These discussions do not take into account the oil depletion effects.
The global market will be significantly affected. Air freight and travel
will be nonexistant or at best used for high value low weight & volume products.
The cost of energy will be so great that the pay
scale differences will not be anywhere near as important.
Freight and energy costs will cause a much greater use of local manufacture.
There is another factor. The increasing demand for liquid fuels and
energy in oil exporting countries will reduce the export availablity.
This will bring the effects of oil depletion earlier than otherwise would
be the case.
Road transport costs will also encourage local manufacturing. The only
alternative will be electric railways after conversion of the existing
railways to interstate electric traction.
Trucks use 6 to 8 times the fuel per km/ton than diesal trains.

An article by an economist that really makes sense. (I new it could happen).

I once worked for a company in Switzerland for a few years. Most Swiss going into their shops see very little that is made in their country. But their biggest industry is manufacturing! What they make are not relatively simple consumer procucts but sophisticated machines that others buy to make the products they produce. They are amongst the few nations with the abilities to produce these machines.

Not to say that there is not an unemployment problem there. But this is something separate, we do need mechanisms to help us through a transition to a greater sophistication. But to call off globalism with all its advantages because of a problem would be short sighted.

What the article showed is that despite doubts we do have a healthy industry. Yes unemployment is too high but we are moving in the right direction. The public as a whole does not see the performance of these earners because their output is not seen in the home, but it is still there. Even with call centres we do have growth in that area in the field of multilingual centres where we have a core of people all with perfect English language skills but each with a perfect command of a parent language. These centres can charge a premium rate for their services, and yes they operate internationally.

As a “hidden exporter” myself I am well aware of what is being achieved, and can be achieved if we work on our natural human resources.

I recently enjoyed a lunch with a perfect salad dressing, a high grade olive oil and a magnificent balsamic vinegar. I often enjoy an excellent Porter beer. All Australian made. Problem I can't buy any of these items in the supermarket who only sell cheap imported junk or at licensed restaurants who think a beer is only good if it is imported and refuse to stock the great Aussie beers made by the little breweries.

The problem is our attitude.

logic wrote: "I recently enjoyed a lunch with a perfect salad dressing, a high grade olive oil and a magnificent balsamic vinegar. I often enjoy an excellent Porter beer. All Australian made."

You are talking about expensive boutique products which are normally bought by a small minority of Australia's, and the world's, population. With an astonishingly unequal world, there is no way most of us can expect to be able to compete with workers from low wage economies.

If it weren't for all those stupid cock-sure economists who so stridently denied this self-evident reality with such deafening loudness for these past three decades, many of us would have shaken off our complacency about this long before now.

---

Bazz (http://forum.onlineopinion.com.au/thread.asp?article=5218#64276), you are spot on about oil. Large scale International trade will simply not be possible in a few years time. Why are our most vocal economists too sttupid to see this?

Besides, in a healthy world economy, only a relatively small proportion of each country's output would be traded and the rest would be consumed locally.

Ahh Yes Daggert, to quote Kenneth Boulding;

Anyone who believes that expotential growth can go on forever
in a finite world is either a madman or an economist !

Dagget
The facts disprove your argument. If we can't compete with China, how come our real (after inflation) average earnings are at record highs, and our unemployment rate is at 30-year lows?

We don't maintain our living standards by trying to compete with China at the things they do well. We maintain them by producing the things we are better at and exchanging some of them for the things China produces better than us . Win-win. That's always what trade is about.

Rhian,

I dealt with 'our real (after inflation) average earnings are at record highs' on a thread in response to Peter Saunders' article "Redefining Poverty" at http://forum.onlineopinion.com.au/thread.asp?article=3737#12173

My point is that measures of inflation omit many significant factors which have increased the cost of living for ordinary Australians. The most blatent fiddle in inflation figure is the omission, since 1999, of the cost of housing. There are many other ways, which have not been measured in inflation figures, in which the overall increasing complexity of of life has increased the cost of living in recent decades.

The simple fact that at least two incomes are almost always necessary to pay the cost of living for a family instead of one should cast enormous doubt on claims of rising real incomes.

In one sense it is true that real incomes have 'risen'. We are on average consuming vastly more of the earth's non-renewable natural resources at the expense of future generations, but I would dispute that this has resulted in a better quality of life for us on average.

As for 'low unemployment' figures, I suggest you look at the kinds of jobs that many Australians, many with degrees and qualifications are forced to work in, in comparison to the jobs that their parents had. I know of cleaners who have computer science degrees. How would you like to be forced to earn your living as a telemarketer, a junk mail deliverer or a traffic controller, nearly all on low rates of pay with no predictability as to what hours they will be working from one day to the next? I suggest you read Elisabeth Wynhausen's "Dirt Cheap" which shows just how bad things were even before Howard introduced his decreprd "Work Choices" legislation.

And, don't forget that, now, if you work for more than one hour per week, you are considered to be 'employed'.