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The Forum > Article Comments > Economic philosophy fails Australian agriculture > Comments

Economic philosophy fails Australian agriculture : Comments

By Ben Rees, published 25/11/2013

Classical economics' Says Law incorrectly conflates productivity and profitability, creating problems for Australian farmers.

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"My own take on Say’s law and Engel’s law is that, in this topic, such talk casts more shade than light. Obviously if you are so confused that you blame free market economics for governmental imposts (Campaigner)"

I am not arguing from a theoretical point of view and have not claimed that government imposts are a result of the free market. Just that they exist.
I have alleged however that the free market choice of the Coles half of our supermarket duopoly and the free market choice of the Woolworths half of our supermarket duopoly to follow suit in offering milk at a price that is below the cost of production, processing and distribution is a manipulated market in the absence of effective "anti-trust" laws in the modern sense of the word.
This distortion of the price then becomes responsible for closures of dairies and processing works and the offering of others for sale at fire sale prices.
However you may economically justify this "free market" the fact is it is a corrupt market which makes it easy for other players to acquire assets which would not normally be for sale.
Again the dairy industry is the present example.
Posted by campaigner, Saturday, 30 November 2013 11:21:27 AM
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continued
However I see no other option in the reality of trade and society that Govt needs to regulate because that is what the trading partners do. CAP covers most of this in the EU http://ec.europa.eu/agriculture/cap-overview/2012_en.pdf You need to understand CAP is not production based but compensates farmers for social regulation to meet social and Environmental goals,( i guess this could be market based as society needs to pay for this service).
Forget all the theory and look at the reality, If you dont export yourself then you will have no idea of the REALITY in the world markets where anything justifies trade restrictions and costs and NO country seems to give a stuff how much more efficient we are. Then on the domestic market again there is no bonus paid for efficiency when an import comes cheaper because of protection or lack of standards.
The answer is not to have your head in the sand and believe in theories that no other country follows, If society chooses regulation then society must pay. If other countries support thier industries then our industry should have the same level of protection, no more no less.
Like the carbon tax, my beliefs didnt matter as long as EVERYONE PAID THE SAME AMOUNT, or my business was compensated against product from countries who didnt pay. instead of taxing local business and letting in imports without the same level of tax, this only achieved in shutting down Aussie biz and replace it with imports
If our government (representing the people) wanted to stop live cattle trade because of our morals and beliefs, then I dont care as long as any losses were paid for by the people imposing them. not having the farmers pay for the moral decision our people chose over another countries practice
Posted by bartb, Saturday, 30 November 2013 2:04:29 PM
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Regardless of whether Ben's table proves or disproves any economic theory, the rapid escalation of debt against GVFP should be ringing alarm bells for all public policy makers and commentators.
Instead we get a commetariat that sticks relentlessly to production and percentage of production exported and lampoons anyone who dares to suggest that food security may ever become an issue as if any decline will be gradual and linear in nature. This will not necessarily be the case.
Posted by campaigner, Saturday, 30 November 2013 3:15:46 PM
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“the ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed, the world is ruled by little else. Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back.”
Keynes

I don’t know where you guys got the idea that I stand for “theory” and you stand for “reality”.

We are all using economic theory because without it, the facts, the data, of themselves, would just be billions of one-off transactions. We're all using theory, because the data cannot be interpreted without it.

The question is not whether or not one is using theory or ideology, the question is whether it’s true or not. I have shown why yours is self-contradictory. You have not shown why mine is wrong, only that you don’t like it.

But the fact that you don’t like the reality that my theory correctly describes, doesn’t mean I’m being “unrealistic”: it means you are.

We have now reached the stage where you all
1. disown the thesis of the article;
2. are unwilling to specify any specific proposal that would satisfy your own argument let alone mine, and
3. cannot distinguish legitimate from illegitimate interventions.

The only thing you have in common is that you want monetary benefits – handouts by another name – paid for by government violating someone else’s property rights.

Bart, the government didn’t represent me when they shut down the export cattle industry. Did they represent you? No? Well what makes you think they represented “the people”, rather than a small, selfish, ignorant, greedy, powerful group of parasites?

Your argument amounts to saying, unless and until an impossible precondition is met, you insist on calling for unspecified arbitrary interventions which you openly admit are a major source of the problem you’re trying to solve.

Since political action would be necessary to solve the farm profitability problem in any case, why is it more “realistic” to move politicians for more bloody meddling interferences, rather than less?
Posted by Jardine K. Jardine, Saturday, 30 November 2013 6:06:53 PM
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Nev, we’ve already seen you can’t identify the standard by which you allege market “distortions” and “corruptions”, so why repeat this? Coles and WW are not a duopoly, because “groceries” is not one single monolithic good. They don’t sell the same goods. And they aren't a duopoly, because of the existence of other supermarket brands. They aren't a duopoly because people can buy their groceries, as they used to, from grocery stores if they want – it’s just that they don’t want.

And even if they were a duopoly you still haven’t established that there is anything wrong with this, insofar as it springs from the consumers’ voluntary actions. Society have every right, by our buying or not buying, to prefer shops who bargain down the prices of their suppliers! You don’t have a God-given right to misuse the government to force everyone else in society to involuntarily pay above-market prices for you to live at others’ expense, simple as that. It’s you who are purely in the realm of abstract theory – incorrect theory!

Campaigner
“The rapid escalation of debt against GVFP should be ringing alarm bells for all public policy makers and commentators. Instead we get a commetariat that sticks relentlessly to production and percentage of production exported”

Look I think we all agree on much more than we disagree. I just wish everyone would stop for a sec and *re-think*.

The problem is not too much freedom for gossakes, it’s not enough!

All
"I beseech you, in the bowels of Christ, consider it possible you may be mistaken."
Cromwell

I’d like to see the productive class identify ourselves as such, and make common political cause to demand *less* taxing and regulation of every productive activity, groaning under layers of dysfunctional marxoid bureaucracies and parasitic vested interests. They don’t represent “society”: they represent themselves!

Anyway, you’re voting in vain to vote for either Labor or Liberal.

At least consider that even more big government is wrong and unpragmatic and unrealistic; and consider whether you don’t agree more with the policies of the LDP than Marx and Engels!

http://www.ldp.org.au
Posted by Jardine K. Jardine, Saturday, 30 November 2013 6:20:14 PM
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Jardine, Have a think who is unrealistic.
do you think the world which is more protectionist will suddenly do a full turn around and move to free trade, Do you think China the worlds biggest trading partner, will become a free trade economy , you must be joking.
You just are ignoring these facts, As i keep saying, i dont care about what theory is right or wrong when this is the reality.
If you cant beat them, join them.
Please explain how you intend on convincing the rest of the world to follow free trsde
Posted by bartb, Saturday, 30 November 2013 9:16:04 PM
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