WASHINGTON, Jan. 12 (UPI) -- Australians like to call their land the "lucky country," because of its wealth, relative isolation from the world's problems and relaxed lifestyle. In fact, we could just as easily talk about historically "Four Lucky Countries": Australia, New Zealand, Argentina and Uruguay.
All are areas on the margins of the world landmass, separated by great oceans from the centers of world conflict. All had extensive areas of rich natural resources, pastoral, agricultural, and mineral.
Of course, it was the immigrants, not native peoples, who were lucky. All four countries saw clearance and subjugation of indigenous people by industrial-armed militaries in the 19th century. All were colonized primarily by massive European immigration in the mid- to late 19th century, although political outposts had existed in most well before, and have experienced continuing immigration subsequently.
All have had economies dominated by large-scale cereal agriculture of newly opened lands, ranching of stock for export by refrigerated steamer, and exploitation of timber or mineral resources, or both. All were "template societies" -- that is, a relatively small group of initial settlers from one country, Britain or Spain, set up the society, and waves of subsequent immigrants from other lands were assimilated into the template they created.
Most interestingly, all developed strong social-democratic political and labor-union movements at the end of the 19th century. And finally, all adopted social-democratic policies of wealth transfer via state pensions, benefit programs, state-guaranteed employment or mandated tenure in private employment, and eventually, state-owned or -protected industries with high trade barriers and/or state subsidies.
Although copied from the programs of social-democratic parties and unions in developed industrial countries, such features were implemented earlier, more thoroughly and with less resistance in the Lucky Countries than in the European heartland where such programs originated.
The populations of immigrants and their descendants experienced an enormous rise in their standard of living as a result of these programs, and came to regard such phenomena as a house, land, diet rich in meat, vacation and recreational opportunities and eventually cars and modern appliances as entitlements.
Of course, to the average American today, the standard of living may seem relatively low. But we can no longer well envision exactly how miserable the grinding absolute poverty of lower-class life in 19th-century Palermo or Dublin really was. Brendan Behan, speaking of such a life, said "To get enough to eat was a victory; to get drunk, a triumph."
To work a mere eight or 10 hours a day, see most of your children grow up and live into your fifties or sixties to die from the effects of more meat, alcohol and tobacco than was good for you -- that sounded like an altogether unimaginably fortunate life for such people.
These benefits were often achieved in a far more secure and less competitive environment than in the United States, which was the only country until the late 20th century to experience a similar standard of living. Whether compared to the poverty of Europe which they left behind, or the stress and competition of the United States, which was an alternative destination at least until the 1920s, the inhabitants of these countries could well afford to call themselves lucky.
Such a situation may be stable for a generation or two, but in a dynamic world it cannot go on forever. The end of colonialism globalized the world market for minerals, driving prices down. The advance of technology in agriculture, food processing and extractive industries meant that family farms faced competition from higher-tech rivals.
The European Union shut Lucky Country farmers out of many traditional markets. And the rise in living standards throughout the industrialized world meant that the levels of quality in everyday life, and things such as job satisfaction, had become moving targets that were passing the old achievements of the Lucky Countries behind.
The last half of the 20th century saw the moment of truth arrive, sooner or later, for all the Lucky Countries. It was no longer possible to be a Lucky Country in the old sense of the word.
Argentina tried more of the same -- more state intervention, more trick economics, more unrealism. Juan Peron perfected the formula, and his successors, military and civilian alike, kept trying to make it work with increasingly disastrous results.
Finally, Carlos Menem tried the drastic measure of tying the peso to the dollar. This had the effect of taking the brakes off the Argentine economy, which immediately sped up.
Unfortunately, there was far more to do in converting the aging Lucky Country structure to a modern, dynamic market economy. The current collapse of Argentina's economy must be understood, above all, in the context of a failure to reform a Lucky Country economy.
The other Lucky Countries have been facing the issue in their own manner.
New Zealand made the most thorough reform efforts in the 1980s, but has since backpedaled.
Australia has made opened itself to the world at a slower pace, but is on the path to converting itself into a competitive world economy.
Uruguay has used its small size and proximity to Argentina and Brazil to develop a tax-haven economy that keeps its Lucky Country social structure partly intact, but with a sense that the inevitable is only postponed.
The story of the Lucky Countries is also an interesting comparative study between the Anglosphere and the Hispanosphere. Despite great similarities in social and economic realities, Australia and New Zealand enjoyed their Anglosphere legacy of high-trust institutions, strong civil society, and parliamentary democracy.
Thus when they suffered parallel economic crises to those of Argentina in the past century, they kept their democracy. Argentina began the century equally rich and, seemingly, equally democratic. Yet it put itself on a downward spiral, while Australia and New Zealand have been on an upward spiral toward participation on an equal footing with the dynamic core of the industrial world.
The history of the Lucky Countries is a lesson alike to those who say that geography determines prosperity, and also to those who say that successful market economies and democracies are merely the matter of the right formula for conducting elections or making macroeconomic reforms.
Democracy and modern market economies are both products, rather than causes, of strong civil societies. Although weak civil societies are not destined to remain weak forever, the path to strengthening them is neither instantaneous nor easy.
The Anglosphere, as the first society to pass through this transition, should not be imitated blindly, but rather studied carefully to serve as a case whose lessons can help others with their own transitions.
