The Murdoch vision

Rupert Murdoch gave a speech last night to the Lowy Institute on “Let’s learn to thrive on disruption“. And what he means he says early on:

For Australia is on the cusp of becoming something rare and valuable in this new world: an egalitarian meritocracy, with more than a touch of libertarianism.

But we can’t wait for later.

In the past few years, we have all seen how advances in communications and travel have eliminated the tyranny of distance. The same might be said for size.

Think about Singapore, Taiwan and Hong Kong. These are all small places, and hardly blessed with natural resources. Yet not only have they carved out a competitive position in the world because of their free, open and dynamic economies, they have become a source of inspiration for countries around the globe.

Australia can and should do better than all of them.

Australia is the best country in the world because we do have the great English traditions of free institutions, free markets and a willingness to accept and adapt to change. The US was once such a country but isn’t any more or at least may no longer be. We are such a country and are getting better. But what I found most astonishing in the speech was this:

Australia must be the world’s disruptive economy.

The economist Joseph Schumpeter once described the process of ‘creative destruction’ as essential to capitalism. The current fashionable word to capture that sense of creative chaos is ‘disruption’.

As soon as I saw the word “disruption” in the title I went looking for Schumpeter’s name. He is the economist of disruption, who sees that the role of the entrepreneur is not to behave in the way economic theory now teaches, concerned with incremental change with one more unit of some already-existing product leading to a change in revenues and costs. It is about individuals who do new things in new ways. Understanding the role of entrepreneurship is to understand the way in which the world betters itself by a continual introduction of new ideas embodied in wholly different ways of doing things.

It is the vision of people who look forward to the future, who want to engage with change because they know that change is coming, understand that change is often for the better and have introduced institutions that will allow such changes to be introduced, causing disruptions of course, but also with a relatively smooth transition to the new. This is how it has always been in this, the last-ever new frontier society in the world, and I too hope it will continue in just this way, building on our past and on into a future filled with unknown unknowns.

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