have even been prepared to venture a more meaningful concept of international competitiveness as part of a vision for Australia's future. The former government's white paper on Australia and the Asian Century is one example. Another is the Business Council of Australia's recently released report Building Australia's Comparative Advantages. Given the limitations of the mechanicalist narrative with its tired fixation on the real exchange rate it must be especially galling for some of those involved in these two projects to find themselves accused of recommending that governments pick winners. During the 1980s and 1990s Australian mechanicalism was used to motivate support for a set of policy reforms that was long overdue. But it is long past time when in respect of those things for which Australian mechanicalism could conceivably prove useful as a narrative, long past time that we should have been declaring success. We no longer have centralized industrial relations delivering wage indexation. Instead we have some measure of aggregate wages flexibility and this has been demonstrated by the moderation in nominal wages growth in recent times as the terms of trade have receded. Capital markets are open and flexible. We no longer have a highly distorting wholesale sales tax. We no longer have most of the economy shielded from effective competition with lazy business operators able to pass all costs forward onto Australian consumers. The structure of the economy has been transformed and it's been transformed in a process that provided a considerable boost to productivity. We even have a bipartisan political commitment to a medium term anchor for fiscal policy. But we face a new set of challenges and these are challenges which the narrative of Australian mechanicalism either provides no answer or provides the wrong answers. It's time for a more honest narrative. The case for reforms to boost competition to enhance labour market flexibility and to provide the conditions for productivity growth, that case is strong. But it doesn't rest on export competitiveness. Whether they induce a real depreciation and in turn boost exports or not, these things should be pursued because they expand opportunities, they enhance freedoms and in so doing they improve the wellbeing of the Australian people. And the same is true of much of the rest of the economic reform program implemented in Australia from 1983. The mercantilist narrative diminishes the efforts of a generation of Australian policy reformers some at least of whom have been focused on more respectable goals. All economists since Adam Smith have emphasised the dependence of aggregate economic outcomes upon the exercise of individual agency. That's actually what economics is about. Recent contributions by Nobel Laureates Jay Stiglitz and Edmund Phelps draw attention to some of the capabilities required of individual agents if they are to be relied upon to support the wealth of nations and they draw attention also to the need to nurture those individual capabilities. Edmund Phelps published an extraordinary book published last year entitled Mass Flourishing. Details the primary role played by innovation in an historical accounting of material progress, economic inclusion and human fulfilment. According to Phelps, innovation has been driven historically by grassroots dynamism. That's his phrase. Something which he sees as the product of modern values transcending traditional values. And he maintains that this grassroots dynamism has broken down in much of the western world due to short termism in government, short termism in business and finance and in a thundering echo of Adam Smith by corporatism organised to protect vested interest. The poor consequences of short termism and of the advancement of vested interest are emphasised also by Jay Stiglitz in his recent publication The Price of Inequality. The importance of an emphasis on individual capabilities has been argued forcibly for some decades now by another noble laureate, Amartya Sen. Sen emphasises individual capability not only because of its implications for aggregate outcomes but because individual capability is a matter of primary interest in itself. Indeed it is the primary matter. The core concern should be the extent to which individuals enjoy a set of capabilities that provides them the freedom to choose a life of value. I'll come back to that concept. A renewed focus on individual agency and in particular on the capabilities enjoyed by citizens informs a more sophisticated understanding of international competitiveness and it informs a more honest economic reform narrative. The narrative I would suggest should comprehend the role played by national endowments in driving national performance. That is, it should be capable of explaining how the economic, social and environmental outcomes of a nation and also the distribution of those outcomes among its people how those things rest upon the country's particular set of endowments. While some of a nation's endowments are a consequence of nature others have been developed by earlier generations of humans. In the former category are a set of natural assets including things like geographic location such as the one that Singapore enjoys, demography, energy, minerals and soil deposits, native flora, fauna and ecosystems. While these endowments are the product of nature they're not static of course the human population of Australia is growing rapidly and it's aging mineral energy and soil resources are being depleted native flora, fauna and ecosystems are being degraded in many cases irreparably. In the category of endowments created by humanity are to be found the products of foundational investments in such things as our rich indigenous cultures. Modern multiculturalism the visual and performing arts, our legal and regulatory structures, our education and health facilities, our economic infrastructure in systems supporting research and innovation such as they are in policy frameworks that promote freedom and economic security and in working conditions that support human dignity these are created in Australian endowments. These foundational investments have been truly transformational transformational in precisely the sense that Catherine Livingston has demanded of those who today advance various structural reform proposals. National endowments are the source of individual capability. A core component of individual capability is human capital of course a term that gets bandied around much but no amount of human capital will ensure that an individual has the opportunity to choose a life of value if national endowments omit other capabilities. These other capabilities include a set of freedoms and institutions that for some years now and I would suggest at increasing costs we have been taking for granted including freedom from bigotry. A well functioning political system with politicians who are motivated to enhance national well-being. A well resourced and respected public service strengthened by the doctrine of ministerial responsibility. Independent transparency mechanisms a truly accessible judicial system. Independent unpoliticized media. A tax system that can be relied upon to meet emerging fiscal requirements with minimal damage to incentives to work, save and invest infrastructure governance that anticipates a better future education systems that offer pathways to knowledge and science and innovation systems that support creativity and the dissemination and commercialization of ideas. We have been taking these things for granted at our cost. The need to ensure that Australians are endowed with the capabilities that will be relevant to success in this Asian century calls for a renewed focus on all of these and other national endowments. The white paper on Australia in the Asian century identified a need for new foundational investments including public investments in our schools in our universities and in vocational training centres in developing Asia capable workplaces and institutions in developing a much deeper understanding of the history, the cultures, the languages the geography and the governance of our regional neighbours in devoting more effort to what has become known as track 2 diplomacy in building strong people-to-people relationships based on trust and mutual respect and in encouraging adaptability and those involved in writing the white paper would also have endorsed Edmund Phelps emphasis on the fostering of grassroots dynamism. International competitiveness in the Asian century will be enhanced by paying attention to all of these endowments and by leveraging them into commercial partnerships not by pursuing a race to the bottom on wages, taxes, social foundations, environmental standards or animal welfare. So let me say something about picking winners. The council against governments picking winners in terms of products particular products and particular industries is well based historically no doubt about it, but governments do have a responsibility for building national endowments and we should be comfortable with the fact and it is a fact that a country's pattern of national endowments should favor some industries and some products over others. Now the economists in the room might accept all of that yet still want to maintain that governments should be disinterested in the pattern of commercial activity that emerges that governments should take no interest in the shape of Australia's industrial development for example. Well I want to encourage you all to think differently our reluctance to describe consequences comprises the effectiveness of a narrative that really shouldn't need to be said Australian mechanicalism identifies a winner that winner is exports. Like Adam Smith we know that narrative should have should have no support in economics but we've been happy to go along with it and that's because we know that our reforming arguments will not be persuasive without a compelling narrative. In the 1980s we accepted that for governments and for those who advised them it's not enough to talk in abstract terms about the importance of freedom the importance of opportunity, of competition, of productivity, of economic efficiency we understood that governments have to explain to people the probable outcomes of the exercise of personal freedoms, the consequences of people having access to greater opportunity and the commercial implications of reforms to enhance economic efficiency. Indeed surely it would be unconscionable of government not to do so. In developing compelling narratives there's no choice to identify winners. That's actually a large part of what makes them compelling the identification of winners is the attractive vision bit that follows the scary burning platform part of the story that we economists feel much more comfortable telling. But once the winners of government policy have been identified a government can hardly maintain that it would have preferred a different set of winners and so in that very real sense the winners of government policies are those the government has picked. Let me conclude I've argued that the concept of international competitiveness that's embodied in the Australian mechanicalist narrative with its focus on the cost confronting exporters has outlived its usefulness. Its clouding or understanding of structural adjustments underway in the Australian economy especially those that are a consequence of the China boom and its compromising efforts to deal effectively with a number of confronting policy challenges including climate change and making a success of the Asian century. We need a richer understanding of international competitiveness and that understanding has to be both capable of and has to be comfortable with identifying the winners of a more internationally competitive Australia. As a profession we economists are never going to agree on who those winners should be and indeed many economists will never feel comfortable even thinking about policy objectives at that micro outcomes level but I would encourage them not to be too critical of those who are prepared to give it a go. I would encourage them to accept at least that this discussion is one worth having. In the meantime we economists could serve a useful purpose by articulating a respectable goal for economic policy at whatever level of abstraction we feel comfortable. To that end I'm going to conclude with some propositions with which I feel comfortable. An internationally competitive Australia would be a place in which political activity is predictable with policy based on sound theory and robust evidence. It would therefore be a place in which government policy avoids short termism and has no taste for protecting vested interest.  An internationally competitive Australia would be a good place to do business. It would be a place that provides access to labour with the right skills and to deep and liquid capital markets that are sophisticated and robust. It would be a place in which those developing regional value chains or even global value chains are placed in which they expect to find world class partners. Partners with a sophisticated understanding of Asian languages of Asian cultures and of Asian institutions. It would be a place that offers its people a high quality education and rewarding jobs and careers. It would be a place in which grassroots dynamism flourishes in which intellectual development is encouraged and in which science, innovation and effort is rewarded. In more abstract terms Australia's international competitiveness should be assessed according to the richness of the set of opportunities it offers the people who live in it and those who could live in it in generations to come. But international competitiveness even conceptualised in this rather more challenging manner does not represent the ultimate goal of public policy. That has to be stated at an even higher, even more abstract level. In this address I've emphasised the responsibility that public policy has in the nurturing of national endowments. The public policy of Australia should be directed to ensuring that all Australians, including those not yet born are endowed with capabilities that afford them the opportunity to choose a life of value. That is the measure of the wealth of Australia and also of the sources of its wealth. Thank you.


give, let's see, yeah, join code refinery and provide their courses this way, and we can do it even more. So you know, I'll propose that tomorrow after the course is done, we can share the Alto University Zoom Room, and we can join there and have an after party of sorts. So like all the instructors and helpers can join and we can discuss what we thought in and so on. Yeah. Oh, how about this poll? Oh, should we have a poll about is the Twitch style better than in person or both or what? But of course, what's ideal is to have both. So somehow teaching available online, but in person groups available. Yeah, I added the poll here on their feedback, please answer. And there's only two options there because the obvious answer would be both. So that doesn't really, if everyone says both, that's good. But that doesn't really tell us much. I'm not sure if trying to run both at the same time is the obvious, right? How obvious best running both, but separately is maybe. Yeah, that's double. Yeah. I added another option based on someone's idea. So Twitch and in person and zoom as three options here. Well, on Twitch, we can get rid of the image of the speaker. If I shrink it down. I think I need to be more active about producing the size when it's in place. Yeah. Okay. Does anyone, is anyone else on the call and wants to chat with us some? Yeah. So I guess we'll say this again tomorrow, but please check out code refinery. Subscribe to our newsletter and their Twitter. We're trying to figure out how to even communicate with people about the events we do. So it's funny. No one wants to hold any personal data on anyone because of personal data stuff. So we basically sit around and never form a community. And like, it's really hard to reach out to people. Oh, what about which advanced courses you would like? Did I write that there? I'll put this at the bottom. I'll actually put it at the top. I should other. Well, I guess we're running out of stuff to say if no one else is joining and chatting with us. So maybe we should call this. Good for now. So see you tomorrow. Same time. We cover. Things that are even less about coding, but more about. Let's see, like using Python in a professional sense. Okay, well, thanks. Thanks to everyone. See you all tomorrow. Bye.