A ‘battle of ideas’ is taking place around the globe

Graduates of the University of Melbourne can assist in its resolution

By Tom Elliott

Seventeen years ago, philosopher and historian Francis Fukuyama wrote an essay entitled The End of History, in which he argued the end of the cold war and the subsequent collapse of the Soviet Union meant that the triumph of free markets and liberal democracy was complete.

Yet today, it is painfully obvious that Fukuyama’s prediction is yet to come true, and may yet be proved false.

Unfortunately, many of the qualities that university graduates should hold dear – such as freedom of expression, the right to challenge established beliefs and orthodoxies, and the triumph of reason over superstition – are under threat by such forces as the rise in religious extremism and the watering down of individual liberties by many governments in response to perceived security concerns.

Yet, the outlook is not all bad.

Now, this may come as something of a surprise to graduates who have slaved away at the truly dismal doctrine of econometrics, but economics in its purest sense is not fundamentally a mathematical science, but a social one that attempts to comprehend how individuals and groups interact with each other to maximise welfare.

At its best, sound economics is capable of advancing the worthwhile goal of human freedom, and I would argue that we are at one of those times in history when this is extremely important.

Three important factors should make us all optimistic about the future.

First, the rise of modern communications technologies like email and the World Wide Web mean that, for the first time ever, a majority of the world’s population has relatively free access to ideas and concepts. In many cases, with this access, people realise that a better life is possible.

Second, while they will be with us for some time, the forces of economic protectionism appear to be in retreat around the globe. Even the new leader of the Federal Labor Party, Kevin Rudd, appears to have admitted that socialism and its bedfellow protectionism might not be the welfare enhancing policies they once appeared.

The reduction of economic protectionism, especially in agricultural markets, is important because it gives poorer people in developing countries a chance to lift themselves out of poverty – not by being passive recipients of Western aid, but by more dignified participation in the global economy.

The final factor that gives me great hope, however, is much closer to home. When I attended Melbourne University in the mid to late 80’s, Australian students were very parochial and unlikely to leave their own state, let alone their own country to study at a tertiary level. Indeed, the presence of students from Tasmania was still considered quite exotic just a generation ago!

Yet, I understand that the proportion of people who now attend this University from interstate and, increasingly, from overseas, has risen dramatically. This can only further the cause of goodwill between different people, cultures and countries.

So what advice can I give to those graduating today?

First, you should feel justifiably proud of what you have achieved in your academic careers here in the Faculty of Economics and Commerce at Melbourne University. This is clearly the best university in Australia, and amongst the best in the world.

Second, do not ever assume in life that other people, often referred to as the mysterious ‘they’ in markets, know more than you. There’s no reason why you cannot be the best at whatever it is you now choose to do.

Third, stay in touch with the friends and colleagues you’ve made during your time at university, for you have a shared experience here that will appear increasingly valuable as time passes.

And finally, remember this. Right now, you probably have more information stuffed in your heads than you ever will again. Sadly, much of this will dissipate over time. But what will never leave you is that which is most valuable about your university education, and that is the ability to think, to solve problems in a rational and disciplined manner. Maintain this ability, and there’s nothing you can’t achieve.

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An edited excerpt of his Occasional Address delivered at the graduation on 15 December 2006.

Tom Elliott is the Managing Director of MM&E Capital and a University of Melbourne alumnus who graduated in 1989.

Volume 1 April 2007

A ‘battle of ideas’ is taking place around the globe

By Tom Elliott