The Australian Economy: Historical Development

 The beautiful campus of the University of Sydney.

On Wednesday, January 5 we visited the University of Sydney for a guest lecture by retired faculty member Evan Jones, who taught in the political economy program since 1973. 

Addressing Australia’s origin of immigrants, Britain brought its convicts to Australia as a form of punishment in 1788.  This convict colony was not expected to become economically sustainable.  Eventually, Britain sent free men and women to Australia.  By the 1850s, there was a post-California gold rush.  We read in John Hirst’s A Story of Australia that there was a rush of people from around the globe who were hoping to make it rich.

Concerning exports, there was a gradual takeoff of wool production in the 1820s.  The wool was exported to English woolen mills.  Moving forward to World War I, the steel industry was created, which began the manufacturing sector in Australia.  Eventually a two-faced development occurred.  Australia began to produce for its domestic needs and also produced for exporting.  A balance was needed in order for the convicts, migrants, and gold diggers to survive. 

Evan Jones explained to us that Britain wanted to become the workshop of the world.  In this imperialistic arrangement, Britain demolished its own agriculture sector and shifted its gears to focus on manufacturing and imported everything else it needed.  Britain’s colonies (including Australia) provided raw materials.  Britain allowed a free trade agreement on Australia’s grain, thus promoting imperialism even further.  The British Imperial division of labor is such that rural and mineral staples are exported to the ‘mother country.’

Concerning GDP, unemployment, and inflation since World War II, Australia has gone through the both the boom and bust phases of the business cycle.  In the 1950s, there was an economic boom, in which a massive power and irrigation infrastructure expansion took place, thus providing post-war European migrants a material livelihood.  In the 1960s, a massive resource boom began which was characterized by exports to Japan.  Both a decay and restructuring of the manufacturing industry and an agricultural crisis occurred in the 1980s.  A general recovery occurred through a massive prolonged resources boom and exporting to China took place in 1990s and 2000s. 

As of 2009-10, Australia’s primary export partners are China, Japan, Korea, India and the United States.  Australia’s primary import partners are China, United States, Japan, Thailand, and Singapore.  Their top exports include coal, iron ore, education-related travel services, and personal travel (tourism). 

The girls enjoying our BBQ on the deck of the Tiffany apartments.