The Australian colonies did comparatively very well in economic development and prosperity. Surely we can repeat this, given that we were left a legacy of an educated workforce, peaceful functional society, and vast mineral reserves?

Unfortunately, these past successes are under fundamental threat.

As living standards fall and geopolitical threats loom, let’s examine why we did so well.

Nobel Prize winners Acemoglu, Johnson, and Robinson emphasised the quality of government, using Australia and others as an example. Our federal and state governments built roads, schools, medical services, facilitated the pastoral industry, mining, democracy. They guaranteed property rights. Government was not monopolised by a small group that extracted all the wealth for itself. There was a reason for squatter and mining property rights.

William Wentworth led the squatters of NSW largely to defeat by democrats in the 1850s. Although it was an institutional defeat, in which they retained influence in the less democratic Upper House of Parliament. This enabled them to protect the economy.

In for example South America defeat of the large landowners took two centuries and democracy is arguably shaky. Absolutism was the tradition of their colonial powers, Spain and Portugal. Absolutism lasted in those countries until a final difficult transition in 1974-75. This is surely not something that any Australian would prefer. Although there is little popular appreciation in Australia of how unusual and fortunate our constitutional beginnings were.

This was not the defeat of absolutism in Europe. That lasted until the fall of the Berlin Wall in 1989 and surely is ongoing.

Acemoglu was recently challenged for not describing what good institutions are or where they came from: ‘The institutional changes it describes seem only to come from other institutional changes, making the core argument regress forever – turtles all the way down.’ But this does not change the importance of functional institutions.

He has ‘remarkably glum views’ about technology and AI, although technological progress ‘has made the average person many times richer than in pre-industrial times’. (The Economist)

Another writer describes six ‘killer apps’ as the explanation for Western economic dominance, these being competition, science, property rights and the rule of law, modern medicine, consumerism, and the work ethic. (Civilisation, Ferguson) Another ascribed Western success to the geographical advantage of having much of the world’s useful wild plants (e.g. wheat, barley) and wild animals (the precursors of modern pigs, sheep, cattle, and horses). (Guns, Germs and Steel, Diamond)

When Captain Phillip set foot on Sydney Cove in 1788 he brought the ‘killer apps’ and useful plants and animals with him. Our modern diet includes few native plants and animals, with exceptions such as macadamia nuts and barramundi. We eat some kangaroo, a lean healthy meat.

Phillip also brought convicts who became surprisingly aspirational farmers and herders. Their children became ‘cornstalks’, allegedly taller and more healthy than their often undernourished, sickly European counterparts. (Bigge, Kate Darian-Smith) Aboriginal stockmen were an essential part of successful Australian enterprise. (Irving)

Nearly half of the early Australians were illiterate (1858). We gradually developed effective schools, labour, and health systems. Although our modern democratic politics are dominated by fierce debates about the form that these should take. There is never a final answer.

We never descended into the tropical lassitude and ‘horror’ of colonists in Africa satirised by Joseph Conrad in Heart of Darkness. Or by Machado de Assis, who wrote about the hopelessness of Brazilian slave owner society in the 1880s – incredibly rich but idle and barren in achievement. Slavery was only abolished in 1888. (BBC In Our Time)

We had fortunate colonial leadership. The first Premier of South Australia, Boyle Travis Finnis, described how the new self-governing Parliament of 1856 forced him to ‘not only profess but act in the full determination to use his influence and his power to promote the general advance of the community’. (autobiography).

The Father of Federation, Henry Parkes, vigorously promoted free trade, as did George Reid, the fourth Prime Minister of Australia. Edmund Barton and Alfred Deakin led the Australian colonies into successful federation, and a new functional Constitution. So functional that it requires few amendments, or so the people have rebelliously decided.

Samuel Smiles was a popular Victorian writer who promoted ‘thrift’. Look after the pennies and the pounds will take care of themselves, he sometimes said. This approach better describes our societal development than much of our modern intellectual life, which is negative, even a problem in itself.

Thrift and trade are the key to Australia’s future, surely, built on good institutional foundations. Australia is only one or two budgets away from fiscal responsibility, and perhaps three or four away from restarting the economic growth that is the basis of prosperity. Industry associations regularly provide useful advice on taxes, and regulatory and budgetary reform which can easily be followed.

This is not a battle of ideas, nor is it one of interests. The fundamental problem of today is that responsible budgeting is seen as an alternative to a Constitutional model of ever-increasing welfare, and government overreach which restricts economic growth. An ideology of a particularly unfortunate character.

We should look instead to Acemoglu, Ferguson, or Diamond. And our leaders from Finnis to Parkes, from Barton to Menzies.

In their version of the country Captain Phillip stepped ashore at Sydney Cove in 1788 with the keys to nearly everything beneficial in the modern world, from government to the economy, to social attitudes which increasingly supported liberty and equality. Unusually so if the historical alternatives are examined. Is this view reflected in your local museum? Or are the conclusions negative?

Perhaps Parliament House Canberra could state this, with an acknowledgement about continuing political disagreements about the form of the modern safety net of education, health, welfare, Indigenous affairs, and labour laws. It might even inspire young people.

The Hon. Reg Hamilton, Adjunct Professor, School of Business and Law, Central Queensland University