Full text: Borrowing and business in Australia

ciples of thrift, to the removal or at least to the depression of 
the stimulus to private enterprise, to the acceleration of that 
spurious form of enterprise which we have, with probably little 
justification, labelled speculation, and to an attitude of depen- 
dence upon government initiative in development which has 
gone far to undermine the economic virility of the Common- 
wealth. That this is a hard saying, as painfully obvious to the 
present writer as to the most unreflective patriot, need not be 
doubted ; but so conclusive is the evidence that it is ‘worthy of 
all acceptation’. 
In its political aspect the situation we have described leads 
to many evils that are, of course, fundamentally economic. 
Under a party system of government such as that which 
characterizes British communities, unrestricted borrowing 
facilities tend to be translated into experimental social legisla- 
tion which, however praiseworthy in a social sense, is economi- 
cally unjustifiable. The capital wherewithal for the indulgence 
of political whims is too fatally accessible ; there is, in effect, an 
apparently unrestricted supply of cloth for cutting coats of 
many unserviceable patterns.! But the primary evil is to be 
detected in the possibility which is held out to political parties 
of bargaining for power with borrowed money. That this con- 
dition is inseparable from our present financial organization, 
and that other communities in a similar stage of development 
bo that of Australia have done likewise, is beside the question. 
If, as we believe, there is a good case presented for an economic 
examination of the Australian position in common with all 
other borrowers in the same category, the hostile critic is likely 
to prove in the end the best friend. 
The purely economic dissection based upon the evidence 
accumulated in the preceding pages would be directed towards 
a solution of the following problems. What are the purely 
economic tendencies to be observed as a result of long-continued 
external borrowing ? Which of them are adverse to prosperity, 
and, particularly, to the maintenance of the high standards of 
living to which we have become accustomed? On balance, 
* ‘No readier or more dangerous mode of increasing debt can be found than the 
execution of public works that are not economically productive. Vague assertions 
of indirect benefits should not be allowed to conceal the fact that “improvements” 
of this kind should be paid out of income, and cannot be regarded as investments 
In the proper sense of the term.’—Bastable, op. cit., p. 627.

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