Recent history suggests that this model cannot survive in a globalised economy - one in which capital can be withdrawn from a country at the touch of a computer button. An increasingly open world economy favors nations which embrace open competition and open information flows.
The American economic model is far from perfect but is demonstrably capable of producing long term economic growth and sharing the benefits of that growth widely. It is this model - modified around the edges and changed a bit here and there to accommodate local needs - that Australia should take as its own.
Australia has already moved a long way in that direction. It has deregulated large segments of its non-information industries, and privatised utilities. It has curbed the power of its trade unions. It is about to lower income taxes.
But there is more to do. For we live in a world in which all resources are highly mobile, and in which the ability of governments to control events is limited. I am told by many young entrepreneurs that they prefer to seek the capital needed and the atmosphere so essential to success in America, rather than cope with the welter of regulations and the abnormally high marginal income taxes that still prevail in Australia.
This naturally stifles entrepreneurship, which is a pity, because a wonderful country such as this should be the natural home of young, thrusting entrepreneurs. And Australia's participation in the economies of the region should be a magnet for new high-tech firms seeking to sell goods and services to the millions of potential customers in the region.
Indeed it is a pity twice over - because we are coming close to the day when technology will mitigate the effects of Australia's geographic isolation. A day when technology will trump distance.
A leading historian has written of how "the tyranny of distance" has shaped Australian history. In the 1850s it took a letter 90 days to get from London to Australia. This was cut to 45 days in the late 1870s and reduced further when telegraphy was introduced.
Today companies such as mine make world news available to Australia in print almost as it occurs, and instantly on websites available on the Internet. As a result, Australia's geographic isolation is now less relevant than it has ever been - the tyranny of distance has been overthrown by technology.
I see no reason beyond government policy why Sydney cannot compete with mighty America and tiny Israel as a world-class high-tech centre, and with Singapore, Shanghai and Hong Kong to become an important capital market.
But first it has to become a world class, open market for all forms of communications and ideas - something that seems far past the imagination of our present rulers.
Nonetheless I am, I admit, very optimistic about our chances of emulating America's recent successes.
- Like America, this country was carved out of the wilderness by people who had no choice but to struggle or perish.
- Like America, that original migrant stock has been enriched by later migrants who have come here in search of opportunity - hands with which to work, minds with which to create.
- Like America, Australia is rich in natural resources.
- So, like America, Australia stands on the threshhold of long-term, solid economic growth.
But to emulate America's success, and to achieve sustainable economic growth, Australia must become the centre of great academic excellence. To say that the wealth of nations in the future will consist of intellectual capital is to repeat what is by now a truism. Only 2% of the value of a computer chip comes from the raw materials it uses. The balance represents the intellectual capital imbedded within the chip.
Look at Silicon Valley in California, where more wealth has been created in the last ten years than anywhere in history. And why is it there. Not the climate. Not natural resources. No, it is practically an extension of that great educational establishment, Stanford University - not ten miles away!
There is no reason why Australia cannot build a university system in the next century comparable to that of America. We provide an attractive place for academics to live. We have the space on which to erect great campuses. We have a start with the many fine educational institutions that already exist here.
John Howard recently said we must be a "can do" country - a country that can convert its luck and its cleverness to its long-term national advantage. In that same speech, he also said we must reform those institutions which in the past have contributed to our uncompetitiveness.
A superior higher educational system - on a par with the best of the U.S. and England - is crucial in securing our long-term national advantage and the single most important component toward ensuring our international competitiveness.
Tonight we should challenge the Prime Minister to back up his words by putting education at the forefront of his national agenda and to commit the resources necessary to building a university system capable of attracting and training the next generation of both Australian and Asian leaders.
So let me sum up this way.
All good foreign policy has two core aims - to protect the security of the people, and to extend their prosperity.
Australians should not worry whether they are European or Asian. We are Australians - and that is more than good enough, wherever we may be situated.
We can make our greatest contribution to the region by strengthening our regional engagement, and by showing our values and our economic system provide an example worth following, and by establishing our country as one of the world's great educational centres.
As I said, I am an optimist. I can see a day where, with the help of organisations such as this, Australia,
- will resolve its foreign policy dilemmas;
- where it will understand that it must have mutually beneficial relations with the countries of the East Asian region and with the United States;
- where it will develop its intellectual capital and embrace the emerging telecommunications technologies to conquer the disadvantage of distance;
- where it will prove that its social and economic model is worthy of emulation; and
- where it will become a magnet for potentially great scholars, wealth creators and leaders.
These goals are obtainable. And with your help, and that of forward-looking leadership they can be achieved.