"They aren't, and never will be, so therefore the assumptions are asinine."
Hear hear.
While we strive for a level playing field, more sensible governments try for the high ground, with the wind and sun at their backs.
I also liked the point about education and teachers. In one teacher country schools, students are often called to help the younger students, to the benefit of both. After all, writing an exam essay is essentially 'teaching'.
Modular course structures would also tend to break down class barriers.
Doctors and nurses begin with a first aid certificate, then continue to add modules for the rest of their careers. This simple philosophy could be applied in virtually all career paths.
First we need a free education system; much like the one our older statesmen enjoyed.

A well written and thoughtful essay. At last some explanatory writing on economic policy that is substantive and erudite without jargon, and allows the non academic reader access to a generally arcane science that affects us all on a daily basis.

I agree with your statement 'To assume that completely free trade is feasible, and that protection is always undesirable, is to believe that all other governments and all manufacturers and agents in other countries are wedded to and willing to adhere to those concepts'

The problem is to get international agreement on what trade may be protected (by modest tariffs as you suggest or other instruments) and what should not be. We have longed rued the US subsidisation of farmers in the US and Europe while ours deal in the 'level playing field'

Perhaps for those industries that are 'socially essential'- jobs and research intensive - such as some manufacturing and idustries should be agreed to be fair game for tariffs while resource industries should not?

How also do we tackle the problem that protection may prolong the life of 'dinosaur industries' such as; I suggest that our automotive industry is one of those; it has long produced inefficient vehicles.Perhaps tied Govt grants and low interest loands are the solution for such industries rather than tariffs?

In my opinion mining in Austrlia is now as much a problem as it is a benefit; perhaps more so for the majority for the 95% who do not work in mining related jobs and face the high prices it has brought, particularly for housing. We have a situation where the high dollar it has generated has reduced jobs in manufacturing tourism and agriculture by as much or more than the increase in mining jobs.

Answers to that are simple - first make them pay for all of their carbon emissions (giving them 65-95% free permits transfers the carbon burden onto the rest of us). Then bring in the original mining super profits tax; which only increases taxes on their excessive profits, it does not jeopardize the viability of mines.

PS. I also agree theat the old days of 'cadetships' for education were far preferable to the HECS debts of today.

Rosie1
RE;
"How also do we tackle the problem that protection may prolong the life of 'dinosaur industries' such as; I suggest that our automotive industry is one of those; it has long produced inefficient vehicles".

The problem with abandoning car manufacturing in Australia is that we lose those industries that depend on it or supply it, the steel industry flat products section for instance. That industry is now suffering because it is incurring very high costs for coal and ore and has lost most of the demand and sheet for cars, refrigerators and washing machines and for steel plate for fabrication etc.

It should be possible for government to insist on near world's best practice for duty dependent industries. GMH is now producing a very credible and apparently successful small car with its Cruise models. The Commodore and the Falcon are now world class cars although a bit too big.

That is what we need.

“Any contribution to a discussion on protection should focus on what kind of country we wish for Australian citizens two or more generations from now.”

John, who’s “we”?

Obviously you wouldn’t be using the term to include those who disagree with you, who don’t care one way or the other, or who would prefer their income not to be diverted to pay for any of the schemes you advocate.

So could you please explain how your theory would make sense after taking those subtractions into account – how would the situation be different from that obtaining as a matter of free trade?

Also, since the electoral process does not provide for the people to vote on any given proposed law or policy, how would you know that what you claim about "us" is true?

… people with clearer long term views have been ignored…”

Since, according to this theory, the people with unclearer short term views are in the majority, what makes you think you’re not in the majority?

“The Reserve Bank, which the citizens own through their government…”

If a citizen can’t sell or pledge his share, or exercise any of the incidents of ownership, then the claim that the citizens own it is obviously what is commonly known as a fiction or non-truth, isn’t it?

“Basically, balancing the internal sovereign government's budget is of little relevance…”

Your supporting argument established only that it’s of little relevance *to governments*. You haven’t established that it’s of little relevance to the people who are expropriated by such fiat redistributions, nor those ruined or unequally privileged in the economic recessions or artificial booms resulting from government’s addiction to based inflationary finance.


“Arguing that sovereign governments needs to, or should, adhere to the budgeting rules applicable to a business or an individual, is either mischievous, a result of ignorance, or sometimes both.”

Isn’t this just the standard Keynesian line that governments can print money or lower interest rates at whim, without it having any adverse economic or social effect? Current events in Greece and America prove you wrong. If it was true,

(cont.)

... the Great Depression and the GFC would not have happened.

“To assume that completely free trade is feasible, and that protection is always undesirable, is to believe that all other governments and all manufacturers and agents in other countries are wedded to and willing to adhere to those concepts.”

No it doesn’t. The benefits of free trade do not depend on some imaginary state in which there are no restrictions on trade. If it did, we would still be back in the dark ages.

If other states subsidise their industries, the effect is to tax their populations so as to give free handouts to ours. Even in such a totally one-sided situation, our population is still better off than with greater restrictions on free trade.

There are three further fatal flaws with John’s argument.

1. John assumes that, unlike the common herd who don’t know the true evaluation of present versus future uses, he speaks with a god’s-eye view, looks down on the economy as a whole – now and in the future - and approves this or that activity as qualifying for a restriction of trade paid for by making society poorer.

But how can this be anything other than arbitrary and unsupported by any rational principle? For example what non-arbitrary standard can John set up to determine how much use of a given resource is “too much”?

Also, “Why should the future be able to enforce greater sacrifices than the present is willing to forego? Furthermore, after a span of years, the future will become the present; must the future generations also be restricted in their production and consumption because of another wraithlike “future”?”
Rothbard, “Man, Economy and State” at p.1132:
http://mises.org/Books/mespm.PDF

2. He assumes technology is fixed for all time.

3. The effect of his proposals would be to grant monopolistic privileges to the owners of resources whose capital values would rise as a result of the restrictions he proposes.

Therefore he has not refuted the arguments in favour of free trade, and it is rather his own protectionist assumptions that are asinine.