The Modern Magic Pudding (MMP)

Could there be a better prospect than magic pudding? Endless pudding for all.


There is no magic pudding.
Paul Keating

The global pandemic has demonstrated that there is a magic pudding in the form of endless government spending. Modern monetary theory holds that so long as a country can control its exchange rate and makes productive, positive investment, then all will benefit. Even mainstream economists are starting to come round to these views. There is a new Keynesianism abroad.

But anyone who has worked with generational welfare, anyone who knows the idle rich understands that endless magic pudding is bad for you. It locks human beings into a holding pattern. It creates a false sense of security and health. It is negative and destructive. It creates obesity and diabetes. It leaves you waiting in your house for someone to come and rescue you as the flood waters rise.

There has to be challenges in life for it to be interesting and rewarding. Healthy human development requires human beings to continually move out of their comfort zones. There have to be tough times.

This is not to say that life should be impossible,  no human being should unduly suffer be that in emergencies, in health, work or general life. The Australian “working mans and woman’s welfare state” was designed to catch people if they fell too hard in later life, through accident or injury or through depressions and pandemics. We created a state that as much as possible helps in times of crisis. But it also leaves lots of gaps for freedom and self-help and development. We recognised the shearer, the shiralee, the inventors and the workers who just wanted to live without judgement or regulation and to create their own humble abodes.

We can do better in combining the best of human motivation and ability and welfare. It is very important to understand the different effects of the American lack of mainstream welfare and the various European models including the UK’s general health and welfare system. The idea should be to combine the best of these models and to be continually refining them.

Social entrepreneurship had its moment of glory in the late 1990s and 2000s. But it was skewered at every point by people who knew better. (Cook, et. al)  The best critical arguments are made by those who create the best possible model for an adversary and then knock it down. In public, political and now even academic life, the tendency is to create a straw man and napalm him. This means that there is a kind of winner takes all mentality to public debate. In addition the idea of creating more social entrepreneurial activities around welfare payments was not helped when Mark Latham, who was an advocate, moved to the extreme, dark side of Australian politics joining Pauline Hansen and Clive Palmer and every other political malcontent needing attention.

There is still merit in understanding and developing cooperative social entrepreneurship. It has been a combination of collective and individual resilience that has made Australian agriculture strong. When government is not there in a catastrophe like Lismore then it is individuals that make the difference. There is too much of a tendency for Australians to expect government to wipe our bottoms.

Many people do not understand that the good qualities of the Australian Labor party came from the time it was decided to field labor parliamentary candidates. From this quite revolutionary moment, Labor has had to be politically pragmatic. The whole working man and woman’s welfare state came from weaving the arbitration system, government and labour workplace activism together in a unique blend. That is what makes Australia unique. It creates our strengths and our weaknesses. Parts of our Australian system, such as Medicare, are not comprehensive enough ie the lack of inclusion of dental care into the general umbrella of universal health provision and rights.

Labor activists who stood for civil rights and against ID cards would turn in their graves at the kind of politics that has emerged during the pandemic. To compel every citizen to be vaccinated goes too far the other way. Under no circumstances should the state ever substitute for an individual’s own right to decide for themselves what happens with their bodies or their general health. If this ever happens then all is lost because rational life and social well being is only as strong as the weakest human citizen. It is every person’s right to question and to find different solutions and pathways to things as fundamental as health and well being.

One of the undoubted reverberations in the coming Federal election will be the creation of a huge non-affiliated, disenchanted vote. We might call it the donkey vote because people will vote for donkeys like Palmer, Latham, Hansen and others simply because they rightly feel dudded by the political elites and that they have no rights.

Like it or not there is a public elite, and this includes the advocates of Modern Monetary Theory, who simply think that it is a matter of pulling the levers of the great social ship of state and everything will be all right.

Sorry. Politics and life does not work that way. Well if it does then we have a sort of state, cultural or ideological totalitarianism which in a political democracy will result in a collapse of the so-called sensible centre and the kind of discontented protests and ideologies and mistrust that give us Donald Trump, Palmer, Latham et al.

Every single citizen, and this is a lesson of Australian Aboriginal society as much as anywhere, should be free in mind, spirit, body. The state should be there to protect this fundamental right not erode it. Federal, State and local government in Australia is snuffing the life out of people.  There is too much decision making based on expertise, knowledge and privilege. Labor representatives like their Liberal counterparts are remote and too all knowing. The power to know what is best must always belong with individuals. The classical liberal principle that every person has the right to hold an opinion which must be respected is the only way human civilization can progress well.

This is not to say that collective constraints like gun laws or seat belts are a bad thing. The point is there is no homogenous strategy. Life is complicated. One of the things that we need our elected representatives and our public intellectuals to do is to reflect this complexity, to comment on it and to occupy the space between, for example, the comfortable world of peer reviewed journals and to call out the corporate sponsorship of research that is skewed to simply vindicate commercial interests. We need people in public office to make judgement calls and that are smart enough to say to public health officials this is not your call.

When the floods come as they have in Lismore and other places.. Australians do not sit around waiting for the SES or the army or the party leaders or politicians to come around..  they work together, they have to or they go under. It is a good thing not a bad thing. When you lose everything a government payment can certainly help and we need to significantly increase the size, flexibility and nature of public support for people in towns like Lismore.  But we also need to understand that if we are not just going to re-build again in a potential flood zone then there has to be social collective entrepreneurship, creativity and individuals and small businesses have to be given the power to create their own futures. Local government, State government and Federal government regulations need to be strong enough to provide protection and flexible enough to allow people to create new houses, new lives, and better ways of living. Emerging out of the ruins should lead to a better life.At the heart of it all has to be crazy people who get on their surf skis and tinnies and rescue those in danger. We need to allow, recognise and invest in individual resilience, creativity, entrepreneurship. Australia is too top heavy.



Beth Cook, Chris Dodds, William Mitchell, “Social Entrepreneurship – False Premises and Dangerous Forebodings”, Australian Journal of Social Issues Vol. 38 No. I February 2003. pp 57-73

Working Papers, 2022, 1