The world tried globalisation and "free-trade" and it has failed miserably. "Free trade " is not about free and fair trade but rather that the top few companies and powerful men/women are out to expliot the masses; 0.1% of the world's richest taking advantage of the remaining 99.9%.

The workers in China are truly explioted by their government and big companies, both foreign and local. China is in deep trouble because she has been fooled by this "globalisation" myth first propagated by Milton Friedman and championed by Reagan, Thatcher.

Today the real value of the US dollars is worth only about AUD 0.5 (50 cents). The countries that is propping up the US dollar is China, Japan and oil-rich Arab countries holding worthless(defacto) bonds issued by the US governments and companies. They can't afford to let the US dollar find its real value through forces of the free-market.

One 'solution' to Arjay's problem is to have managed fair trade (in place of "free-trade") and limited free float of currencies.

In managed fair trade chances are that there is no over production of goods and services such as China is experiencing now (electrical, electronic and consumer durables) .

With a free-float of currencies, currency trading has grown into a casino of sorts. Together with other financial derivatives, traders wreck havoc the world's financial system. The whole industry of currency speculation and derivatives trading does not add produce a single unit of real goods. It's at best a zero-sum-game, but often its companies out to commit fraud like the Freddie Mac and Fannie Mae mortgage swindle that is responsible for this 2008 meltdown

“The world tried globalisation and "free-trade" and it has failed miserably.”

Bearing in mind the grid-lock which followed WWII, where a lot of damaged countries were desperately trying to re-structure their economies away from a war footing and were opting for a lot of interventionism and protectionism, combined with a significant portion of the world locked into the lies and myths of desperate and disastrous communism,
switching to a free-trade/globalised model of trade was eminently sensible for the following reasons

1 engaging through trade with another country encourages peripheral exchanges (example people who were suspicious of one another make personal friends), typically the Nixon initiative to China.

2 engaging in trade often requires businesses to set up satellite operations requiring transfer of skills and expertise, sometimes through people relocating. Countries with commercial investments in other countries are less likely to interfere (invade) those countries because they threaten their own investments.

3 protectionism brings with it its own disadvantages. Most notably the exclusion of better import sources disadvantaging the consumers who are forced to purchasing the locally produced product which, through lack of competitiveness, supplies inferior performance for a higher price and also monopolizes resources (factories) and skills (people) which could be more productively employed elsewhere (economies of scale).

I personally do not think the “free-trade” initiative has failed at all.

Example: whilst “inflation” in Australia has marched ahead, the price of electrical tools available in Bunnings and compatible domestic appliances available in electrical shops has fallen well below what they cost 25 years ago and they often offer superior features to what was on offer 25 years ago.

I do think that a lot of people resent change, when it effects them in their comfort zone, even good change, which has otherwise seen them more able to afford many consumer products which would have been priced beyond their personal budgets.

Free trade offers opportunity for all countries to enhance the quality of life of their peoples. Protectionism does the opposite.

Col Rogue,

I am in complete agreement with you that free trade as promoted by Adam Smith in his magnum opus Wealth of Nations is the ideal the world has to go for. But "free-trade" in practice is far from ideal.

Britain preached 'free-trade' during the height of her colonial power. Raw cotton was bought at rock-bottom prices from India, but were sold back to India at many times what was paid for. It was a crime to spin cotton into yarn and weave yarn into cloth in India. It_ hurt factories in Manchester.

Gandhi described the process:

"English people buy Indian cotton in the field, picked by Indian labor at seven cents a day, through an optional monopoly.

This cotton is shipped on British bottoms, a three-week journey across the Indian Ocean, down the Red Sea, across the Mediterranean, through Gibraltar, across the Bay of Biscay and the Atlantic Ocean to London. One hundred per cent profit on this freight is regarded as small.

The cotton is turned into cloth in Lancashire. You pay shilling wages instead of Indian pennies to your workers. The English worker not only has the advantage of better wages, but the steel companies of England get the profit of building the factories and machines. Wages; profits; all these are spent in_England.

The finished product is sent back to India at European shipping rates, once again on British ships. The captains, officers, sailors of these ships, whose wages must be paid, are English. The only Indians who profit are a few lascars who do the dirty work on the boats for a few cents a_day.

The cloth is finally sold back to the kings and landlords of India who got the money to buy this expensive cloth out of the poor peasants of India who worked at seven cents a day(Fisher_1932_pp_154-156)"

The machinations of the rich and powerful are still the same. They have not changed but appear in a more subtle form.

Lori Wallach a trade lawyer and world citizen knows what she is talking about. Three fantastic videos by her on "free-trade"
http://www.globalissues.org/video/728/lori-wallach-free-trade-how-free-is-it

I think that may have been *Mr Wudd's* motorcade that just passed us on the way home all of about 10 mins ago.

Finished shopping, pulled into Maccas Jimbaran for late lunch. Ordered a cheese burger combo but got a Big Mac.

On the way out, coppers everywhere at every intersection, intersperced with military police. Didn't notice any of the really hard core guys with machine guns like just after the executions though.

Then cop cars, flashing lights, a few big motor bikes, then a big black flash Merc followed by a couple of mini buses full of whiteys.

Ever so tempted to flip the Merc the bird but just barely managed to restrain myself.

I guess they were down at one of the flash Nusa Dua hotels out the front, or mayb it was some other hob nob altogether.

Well, *Col Rouge* the red necked propaganda parrot extraordinaire.

Who am I or anyone else U ask?

Simply, we are the people who are of the view that the needs of the many outweigh the wants of the few.

As for yr chinese tools, I personally do not support providing profits to war criminals and human rights abusers who not only keep their own work force in nigh on slave conditions and use not their wages for advancing the social security of the people as elicited in the following report:

2008
REPORT TO CONGRESS
of the
U.S.-CHINA ECONOMIC AND
SECURITY REVIEW COMMISSION
ONE HUNDRED TENTH CONGRESS
SECOND SESSION
NOVEMBER 2008
Printed for the use of the
U.S.-China Economic and Security Review Commission
Available via the World Wide Web: http://www.uscc.gov

BUT worse still use their profits, that we in part provide them by buying their 2nd rate goods, to make weapons to sell and earn more profits to the people who are fighting, killing and still trying to kill our Australian too dumb to know any better defence personnel.

These scum who argue that Human Rights should be divorced from trade ought consider making their own trip to red china, and maybe if they're lucky, their family will get to pay for a bullet to their mid brain for being opinionated or otherwise exercising the rights which we so often take for granted.

Arjay, I remind you that our trade account for September was
actually around the 3 billion$ in the black. The problem is
our current account, which includes interest payments on loans etc.

If Australians saved more, then there would be no need to borrow
from overseas. That is why I make my suggestion to index
interest from bank deposits, ie to make it worthwhile for savers,
which is not the case right now, due to inflation not being allowed
for in the tax system.

We could also introduce tariffs etc, which we tried before. It
failed, as it makes goods far more expensive for consumers, so
lowers their living standard. It also creates local monopolies,
given our relatively small population. The result is shoddy goods
at an expensive price, consumers lose.

Let me put it this way. If you were forced to pay 8000$ for
the next computer that you buy, as it was Australian made, would
you be better off?

It seem to me you are not separating the two distinct markets,
one of mass produced consumer goods, made on the cheap. The
other of speciality products, made to fit, exclusive design,
specialised timbers etc, where locals have the market all to
themselves. Australians should do things where they have a
comparative advantage, not try to compete with those who do some
things better and cheaper.