Looking at life beyond the dividend cheque
Country B on the other hand is the world's largest creditor nation with an unemployment rate of 4.5%. It's almost impossible to get your car stolen in Country B and using an entirely different model, it's delivered growth rates in excess of 8% over an extended period since the end of the Second World War.
Brow beating
So how would you feel if, as a resident of Country B, you were continually urged to adopt the economic policies of Country A? This may sound fanciful but it's exactly what's happening with the United States and Japan. And the Japanese aren't the only ones to have the US government pronouncing from the teacher's lectern – most European nations are reluctantly sitting in the same classroom too.
With signs that the global economy runs the risk of edging into a deflationary era, the feeling of antipathy that this brow beating generates is the last thing the world needs. And while the Americans have an economy with many attributes, to many visitors their society doesn't seem as successful as they would have us believe.
As one European minister remarked recently at a G7 meeting in the US, "In one breath the Americans are urging us to adopt their economic policies, in the next they're telling us not to stray too far from the hotel". This makes the point that the relationship between economics, society and our quality of life is a little more complex than some economists would have us believe. Unemployment may be low but for many Australians, seeing someone by the side of a US highway with a sign that reads 'will work for food' is a little confronting.
There are some parallels here too. Residents of country towns may be pleased with the performance of their bank shares but if the price has been paid by their son or daughters' retrenchment from the local branch, the personal balance sheet becomes a little more difficult to interpret.
And yet the tone of economic and financial commentary tends towards uniformity rather than difference. Perhaps it's because many commentators are hiding their own bias under a blanket of economic neutrality. Or maybe they just don't bother to seek a breadth of opinion. The last 15 years, during which time many countries embarked on a course of privatisation, deregulated markets and a push towards small government is a good example. While these policies have been successful in some countries, in others they've been disastrous.
Act of heresy
Take Russia's recent history. While some would blame the previous communist regime, the advice of the IMF and Jeffrey Sachs of the Harvard Institute for International Development was critical. Life expectancy has now reverted to 19th century levels, the population is believed to be declining and the wealth that the whole process should have created is sitting in Russian mafia bank accounts overseas. On the other hand, those nations that took a more cautious approach (China and Chile for example) have fared better.
So, where are we now? The past 18 months have left policymakers seriously shaken. Questions are now being asked about issues that weren't even on the agenda a few short years ago. In the highest echelons of government questioning the free movement of capital would have been an act of heresy for most of the decade - now discussion is commonplace. Even the Reserve Bank is getting in on the act.
Articles are appearing in the mainstream press that offer the examples of the Netherlands, Denmark and Austria as successful economies that haven't paid the price of social dislocation but have reduced unemployment rates and kept shareholders happy with outperforming stockmarkets – a combination that we're often told is almost impossible.
Debate fires up
Many would have noticed that legendary hedge fund operator George Soros, who has been bleating about unregulated capital flows and its tendency to produce instability for the best part of a decade, now has a best seller. And while some people have always questioned whether privatisation delivers all the benefits that its proponents suggest, politicians are now paying a little more attention than they once did.
It's not that the tone of the debate is slowly changing, it's that for the first time in many years we're starting to see a debate at all. This has to be a good thing as it speaks of a more holistic approach that looks at our economy as part of our society, not as a system that operates in isolation. For the countries to our North it's been an expensive lesson. The irony is that we had to stand on the edge of the precipice and peer into the void before anyone raised their voice.
John Addis – (with apologies to our US subscribers, please don't take it personally!)