Fighting Ghosts: Why the Right is Arguing with a Fictional Past

An MMT Autopsy of Australian History

Oct 11, 2025

An MMT Autopsy of Australian History

The words we use to describe our economic history aren’t neutral. They’re weapons in a battle over what’s possible. When a key voice of the conservative media establishment, like James Morrow—National Affairs Editor for The Daily Telegraph and a prominent host on Sky News—frames Australia’s past prosperity as a “centre-right miracle,” he’s not just making an argument. He’s trying to set the terms of debate before it even begins.

But here’s the thing about economic mythology: it crumbles the moment you ask: How did the money actually flow? And mythology, however comforting, won’t solve the housing crisis or climate change.

Political analyst Kos Samaras has handed the Australian establishment a diagnosis they don’t want to hear: the nation is undergoing a structural realignment to the left, driven by generations who’ve lived through the failure of the old consensus. The reaction from commentators like Morrow was predictable, panic dressed up as economic wisdom.

But Samaras is right about the shift. Morrow is catastrophically wrong about what it means.

Here’s the thing about economic mythology: it crumbles the moment you ask: How did the money actually flow? And mythology, however comforting, won’t solve the housing crisis or climate change.

The “Free Market Miracle” That Never Was

I grew up hearing the same story Morrow tells: from Hawke to Howard, Australia embraced free markets and prospered. It’s a neat narrative that serves a clear political purpose. It’s also complete and utter rubbish.

Let me walk you through what actually happened, using the lens that matters most—not political labels, but operational reality. How did the government actually deploy its capacity as a currency issuer during those supposedly “free market” decades?

The Hawke-Keating Accord: This wasn’t a free-market agreement. It was centrally planned economic coordination. The deal explicitly traded wage restraint for a massive expansion of what economists call the “social wage”: government spending on Medicare, education, family support, and superannuation. That wasn’t the market working; that was fiscal policy doing exactly what MMT says it should do: managing aggregate demand while building public infrastructure.

Howard’s “Miracle” Surpluses: Even the sainted Howard-Costello surpluses were built on two foundations that had nothing to do with small government. First, a once-in-a-generation mining boom that flooded Australia with external income, enabling the government to run surpluses without crashing domestic demand.

Second, a massive run-up in private household debt. While Costello was bragging about surpluses, Australian households were taking on debt at the fastest rate in our history. The government wasn’t being fiscally responsible—it was forcing families to become the economy’s credit card.

The moment the private sector tried to repair its balance sheet, Howard’s surplus vanished. We needed massive deficits during the GFC to avoid catastrophic collapse. The “miracle” was an accounting illusion that nearly cost us our lives when reality reasserted itself.

The Real Story: Australia’s prosperity during those decades came from exactly what Modern Monetary Theory predicts: a currency-issuing government using fiscal policy to maintain full employment and build productive capacity. The “free market” rhetoric was political decoration on a fundamentally Keynesian operation.

Why the New Majority Gets It (Even If They Don’t Know MMT Yet)

Here’s what Morrow and his colleagues refuse to acknowledge: the structural shift Samaras identifies isn’t just about changing social attitudes. It’s a rational economic response from generations who’ve lived through the failure of the neoliberal model.

Gemini-generated: Why the New Majority Gets It!

Younger Australians aren’t rejecting the “centre-right consensus” because they’re “woke.” They’re rejecting it because it has failed to deliver the basic foundations of prosperity: secure work and affordable housing. They’re facing the direct consequences of an economic model that prioritises financial speculation over real investment, corporate profits over wage growth, and asset price inflation over productive capacity.

This is why the turn to the left isn’t a threat to prosperity; it’s a prerequisite for it.

The challenges of the 21st century, extreme inequality, climate breakdown, and precarious work can’t be solved with the tired tools of the old consensus. They demand a new economic paradigm, one that understands and utilises the full capacity of a sovereign currency issuer.

Whether they use the term or not, the emerging majority is demanding an MMT-informed approach:

Precarious work? The solution is a federal Job Guarantee that provides secure employment while building public infrastructure.
Climate change? The solution is the kind of government-funded industrial mobilisation that built the Snowy Mountains Scheme—except this time, we’re building the renewable energy grid that will power the next century.
Unaffordable housing? The solution is direct public investment in social housing to address the real resource shortage, not just policies that inflate asset prices for existing owners.

What Morrow Really Fears: Democracy Meeting Economics

The real threat to the old consensus isn’t “leftist ideology”, it’s that more Australians are starting to understand how money actually works. Once people grasp that we’re a currency issuer, not a currency user, the entire “we can’t afford it” framework collapses.

That’s what terrifies them. Not socialism. Not wokeness. The possibility that ordinary Australians might start asking: “If we can create money for bank bailouts and submarine deals, why can’t we create it for housing and climate action?”

The old guard built their authority on a simple lie: that government budgets work like household budgets. That public spending must be “paid for” by taxes or borrowing, and that we must choose between economic prosperity and social justice.

But the operational reality of a sovereign currency destroys these myths. When you understand sectoral balances, when you see how banks create money, when you grasp that government deficits become private sector surpluses, suddenly the impossible becomes inevitable.

The emerging majority isn’t just demanding different policies. They’re demanding economic literacy. And economic literacy is the death of economic mythology.

The Coalition’s Real Problem: They’re Arguing with Reality

The Coalition’s crisis isn’t that they’re losing the political argument. It’s that they’re still trying to have an argument from a history book that the rest of the country has already closed.

They’re defending a mythical past that never existed, while the emerging majority grapples with real problems that demand real solutions. When you’re a currency issuer facing unemployment, housing shortages, and climate breakdown, the constraint isn’t “the money”, it’s political will and real resources.

The future of Australian prosperity won’t be found by looking backward at a fictional “centre-right miracle.” It will be built by embracing the operational realities of our monetary system to solve the actual problems of the 21st century.

Morrow and his colleagues can keep defending a fictional past while the rest of us build a real future. The question isn’t whether Australia will embrace its capacity as a currency issuer; it’s whether we’ll do it fast enough to matter.

What would you build if you understood that the constraint isn’t “the money”, it’s our willingness to act?

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