AbstractThe article traces the origins of the Australian economic crisis of the 1980s, and suggests that many problems can be related to the special character of the country's long‐term economic development. The dominance of two exceptional commodities, wool and gold, created a remarkably high standard of living in the nineteenth century. But there were dangers. High labour productivity was achieved without the underpinnings of modem technology, and it was difficult to achieve sustained industrialisation from a high income base in a small, open society. Further, the efficiency of traditional commodity production helped create an inward‐looking urban‐industrial sector. Gradually fundamental change in the composition of global trade has marginalised Australia's traditional export sector. The urgent need now is for an aggressive exploitation of the country's considerable resources in science and technology. If this is achieved the 1980s could see a basic shift in Australia's economic hi