Where is the money to come from?

Last week I went to Parliament for the launch of a major study called the Economic Cost of Dementia in Australia. It was commissioned by Alzheimer’s Australia, and carried out by NATSEM, the social and economic modelling group at the University of Canberra. Their work is always accurate and thoughtful, and the presentation was excellent. Since I have a couple of roles with Alzheimer’s, and am also a carer, I had an immediate interest in what was being put forward to us.

I’ve read the report and have no major criticisms. I am always a bit suspicious of talk about ‘economic costs’, for example those with respect to traffic congestion. But so far as I could see, the authors had done their work well. They distinguish between direct and indirect costs. All health issues involve direct costs — doctors, specialists, hospital, pharmacy, ambulance and so on. The report sees direct cost in this case as ‘actual out-of-pocket cost, which excludes subsidies and support from government’. Indirect costs include loss of income both of those with the disease and of those who care for them. Two-thirds of the carers are women, aged 65 or more, and three quarters are either partners or children.

I’ve written about Alzheimer’s before (here, and for example, and here), and I won’t rehash any of that. The new report tells us that dementia is on the rise as longevity increases. Today, or at least early in 2017, the estimate for the total number (an estimate, because some people with dementia are not known to doctors or hospitals) is 413,105. Some 26,000 of them are defined as having ‘ early-onset dementia’, meaning that they have been visited by the disease before the age of 65. Some have been afflicted in their thirties. To the sufferers we add another 291,163 people who act as carers, about a quarter formally, as in nursing homes, three quarters ‘informally’ at home. I am one of the latter group. That’s about 700,000 people, getting on for three per cent of the nation’s population.

Dementia is a cruel disease. There is no cure. The best you can hope for is postponement. I have come to know just how diabolical ‘short-term memory loss’ can be. People will tell you, ‘Oh, but I have that a lot’. But they don’t. They’ve forgotten something, a name, a date, a factoid of some kind. But they will retrieve it fairly quickly. For people living with dementia that name, factoid or date is gone. Think how we depend on high-technology machines. If you are saddled with short-term memory loss or ‘mild cognitive impairment’ you will not be able to use the new smart phone, because you will never be able to master it. No matter how many times you are shown what to do, the demonstration will escape your memory quickly. You want to get some money from the ATM? A person living with dementia will have forgotten the PIN number. They will know the familiar walks around the suburb, but put them in an unfamiliar street, even one close to home, and they will be lost, and helpless. Yet they know where home is, or they think they do. My father, here on a visit, wandered off, sure he knew where he was going. He did know, perfectly well, but he was remembering the Canberra of 1929, a couple of kilometres from where we lived. I guessed, and found him near where he had courted my mother.

Long-term memories are pretty safe, as with Dad. People with dementia can recall many, quite detailed, memories of their childhood and young adulthood, because the memories have been rehearsed so much over the years. But what we did yesterday, in any detail, will pass away from the mind. What we did two days ago is gone, unless it is brought back for discussion, and even then much of it will have disappeared. The person being cared for is still the same person, struggling with a chaotic mental fog that affects communication. A sentence will start, falter and stop. They feel guilty, angry, helpless, despondent, fearful that their friends will avoid them. At one point they will tell no one what is the matter. At another time they can hardly stop telling people. Most friends and near family know something is the matter before there is any diagnosis. A proper diagnosis may take a year or more, and it can be a terrible blow.

For the carer, there is a lot to learn, about the disease and its various manifestations. It is essential to have a new peer group of people like yourself, and Alzheimer’s Australia provides that through a program called Learning to Live with Memory Loss, which is a boon to both the carer and the person being cared for. I have an old friend whose wife has gone through the disease and is now in care. He has been a great help to me. Being a carer is not a 24/7 occupation, but if you become one you will need to be ready 24/7 for the next discovery of the way the disease works, ready to develop a mechanism for dealing with it, and ready to put it into practice. You will learn to have a quick smile, to love with all your heart, and to wash away the felt guilt and unhappiness of the person you are caring for with all your resources. He or she has done nothing wrong. Rather, they have been given a great load to carry, and they often despair.

I’ve gone into some detail here because those outside the dementia world have little idea of what it is like, every day, to be in such a relationship. NATSEM’s report puts the annual costs of dementia at $14.67 billion, and predicts a rise to $36.85 billion in forty years’ time. The annual costs today represent a bit less than the amount the Commonwealth pays the States and Territories to run all the hospitals and related services. And if we could reduce the incidence of dementia, through better health education, earlier diagnosis, and encouraging people to lead healthier lifestyles, we might reduce those costs, and postpone the evil hour. And we should.

For in fact all the known lifestyle hazards will lead to a greater risk of encountering dementia in later life. Being overweight or obese in mid-life, being a drinker or a smoker, being someone who has little social interaction, having a sedentary lifestyle — all these factors point to dementia as well as all to the other illnesses that these habits generate.

What is needed is some kind of national approach to dealing with dementia. There is one. It is called The National Framework for Action on Dementia 2015-2019, and it was signed in 2015 by all Australian Governments. Where is it to fit with all the other health priorities? I shake my head at the problems facing the Federal Government. There is a body called  The Parliamentary Friends of Dementia, which has co-convenors drawn from the Coalition and the Labor Parties. Both spoke at the launch ably and with passion. Each recognises how difficult it all is. Every day there are  new appeals, claims and demands for more money for a new health issue.

And last week we saw just how difficult it is for the parties to agree on anything. The Government has to get the budget into balance in the foreseeable future. Almost two thirds of the Federal Budget goes on health, education and social welfare. The notion that all the needs can be met from the fat cats in Defence by getting rid of the toys for boys is just ludicrous. Defence is a small part of the national budget. The parties agreed that cuts had to be made, but not those proposed by the Government. So the bill failed. No one seems prepared to consider cuts for any program. I hope that some of the younger MPs and Senators are noting that if you want to reduce public spending, it’s better not to have started some programs at all.

Alzheimer’s is a national problem. My family has been good at looking after its own without seeking assistance, and since my grandfathers were a miner and and railways blacksmith, that was done on small incomes indeed. I do not seek help, either financially or in any other way, and we are not in any significant way part of the ‘cost’ the report draws attention to. But there are a lot out there who have no strong family network, and no other support. They are the ones who need help. I hope that somewhere, sometime soon, there will be recognition of the sheer scale of the problem of dementia. Paradoxically, the longer we live the more likely we are to succumb to it.


Join the discussion 88 Comments

  • margaret says:

    I had planned to be a reader only, however I like the information and honesty of this piece – it’s also close to home.

  • Neville says:

    I have lost two good friends recently, both in their late eighties and both exceptional men during their lifetimes. Both were high achievers and both were very fit and lived a very healthy lifestyle.
    The onset of their dementia and their deaths occurred over a very short period of about ten years. I had weekly contact with these men and didn’t notice any change until about ten years before they died. I don’t know if this ten year period is unusual but their wives were carers and are devastated with the loss of their husbands. Over this time both husbands stayed at home, except for a short interval in hospital before they died.
    Both eventually suffered falls and this was the reason for their final hospital visit. One man was the longest serving JP plus the longest serving president of our hospital and the other was also a JP and our longest serving councillor. They were both well read and a joy to meet and have a chin wag with and I really miss them.

  • BB says:

    Fortunately no one in my family has suffered this. That is my parents my wife’s parents, grandparents and even great-grandparents that I know of. They did live to a ripe old age for instance my grandmother lived to nearly 100. This is not to say I do not have a feeling for the problem. Seems to me on a personal it is their family who bear the brunt of it. There are many who care for those family who cannot look after themselves but in the case of dementia it is especially tragic. Caring for someone who no longer is self-aware must be very very hard.

    I know of some one who is wife was affected by Alzheimer’s I do not quite know their age that he appears to be in 60s she looks very old and seem to get older every time I saw her. The deterioration has been very rapid and now she needs 24/7 care. Centrelink is now refusing to pay the fees. This is causing him a great deal of angst since he is a retiree and it is far more than he thinks he can provide. He is not a close friend but I do understand I think what he is going through.

  • Aert Driessen says:

    A heart-rending story Don and I feel for you. I have minor caring duties (restricted to domestic duties) but nothing like you describe and none to do with safety. I’m 80 next year and so far so good. What concerns me personally is effectiveness (if that’s the right word) of the Captain Oates solution and, further down the legislative road, voluntary euthanasia — with the emphasis on voluntary and nor necessarily interventionist (like voluntary withdrawals from medications and sustenance. Just two thoughts at this stage. As for finance, my suggestion is stop all funding on climate change topics, provide the economy with the lowest cost and hitherto proven power (fossil fuels), grow the economy, and grow tax revenue.

    • Chris Warren says:

      Aert Driessen

      “… my suggestion is stop all funding on climate change topics, provide the economy with the lowest cost and hitherto proven power (fossil fuels).” This is rather radical.

      Why do anti-science fanatics continually inject their pet theories into every thread.

      Humanity would be better off in the long run if we do the opposite. Given the controversy the current funding is about right.

      As the rate of atmospheric CO2 increase in ppm is itself increasing, and as stratospheric water vapour is also increasing (a product of combustion of hydrocarbons), increased utilisation of fossil fuels will only make global warming worse.

      Public health issues will then increase.

      • bryan roberts says:

        I suggest that the two are only related in the sense that the climate alarmists are demented.

        I too, lost my mother to senile dementia, increasingly vague for the fifteen years before she died, in her mid nineties. The body way outlasted the brain.

        I recognise Don’s point, but the ever-present issue is – who pays? We all approve of initiatives like the NDIS, but we all take one step back when asked to pay for it.

        Why not an inheritance tax, to contribute towards the costs of providing for that affluent generation? After all, they made the money. Gen X, Y and Z can get their cut, but the Government should get its cut, too.

        • Don Aitkin says:

          Having just discovered that the superannuation changes the Government has put through involved my paying several thousand more in income tax, I feel that I am doing my bit!

          • David King says:

            Unless you have some scientific expertise in an area, you should be careful about making rash statements without expertise regarding “climate alarmism.” I found your comment about dementia deeply personally insulting also, you have merely demonstrated ignorance alongside insensitivity. I suggest to you go and talk to people with real knowledge/expertise in both fields before making such comments.

          • Don Aitkin says:

            David, which comment or comments are you addressing here?

      • Ross Handsaker says:

        “..and as stratospheric water vapour is also increasing (a product of combustion of hydrocarbons)”
        According to National Geoscience 7 article, published on-line 31 August 2014 – Vertical Structure of Stratosphere Water Vapour Trends Derived from Merged Satellite Data – it is only in the upper stratosphere that data shows positive long-term trends. Lower and mid-stratospheric long term trends are negative.
        Chris, you will need to explain how the combustion of hydrocarbons has caused a rise in water vapour levels in the upper stratosphere but had the opposite effect in the lower and mid-stratosphere.

        • Chris Warren says:

          Chris, you will need to explain how the combustion of hydrocarbons has caused a rise in water vapour levels in the upper stratosphere but had the opposite effect in the lower and mid-stratosphere.


          • AM1202 says:

            Chris, did you read to first line in this topic. Please take you Climate Change post to the correct/ other blog. Jesus wept !

        • AM1202 says:

          Ross, this has got nothing to do with this topic.

          • Chris Warren says:


            Your comment was ill informed out of place and out of time.

            I have already pointed out the zealotry of those who inject climate stuff starting with Aert Driessen and followed by Ross Handsaker.

            I note your perfect silence ion each case.

          • dlb says:

            AM1202 just cautioned Ross H about being off topic in the comment you are replying to.

          • AM1202 says:

            Chris, did you do logic somewhere in your education ? When I was learning mathematics at uni, we ventured into the area of true and false statements. The lecturer looked up at the sea of fresh young faces in the lecture theatre and said “There is one light in this lecture theatre” True or false ?

            Most of the faces guffawed and responded with False. The lecturer said it was True. Why ? because he did not use the modifier ONLY.

            “Let me count the lights” he said. “There are 23. Yet I can say “There is one light in this theatre”, and I can also say “There are two lights in this theatre”, and I can keep saying that right up to 23 lights, and each statement would be TRUE.”

            So using the powers of logic, where in my berating of off topic posters did I use the modifier ONLY or somehow exclude other OFF TOPICERS ?

            Perhaps you need to read LOGIC FOR DUMMIES.

  • Nicole says:

    An outstanding, enlightening commentary. I have passed it along – Nicole Fisher

  • Chris Warren says:

    If you consider this in more general terms. ie funding welfare state capitalism, then an answer emerges rather easily.

    Either reallocate existing public revenues or obtain additional public revenues.

    If you base yourself on pure capitalism then some will have all the money they need (so there is no issue) but most will just have to suffer and accept early graves.

    • Don Aitkin says:

      Who is basing themselves on ‘pure capitalism’? No country in the world does. Australia has a mixed economy, a rather highly regulated capitalism. If we reallocate existing public revenue we move money around inside the welfare system, which no one will do. Yes, we can tax more, with the awkward realisation that the extra tax will go to other areas, new demands for public expenditure. I said it was difficult.

  • Chris Warren says:


    There are undercurrents calling for raw capitalism within rightwing factions of Western political parties.

    Example: “the underlying message for Britons is relentless: raw capitalism is the only game in town, and you need to start working much harder.”

    Source: https://www.theguardian.com/politics/2012/aug/22/britannia-unchained-rise-of-new-tory-right

    Also philosophy such as; Ayn Rand.

    • margaret says:

      Not to detract from the economic cost of dementia there are many other health problems that beset people as they get older and Ken Loach’s film, I, Daniel Blake illustrates tragic consequences in a broken Britain.
      We seem to be returning to a Dickensian world and adding to the blight of hardship and sickness (exacerbated by horrible ‘online only’ bureaucratic processes and bungling) an Orwellian future.
      I wonder if those who believe fervently in a ‘user pays’ health system and the cutting of welfare, were only brave enough to see I, Daniel Blake, would they espouse the same beliefs after viewing?
      Or, would they see the film as a manipulative tearjerker and nothing more? The reviewer actually seems to conclude that it’s more than that. The audience I sat with was overwhelmingly a 55+ one but the parallel story of a young single mother with two children was as affecting.
      It’s kind of off topic but also not, because we all feel most involved with the particular health ‘curve balls’ that hit us personally, instance, a loved one’s quad heart bypass 2 years ago.

      • PeterD says:

        Hi Margaret,

        You wrote: “Daniel Blake illustrates tragic consequences in a broken Britain”.

        This is a very fair conclusion based on the film. What I also recall from the film were the terrible practical consequences arising from the fact that this worked-hard-all-his-life man had no computer skills yet the system required this of him. I also liked this man because of the way he challenged the system in the office and the way he cared for the woman and her children. He was a man with heart but also intemperate and hot-headed. The Centrelink system in Australia with its recent controversy activated a debt-recovery+ interest cycle as soon as discrepancies between reported details and ATO data were identified – no questions asked [not so now]. Hard-hearted assumptions in both cases – transactions must be conducted virtually [UK film], and you’re assumed to be guilty without due consideration [Oz] – exacerbate stress and trauma. In the film, I think there was a comment that the system had been imported from the US – next thing{it has already happened} Australian know-how will be imported into the UK mix!

        In terms of supporting NDIS and those with dementia, the costs and scale are enormous, as Don indicates. The budgetary questions of the moment for this Government are how do we quarantine money to support the NDIS commitments? Dementia introduces whole new dimensions.

        There are many politicians – Tony Abbott, for one – who have recently opposed any increase in taxes. As a nation, the question of principle seems to be: does the Government accept responsibility for both such roles {supporting people with disabilities and dementia) or is it a matter of the family meeting the costs and sacrifices, as is often the case now?

        • margaret says:

          Peter I don’t think Daniel Blake was intemperate and hot-headed as you described him (after praising his character). Couldn’t intemperate imply that he drank, which he didn’t? The incidents where he ‘stood up’ for the young mother in the employment payment office, followed her to the ‘escort’ agency to beg her not to take that last resort, and then graffitied the building with his demands, were the actions of a person with self-respect who would not accept being treated like a non-person. Without that feeling he would have died in his stripped bare flat (that was a few months before a comfortable little place with mementos, music and his lovely wood carving), alone and defeated by the system.
          As far as who pays for the cost of increasing rates of dementia, those who have the ability to pay should do so and those who don’t should receive monetary assistance. Not so many people are able to put away a contingency amount for the possible future and not many are able to keep their $$$ coming in after sixty five, nor retire on the financial advisers recommended minimum.

          • PeterD says:

            Hi Margaret,

            I agree with your second paragraph re finance although the categories into which people fit, as well as the financial cut-off limits, will be subject to disputation – self-describing? government imposed? income based etc.?

            In terms of Daniel Blake: it is true that ‘intemperate’ can mean excessive indulgence in alcohol (temperance) but I was using the word in terms of being ‘unrestrained, unbridled’.

            In many instances, Daniel’s actions were, as you state, those of a person with self-respect who would not accept being treated like a non-person; but this is not incompatible with hot-headed and unbridled outbursts. Basically the theme explores an increasing level of stress and trauma, coupled with a serious heart condition, in Daniel’s life. Frustration at being forced to use computers, the mishandling of his claim, the hard heartedness of the British welfare system and its sheer injustice, drive him to outbursts. A docile person would not ask who is the first in line and for a substitution; he is fond of his neighbour(s) but conveys some strong messages about what he sees as behavioural norms; the climatic writing of the film’s title on the office walls is unrestrained and hot-headed because he knows it violates the law. He is driven to breaking point by the system: at times subjugated by it (going to CV training) he defies staff in a hot-headed manner, driven by exasperation and a deep sense of unfairness. Yes, I like this character but he has some flaws that contribute to his downfall. In some ways his tragedy is not that of the Shakespearian hero with a single tragic flaw but more that of the Willy Loman, the common man, who is crushed by a brutal system but has the spirit to rage against it.

          • margaret says:

            Yes, but Willy Loman was sucked into the American Dream. Daniel Blake was just going about his business, dealing with the mental instability of his wife, who he loved, and then double whammied by a heart attack. Willie Loman would have puzzled him.
            The admiration of calm cool collectedness is all very well … how some of us would love to be blessed with temperaments that ‘take everything in their stride’.

          • PeterD says:

            Hi Margaret

            These two guys are both crushed by powerful systems: but they are contrasting characters: one is imbued with the marketing rhetoric, the other appalled by Centrelink equivalents.

            ‘The admiration of calm cool collectedness is all very well ‘ Yes, a state of being devoutly to be sought; go placidly amidst the noise and haste blah blah blah; but it is somewhat elusive.

          • margaret says:

            Yes Desiderata is a good guide, because knowing the difference between what can be changed and what can’t (by any individual) is the key to some sort of acceptance and contentment.

          • PeterD says:

            Hi Margaret

            You wrote: ‘Desiderata is a good guide…. is the key to some sort of acceptance and contentment.’

            I was referring to the Desiderata but I think your reference is to the Serenity Prayer by Reinhold Niebuhr:

            “God, grant me the serenity to accept the things I cannot change,
            Courage to change the things I can,
            And wisdom to know the difference.”

            I mention this because – based on other postings – I believe you would remove the first three letter word.

          • margaret says:

            Thanks Peter – yes I had confused the two – (I actually thought they were one and the same, having not read either for ages and losing my fridge magnet of the Desiderata) 🙂

          • margaret says:

            Oh, the God word, yes, however when you attend a Church school for five impressionable years he’s part of the vernacular.

          • margaret says:

            Peter, you wrote the below, but this is not specifically to you. It’s to anyone.

            “I agree with your second paragraph re finance although the categories into which people fit, as well as the financial cut-off limits, will be subject to disputation – self-describing? government imposed? income based etc.?”

            I didn’t study economics at university but I’ve certainly played my part in helping the economy as a consumer, too much house hopping over the years and purchases as a parent, home buyer, home improver (Bunnings should give us a gold card discount), travel in Australia, spreading amounts here and there in regions far from home etc. I’ve been lucky because I was able to live a middle class lifestyle.
            I still feel middle class despite a distinct downturn in finances and that’s really what matters – the feeling. It’s a feeling that you’re part of a majority, not a hollowed-out shrinking one, and that this state of being is not so much ‘relaxed and comfortable’ (a term used by Howard? who then quickly moved on to ‘alert but not alarmed’), but to feel middle class is to feel there are possibilities for you and your children as citizens of a first world country and to feel that those who haven’t attained the financial security of ‘the middle’ (who are often people within your own circle or neighbourhood) do at least have the possibility to get there if they work towards it.
            I don’t care about the rich, and often the rich don’t accept that they are. The rich will always be with us to turn that saying on its head. Good on them if they worked to get what they have but nearly all of us have done that over our working lives. We just haven’t earned a $5.6 million salary for enough years to call it a day and laugh all the way to the bank. What a skill set the CEO of Australia Post must have!! How did he learn this skill set? Did he achieve his position through meritocracy?
            Where will the money come from? Maybe from not paying ludicrous salaries to people in high places.
            Someone once wrote that the ideal is to be middle class. I agree. There are enough degrees within that to not fear ‘equality’ is being imposed, and the country becomes a happier one.

    • Don Aitkin says:

      Ayn Rand has been an undercurrent for the best part of a century. And The Guardian is not a source for what happens on the right of politics. There are always undercurrents.

  • Michael Dunn says:


    I think the short answer to the financial issue must be that as we age, we need to set aside some of our own money if possible, to cope with the high costs of age care, whether it’s dementia or something else. Fortunately my parents had done that, so that when they both had to go into care for 3 years, it could be paid for.

    Of course, the current level of welfare services still offers a safety net for those with few or no savings. However, I feel it’s time to stop finding the answer to each major problem in more taxes and more public spending — MD

  • Sammy Jay says:

    According to Don’s figures, the cost of dementia will increase by 2.3% annually over the next 40 years. GDP growth in Australia has averaged 3.5% annually since 1960. Based on these figures, accommodating the additional costs should be a doddle provided growth remains in the ballpark of the long term average.


    Don’s figures show that dementia currently costs $14.67 billion per annum. It is worth mentioning that this figure is dwarfed by discretionary spending, which is $20 billion annually just for gambling.

    Another way to look at it is that increasing productivity and technology has been eliminating jobs in manufacturing, mining, the white collar sector and elsewhere for decades. If new jobs are not produced in the service industries, such as aged care, where else are they going to come from?

    In conclusion, I see know reason for alarmism.

    • Don Aitkin says:

      I might have said that, among other things, I see no great point in long extrapolations, which include the cost of dementia in 2056. We have little purchase on what happens in the next forty years. But dementia is a growing problem because our population is becoming older, as medical advances extend human life. Along with the extended life comes a new set of problems, of which dementia is one. I agree with Michael Dunn above, and indeed my wife and I have done exactly that. And I agree generally with Margaret further above. Somewhere we have to find a balance between self-reliance and safety net. I wrote about this issue earlier, with respect to obesity, and I have no solutions. I’ll write about the import of work soon, which is another as[ect of this whole general problem.

  • dlb says:

    “If you are saddled with short-term memory loss or ‘mild cognitive impairment’ you will not be able to use the new smart phone, because you will never be able to master it.”

    Also applies to the many older and other people that have been left behind by the tech revolution. People who just want a simple service job in a café are told they must apply on line. If they are accepted for the job, then there is all the online bureaucracy Margaret mentioned above, such as inductions – mind numbingly dumb, yet totally exasperating if you make a mistake.

    My father in his eighties refuses to pay his bills online and tells service providers what to do with their computers and smart phones. Sometimes I am tempted to make a list of utility companies, banks, Govt departments etc. that offer traditional payment methods and good customer service over the phone (no foreign call centres), and pin them up on public noticeboards.

  • Chris Warren says:


    You have been extremely unfair to “The Guardian”. The Guardian was the messanger – the knowledge was from their informants who clearly were:

    “…a source for what happens on the right of (their) politics.”

    • Don Aitkin says:

      Was I extremely unfair to The Guardian. Since the article was written five years ago, it’s not really a piece on contemporary undercurrents, is it. Did you realise that it was so old? What has happened since?

      • Chris Warren says:

        “Did you realise that it was so old?”
        Not so old in political terms. I was in the UK when it was published.

        “What has happened since?”
        £12 billion of welfare cuts

        • Don Aitkin says:

          Well, if it’s not ‘so old in political terms’ it seems that the ‘new Tory right’ label has disappeared. In fact, that Guardian piece is firmly in the past. Truss and Patel are Ministers, and are bound by Cabinet solidarity. Raab was a junior minister under Cameron but not under Theresa May.

          I’ve read that piece carefully, and done some homework. So far as I can tell none of them is calling for ‘raw capitalism’, whatever that is, and Britain, like the rest of the Western world, does not have enough money to accommodate all the welfare demands made upon the Treasury. The fact that some people think workers are lazy or that there ought to be more competition between those in work and those who would like to be in work is not in any way a new thought, or surprising undercurrent.

  • margaret says:

    Equity. Not only is equality unachievable and undesirable, the strategies for its implementation are faulty and inequitable.

  • Chris Warren says:


    I presume they are not preventing welfare cuts, or wage cuts. These are “capitalism in the raw” when debt gets so large that the previous social contract – full employment, living wage, secure retirement, decent health and education based on welfare state capitalism – breaks down.

    The UK welfare state capitalist social-contract has broken down and the numbers of homeless is increasing and real wages will be cut over time.

    According to the UK Financial Times 25 November 2016 [Gemma Tetlow and Sarah O’Connor]

    Britons face more than a decade of lost wage growth and will earn no more by 2021 than they did in 2008 as the workforce endures the worst period for pay in at least 70 years, a think-tank has warned. “One cannot stress enough how dreadful that is — more than a decade without real earnings growth,” said Paul Johnson, head of the Institute for Fiscal Studies, in his analysis of the latest official economic forecasts from the Office for Budget Responsibility.

    This is capitalism in the raw and does not need to be a new thought – it is as old as the history of capitalism. And riots such as at Tottenham are the result.

    • Don Aitkin says:

      Why do you think it broke down, Chris? Was it just another phase in ‘the crisis of capitalism’ as outlined by Marx? Or did it have something to do with the causes of the vote to leave the EU?

      • Chris Warren says:


        There is a lot all over the internet on this, and the stuff by Steve Keen does point to a crisis mechanism independently of any BREXIT or national economy.

        However I always take a long-run view, and (if you have access to a university library), the general trend since the late 1950’s is towards economic breakdown in the long run. The source is some charts produced by OECD Econometricians Llewellyn, Potter, Samuelson, “Economic Forecasting and Policy” ISBN 0710206003 at p40 – 41.

        This points to what they call “Macroeconomic imbalances”.

        So this clearly points to a crisis in capitalism.

        This is independent of Marx, but I am not sure which part of Marx is relevant.

        Raw capitalism increases inequality, but under social democracy, this can be adjusted through welfare state. This is how matters stand in the UK according to reputable sources: http://archive.is/H5Ykh

        However due to a gathering rise of politicians such as Farage, Le Pen, Hanson, Trump etc. the welfare state will be pulled back and we end up with a very nasty capitalism in the raw and a social disaster as in Greece.

        • spangled drongo says:

          “However due to a gathering rise of politicians such as Farage, Le Pen, Hanson, Trump etc. the welfare state will be pulled back and we end up with a very nasty capitalism in the raw and a social disaster as in Greece.”

          Or then again they may just prevent more of this progressive left stupidity:


        • Don Aitkin says:

          Chris, Marx said that capitalism was always in a state of crisis, because the rate of profit for capitalists starts to decline. He also said that because of these factors (there are more) capitalism was inherently unstable, and that life under capitalism would be untenable for the proletariat. In fact, the standards of living of workers have risen steadily since the industrial revolution. Schumpeter said that capitalism was an example of ‘creative destruction’. Things were always changing, mostly for the reasons outlined in Capital. As I’ve said in earlier essays, not everything that Marx wrote was nonsense! Entrepreneurial ambition has transformed the lives of ordinary people, much for the better, since the middle of the 19th century. Marx’s predictions were simply and flatly wrong.

          I don’t know what is ‘all over the Internet’, but you might profit by reading some Marx, or at least a precis of Capital, and certainly Schumpeter’s Capitalism, Socialism and Democracy.

  • spangled drongo says:

    Maybe if we were prepared to work an extra 9 minutes a day, our capitalist culture would work better:


    • Ross says:

      Both good, and well reasoned arguments, from two intelligent and independent commentators, Drongo.
      Thanks for supplying the links.

  • Chris Warren says:

    More calls to cut welfare ……

    “the government needs to cut tax incentives such as negative gearing and welfare handouts …”

    Seven signs Australia facing ‘Armageddon’
    Joe Hildebrand news.com.au | 18th Feb 2017 8:46 AM


    Thus speak our Liberal fellow travellers. The undercurrent is an upsurge.

    • spangled drongo says:

      One of the main purposes of negative gearing was that if you were running more than one business and one profit making business was keeping a loss making business alive and employing people by offsetting losses against profits, this was helping employment and general business activity.

      Paul Keating realised this 30 years ago and it has been good for promoting business.

      I don’t think the same can be said about welfare handouts.

      • Ross says:

        Good for you to reference Paul Keating. An even better source of wisdom. Thanks Again, Drongo.

        • spangled drongo says:

          In spite of your blithering, rossie, that is where it originated.

          On your side of politics.

          But don’t think we don’t all appreciate your mindless sarcasm.

          • Ross says:

            So much hostility. You try to be nice…
            No wonder some people are afraid to post on this site.
            Paul Keating was indeed an intellectual giant. Why are we arguing, Drongo?

          • spangled drongo says:

            Holy Moley, stuff me Foley. do me now but do me slowly.

          • spangled drongo says:

            Paul K did a couple of things right but I remember my neighbours paying 20% interest on the mortgage of the house they had saved all their lives to build and then losing the lot, including all their equity, mainly due to that intellectual giant.

            He did ’em rather quickly, really.

          • Ross says:

            You make a good case, Drongo.

          • margaret says:

            “Almost everything in Paul Keating’s youth was different from my own. The difference reflects the great divide in culture and experience that ran through the old, pre-multicultural Australia. All the familiar elements- ancestry, religion. Politics, class, culture – were the opposite of mine”
            Don Watson
            p.10 Recollections of a Bleeding Heart.

            … and yet they got on famously until he wrote the book, which really is ‘a great yarn’ and an insight into so much about Australia and its politics.

          • Ross says:

            Thanks, Margaret. Always here with an interesting insight. It was a great book!

      • PeterD says:

        Hullo to those who have mentioned Paul Keating,

        In some ways, whether you agree with his politics or not, Paul Keating had, and still has, a strong sense of independence and a style of leadership which has been described as ‘crazy-brave’. In a time of such close voting numbers in the parliament, with such a spectrum of views, one needs to be possessed of a mighty backbone to progress legislation. Contemporary leaders can so easily be held captive to their own party factions, or to those who donate, or the unions, or just plain popularism. Shorten comes across as a ‘wobbly dancer’ on many issues and Malcolm is not that much different. It seems we live in an era where ‘the best lack all conviction and the worst are full of a passionate intensity’.

        In a personal sense, Paul Keating’s flaws are there for all to see. HIs conflict with Don Watson, one suspects, was associated with his desire to protect his record; similarly, with Tony Abbott, whose ‘record’ demands such defence. Others record history and leaders ideally, should remain humble. Paradoxically, the drive, ambition and hubris which propels them to leadership invites self-promotion rather than humility.

        • Don Aitkin says:

          I had some irregular contact with Paul Keating, socially and in government. I thought him a most pleasant individual, much nicer than his predecessor. Donald Horne told me that ‘nothing existed for Paul until he had discovered it, and then he had to tell you all about it.’ I encountered a bit of that. He wasn’t as good as the captain of government business as Hawke, the best chairman I have ever seen in action. I guess no one can be good at everything. PK is certainly jealous of his reputation, but in my view, and I was part of government when he was senior, is that he over-emphasises his own role in almost everything.

    • Don Aitkin says:

      Chris, Why is an undercurrent an upsurge? It doesn’t seem to be, almost by definition.

  • Chris Warren says:


    An “undercurrent” exists as policy options internal to a political movement or social movement by anyone. They need not represent the present status quo.

    Upsurge is when they become voiced publicly in a new political climate characterised with new-style candidates, new support bases in electorates, and public trial-ballooning by party shakers and movers. Sometimes the upsurge results in savage waring factionism as in the NSW Liberals, and complete splits as in the ACT Liberals, and actual walkout(s) in Coalition ranks in Federal Parliament.. You end up with a new status quo.

  • Chris Warren says:

    As we have learned Drongo introduces a mountain of falsifications, so we need to fact-check his 20% interest on owner occupied housing?

    So Drongo:

    Was this in Australia?

    What year?

    Was the house strata titled or company titled or other?

    IN the 1980’s retail interest rates went to record highs but I cannot recall them ever reaching 20% for owner occupiers of normally titled housing.

    I was paying 17.25% from Citibank for a loan on a Company Title flat, and I kept a close eye on rates during this period late 1980’s

    20% would have been applied if their was some special circumstances – such as greater risk.

    Which bank?

    • spangled drongo says:

      Chrissie dodges and weaves and refuses to answer many rational questions on climate change but when a neighbour tells you he is paying 20% interest because of Keating’s fiscal management he bridles in defence and issues a set of demands.

      Chrissie luv, when my neighbour tells me something about his hardship and I subsequently see him having to vacate his home I don’t grill him on the details.

      Are you claiming that there were no mortgage interest rates of 20%?

      In those times it was common for finance companies to charge monthly interest [up to 2% depending on risk] and if you combined your house borrowings with your business borrowings [prior to negative gearing] this is often what business people did.

      Now about all those questions you have avoided all this time…..

    • spangled drongo says:

      “As we have learned Drongo introduces a mountain of falsifications”

      As we have certainly learned, chrissie, who waffles on about the terrors of “raw capitalism”, strongly supports those who play god in the energy market and destroy any chance of a functional outcome.

      “Solar-powered homes in south-east Queensland, which boasts the world’s highest concentration of rooftop panels, have begun consuming on average more electricity from the grid than those without solar, the network operator has found.”

  • Chris Warren says:


    Have you (incorrectly) assumed I have not read Schumpeter’s “Capitalism, Socialism and Democracy”?

    I do not think that “Marx’s predictions were simply and flatly wrong.” This was covered in ANU undergraduate course in the 1970’s where the point about Marx’s “countervailing tendencies” was mentioned.

    The charts I referred to earlier (Potter, Samuelson, LLewellyn) seem to validate Marx’s theory of structural crisis. There is no other explanation of such long-run circumstances.

    I place significant importance on “countervailing tendencies” as it seems these are reaching their limits.

    • Ross says:

      Chris’s well researched rebuttal, certainly seems to make sense.

    • Don Aitkin says:

      If I incorrectly assumed you had not read Schumpeter, I might suggest (I hope correctly) that it might be worth reading it again!

      How could I oppose with any confidence something you remember from a 1970s course at the ANU. Marx said that there was (would be) an inevitable clash between the downtrodden workers and the capitalists, from which a new order would arise. In fact, the condition of the ‘workers’ has improved astonishingly since then. That prediction was wrong, unless (i) you don’t think there has been any improvement (for which claim I would like argument and evidence), or (ii) you are prepared to wait indefinitely until the ‘final crisis’ occurs (good luck to you).

      What limits do you think the countervailing tendencies are reaching, and why do you think so?

      I’m sorry that this may seem like comments on an undergraduate essay, but I can’t help it.

      • Chris Warren says:


        You may have studied Marx at a higher level or more recently, but my point remains in your new terms:

        As you noted, presumably as a characterisation, “there was (would be) an inevitable clash between the downtrodden workers and the capitalists, from which a new order would arise. ” Again this is subject to countervailling tendencies. I think a more accurate characterisation would be Marx’s “expropriators will be expropriated”.

        No one doubts that the conditions of todays downtrodden are improved compared to the downtrodden in Marx’s time – at least outside the Third World slums. But this is not the point. Poverty is relative and even the unemployed get better housing than the hovels served up to them in Marx’s time. This is not due to pure capitalism but to social welfare capitalism.

        The conflict Marx alluded to can be seen when a capitalist government instrumentality tells some workers they must accept less pay for the same work and this is imposed on workers.

        It would take time to gather data on countervailing tendencies, Steve Keen has produced some material on this.

        But, in more simple terms, we seem to be moving towards some sought of final economic crisis according to some:


  • Don Aitkin says:

    For Margaret at 3.47 above.

    I agree with a lot of this.Two generations ago my extended family was best described as more-or-less skilled working class. Just about all the kids (born between 1903 and1929) went on to become white-collar professionals of one kind or another, mostly teachers. Their children, my generation, went on in the same sphere, more white collar professionals. Our children, the same. None of us is rich, none is poor. All have been assisted to go to university if they wanted to do that (not all did), and helped to buy houses or flats (the latter mostly).Thereafter they were on their own. Their children I expect, will do the same. It will be a different world to the one I entered, with no tenure, jobs changing, life-long learning, shifts across the world, and so on. They have all been taught (more or less successfully) self-reliance. If there is a crisis, the family will assist. I have no envy at all for the rich, and think that an interesting job that uses your talents is the best possible career.

  • Chris Warren says:

    As we have learned, Drongo introduces a mountain of falsifications”

    Latest one was its statement:

    ” I remember my neighbours paying 20% interest on the mortgage of the house they had saved all their lives to build ”

    This was a politically motivated falsification as owner occupied mortgage rates never reached 20% according to RBA data (at the bottom of this webpage: http://tinyurl.com/Drongo-False-20percent ).

    The Australian Bureau of Statistics also list “Housing Finance Interest Rates” at table 3.3 here:


    Owner occupier mortgage rates were never 20% under Keating and Drongo has invented a Trumped-up “alternative fact” as a political provocation against Paul Keating.

    Such schemes must always be exposed.

    Drongo’s falsification count is now 29.5.

    • spangled drongo says:

      Chrissie luv, why don’t you answer my questions and comments directly instead of making dumb assumptions and blithering on about events of which you know absolutely nothing.

      You obviously have no idea about how banks in those days [prior to deregulation] conducted business as much as possible through their own finance companies.

      Quoting standard rates [that also reached very close to 20%] simply proves that what my neighbour told me was more than likely correct and if you had the foggiest idea what borrowers and lenders did in those times you wouldn’t soil yourself with your ignorant remarks.

      I don’t claim to know anything other than what my neighbour told me but for you to call me a liar when anyone with any idea of the shenanigans that went on in financial institutions in the Skase, Bond era would clearly understand, would know that you, very obviously, haven’t got a clue.

      • Ross says:

        With the greatest of respect, Drongo, is it possible your neighbor got it wrong?
        I guess we will never know. Perhaps we should move on, to avoid any further anger.

        • spangled drongo says:

          Yes, he could have under estimated but if he was the one paying the bills he probably got it spot on.

          But seeing as you seem to know even less than chrissie [if that’s possible] about what went on with first mortgage loans in those days, I guess you both will never know, too.

          • margaret says:

            Oh Spangled you’re adorable …

          • spangled drongo says:

            Now don’t start sounding like rossie, marg.

          • Ross says:

            I would have to agree with you again, Drongo.
            From what I have read, I suspect I do indeed ‘know’ less than Chris Warren.
            A bit of a smart cookie, who backs up his arguments with facts, rather than anecdotes.
            What can I say, Chris? Love your work. Hate your guts.
            But I enjoy your contributions, Drongo..

          • spangled drongo says:

            A bit of a smart arse, who backs up his blithering with factoids, rather than accuracy.


  • spangled drongo says:

    In those days interest rates were so high through the usual channels – but as usual quite a lot lower for retired people to get an income from – that instead of dealing through my bank I would often go to a retired person and hand them my title deeds with a letter of undertaking and pay them interest only for an agreed period.

    This mortgage loan, though unregistered, was hugely cost saving and always a win/win for both parties.

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