The paper “ The Benefits and Disadvantages of Economic Rationalism for Australian Consumers” is a forceful example of an essay on marketing. Economic rationalism is an approach to the economic policy where the primacy of markets is accepted. In this case, the market is the determiner of what the economy will produce and how they will produce it. Market forces are used in determining wages and there is no interference of laws such as minimum wages or by the Industrial Relations Commission (Gates & Steane, 2007). Social security is put in place to ensure that those who live in poverty are catered for.
When Australia adopted the economic rationalism policy, it was expected that there would be a rise in production (Stilwell, 2000). Government intervention in the economy was to be minimized and the role of market forces increased. Australia consumers have been able to benefit from market rationalism. Despite this, rationalism had uneven and unanticipated outcomes in Australia which affected consumers. This summative essay will analyze whether Australian consumers are better off as a result of economic rationalism. There have been a lot of debates looking on the best way for the government to promote economic development (Gates & Steane, 2007).
Poor economic growth, unemployment, and taxation led to alternative ideas and economic reforms in Australia (Fenna, 2013). Australian Labour Government implemented economic rationalism to improve economic efficiency. Through the policy, it was expected that resources would be allocated more rationally. The policy was based on money and markets in delivering its outcomes rather than states and bureaucracies. Through economic rationalism, the consumer was supposed to be the principal beneficiary. The market forces were supposed to enhance efficiency to help consumers save costs.
This was through the creation of a free market (Fenna, 2013). It’ s important to note that the free market is ideal and leads to maximum economic efficiency. With the help of the government, it is possible to come up with a market that is almost ideal. Economic rationalists beliefs that the primary aim of the market is to maximize efficiency (Wright, 2003). Based on the first theorem, society through economic rationalism comes up with the best way to utilize resources that lead to the maximization of their welfare. The Australian government contributed to making the market infinitely adaptable.
This implied that companies had to look for the most efficient mode of production. To achieve this, the government reduced regulations (Gates & Steane, 2007). This made industries come up with the most efficient ways of producing goods and services. This made Australian society come closer to infinite adaptability. Reduced inefficiencies in production translate to low costs that benefit the consumers (McLean, 2012). All inefficiencies that lead to high costs are eliminated. Based on the first theorem, when a society is near to an ideal market, they benefit from enhanced welfare. One of the actions by economic rationalism towards the ideal market is the removal of public goods.
This is through ensuring that there are no institutions funded by taxpayers’ money offering services (Wright, 2003). This led to the privatization of some public companies in Australia. Privatization was carried out to ensure the institutions competed in the free market. Competition in the free market makes organizations reduce operating costs to attain a competitive advantage.
Since the public institutions were forced to compete, they had to come up with ways of being more efficient (King, 2012). Australian consumers were able to benefit from access to high-quality goods and services. Consumers were able to benefit from enhanced efficiency brought up by privatization.
DiRita, P. A., Parmenter, T. R., & Stancliffe, R. J. 2008, “Utility, economic rationalism and the circumscription of agency,” Journal of Intellectual Disability Research, Vol.52, no.7, p.618-625.
Edwards, L. 2002, How to argue with an economist: Reopening political debate in Australia, Port Melbourne: Cambridge University Press.
Fenna, A. 2013, “The Economic Policy Agenda in Australia, 1962–2012,” Australian Journal of Public Administration, Vol.72, no.2, p. 89-102.
Gates, D. K., & Steane, P. 2007, “Historical origins and development of economic rationalism,” Journal of Management History, Vol.13, no.4, p.330-358.
King, J. E. 2012, The Elgar Companion to Post Keynesian Economics. Förlag: Edward Elgar Publishing.
McLean, I. 2012, Why Australia prospered: The shifting sources of economic growth. Princeton: Princeton University Press.
Pancer, E., & Handelman, J. 2012, “The evolution of consumer well-being,” Journal of Historical Research in Marketing, Vol.4, no.1, p.177-189.
Stilwell, F. J. 2000, Changing track: A new political-economic direction for Australia. Sydney: Pluto Press.
Whish, R., & Bailey, D. 2012, Competition law. Oxford: Oxford University Press.
Wright, J. 2003, The ethics of economic rationalism. Sydney: UNSW Press.