Twenty years ago, as I was travelling through Europe with the Australian rowing team, I bought a copy of The Economist magazine. One article by then editor Nico Colchester made such an impression on me that I kept it – and still have it on display in my Adelaide office.

Colchester spoke of the need to keep things ‘crunchy’: the need to have winners and losers if the free market is to function effectively.

Unfortunately, as nations become wealthier they tend to become soggy, and sogginess inevitably leads to failure.

Colchester’s words have particular relevance today as successive governments rush to socialise losses, nationalise banks and stop people from losing money. The commentariat have proclaimed the death of capitalism and free markets whilst advocating for a new path that sounds distinctly like the socialism of old.

The problem with this thinking is that we are in this mess right now, not because of the free market but because of government. US monetary policy under Alan Greenspan was the loosest in history, promoting successive asset bubbles without allowing the appropriate corrections to redress the imbalance. The result is the disaster that began in the USA and has spread across the globe.

Government pursues these absurd policies in an attempt to protect people from themselves and the decisions they have made. By providing a perpetual ‘get out of jail free’ card, government encourages a society that has diminished personal responsibility.

It is no coincidence that historically the epicentre of global economic power has always shifted away from the soggy empires to the nations that keep things ‘crunchy’. Accordingly, I believe that the next two decades will see the centre of global economic growth shift from the USA to Asia.

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