Ian W. McLean is currently a visiting research fellow in economics at the University of Adelaide, where he taught for many years. He is the coeditor of The Australian Economy in the Long Run.

"[T]he first major economic history of Australia for 40 years."--Ross Gittins, Sydney Morning Herald "[R]emarkable... Why Australia Prospered distills decades of research and teaching to present an account of Australia and its development that is solid, surprising and pertinent to the contemporary debate about the country's future... In his assembly of evidence and his judicious review of the debates of Australian development, McLean has made a profoundly important contribution to our understanding of where Australia has come from as a nation, where they country is now--and where it is going."--Australian Financial Review "In Why Australia Prospered, Ian McLean explores the fascinating mix of factors explaining this persistence of prosperity... [A] carefully researched book."--Times Higher Education Supplement "McLean provides a comprehensive account of the factors contributing to Australia's remarkable economic growth."--Choice "In this impressive book McLean demonstrates the contribution economic history can make to scholarship on the past and the politics of the present... [T]he work of a manifestly fine scholar with many important points to make and ideas that need to be heard far beyond university economics departments, or what's left of them."--Stephen Matchett, Australian "[A]n outstanding piece of scholarship... Ian McLean has written a timely and masterful account of the long sweep of Australia's economic history, which will be relished by anyone interested in the unique circumstances of this country's remarkable economic development. Written for the non-specialist, the narrative is accessible, brisk and appropriately, if sparsely, illustrated with charts and tables."--Ian Harper, EH.Net "[T]his is a superb book. Anyone with even a superficial interest in Australian economic history should read it, and be educated by it."--Tim Hatton, Australian Economic History Review "McLean has an admirable ability to sum up complex issues using simple, often elegant sentences. He is a highly skilled tradesperson who uses economists' tools, but this does not compromise the readability of his text. Why Australia Prospered deserves a wide audience. It would be a suitable text for undergraduate use, while giving postgraduate students and established scholars plenty to think about."--Lionel Frost, Australian Historical Studies "Why Australia Prospered is both expansively ambitious and narrowly precise... McLean is a meticulous analyst and a calm judge, comfortable with unorthodoxy and big turning points if that is where the evidence leads."--Jock Given, Inside Story "McLean's telling of Australian economic history is not only fascinating, it is also fresh... [It is] a book that better integrates Australia's story into mainstream economic history than any before it."--Andrew Leigh, Journal of Economic Literature "It is engagingly written... Most important of all is McLean's impressive use of the comparative approach... While the book's focus is on natural resources and institutions, the author provides stimulating interpretations of many phases of economic history."--Simon Ville, American Historical Review "Why Australia Prospered is a rewarding read. The book is targeted at a broad audience, and to this end, MacLean interweaves historical narrative with analysis. Its chronological presentation allows some refreshing perspectives on events, and theoretical and policy debates, all of which are informed by the deep scholarship that the author demonstrates... [T]his is an excellent and enjoyable book that reminds us of the importance of historical context."--Shauna Phillips, Australian Journal of Agricultural and Resource "With this new book, McLean provides a missing exposition that could help re-energise such studies. It is a coherent, well-written, well-reasoned and accessible survey of Australian economic evolution. It benefits from the integration that comes from being penned by a single mind."--Glenn Withers, Economic Record "Australian economic history is undergoing something of a minor revival ... and this book is a welcome addition to the literature on the history of Australia in the global economy, stressing as it does both continuity and change."--David Meredith, English Historical Review

• List of Figures ix List of Tables xi Preface and Acknowledgments xiii Map xvi Chapter 1 Introduction: Weaving Analysis and Narrative 1 Chapter 2 What Is to Be Explained, and How 11 * Comparative Levels of GDP Per Capita 11 * Booms, Busts, and Stagnation in Domestic Prosperity 15 * Other Indicators of Economic Prosperity 19 * From Evidence to Analysis 25 * Extensive Growth and Factor Accumulation 27 * Growth Theory and Australian Economic Historiography 29 * Recent Themes in Growth Economics 32 Chapter 3 Origins: An Economy Built from Scratch? 37 * The Pre-1788 Economy of the Aborigines 38 * The Aboriginal Contribution to the Post-1788 Economy 42 * The Convict Economy and Its Peculiar Labor Market 44 * Further Features of the Economy Relevant to Later Prosperity 50 * British Subsidies and Australian Living Standards 53 Chapter 4 Squatting, Colonial Autocracy, and Imperial Policies 57 * Why the Wool Industry Was So Efficient 58 * Evolution of Political Institutions: From Autocracy to Responsible Government 63 * The Labor Market: Ending Transportation, Preventing Coolie Immigration 67 * Thwarting the Squatters: Land Policies to 1847 69 * Other Determinants of Early Colonial Prosperity 73 * The Argentine Road Not Taken 76 Chapter 5 Becoming Very Rich 80 * The Economic Effects of Gold: Avoiding the Resource Curse 84 * Sustaining Economic Prosperity Following the Rushes 90 * Consolidating Democracy and Resolving the Squatter- Selector Conflict 96 * Openness and Growth 100 * Rural Productivity and Its Sources 108 Chapter 6 Depression, Drought, and Federation 113 * Explaining Relative Incomes 113 * Eating the Seed Corn? 116 * Boom, Bubble, and Bust: A Classic Debt Crisis 119 * Why Was Recovery So Slow? Comparison with Other Settler Economies 125 * Tropics, Crops, and Melanesians: Another Road Not Taken 132 * Economic Effects of Federation 135 * Accounting for the Loss of the "Top Spot" in Income Per Capita 139 Chapter 7 A Succession of Negative Shocks 144 * Why Was the Economic Impact of World War I So Severe? 147 * Why No Return to Normalcy? 148 * Pursuing Rural Development--A Field of Dreams? 154 * Growth in Other Settler Economies 157 * Debt Crisis, Then Depression-- Policy Responses and Constraints 160 * Imperial Economic Links-- Declining Net Benefi ts 165 * Could the Post-1960 Mineral Boom Have Occurred Earlier? 170 * The Debate over Stagnant Living Standards 173 Chapter 8 The Pacific War and the Second Golden Age 176 * Why the Pacific War Fostered Domestic Growth 177 * The Golden Age Was Not Uniquely Australian 183 * Export Growth, Factor Inflows, and the Korean War Wool Boom 186 * Macroeconomic Theory and Policies--What Role? 191 * Location Advantage: Asian Industrialization and Changing Trade Partners 193 * High Tide for Australian Industrialization 196 * Underinvestment in Human Capital? 199 * The Debate over Postwar Growth Performance 205 Chapter 9 Shocks, Policy Shift s, and Another Long Boom 210 * Why Did the Postwar Economic Boom End? 212 * The Reemergence of a Booming Mining Sector 215 * Macroeconomic Management in the 1970s 217 * Economic Policy Shift s in the 1980s 219 * Reevaluations 224 * The Quarry Economy: The Return of Resources-Based Prosperity 228 * The Contribution of Economic Reforms to Productivity 235 * Sustaining Prosperity through Boom and Bubble--A Historical Perspective 241 Chapter 10 The Shifting Bases of Prosperity 246 Appendix Note on Statistics and Sources 257 References 259 Index 277

Ian W. McLean is currently a visiting research fellow in economics at the University of Adelaide, where he taught for many years. He is the coeditor of The Australian Economy in the Long Run.

"[T]he first major economic history of Australia for 40 years."--Ross Gittins, Sydney Morning Herald "[R]emarkable... Why Australia Prospered distills decades of research and teaching to present an account of Australia and its development that is solid, surprising and pertinent to the contemporary debate about the country's future... In his assembly of evidence and his judicious review of the debates of Australian development, McLean has made a profoundly important contribution to our understanding of where Australia has come from as a nation, where they country is now--and where it is going."--Australian Financial Review "In Why Australia Prospered, Ian McLean explores the fascinating mix of factors explaining this persistence of prosperity... [A] carefully researched book."--Times Higher Education Supplement "McLean provides a comprehensive account of the factors contributing to Australia's remarkable economic growth."--Choice "In this impressive book McLean demonstrates the contribution economic history can make to scholarship on the past and the politics of the present... [T]he work of a manifestly fine scholar with many important points to make and ideas that need to be heard far beyond university economics departments, or what's left of them."--Stephen Matchett, Australian "[A]n outstanding piece of scholarship... Ian McLean has written a timely and masterful account of the long sweep of Australia's economic history, which will be relished by anyone interested in the unique circumstances of this country's remarkable economic development. Written for the non-specialist, the narrative is accessible, brisk and appropriately, if sparsely, illustrated with charts and tables."--Ian Harper, EH.Net "[T]his is a superb book. Anyone with even a superficial interest in Australian economic history should read it, and be educated by it."--Tim Hatton, Australian Economic History Review "McLean has an admirable ability to sum up complex issues using simple, often elegant sentences. He is a highly skilled tradesperson who uses economists' tools, but this does not compromise the readability of his text. Why Australia Prospered deserves a wide audience. It would be a suitable text for undergraduate use, while giving postgraduate students and established scholars plenty to think about."--Lionel Frost, Australian Historical Studies "Why Australia Prospered is both expansively ambitious and narrowly precise... McLean is a meticulous analyst and a calm judge, comfortable with unorthodoxy and big turning points if that is where the evidence leads."--Jock Given, Inside Story "McLean's telling of Australian economic history is not only fascinating, it is also fresh... [It is] a book that better integrates Australia's story into mainstream economic history than any before it."--Andrew Leigh, Journal of Economic Literature "It is engagingly written... Most important of all is McLean's impressive use of the comparative approach... While the book's focus is on natural resources and institutions, the author provides stimulating interpretations of many phases of economic history."--Simon Ville, American Historical Review "Why Australia Prospered is a rewarding read. The book is targeted at a broad audience, and to this end, MacLean interweaves historical narrative with analysis. Its chronological presentation allows some refreshing perspectives on events, and theoretical and policy debates, all of which are informed by the deep scholarship that the author demonstrates... [T]his is an excellent and enjoyable book that reminds us of the importance of historical context."--Shauna Phillips, Australian Journal of Agricultural and Resource "With this new book, McLean provides a missing exposition that could help re-energise such studies. It is a coherent, well-written, well-reasoned and accessible survey of Australian economic evolution. It benefits from the integration that comes from being penned by a single mind."--Glenn Withers, Economic Record "Australian economic history is undergoing something of a minor revival ... and this book is a welcome addition to the literature on the history of Australia in the global economy, stressing as it does both continuity and change."--David Meredith, English Historical Review

• List of Figures ix List of Tables xi Preface and Acknowledgments xiii Map xvi Chapter 1 Introduction: Weaving Analysis and Narrative 1 Chapter 2 What Is to Be Explained, and How 11 * Comparative Levels of GDP Per Capita 11 * Booms, Busts, and Stagnation in Domestic Prosperity 15 * Other Indicators of Economic Prosperity 19 * From Evidence to Analysis 25 * Extensive Growth and Factor Accumulation 27 * Growth Theory and Australian Economic Historiography 29 * Recent Themes in Growth Economics 32 Chapter 3 Origins: An Economy Built from Scratch? 37 * The Pre-1788 Economy of the Aborigines 38 * The Aboriginal Contribution to the Post-1788 Economy 42 * The Convict Economy and Its Peculiar Labor Market 44 * Further Features of the Economy Relevant to Later Prosperity 50 * British Subsidies and Australian Living Standards 53 Chapter 4 Squatting, Colonial Autocracy, and Imperial Policies 57 * Why the Wool Industry Was So Efficient 58 * Evolution of Political Institutions: From Autocracy to Responsible Government 63 * The Labor Market: Ending Transportation, Preventing Coolie Immigration 67 * Thwarting the Squatters: Land Policies to 1847 69 * Other Determinants of Early Colonial Prosperity 73 * The Argentine Road Not Taken 76 Chapter 5 Becoming Very Rich 80 * The Economic Effects of Gold: Avoiding the Resource Curse 84 * Sustaining Economic Prosperity Following the Rushes 90 * Consolidating Democracy and Resolving the Squatter- Selector Conflict 96 * Openness and Growth 100 * Rural Productivity and Its Sources 108 Chapter 6 Depression, Drought, and Federation 113 * Explaining Relative Incomes 113 * Eating the Seed Corn? 116 * Boom, Bubble, and Bust: A Classic Debt Crisis 119 * Why Was Recovery So Slow? Comparison with Other Settler Economies 125 * Tropics, Crops, and Melanesians: Another Road Not Taken 132 * Economic Effects of Federation 135 * Accounting for the Loss of the "Top Spot" in Income Per Capita 139 Chapter 7 A Succession of Negative Shocks 144 * Why Was the Economic Impact of World War I So Severe? 147 * Why No Return to Normalcy? 148 * Pursuing Rural Development--A Field of Dreams? 154 * Growth in Other Settler Economies 157 * Debt Crisis, Then Depression-- Policy Responses and Constraints 160 * Imperial Economic Links-- Declining Net Benefi ts 165 * Could the Post-1960 Mineral Boom Have Occurred Earlier? 170 * The Debate over Stagnant Living Standards 173 Chapter 8 The Pacific War and the Second Golden Age 176 * Why the Pacific War Fostered Domestic Growth 177 * The Golden Age Was Not Uniquely Australian 183 * Export Growth, Factor Inflows, and the Korean War Wool Boom 186 * Macroeconomic Theory and Policies--What Role? 191 * Location Advantage: Asian Industrialization and Changing Trade Partners 193 * High Tide for Australian Industrialization 196 * Underinvestment in Human Capital? 199 * The Debate over Postwar Growth Performance 205 Chapter 9 Shocks, Policy Shift s, and Another Long Boom 210 * Why Did the Postwar Economic Boom End? 212 * The Reemergence of a Booming Mining Sector 215 * Macroeconomic Management in the 1970s 217 * Economic Policy Shift s in the 1980s 219 * Reevaluations 224 * The Quarry Economy: The Return of Resources-Based Prosperity 228 * The Contribution of Economic Reforms to Productivity 235 * Sustaining Prosperity through Boom and Bubble--A Historical Perspective 241 Chapter 10 The Shifting Bases of Prosperity 246 Appendix Note on Statistics and Sources 257 References 259 Index 277

Ian W. McLean is currently a visiting research fellow in economics at the University of Adelaide, where he taught for many years. He is the coeditor of The Australian Economy in the Long Run.

"[T]he first major economic history of Australia for 40 years."--Ross Gittins, Sydney Morning Herald "[R]emarkable... Why Australia Prospered distills decades of research and teaching to present an account of Australia and its development that is solid, surprising and pertinent to the contemporary debate about the country's future... In his assembly of evidence and his judicious review of the debates of Australian development, McLean has made a profoundly important contribution to our understanding of where Australia has come from as a nation, where they country is now--and where it is going."--Australian Financial Review "In Why Australia Prospered, Ian McLean explores the fascinating mix of factors explaining this persistence of prosperity... [A] carefully researched book."--Times Higher Education Supplement "McLean provides a comprehensive account of the factors contributing to Australia's remarkable economic growth."--Choice "In this impressive book McLean demonstrates the contribution economic history can make to scholarship on the past and the politics of the present... [T]he work of a manifestly fine scholar with many important points to make and ideas that need to be heard far beyond university economics departments, or what's left of them."--Stephen Matchett, Australian "[A]n outstanding piece of scholarship... Ian McLean has written a timely and masterful account of the long sweep of Australia's economic history, which will be relished by anyone interested in the unique circumstances of this country's remarkable economic development. Written for the non-specialist, the narrative is accessible, brisk and appropriately, if sparsely, illustrated with charts and tables."--Ian Harper, EH.Net "[T]his is a superb book. Anyone with even a superficial interest in Australian economic history should read it, and be educated by it."--Tim Hatton, Australian Economic History Review "McLean has an admirable ability to sum up complex issues using simple, often elegant sentences. He is a highly skilled tradesperson who uses economists' tools, but this does not compromise the readability of his text. Why Australia Prospered deserves a wide audience. It would be a suitable text for undergraduate use, while giving postgraduate students and established scholars plenty to think about."--Lionel Frost, Australian Historical Studies "Why Australia Prospered is both expansively ambitious and narrowly precise... McLean is a meticulous analyst and a calm judge, comfortable with unorthodoxy and big turning points if that is where the evidence leads."--Jock Given, Inside Story "McLean's telling of Australian economic history is not only fascinating, it is also fresh... [It is] a book that better integrates Australia's story into mainstream economic history than any before it."--Andrew Leigh, Journal of Economic Literature "It is engagingly written... Most important of all is McLean's impressive use of the comparative approach... While the book's focus is on natural resources and institutions, the author provides stimulating interpretations of many phases of economic history."--Simon Ville, American Historical Review "Why Australia Prospered is a rewarding read. The book is targeted at a broad audience, and to this end, MacLean interweaves historical narrative with analysis. Its chronological presentation allows some refreshing perspectives on events, and theoretical and policy debates, all of which are informed by the deep scholarship that the author demonstrates... [T]his is an excellent and enjoyable book that reminds us of the importance of historical context."--Shauna Phillips, Australian Journal of Agricultural and Resource "With this new book, McLean provides a missing exposition that could help re-energise such studies. It is a coherent, well-written, well-reasoned and accessible survey of Australian economic evolution. It benefits from the integration that comes from being penned by a single mind."--Glenn Withers, Economic Record "Australian economic history is undergoing something of a minor revival ... and this book is a welcome addition to the literature on the history of Australia in the global economy, stressing as it does both continuity and change."--David Meredith, English Historical Review

• List of Figures ix List of Tables xi Preface and Acknowledgments xiii Map xvi Chapter 1 Introduction: Weaving Analysis and Narrative 1 Chapter 2 What Is to Be Explained, and How 11 * Comparative Levels of GDP Per Capita 11 * Booms, Busts, and Stagnation in Domestic Prosperity 15 * Other Indicators of Economic Prosperity 19 * From Evidence to Analysis 25 * Extensive Growth and Factor Accumulation 27 * Growth Theory and Australian Economic Historiography 29 * Recent Themes in Growth Economics 32 Chapter 3 Origins: An Economy Built from Scratch? 37 * The Pre-1788 Economy of the Aborigines 38 * The Aboriginal Contribution to the Post-1788 Economy 42 * The Convict Economy and Its Peculiar Labor Market 44 * Further Features of the Economy Relevant to Later Prosperity 50 * British Subsidies and Australian Living Standards 53 Chapter 4 Squatting, Colonial Autocracy, and Imperial Policies 57 * Why the Wool Industry Was So Efficient 58 * Evolution of Political Institutions: From Autocracy to Responsible Government 63 * The Labor Market: Ending Transportation, Preventing Coolie Immigration 67 * Thwarting the Squatters: Land Policies to 1847 69 * Other Determinants of Early Colonial Prosperity 73 * The Argentine Road Not Taken 76 Chapter 5 Becoming Very Rich 80 * The Economic Effects of Gold: Avoiding the Resource Curse 84 * Sustaining Economic Prosperity Following the Rushes 90 * Consolidating Democracy and Resolving the Squatter- Selector Conflict 96 * Openness and Growth 100 * Rural Productivity and Its Sources 108 Chapter 6 Depression, Drought, and Federation 113 * Explaining Relative Incomes 113 * Eating the Seed Corn? 116 * Boom, Bubble, and Bust: A Classic Debt Crisis 119 * Why Was Recovery So Slow? Comparison with Other Settler Economies 125 * Tropics, Crops, and Melanesians: Another Road Not Taken 132 * Economic Effects of Federation 135 * Accounting for the Loss of the "Top Spot" in Income Per Capita 139 Chapter 7 A Succession of Negative Shocks 144 * Why Was the Economic Impact of World War I So Severe? 147 * Why No Return to Normalcy? 148 * Pursuing Rural Development--A Field of Dreams? 154 * Growth in Other Settler Economies 157 * Debt Crisis, Then Depression-- Policy Responses and Constraints 160 * Imperial Economic Links-- Declining Net Benefi ts 165 * Could the Post-1960 Mineral Boom Have Occurred Earlier? 170 * The Debate over Stagnant Living Standards 173 Chapter 8 The Pacific War and the Second Golden Age 176 * Why the Pacific War Fostered Domestic Growth 177 * The Golden Age Was Not Uniquely Australian 183 * Export Growth, Factor Inflows, and the Korean War Wool Boom 186 * Macroeconomic Theory and Policies--What Role? 191 * Location Advantage: Asian Industrialization and Changing Trade Partners 193 * High Tide for Australian Industrialization 196 * Underinvestment in Human Capital? 199 * The Debate over Postwar Growth Performance 205 Chapter 9 Shocks, Policy Shift s, and Another Long Boom 210 * Why Did the Postwar Economic Boom End? 212 * The Reemergence of a Booming Mining Sector 215 * Macroeconomic Management in the 1970s 217 * Economic Policy Shift s in the 1980s 219 * Reevaluations 224 * The Quarry Economy: The Return of Resources-Based Prosperity 228 * The Contribution of Economic Reforms to Productivity 235 * Sustaining Prosperity through Boom and Bubble--A Historical Perspective 241 Chapter 10 The Shifting Bases of Prosperity 246 Appendix Note on Statistics and Sources 257 References 259 Index 277