Economics Explored

Before industrialisation, most people lived in extreme poverty, worked long hours, and faced dangers that are almost unimaginable today. In this episode, host Gene Tunny speaks with Chelsea Follett, Research Fellow at the Cato Institute and author of The Grim Old Days: An Introduction to the Pre-Industrial Past. Chelsea challenges romanticised views of history and explains how the Industrial Revolution and subsequent economic growth transformed human living standards.Gene would love to hear your thoughts on this episode. You can email him via [email protected]. Takeaways from this episodeLife before industrialisation was extraordinarily difficult. Extreme poverty, high mortality, poor sanitation, back-breaking labour, and food insecurity were normal features of everyday life for much of human history.Economic growth transformed human wellbeing. The Great Enrichment was accompanied by dramatic improvements in life expectancy, nutrition, sanitation, healthcare, and opportunities for education and leisure.The Industrial Revolution may have an undeservedly bad reputation. Chelsea argues that child labour, long working hours, and dangerous living conditions preceded industrialisation. Rising prosperity ultimately helped societies address these problems.The causes of the Great Enrichment remain debated. Possible explanations include improvements in institutions, changing attitudes towards commerce, Enlightenment ideas, scientific progress, and competition between European states.The past was not necessarily kinder or more environmentally sustainable. Historical accounts reveal widespread domestic violence, cruelty towards animals, and environmental destruction.Modern prosperity should not be taken for granted. Chelsea argues that excessive restrictions on technological innovation could prevent future improvements in living standards, including potential gains from AI and autonomous vehicles.Timestamps00:00 – Introduction: Chelsea Follett and The Grim Old Days02:06 – Why Chelsea wrote the book: Using humanity's fascination with grim stories to communicate economic progress05:06 – The horrors of the pre-industrial past: The Erfurt latrine disaster, a cannibalised Dutch political leader, and historically high mortality rates09:32 – Why the Industrial Revolution gets a bad rap: Misconceptions about poverty, child labour, and working conditions12:06 – When did the Grim Old Days end? Industrialisation and the uneven emergence of modern prosperity14:27 – What caused the Great Enrichment? Institutions, ideas, Enlightenment thinking, and European competition19:56 – Did medieval peasants really work less than we do? Debunking myths about pre-industrial working hours and living conditions24:06 – Alcohol, superstition, and dangerous medicine: Life before modern healthcare and sanitation27:02 – How medical progress transformed everyday life: Chelsea's personal experience with scarlet fever28:30 – The connection between prosperity and health: How economic growth made modern sanitation, nutrition, and medicine possible32:19 – Was the past a kinder place? Domestic violence, animal cruelty, and environmental degradation35:53 – Could we return to the Grim Old Days? The fragility of prosperity and risks from restricting innovation39:09 – What's next for Chelsea? Challenging nostalgia for the twentieth century42:58 – Where to find The Grim Old Days: Publication details and Chelsea's hopes for the bookLinks relevant to the conversationChelsea Follett's book: The Grim Old Days: An Introduction to the Pre-Industrial Past:https://www.simonandschuster.com/books/The-Grim-Old-Days/Chelsea-Follett/9781969284120 Human Progress:https://humanprogress.org/ Previous episode with Marian Tupy on Super Abundance:https://economics-explained.simplecast.com/episodes/abundance-mindset-exploring-the-super-abundance-thesis-w-marian-tupy-cato-institute-ep258 Lumo Coffee promotion10% off Lumo Coffee’s Seriously Healthy Organic Coffee.Website: https://www.lumocoffee.com/10EXPLORED Promo code: 10EXPLORED  

What happens when a town runs out of money? During the Franco-Prussian War of 1870, the French town of Sedan faced an economic crisis as gold and silver coins disappeared from circulation. Yet, as Émile Zola recounts in his novel The Debacle, an ingenious solution helped keep commerce alive: locally issued emergency paper money. Show host Gene Tunny explores this remarkable story and what it reveals about the nature of money, the importance of trust, and the ability of communities to improvise when conventional financial systems break down.Gene would love to hear your thoughts on this episode. You can email him via [email protected]. Takeaways from this episode1. Money has three essential functions. It serves as a medium of exchange, a unit of account, and a store of value. Different objects have performed these roles throughout history, from cattle and shells to gold, silver and paper currency.2. War can disrupt the circulation of money. During the Franco-Prussian War, hoarding, disrupted banking operations and the movement of precious metals contributed to severe shortages of coinage in towns such as Sedan.3. Emergency money can keep local economies functioning. Locally issued paper notes can provide a temporary means of payment when conventional currency becomes scarce, provided people have confidence in the issuer.4. The money supply is not entirely under central bank control. Nicholas Kaldor's critique of monetarism highlights how banks, businesses and households can develop alternative payment and credit arrangements when cash is restricted.5. Trust is fundamental to any monetary system. Whether money consists of gold coins, emergency paper notes or modern fiat currency, its usefulness ultimately depends on people believing it will be accepted in exchange.Timestamps00:06 - Introduction: Émile Zola, The Debacle, and the nature of money01:45 - The Battle of Sedan and the collapse of Napoleon III's empire06:48 - Zola's account of emergency paper money in Sedan09:30 - What does the story tell us about money?10:00 - Sponsor message: Lumo Coffee12:46 - What is money? From cattle and shells to cigarettes and stone discs15:30 - Money's three functions: exchange, accounting and saving20:30 - Why gold and silver coins disappear during crises24:12 - How war disrupted Sedan's monetary system27:30 - Necessity money: how local paper notes could keep trade going29:59 - Trust and the acceptance of emergency currency31:00 - Nicholas Kaldor's critique of monetarism33:30 - How people find substitutes when cash becomes scarce35:18 - Historical examples of necessity money38:00 - Local currencies, including the Bristol Pound and Swiss WIR39:00 - What emergency money teaches us about trust40:26 - Could emergency money work in a future crisis?42:30 - The future of fiat money and concluding reflectionsLinks relevant to the conversationÉmile Zola, The Debacle:https://www.amazon.com.au/Debacle-1870-71-Classics-%C3%89mile-Zola-ebook/dp/B00358VHSI BNP Paribas, history of necessity money:https://histoire.bnpparibas/en/a-necessity-note-of-1871-from-comptoir-descompte-de-paris/ Les Echos, historical account of the Bank of France's wartime evacuation. The episode discusses an account of gold, banknotes and valuables being transported to safety in 1870:https://www.lesechos.fr/finance-marches/banque-assurances/stocks-dor-6-cachettes-de-la-banque-de-france-1154241 Nicholas Kaldor’ “The New Monetarism”:https://www.scribd.com/document/516900044/Kaldor Lumo Coffee promotion10% off Lumo Coffee’s Seriously Healthy Organic Coffee.Website: https://www.lumocoffee.com/10EXPLORED Promo code: 10EXPLORED 

Australia's latest Intergenerational Report assumes productivity growth will rebound significantly over coming decades, with AI potentially playing a major role. Is that reasonable? Professor Chris Berg of RMIT joins Gene Tunny and John Humphreys for a wide-ranging discussion of AI's economic potential and risks. They explore lessons from the computer and internet revolutions, AI's huge energy requirements, whether its benefits will appear in GDP, the cybersecurity threat from autonomous agents, and why competition may be a better safeguard than heavy-handed regulation.Gene would love to hear your thoughts on this episode. You can email him via [email protected]. Takeaways from this episodeAI could be a genuinely productivity-enhancing technology, but forecasting the size of the gains is extraordinarily difficult. Berg argues that AI is already allowing people to accomplish tasks with dramatically less human effort, although how much of that ultimately appears in measured productivity remains uncertain.    Transformative technologies don't necessarily produce immediate jumps in measured productivity. Computers and the internet transformed economic and social life, while some of their gains arrived with lags or appeared as consumer surplus rather than conventional GDP.    The AI revolution is also an energy and capital-investment story. Data centres are effectively factories for machine intelligence, creating potentially enormous new electricity and infrastructure requirements.  Cybersecurity may be a more immediate AI risk than science-fiction extinction scenarios. Berg argues that AI could allow enormous numbers of agents to probe vulnerable systems simultaneously, while also providing defenders with better tools.   Regulation could have unintended consequences. The discussion questions whether national AI regulation can work when models are developed globally, while John argues that regulation that entrenches a handful of dominant firms could itself increase systemic risks.Timestamps0:00 – AI and Australia’s productivity challenge4:06 – AI, demographics and economic growth5:50 – AI’s enormous energy and capital requirements11:29 – Will AI show up in the productivity statistics?18:24 – How AI is already transforming work21:13 – Could AI change the productivity trajectory?22:42 – Could AI kill us all?28:59 – AI agents and the cybersecurity threat35:11 – Can governments effectively regulate AI?40:00 – The AI risks worth worrying about43:30 – Could AI become a monopoly?Links relevant to the conversationFull ATA livestream - Albanese bets everything on AI || #52:https://www.youtube.com/live/Knec2ULWCfA?si=gw7fpzRJo7kk1Kvl Chris Berg’s Substack:https://chrisbergaus.substack.com/ Lumo Coffee promotion10% off Lumo Coffee’s Seriously Healthy Organic Coffee.Website: https://www.lumocoffee.com/10EXPLORED Promo code: 10EXPLORED  

When the award-winning Springfield café  Screamin’ Beans announced its closure, Gene Tunny saw it as a symptom of a bigger problem: wage and regulatory costs rising faster than many small businesses can absorb. In this episode, Gene looks at a landmark Australian Fair Work Commission decision that could reshape pay for gig economy delivery drivers, and shares a conversation with John Humphreys of the Australian Taxpayers’ Alliance on why the net benefit of a minimum wage rise to a worker is often very different from the gross headline number. Drawing on Thomas Sowell's concept of the "zero-sum fallacy" and a recent dispute at BHP's Port Hedland, Gene makes the case for weighing the trade-offs of labour market regulation rather than assuming good intentions guarantee good outcomes. Gene would love to hear your thoughts on this episode. You can email him via [email protected].  What You’ll Learn from This Episode Why economists argue that higher minimum wages involve important trade-offs. How new Fair Work Commission decisions could affect gig economy workers, consumers and businesses. What economists mean by the "zero-sum fallacy." Why workplace regulation can sometimes reduce employment opportunities despite good intentions. Timestamps Closing of Screaming Beans Café  (0:06) Impact of Wage Increases on Businesses (2:58) Fair Work Commission Decision on Gig Economy (4:53) Discussion with John Humphreys on Minimum Wage Increases (10:01) Economic Theory and Regulation of the Gig Economy (17:34) Conclusion and Call to Action (24:39) Links relevant to the conversation Australian Taxpayers’ Alliance livestream, Thursday 9 July, “Greens set to keep balance of power || #49”: https://www.youtube.com/live/_snxV9CzvRk?si=DXVtaaXhu3cqL8O7 Gene Tunny's CIS paper: Closing Opportunities, Not Closing Loopholes: https://www.cis.org.au/publication/closing-opportunities-not-loopholes/ Thomas Sowell’s Economic Facts and Fallacies: https://www.hachettebookgroup.com/titles/thomas-sowell/economic-facts-and-fallacies/9780465022038/?lens=basic-books   CIS’s Michael Stutchbury: “We’re punching ourselves in the face”: https://www.cis.org.au/commentary/opinion/were-punching-ourselves-in-the-face/ Lumo Coffee promotion 10% of Lumo Coffee’s Seriously Healthy Organic Coffee. Website: https://www.lumocoffee.com/10EXPLORED Promo code: 10EXPLORED 

Most tax debates focus on the what: rates, base, and who pays. This episode is about the how: the process by which economic policy gets made. Drawing on his time in the Australian Treasury, host Gene Tunny argues that the latest changes to capital gains tax and negative gearing reflect a breakdown in good policymaking. They were announced on budget night without the consultation, published modelling, or public mandate that major reform deserves. As a contrast, Gene revisits the Howard government's GST process of the late 1990s: a detailed white paper, published modelling, and a policy taken to an election for a fresh mandate. With clips from a recent Death and Taxes livestream featuring co-host John Humphreys and guest Derek Francis, the episode asks a question that reaches well beyond Australia: what does good policy process look like, and what does it cost us when governments skip it? Gene would love to hear your thoughts on this episode. You can email him via [email protected].  What You’ll Learn from This Episode Why good policy process is critical for successful economic reform. How the GST was developed through extensive modelling, consultation and public scrutiny. Why inadequate consultation can lead to unintended consequences. The role Treasury plays in providing economic advice to government. How poor policy design can affect investment, productivity and public trust. Timestamps Economic Policy Episode Introduction (0:06) Relevance of Policy Process to Other Countries (4:53) The Howard Government's GST Policy Process (8:11) Current Government's Policy Changes and Issues (13:10) Derek Francis' Criticism of Treasury (22:12) Treasury's Handling of Cigarette Excise Tax (23:17) Derek Francis' Theory on Treasury's Decline (26:49) Home Guarantee Scheme Modelling Issues (37:49) Conclusion and Call for Improvement (41:33) Links relevant to the conversation Australian Taxpayers’ Alliance livestream, Thursday 25 June, “Labor's new tax disaster, with Derek Francis || #47”: https://www.youtube.com/live/vqz_hEVyg70?si=F8DS2GxdUz_-PkmJ Previous episode on capital gains tax, “Taxing Capital More in a Productivity Slump? Perverse Policy in Australia”: https://economics-explained.simplecast.com/episodes/taxing-capital-more-in-a-productivity-slump-perverse-policy-in-australia Howard Government White Paper on “A New Tax System”: https://treasury.gov.au/sites/default/files/2019-03/Whitepaper.pdf Lumo Coffee promotion 10% of Lumo Coffee’s Seriously Healthy Organic Coffee. Website: https://www.lumocoffee.com/10EXPLORED Promo code: 10EXPLORED 

Housing affordability, congestion and rising living costs are putting pressure on Australia's major cities. Could stronger regional development provide part of the solution? Gene Tunny shares highlights from a recent discussion with Nationals leader Senator Matt Canavan on his "Hyper Australia" agenda. They explore regional infrastructure, public investment, economic concentration, GST distribution and the case for decentralisation, while asking an important economic question: do regional development projects pass the cost-benefit test? Gene would love to hear your thoughts on this episode. You can email him via [email protected].  What You’ll Learn from This Episode Why Australia's economy is unusually concentrated in a small number of capital cities. The potential benefits and drawbacks of decentralising population and economic activity. How infrastructure projects such as irrigation dams are justified by proponents of regional development. Why regional Australians may face different cost-of-living pressures than residents of major cities. How reforms to federalism, public service locations and state boundaries could influence economic development. Timestamps 00:00 Introduction to Hyper Australia 03:00 Why Australia's economy is concentrated in capital cities 07:00 Regional cost-of-living pressures and data gaps 10:15 GST distribution and public transport subsidies 13:15 The economics of dams and regional infrastructure 18:25 Relocating public servants to regional Australia 22:00 New states and competitive federalism 27:50 Gene's assessment of the Hyper Australia proposal  Links relevant to the conversation Australian Taxpayers’ Alliance livestream, Thursday 18 June, “Future of the Nationals, with Matt Canavan || #46”: https://www.youtube.com/live/D0Xpho1mxsk?si=1IWFiDOKZpTIdjNy Senator Canavan’s website: https://mattcanavan.com.au/ Lumo Coffee promotion 10% of Lumo Coffee’s Seriously Healthy Organic Coffee. Website: https://www.lumocoffee.com/10EXPLORED Promo code: 10EXPLORED 

Australia has endured nearly a decade of weak productivity growth, and living standards are under pressure. In this episode, Gene Tunny and John Humphreys explore the common thread connecting several major economic debates: investment and incentives. They discuss Australia's productivity slump, the Federal Government’s proposed capital gains tax changes, Brisbane’s Olympics infrastructure plans, and the challenges facing the National Disability Insurance Scheme (NDIS). Along the way, they explain why economists place so much emphasis on incentives and what current policy settings could mean for Australia's future prosperity. Gene would love to hear your thoughts on this episode. You can email him via [email protected].  What You’ll Learn from This Episode Why productivity growth is the ultimate driver of long-run living standards. How savings, investment and innovation contribute to economic prosperity. The economic arguments for taxing capital gains differently from labour income. Whether Brisbane’s Olympic infrastructure spending is likely to address existing bottlenecks. Why economists place so much importance on incentives when designing public policy. Timestamps Introduction to episode on Capital Gains Tax policy change and Productivity Slump (0:00) Economic Performance and Productivity (4:55) Capital Gains Tax Proposals (14:24) Economic Theory and Capital Taxation (24:28) Olympics Infrastructure and Public Investment (29:37) National Disability Insurance Scheme (NDIS) (38:22) Investment and Incentives in Government Programs (44:12) Links relevant to the conversation Australian Taxpayers’ Alliance livestream, Thursday 11 June, “Tax blunders & shrinking economy || #45”: https://www.youtube.com/live/K1Fsnjeg3mM?si=jKrxraJJlT0DzLfd Richard Holden’s opinion piece “There is no economic case for taxing work and investment the same” (paywalled): https://www.afr.com/policy/economy/there-is-no-economic-case-for-taxing-work-and-investment-the-same-20260528-p601ke Lumo Coffee promotion 10% of Lumo Coffee’s Seriously Healthy Organic Coffee. Website: https://www.lumocoffee.com/10EXPLORED Promo code: 10EXPLORED 

Debt and deficits used to be political dealbreakers. So why don’t they seem to matter anymore? In this episode, Gene Tunny explores the concept of fiscal illusion with John Humphreys and Professor Sinclair Davidson. They examine whether Australia is “sleepwalking” into a more precarious fiscal position, and what could happen if a crisis hits. A thought-provoking discussion on debt, accountability, and economic literacy. Sinclair Davidson is Professor of Institutional Economics in the School of Economics, Finance and Marketing at RMIT University. John Humphreys is Chief Economist at the Australian Taxpayers’ Alliance.  Gene would love to hear your thoughts on this episode. You can email him via [email protected].  Takeaways Governments use various budget measures that can obscure the true fiscal position (“fiscal illusion”). Off-budget spending and government “investments” may not appear in key budget figures, even when they worsen debt. Growth in national debt may be the clearest indicator of underlying fiscal reality. Public attitudes toward debt and deficits have softened, reducing political pressure for fiscal discipline. Debt may not be an immediate crisis, but it represents a slow-burning risk that could become serious over time.  Timestamps Public Debt and Its Implications (0:00) Off-Budget Spending and Fiscal Risks (4:17) Complexities of Budget Reporting (6:29) State Debt and Federalism (12:17) NDIS and Government Spending (42:50) Economic Literacy and Public Perception (54:40) Alternative Solutions and Policy Reforms (56:46) Links relevant to the conversation Australian Taxpayers’ Alliance livestream, Thursday 23 April, “New Taxes and Rising Debt”: https://www.youtube.com/live/6sc7wU8vKpo?si=QG4tmu8ntyb6dspL Lumo Coffee promotion 10% of Lumo Coffee’s Seriously Healthy Organic Coffee. Website: https://www.lumocoffee.com/10EXPLORED Promo code: 10EXPLORED

Free trade has long been a cornerstone of economic thinking, but is it still fit for purpose in a more dangerous and uncertain world? Gene Tunny is joined by Dan Ryan and John Humphreys to debate tariffs, industrial policy, and economic resilience. They explore whether Australia has gone too far in opening its economy, the risks of fragile global supply chains, and the perceived trade-offs between efficiency and national security.  Dan Ryan is Executive Director of the National Conservative Institute of Australia, and John Humphreys is Chief Economist at the Australian Taxpayers’ Alliance.  Gene would love to hear your thoughts on this episode. You can email him via [email protected].  Takeaways Free trade generally boosts living standards but may also introduce vulnerabilities in a geopolitically unstable world. Tariffs can protect domestic industries, but they also raise prices and risk economic inefficiency. Supply chain resilience is emerging as a key policy concern, alongside cost efficiency. Deindustrialisation is driven not just by trade, but also by automation and energy costs. There may be a middle ground: limited, targeted trade restrictions for national security rather than broad protectionism. Timestamps 00:00 – Introduction: Free trade under pressure 02:45 – Why Australia lost refining capacity 03:40 – Supply chains and geopolitical risk 05:40 – What does “cheapest” really mean? 07:30 – Do tariffs encourage local production? 10:35 – Automation vs trade in deindustrialisation 13:05 – Energy costs and competitiveness 15:15 – Is reindustrialisation realistic? 18:15 – What tariffs would actually look like 20:30 – Dan’s case for a 10% tariff baseline 22:15 – Can tariffs replace income taxes? 25:10 – Historical tariffs in Australia 27:30 – Are tariffs just another tax? 28:25 – Would tariffs really bring jobs back? 30:50 – Technology vs trade: what matters more? 33:15 – Tariffs, revenue, and economic trade-offs 36:00 – Final reflections: trade vs national security Links relevant to the conversation Australian Taxpayers’ Alliance livestream, Thursday 16 April: https://www.youtube.com/live/fyukScFysDs?si=FwDjygolodDUQVRz Lumo Coffee promotion 10% of Lumo Coffee’s Seriously Healthy Organic Coffee. Website: https://www.lumocoffee.com/10EXPLORED Promo code: 10EXPLORED 

What happens when geopolitical tensions collide with domestic economic pressures? In this episode, Gene Tunny is joined by John Humphreys and Tom Switzer to unpack the economic fallout from escalating tensions with Iran. The conversation then turns to Australia’s housing affordability crisis—examining whether government policies, population growth, or supply constraints are to blame. Gene would love to hear your thoughts on this episode. You can email him via [email protected].  Takeaways Housing affordability remains a major challenge in many advanced economies, with strong demand outpacing limited supply. Policies like Australia's 5% deposit scheme can boost prices by increasing demand in an already constrained market. Both supply and demand matter—increasing construction and managing population growth are key levers. International examples (such as Canada) suggest that policy changes can influence housing outcomes. Timestamps Iran Nuclear Tensions and Market Reactions (0:00) Impact of the 5% Deposit Scheme on Housing Affordability (6:02) Supply and Demand Dynamics in Housing (7:51) Proposed Solutions and Policy Reforms (14:50) Long-term Factors Contributing to Housing Affordability (18:55) Final Thoughts and Call to Action (24:08) Links relevant to the conversation Australian Taxpayers’ Alliance livestream, Thursday 9 April: https://www.youtube.com/live/hoRKqJhBhUQ?si=_1uHKUG6zCO7vBP1 Tom Switzer’s show, Switzerland: https://www.youtube.com/@TomSwitzerMedia Lumo Coffee promotion 10% of Lumo Coffee’s Seriously Healthy Organic Coffee. Website: https://www.lumocoffee.com/10EXPLORED Promo code: 10EXPLORED