In this paper (10.8.19), Ben Rees offers his impressions of questionable economics underpinning drought policy in Australia, in light of comments from AgForce about managing the 'cyclical' nature of drought in the agricultural sector.
'It was interesting to have AgForce’s President recently identify their drought policy model as based upon business cycle behaviour. In 1958, John Galbraith commented “nothing in the history of social ideas is more interesting than the treatment of the so-called business cycle”.
'Whilst prices, wages, rents, and interest were all affected by depressions, early research into severe economic fluctuations emanating from depressions were studied on the assumption that such dislocations did not happen. The drought policy comment by AgForce dates contemporary industry economics consistent with Galbraith’s description of early economic thought which assumed that severe dislocations did not exist over the business cycle.'