again, we are debating the peripheral issues. labour productivity increases under the decentralised enterprise bargaining system is less than what occurred under the "bad old days" of arbitration in the 1960s and 70s. We must face reality and accept that the ideological drive of the hr nichols society and the business council of australia has been a dismal failure. we have seen short term focus of achieving greater labour productivity simply by reducing unit labour costs, instead of changes to lead to increased productivity (higher output value) this can only occur by moving to high value manufacturing or service industries. this will only occur by allowing skills accumulation within the industry. having industry focus on enterprise just leads to auctions in the labour market for the skills. there needs to be a conscious effort to promote industry development, pooled r&d to assist firms in the industry, collobarative skills development between large, medium and small businesses within the sector and a movement away from treating labour as a commodity.

during the late 1980s and early 1990s the industrial commission played an important role in forcing both employers and employees to participate in change. importantly the wider public's interest was taken into account.

under the current system some industries can simply pass on costs of exorbitant pay rises to the consumer or other industries and conversely workers in weak bargaining positions have their conditions stripped away with management not being forced to consider other changes.

in developing industry policy it must take into account employment conditions, R&D, investment and trade policies. unfortunately we are focussing on one spoke of the wheel and we are becoming more and more like the traditional farm and quarry. lets put the religious economic zealots to pasture and put into practice policies that can deliver benefits to the employers, employees and the wider public. to do that we need to abandon the zero-sum analysis of the world.

Slasher "religious zealots" would be.... 'me' ?

I will always inject faith issues, because without faith we have only one logical/reasonable/philosophically/intellectually honest and consistent alternative "Nihilism". (though there is a fair number of individuals in these forums who still live in 'fantasy land')

You can wax eloquent about 'policy this and policy that' but in the long run it boils down to human hearts and especially the ones pulling the economic strings.

I do agree that policy is important, even crucial, but policy based on the vested interest of one politically powerful segment of the community (e.g. 'Agricultural') which conciously sacrifices previously important segments (electronics and now manufacturing in GENERAL) for a 'few grains of wheat' should be seen for what it is 'greed' which is sin, for which there is only one remedy 'repentance'.

You can have all the policy fests you like, but if they ignore what is happening around us, they will negotiate themselves into certain and unavoidable economic death and will wake up one morning, no paycheck, no job and glazed eyes saying "What the heck happened ? our union promised us better conditions, more pay.. now we have no job and no pay, and no conditions to whine about".

A few of them will survive, who have the capability of quickly chanelling their talents and remaining resources into tourism for the Chinese Industrialist fat cats to wallow in, while their workers in China languish in poverty social dislocation, unbearable hours and oppressive productivity rates and without compensation for the injuries and health issues caused by the 'we have to be cheap' mentality which put the Australian businesses out of business.

“Nihilism is the belief that all values are baseless and that nothing can be known or communicated. It is often associated with extreme pessimism and a radical scepticism that condemns existence. A true nihilist would believe in nothing, have no loyalties, and no purpose other than, perhaps, an impulse to destroy.” – The Encyclopedia of Philosophy

OK BD – I’m on it. So, to not believe leads to this? And how do you account for the many atheists and agnostics who contribute to charity, lead meaningful lives within the community, hold compassion, tolerance (?!) and humanity above all else? Or are they just putting up a front? Living in that fantasy land you speak of?

Tell you what, when you can justify the evil perpetrated by the Churches and the abuses they have covered up and lied about, I’ll agree that Nihilism is what disbelief leads to. Until all is justified, then one good human who doesn’t believe will always stand higher in the crowd than a hypocritical believer.

However, this thread is about economic discussions. So let’s stay on topic shall we? On that point I agree with the majority of your comments and believe you have the competition vs protection debate quite evenly read. (See, I knew we agreed on something!)

You should know by now Boaz that there is no point *sighing* at me, nor in belittling my contribution as "shallow". Pretending that I misunderstood your intent won't wash either. You explicitly supported protectionism in your post (I quote) .... 'MARTY.. "yes" i AM advocating strategic protectionism, which targets oppressive and dictatorial regimes.'

The fact that you don't support this approach "as a general principle", but only "strategically protecting efficient, well run, ethical industries from UNfair competition which involves the exploitation of hapless and vulnerable indiduals" doesn't make it any more right, or alleviate the problems it creates for others.

What you are saying in fact is that you, a fat cat capitalist in a prosperous OECD country, need your business protected from "exploitation" by people with less than a twentieth of your per capita income - shame on you! Those "hapless and vulnerable individuals" surely have as much of a right to earn a crust by selling their labour as you do.

The other side of this argument is short-sighted too. If your industry is protected, you will have no incentive to become more efficient, and eventually will go out of business through pricing yourself out of existence. It may take a while - depending how long you are propped up - but it will happen. But I expect by that time you will have seen the writing on the wall, extracted as much swag out of it as you possibly can, and left your workers to carry the can of unemployment, thanks to your lack of foresight. Congratulations, you qualify as a fully-fledged exploiter of other people's misery.

Let's stick with this protectionism for a moment, since the generally accepted version - one nation shielding its industries from overseas competitive inroads through financial means - is also a useful metaphor for what will happen at home too, over time.

TonyR, when you say that paying 25% of OECD wage is more acceptable than 5%, we are now simply discussing relativities. 5% to one economy still might be more attractive, relatively speaking, than 25% to another. It just depends how poor they are to start with.

Swilkie, I hate to say it but your "desirable as it represents something approaching an ‘apprenticeship’ for the non-westerners" comment is somewhat patronizing. Exactly the same could be said about a shoe factory - an opportunity to observe and learn production management techniques.

The simple fact is that we choose to live in a capitalist economy, but baulk at some of its rules. One of them is that inefficient industries wither and die, and their workers will be asked to find something else to do. If all we can do is take in each other's washing because we sit in protected industries with cast-in-stone rights to have some business pay us more than we can earn for it, the end will come more quickly than you think.

Another little contribution. When I was growing up in Europe in the fifties, there were two labels that were the byword for "cheap and nasty". These were "Made in Germany" and "Made in Japan". Since that time, both economies have waxed and waned, as their industries grew, matured and then became stale - it is a natural cycle, and you cannot protect yourself from nature.

Once again, may I point out that this is not a comment on whether the present IR proposals are "right" or "wrong", I'm just trying to put them into a little perspective.

Pericles,
I agree with some of what you have to say. Australia must become more competitive and must look to efficiency to meet that competition head on.

However, that does not mean that Capitalism need to ignore it’s social responsibility. Most proponents hold the current Capitalist market as a good working model, based on the theory and thinking of the early US Capitalist, John Adams. Yet they time and again forget to include is works on ethics and moral values that are an integral part of a Capitalist system. I think this is the thrust of the other posters arguments. It’s all well and good to maintain competition but to do so at the sacrificial alter of profit over that of human exploitation is unacceptable.

Now, I know that inefficiency is a killer of industry. But to suggest that it’s OK to use a cheaper labour – because it’s cheaper is a little trite. Of course people in Bangladesh, China and El Salvador will be cheaper. Of course they would be happy with 5% of an OECS wage. Any wage will buy a little bread and milk. But the ethical view is whether a business should be allowed to use this market, just because it’s cheap? It comes back to maximising profit.

As an alternative, how about offering the near-same wage as an OECD country and giving the business huge tax breaks in the country – the same effect of bringing industry to the region while infusing the region with ready cash. OK, I am not an economist and can easily be shouted down on this idea but it would seem to me that in this case a little less profit will go a long way to developing industry and work skills in a region.

Like you, I agree that simple protectionism is dangerous and back-stepping. However I think that business needs to regain it’s social responsibility as well. It has been given the legal person privilege, no how about giving it the legal person responsibilities?