Adam Smith is often invoked as the intellectual godfather of modern capitalism — but he was also a moral philosopher. Judo Bank founder and former CEO Joseph Healy joins Gene Tunny to argue that Australia’s market economy has drifted from Smith’s vision. From weak competition and high household debt to corporate scandals and lobbying influence, this episode explores whether capitalism has been “hijacked by capitalists” — and why complacency may be Australia’s greatest economic risk.

Gene would love to hear your thoughts on this episode. You can email him via [email protected]. 

About this episode’s guest: Joseph Healy

Joseph Healy is an experienced Australian banking executive and the author of What Would Adam Smith Make of Modern Australia? He has had a long career in financial services in Australia and internationally, including as a co-founder and former CEO of Judo Bank, a specialist SME bank. Joseph has a longstanding interest in Adam Smith’s work as both an economist and moral philosopher. In his book, he draws on The Wealth of Nations and The Theory of Moral Sentiments to assess the state of modern Australian capitalism — examining competition, corporate governance, banking, regulation, education, and the relationship between economic performance and societal wellbeing.

What You’ll Learn

1. Why Adam Smith must be read as both an economist and a moral philosopher.
2. How shareholder value thinking reshaped corporate incentives from the 1980s onward.
3. Why weak competition in banking, airlines, retail, and energy may be generating economic rents in Australia.
4. How the shift of bank lending toward housing may have created systemic risk and underinvestment in SMEs in Australia.
5. Why Joseph gives Australia a C+ overall — and why that grade could deteriorate.

Timestamps

02:25 – Why Joseph wrote to The Economist
The 250th anniversary of The Wealth of Nations and reclaiming Smith’s legacy.

09:18 – Why Moral Sentiments still matters
“Loved and lovely” — Smith’s moral framework explained.

16:30 – The legal test vs the moral test
“It’s not ‘Will we get caught?’ — it’s ‘Is this the right thing to do?’”

18:29 – Shareholder value and the erosion of restraint
How incentives shifted corporate behaviour from the 1980s onward.

27:39 – Banking concentration and the shift to mortgages
Big Four dominance and declining SME lending.

31:05 – Systemic risk and household leverage
Is Australia too exposed to housing debt?

36:10 – Lobbying and barriers to competition
Why reform is politically difficult.

40:45 – Five areas of reform
Government size, competition, tax reform, governance, trade unions & education.

48:34 – The Qantas example
Lobbying, protection, and consumer impact.

51:39 – What would Adam Smith make of Australia?
The “report card”: A for trade, D for competition, C+ overall.

55:11 – Reclaiming capitalism
“Capture it back again so it’s working for everybody.”

Links relevant to the conversation

Joseph’s book, What Would Adam Smith Make of Modern Australia?

https://majorstreet.com.au/products/what-would-adam-smith-make-of-modern-australia-br-i-small-by-joseph-healy-i-small

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