This book is the first comprehensive account of how Australia attained
the world's highest living standards within a few decades of European
settlement, and how the nation has sustained an enviable level of income
to the present. Why Australia Prospered is a fascinating historical
examination of how Australia cultivated and sustained economic growth
and success. Beginning with the Aboriginal economy at the end of the
eighteenth century, Ian McLean argues that Australia's remarkable
prosperity across nearly two centuries was reached and maintained by
several shifting factors. These included imperial policies, favorable
demographic characteristics, natural resource abundance, institutional
adaptability and innovation, and growth-enhancing policy responses to
major economic shocks, such as war, depression, and resource
discoveries.
Natural resource abundance in Australia played a prominent role in some
periods and faded during others, but overall, and contrary to the
conventional view of economists, it was a blessing rather than a curse.
McLean shows that Australia's location was not a hindrance when the
international economy was centered in the North Atlantic, and became a
positive influence following Asia's modernization. Participation in the
world trading system, when it flourished, brought significant benefits,
and during the interwar period when it did not, Australia's protection
of domestic manufacturing did not significantly stall growth. McLean
also considers how the country's notorious origins as a convict
settlement positively influenced early productivity levels, and how
British imperial policies enhanced prosperity during the colonial
period. He looks at Australia's recent resource-based prosperity in
historical perspective, and reveals striking elements of continuity that
have underpinned the evolution of the country's economy since the
nineteenth century.
