The National Forum   Donate   Your Account   On Line Opinion   Forum   Blogs   Polling   About   
The Forum - On Line Opinion's article discussion area



Syndicate
RSS/XML


RSS 2.0

Main Articles General

Sign In      Register

The Forum > General Discussion > The Free Trade Ideology is Misplaced

The Free Trade Ideology is Misplaced

  1. Pages:
  2. 1
  3. 2
  4. 3
  5. ...
  6. 14
  7. 15
  8. 16
  9. All
The idea of free trade is based on David Ricardo's 'Theory of comparative advantage'. The basic idea is that: even if one party has an absolute advantage in the production of everything, both parties will be better off if they specialize and trade with one another.

Wikipedia gives some simple examples http://en.wikipedia.org/wiki/Comparative_advantage

Unfortunately, while it makes a lovely mathematical model, our lives do not actually fit well into the pattern. Pursuing comparative advantage to it's logical end would be like pursuing freedom all the way to anarchy or stable governance all the way to totalitarianism.

Unfortunately, the neo-liberal agenda continues to exert vast influence over the institutions of our global society, and the 'free trade' bandwagon rolls on. Free trade is often spoken about in the media for example with the assumption that it is a good thing.

Instead of 'free trade', what we are actually looking for is balance.

On the one hand, we want to enable trade across boundaries. This will enable us to purchase what we don't have and will help ensure that local producers are maintaining their efficiency.

On the other hand, however, we want to encourage people to buy locally produced goods and services ahead of those that are imported. This will encourage diversity, interdependence and self-reliance within local economies.

Looking for this balance, I have been working on the concept of a 'locality tax'. This tax would be increasingly applied on the purchase of all goods and services depending on how far away from the purchasers home the good/service was sourced.

I suggest that the tax be applied down to the neighbourhood scale. As an example then, if a person wished to source an item produced in another country, they would have to pay the tax first to their own neighbourhood, then again to their village, their city, their state, and their nation.

Encouraging local self-reliance down to the neighbourhood scale through a mechanism such as this is not only sensible in economic terms. It will also I suggest, be an important step in our becoming an ecologically sustainable global society.
Posted by GilbertHolmes, Sunday, 15 August 2010 5:31:51 PM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
Sounds like another tax. without question this flys in the face of the whole free trade concept. A tax of this kind would be labeled protectionism, subsidy, trade barrier and on it goes.

For mine the only reason free trade ever got the light of day is because large companies saw that they could produce their product by exploiting poorly paid workers in third world countries and then sell it to the wealthy in the west and make bigger profits. There have been some good examples of this over the years. Also the major economies needed somewhere to expand their consumerist theories and continue the economic growth that is required to sustain their problematic system of economics.

The best way to control the playing field is if we as the consumer buy local first and demand by our practices local manufacture. The reality is that we purchase by whether we like the look of something or if it is the cheapest not what is best for the country. Oh Yea we vote that way too.
Posted by nairbe, Sunday, 15 August 2010 7:56:36 PM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
Oh I can just see it now. Farmers and other efficient exporters,
lumbered with all these extra costs, to make them totally
uncompetitive globally. They might as well just go out of
business!

I think you need to rethink your theory Gilbert, for one
person's tariff protection is another persons cost.

The biggest beneficieries of free trade are consumers.
If you think that all those poor people would be better
off, paying 5 times as much for their kid's clothes,
think again. So under your scheme, our standard of
living would crash bigtime.

Why do you think that you need a subsidy to make a living?
Posted by Yabby, Sunday, 15 August 2010 8:06:17 PM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
GH,

What you proposed is wrong on so many levels that it would take several chapters to cover all the misconceptions.

Any relation of Wayne Swan?
Posted by Shadow Minister, Sunday, 15 August 2010 10:20:23 PM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
Yabby, If you hadn't noticed, the only farmers that are making any money at the moment are the ones owned by megacorps. Encouraging people to buy locally would support small farmers to earn a living selling to local communities.

The idea would be to set the tariff at the appropriate level so that you still alow genuinely efficient industries to find export markets (and so you don't encourage genuinely inefficient industries to flourish locally). If stuff is being produced for a similar cost however, you're encouraged to buy local.
Posted by GilbertHolmes, Sunday, 15 August 2010 11:38:59 PM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
Gilbert, farmers largely produce things, where they have a comparative
advantage. Such as suitable soil and climate. Bananas are best
grown in one area, wheat in another, etc.

All that your system would do is set up a massive and complex,
costly administration system.

Most of what our farmers produce is in fact exported, especially
from places like WA. It is vital that inputs are priced
competitively, a global market place achieves that.

We hear this constant complaint that we can't produce much, because
China does it cheaper. Meantime a country like Germany remains
one of the world's largest exporters, high wages and all.
Posted by Yabby, Monday, 16 August 2010 9:31:34 AM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
GilbertHolmes,
I think the idea has merit. What about the idea of also putting a proximity premium on commodity exports like coal and wood chips?
It will never happen though because it might disrupt the already precarious position global capitalism finds itself in. Under our current system Growth is the God that must be appeased at all costs, even our own well-being and survival.
I also like your notion that we are a "global society" that needs to act locally. We have to recognise that national borders are pure abstractions, ignored by global finance and ecology, but shored-up by jingoistic patriotism and ethical-parochialism. National borders are becoming thinner all the time in the light of global trade and environmental degredation. Maybe this "reality" will induce nationalists to accept the tax--a much more tangible notion of community and community-development and self-subsistence. Great thinking Gilbert!

Shadow Minister:
<What you proposed is wrong on so many levels that it would take several chapters to cover all the misconceptions.>

Dear SM,
maybe you could just sketch one or two of the misconceptions?
Posted by Squeers, Monday, 16 August 2010 9:42:31 AM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
Ricardo’s argument was in the context of contemporary political argument between protectionists and free traders. The protectionists argued that tariff barriers make England economically better off. The classical economists demolished the protectionist arguments in a way that no-one has ever been able to refute. They showed that if the logic of protectionism were correct, and England were better off restricting trade with other nations, then for exactly the same reason counties within England would be better off restricting trade with other counties; and so on down to the town and household level. Reduced to its absurdity, we must conclude that people would be better of each working in isolation, and abandoning social co-operation.

Human society exists because labour in isolation is less productive – produces less output per unit of input – than labour in co-operation.

Any policy action directed against free trade is directed radically against the fundamental principle of human social co-operation. It purposes to impose an outcome that is ultimately less satisfactory to the people involved – that’s why it has to be imposed by force: because if people are free to choose, they tend not to voluntarily choose the less productive way.

GilbertHolmes does not refute the argument for free trade. He merely says: “Unfortunately, while it makes a lovely mathematical model, our lives do not actually fit well into the pattern.”

This is not a disproof. The whole point of Ricardo’s argument is that he has given the mathematical proof that free trade is mutually beneficial not only where A is better at producing good ‘a’ and B is better at producing good ‘b’, but where A is better at producing both.

“Instead of 'free trade', what we are actually looking for is balance.”
Who is “we”? Surely you don’t presume to speak on behalf of people who disagree with you?

Please define “balance”
Posted by Peter Hume, Monday, 16 August 2010 10:26:51 AM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
GH
Well said on all fronts about the myth of 'free' trade. The whole concept is flawed on so many levels that it would take too many pages to cover on OLO.

One of the problems inherent in free trade is the idea that we can exploit another country's medieval workplace conditions to the benefit of the richer in the West. So we don't compete on quality but purely on the cost of labour. Often the end price is not cheaper for consumers meaning it is a good system for a small group of middleman.

It is important that nations be self-supporting as much as they are able in food supply and where they can control factors like governance, pesticide use etc. Nations should be able to choose what they import based on need not forced to accept goods they can well grow themselves.
Posted by pelican, Monday, 16 August 2010 10:30:49 AM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
Severin,

Some of the misconceptions:
Taxing inputs, say of machinery, discourages local production.
Indonesia is closer to Darwin than NSW. Do you tax products from NSW more highly than here?
Victoria does not grow bananas, thus there is no local production to support,

Etc.

On top of this the myriad complexities of the tax and policing it will cost much more than it generates, and will have the effect of closing local production, as they will lose their external markets, and efficiencies of scale from the retaliatory tariffs.

Etc.
Posted by Shadow Minister, Monday, 16 August 2010 10:54:50 AM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
*Nations should be able to choose what they import based on need not forced to accept goods they can well grow themselves.*

Nations are free to be members of the WTO or not. But the above
would be a disaster for a country like Australia.

For of course we are major exporters of meat. Based on your
thinking, other nations could easily reject our primary products,
whole industries in Australia would have to close down.

The Americans tried all this, when they put a limit on our lamb.
Americans arn't very good at growing lamb, its twice the price
of ours, its too fatty, so its too expensive. Result is that
few Americans eat lamb, pork chicken etc are cheaper.

Result was that American consumers lost and Australian farmers
lost. Now that the market has been reinstated, they love our
lamb and are our largest customer.

Perhaps it's best to just let consumers decide what they want to
buy or not. Everyone benefits, consumers and producers.
Posted by Yabby, Monday, 16 August 2010 1:02:20 PM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
Your tax will be a reality before too long Gilbert.

It is called "peak oil" or maybe "Israel attacks Iran". The resulting rise in the price of oil will end the insane situation where it is cheaper to mine ore, coal, minerals etc and ship them halfway across the world to be processed into consumer goods then sent back halfway across the world and still be cheaper than something produced locally.

The alternative and the preferred policy of those in business and those on the right would be to reduce wages worldwide to the levels of Chinese workers and then we would all be competitive.

"Free Trade" was only ever a con that resulted in the decimation of western manufacturing and resulted in millions of jobs lost and hardship for working class people on both sides of the equation.
Posted by mikk, Monday, 16 August 2010 1:05:21 PM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
Gilbert,
I have to agree with your perception that neither capitalism as it's practiced today nor "free trade" (sic) works well.

I would argue that there are so many distortions (externalities) the outcome tend to be more Malthusian and the object is money/power rather than people.

It has been a long held view that production as it is currently measured doesn't accurately reflect the real (true) cost of production.

I would further argue that just because it can be can be delivered cheaply that it is necessarily better particularly for the people at either end of the supply chain.

It is an unsupported myth that only private enterprise can deliver efficiently or appropriately.

What is missing is both a sense of responsibility and the concept of enough.
I would agree that people should be compensated for risk. But I find it hard to take when those who claim high risk and get the return when in adverse times hold out their hands to the public for compensation. In other word's get risk payback when times are good but won't accept the consequences of their risk goes pear shaped.

I also find it unacceptable when a large corporation via its powerful government forces 'free trade'(sic)in a third demanding vertical marketing access that excludes local competitors under the guise of pay back for development. it seems to me that a product either stands on its own two feet in the market without the aid of externalities or fails.

In an ideal world your locality tax makes sense from a human benefit perspective but the capitalist would then cry foul stating economies of scale etc.

your plan in theory would certainly go a way to give a quantum to the real cost of production
Posted by examinator, Monday, 16 August 2010 1:51:47 PM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
Really, examinator?

>>It has been a long held view that production as it is currently measured doesn't accurately reflect the real (true) cost of production.<<

Long held by whom? On what grounds? Whose definition of "true"?

>>your [locality tax] plan in theory would certainly go a way to give a quantum to the real cost of production<<

In what way does the market not already factor in transport costs?

This is nothing more than fluffy thinking. Candy floss for the brain.
Posted by Pericles, Monday, 16 August 2010 5:48:27 PM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
Hi Mr Hume,

Free trade tends to benefit those who are already powerful. Such as England in David Ricardo's time.

You say, "Any policy action directed against free trade is directed radically against the fundamental principle of human social co-operation."

The theory of comparative advantage will only work properly where every party is organized to produce what they are relatively best at. This is not cooperation but slavery. What's more, our economy promotes competition as more important than cooperation. In a competitive society, free trade allows the powerful to use their leverage against unprotected, weaker parties.

You say, "GilbertHolmes does not refute the argument for free trade."

That's true. Indeed the mathematical model behind comparative advantage is simple logic. All it shows us, however, is that it is possible for all parties to benefit from trade, not that we necessarily will. The main problem with it is that we are all just living our organic lives, doing what we know, and then comparative advantage tells us that we should actually be doing what we are relatively best at. I think in practice that this generally means major social disruption, unemployment, increases suicide rates etc. None of these 'costs' are measured in the theory.

By balance, I mean that our communities/economies should be open to trade, but also protected against destructive external influences.
Posted by GilbertHolmes, Monday, 16 August 2010 8:29:38 PM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
Hi Pelican,

"One of the problems inherent in free trade is the idea that we can exploit another country's medieval workplace conditions to the benefit of the richer in the West. So we don't compete on quality but purely on the cost of labour."

Couldn't agree with you more. Free trade is a bad idea anyway, but when different places have different wages and workplace conditions, this does not even represent genuine efficiency but exploitation.

Yes to a single global currency value I say (and minimum wage/workplace standards), but that is for another discussion.
Posted by GilbertHolmes, Monday, 16 August 2010 8:37:28 PM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
Shadow minister,

"Taxing inputs, say of machinery, discourages local production."

Because it would discourage purchase from 'foreign' owned businesses, (and therefore would also discourage investment outside of one's own community), the locality tax would encourage a community of any scale (and/or the members of that community) to own the assets within it's boundaries.

In the same way, while it would be friendly to small,locally focussed private business, the locality tax would make it difficult to operate megacorps. Instead, major productive assets would tend to be controlled by (hopefully directly democratic) governments.

What I suggest then is that the locality tax be applied to 'horizontal' purchases within the society, in other words, from different countries, different villages etc, but not to 'vertical' purchases, from businesses being run by the governments of which the purchaser is a part. In this way, major infrastructure would be available without the payment of the tax.

"Indonesia is closer to Darwin than NSW. Do you tax products from NSW more highly than here?"

I expect that Darwin would remain as part of Australia. The less boundaries that you cross, the less tax is payable. If the system was applied globally, Indonesia would probably be a part of the same 'geo-region' as Australia and would therefore get preferential treatment as compared to nations further away.

"On top of this the myriad complexities of the tax and policing it will cost much more than it generates"

It seems to me that the tax could be simply applied to an electronic currency. I suggested to Pelican that we look toward moving to having a single global currency value. This single global currency could be electronic and taxed. Along with this electronic currency, I suggest that local cash currencies, issued at perhaps the level of the small city, be issued. Cash transactions (local) would not be taxed.

"and will have the effect of closing local production, as they will lose their external markets"

I think that you will find that free trade has a long history of closing local production, destroying communites etc.
Posted by GilbertHolmes, Monday, 16 August 2010 9:09:20 PM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
*The main problem with it is that we are all just living our organic lives, doing what we know, and then comparative advantage tells us that we should actually be doing what we are relatively best at.*

Gilbert, there are two sides to all of this. Gilbert the consumer
and Gilbert, who like eveyone else needs to do something to earn
a living. For every $ that Gilbert earns, another consumer has
to think that they are spending their money wisely. That is just
sad reality. If you want to consume, you need to produce what others
want.

So you remind me of some odd shopkeepers I that I have dealt with,
who when I tell them what I actually want, basically imply that
they can't be bothered or similar, to consider my needs as a
consumer, I will just have to put up with what they feel like doing
at the time.

I tend to spend my money elsewhere and those shopkeepers commonly
go broke, blaming everyone but themselves, despite the fact that
they have broken the first rule of business, ie focus on the customer.

Why should customers pay you money, if you arn't doing what the
market, ie customers want?
Posted by Yabby, Monday, 16 August 2010 9:19:30 PM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
G'day Yabby,

Our farming communities have been having the life sucked out of them by free trade for long enough.

Encouraging diversity and local self-reliance is obviously a significant shift away from our current focus on promoting specialization (which supports concentration of ownership ie big business ahead of small) and reliance on exports.

I suggest, however, that it is a shift that we need to make. Who know's, maybe it will help revitalize our farming communities!
Posted by GilbertHolmes, Monday, 16 August 2010 9:25:46 PM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
*Our farming communities have been having the life sucked out of them by free trade for long enough.*

Not so Gilbert. The majority of our farmers depend on exports and
open markets, ie free trade, to make their living. Once again,
they produce what they have a comparitive advantage to produce and
what consumers want to buy. For you to suggest that they produce
something else, shows your lack of understanding of agriculture
and of consumers.

Consumers vote with their wallets every day. That is far more
democractic, then voting once in three years. I respect their
judgement, why don't you?
Posted by Yabby, Monday, 16 August 2010 9:45:46 PM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
Couldnt let this one go by

Yabby said

<<Consumers vote with their wallets every day. That is far more
democratic, then voting once in three years. I respect their
judgment, why don't you?>>

The old capitalist lie "the democracy of the dollar".
Nothing could be less democratic.
The wealthy have millions or even billions of votes while the poor or ill have few or none.
Not my definition of democracy.
Posted by mikk, Tuesday, 17 August 2010 8:50:17 AM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
*Nothing could be less democratic.
The wealthy have millions or even billions of votes while the poor or ill have few or none.*

Err Mikk, the wealthy can only eat three meals a day, they
use toilet paper like the rest of us. etc.

The majority of money owned by the wealthy is invested not
consumed. All consumers are voting with their wallets every
day. Why not let them decide on how to spend their money?

You are free to start your own business tomorrow if you wish.
A bucket, a mop and a vacuum and "Mikk's Cleaning Services"
would be in business. It's purely your choice that you prefer
to sit around hating those who do go out and do the same.
Posted by Yabby, Tuesday, 17 August 2010 9:19:51 AM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
I'm afraid this thread lost me at...

>>we look toward moving to having a single global currency value. This single global currency could be electronic and taxed<<

Presumably, we would use this global currency to transact with... Martians?

If you look for a moment at the contortions that the Euro is going through right now, and spent a few minutes getting your head around the reasons behind these contortions, you would begin to understand what an absolutely ridiculous notion a "global currency" is.

The proposition of a "global currency" would not survive a cursory examination by primary school students, let alone people who are supposed to be smart enough to vote.

Whatever next?
Posted by Pericles, Tuesday, 17 August 2010 11:16:47 AM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
Pericles
Primary school students may not understand beyond the current taught concepts but that does not mean it is not worth a look.

http://financialedge.investopedia.com/financial-edge/0310/One-World-One-Currency-Could-It-Work.aspx
http://www.helium.com/items/872821-could-a-single-global-currency-work
http://www.helium.com/items/1044669-costs-of-a-single-global-currency

The above links give some idea of the pitfalls and gains.

If we were to look at a global wage/award system (as a possibility) I am not sure how it could be achieved without a global currency.

As one of links reveal a global currency is not new. Gold was such a currency at various times.
Posted by pelican, Tuesday, 17 August 2010 5:12:36 PM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
Pericles,
I have not ignored you.....I just have other things to do at times and can't always answer immediately.

What you mean to say is that you don't agree. Given your views on capitalism I'm not surprised.
I based my assertion on the triple bottom line concept.

Before you launch into anti Green rhetoric.

Let me suggest that the failure to take the true value of goods is caused by ignoring externalities.

I'm sure you know what I'm referring to.

In essence our disagreement is more related to the different view regarding the nature of capitalism and its Gausian unpredictability.
Given my dreadful prose all I can do is to point you to the book “Critical Mass” by Phillip Ball pages 275/279 . This will give you a flavour of my views of towards capitalism as it's practised and the folly to rely on it to the degree that the likes of some WA contributors.

The flaw in Col's logic as to liaise faire economics is well described.
Likewise I do agree with ball when he says that command government manipulation is also fraught with disaster.

I further agree with him when he says corruptions easily exists in the extremes of both capitalism and socialism.
I am a long time campaigner against those who give *absolute* answers and or argue by extremes ignoring the very much larger option *s* that can be derived from combinations in between the extremes.

I am resisting a detailed explanation on the grounds it will be a waste of time and that I'm not here to convince anyone of any thing just to encourage though.
Posted by examinator, Tuesday, 17 August 2010 5:41:24 PM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
I think you may be looking through the wrong end of the telescope, pelican.

>>If we were to look at a global wage/award system (as a possibility) I am not sure how it could be achieved without a global currency.<<

Nor indeed could a "global wage/award system" (errr... why would you want one, by the way?) be achieved without political harmonization.

Which, incidentally, has been a significant lesson learned from the Euro experience.

Nor does this convince:

>>... a global currency is not new. Gold was such a currency at various times<<

Well, exactly. Look at the history of the gold standard.

It lasted for less than 100 years, countries joined and left at different times, and it eventually proved unsustainable. That should be enough proof on its own that a single currency is unworkable.

And will continue to be, until the people of the world are united under a single parliament.

Let me know under what circumstances you see that coming to pass.

And there's no call to fret, examinator.

>>Pericles, I have not ignored you.....I just have other things to do at times and can't always answer immediately.<<

Don't worry, the questions will still be there when you are ready.
Posted by Pericles, Tuesday, 17 August 2010 10:27:56 PM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
Fair points Pericles. I am certainly not arguing for a global centralised government - heaven forbid.

I was thinking more in terms of trade, equalizing some of the conditions such as wages. I think it has to come eventually with the development of the Third World in any case ie. as a natural consequence of development - perhaps we are in that natural evolutionary process now.
Posted by pelican, Wednesday, 18 August 2010 9:24:41 AM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
The arguments of the interventionists only make sense if everything is just a matter of opinion and there is no such thing as objective truth.

But reality kicks in at some point. Facts have logical consequences.

I have asked each of you questions. You have not answered them. The reason is, because you can’t. They disprove you. So you just try to pretend that your opinion overrides the truth.

Mikk
You say that capitalism knows the price of everything and the value of nothing.
1. How are you in any better position?
2. Given that values are dispersed in the subjective minds of six billion people, how are you going to know or carry out those values better than the people’s own choices based on their local knowledge and their knowledge of their own values?

GH
1. Who is this “we” who is to override the choices of the billions or millions?
2. How could the “balance” between free trade and intervention that you seek, boil down to anything other than your arbitrary opinion of what should be allowed or disallowed?
3. What is your mathematical disproof of Ricardo’s mathematical proof?

Pelican
1. Why should “the nation” be the one to decide? Why not the state? Why not the region? The town? The household? The individual? Why you?
2. If what you are saying were right, why wouldn’t society be better off restricting trade at every level including the individual level?
3. If not, why not?


All
1. How do you know that any given intervention produces a total net benefit for society however defined?
2. How is government capable of economic calculation to the extent of government ownership?
3. Whatever the resource problems we are trying to fix, how is abolishing economic calculation going to improve our response?

The problem is that the interventionists are trying to advance arguments, that are no more advanced now than they were when Ricardo demolished them 200 years ago. When challenged on this, all their arguments degenerate either into name-calling of one kind or another, or assuming what is theirs to prove.
Posted by Peter Hume, Wednesday, 18 August 2010 10:02:01 AM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
Because Peter as far as policy goes we work at national level in the main ie. the national interest. We do not have a global centralised government we have local representation under our democracy. These representatives are our representatives hence via them hopefully we might one day get to have some influence as to what is in our best interests. We can do that while being mindful of obligations to others at the global level.

That does not mean there are not areas that deal squarely with the individual such as the right to acquire property.

"If what you are saying were right, why wouldn’t society be better off restricting trade at every level including the individual level?"

That is just getting silly. For the same reason as above - it would be against the national interest. What about the rights of farmers not to have to compete with exploitative labour costs. If some farmers/producers/manufacturers are doing the right thing by their workers and in relation to governance etc why should they be penalised or disadvantaged by a lack of duty of care by other suppliers? Not to mention more importantly the impact on the developing world. Why do many people in the developing world continue to go malnourished while the food grown on their soils is exported overseas?

As for who decides? Who do you think should decide? There should be some type of fairness principle at play. Human beings should be able to design a system that is more win-win than me-me.
Posted by pelican, Wednesday, 18 August 2010 10:28:55 AM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
Peter Hume,

The book makes the same point for interventionist side too and it absolute I have to agree. But as I said either extreme is equally flawed.
I simple argue that digging a fortress and being one eyed about either extreme is silly.
Part of this economic conundrum is as the headline puts it free trade
(I would add as it is practised now) is indeed Misplaced.

what we most often have on OLO is two idealised, theoretical sides equally arguing with evidence that suits their personal scientifically unsupportable theories while ignoring the equally valid opposite.

What makes it worse is that most people argue not with objectivity but viscerally and in the case of political parties blatantly manipulate the ill informed without any regard for responsibility or real morality. Both are more Malthusian than anything else.

The sad thing is that this mentality simply promulgates the theory that we are animals and animals we shall stay and to hell with anything else.
Posted by examinator, Wednesday, 18 August 2010 11:45:53 AM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
Hi Pericles,

"a single currency is unworkable. And will continue to be, until the people of the world are united under a single parliament."

Actually I think that you are basically right on this one. Effective global governance will be necessary to effectively administer a global economic system. Personally I am in favour of a directly democratic, decentralized system of government that can be tiered upward from the small neighbourhood to the global scale. So within that context, I am in favour of world government.

I would certainly rather see us working toward instilling democracy into our global institutions instead of slowly ceding our sovereignty to secretive organizations like the WTO and the IMF, with their particularly questionable agenda.

Hello Peter,

"How could the “balance” between free trade and intervention that you seek, boil down to anything other than your arbitrary opinion of what should be allowed or disallowed?"

I am an advocate of a balanced position between policies that move us toward free trade and policies that encourage the purchase of locally produced goods/services. My opinion is no more 'arbitrary' than yours.

"What is your mathematical disproof of Ricardo’s mathematical proof?"

I believe that the maths of Ricardo's theory are correct. The theory is only applicable under certain circumstances, however, and is therefore not an effective argument that free trade should be applied universally, (as much as free market extremists would like it to be).

Hello Examinator,

"what we most often have on OLO is two idealised, theoretical sides equally arguing with evidence that suits their personal scientifically unsupportable theories while ignoring the equally valid opposite."

Personally I think that the middle, balanced position is the most legitimate. The moderate position is not some kind of half-arsed compromise between mutually exclusive extremes, but takes the good from both sides and blends them into something that is bigger than both.
Posted by GilbertHolmes, Wednesday, 18 August 2010 8:06:59 PM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
examinator
How do you square your concept of ‘absolute’ or ‘extreme’ views with the concepts of logic and science? There would be no possibility of a scientific explanation of anything, if anyone insisting on a mathematical or logical proof had to be ruled out because to do so is ‘extreme’ or ‘absolute’.

Take Pythagoras’s theorem. This is not empirical or contingent knowledge. We don’t figure out whether it’s true by doing a statistical probability analysis of what percentage of right-angled triangles comply with it. Why not? Because we already know it applies to all right-angled triangles before we even check them out. If it doesn’t apply, it means it’s not a right-angled triangle.

But how do we know this? Well that’s a good question, and I am not going into that here. But it’s similar to how we know that 7 x 7 = 49. This is also not empirical or contingent knowledge. We don’t test whether it’s true by continuing to try multiplying seven oranges with seven oranges and see whether the result will be 49, and then again with grasshoppers, and then bottles, and so on. We already know what the answer must be.

Ultimately the truths of geometry and mathematics rely on truths from pure logic.

Now pure logic is obviously of limited application in explaining human behaviour. And science has not succeeded in explaining the connection between mind and matter. People act differently to the same stimuli, and even the same person acts differently to the same stimuli at different times. The same method that is used to explain planets, and rocks, and atoms, cannot be used to describe human action.

But that does not mean that physical laws, and logic, do not apply to human action.

They do. And it means we can derive ‘laws’ – universally valid propositions. So long as the premises are factually true or axiomatic, and the logical operations are valid, then the conclusion will be just as sound as 7 x 7 = 49, while ever the assumed conditions apply.
Posted by Peter Hume, Wednesday, 18 August 2010 10:12:07 PM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
For an example of a universally valid proposition in economics, you can only increase a field’s productivity so much by adding fertilizer. After that, adding more won’t increase it. It is not ‘absolute’ or ‘extreme’ to say so. It follows logically from certain physical facts. We can't just create any economic reality we fancy.

If we reject the use of logic as it applies to human action, we are essentially saying that everything is a matter of opinion, and truth is meaningless. But the truth does not always lie between two extremes. It is possible for one antagonist to be right, and the other wrong. It is possible for proof to be based in logic, and not based in contingent or probabilistic kind of knowledge.
Ricardo has given a mathematical proof of what is in issue: http://economics.org.au/2010/08/population-puzzle-solved/#more-723

He has proved that restrictions on free trade reduce the parties’
(1) total physical productivity and
(2) respective shares
even where one party has the advantage in both goods.

Those who deny this, but are unable to disprove Ricardo, are not equally right. They are just simply wrong.

The case is no different than if they were to deny 7 x 7 = 49, and assert that all knowledge is relative.

The absolutists and extremists are those those who reject reason, and assert that their own arbitrary and illogical opinion justifies them in using force or threats to override the actions of others who, left to themselves, benefit each other and society as a whole.

Pelican
What you have said is simply illogical. If you can’t see why, then what makes you think it’s fair to use force or threats to impose your will on others?

Are you what examinator would call an absolutist or extremist? Are you inflexibly fixed in your opinion? What would make you change your mind?

GH
Sorry, that’s not good enough. You cannot prove that you are balanced by asserting that you are balanced. It's illogical.

You haven’t disproved Ricardo. What circumstances do you say do not apply that Ricardo assumed do apply?
Posted by Peter Hume, Wednesday, 18 August 2010 10:15:31 PM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
Peter,

I think that your concentration on the numbers here is really restricting your understanding. I might be relatively better at cleaning the poo pit than my brother for example, but do you really think that that means he should never take a turn?

We are not talking about facts here, but judgement.

As for the specific weaknesses of the theory of comparative advantage:

There will be costs associated with each region adapting their economies to producing what they are relatively best at. These costs can be 'measured' in social terms, (for example the sixth generation banana farmers may have to learn, with much pain, how to become poo pit cleaners), but also in economic terms. For example, the costs of retraining, loss of productivity through unemployment, the purchase cost of new tools etc.

None of these costs are included in the theory, yet depending on the circumstances, it is quite possible that these costs could outweigh any benefits achievable. If that is not true, please enlighten us.

Another big problem with the application of the theory of comparative advantage in today's society is actually mentioned on the website that you linked for us. It mentions that the theory only works when movements of capital are prevented. Such is hardly the case under 'free trade', wherein foreign investment, currency speculation, etc are encouraged.

If one trading party is permitted to purchase the productive infrastructure of another trading party, this throws the dubious pure fact of Ricardo's theory right out the window. You, for example, might already own half of what I produce before we begin any trading - in other words, I'm toast.

If you are so keen on scientific fact, perhaps you need remember that one of the cornerstones of science is that we are supposed to continually challenge our theories.
Posted by GilbertHolmes, Wednesday, 18 August 2010 11:57:44 PM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
"What you have said is simply illogical. If you can’t see why, then what makes you think it’s fair to use force or threats to impose your will on others? "

To many your view is not only illogical it is highly exploitative and results in concentrations of power to one group. You fail to see the faults in your own ideology.

When did I say I would use force or threats to impose my will? OLO is an opinion site and we all put forward our opinions. Australia is a democracy and I have always argued for the people to decide. How is that threatening?

Imbalances of power and potential to exploit the vulnerable is as equally undesirable as a totalitarian regime. Both have the same outcomes.

Using your logic I could easily ask why you wish to use force or threats to impose your will on others. We could go around in the same circles all day, but that would be pointless.
Posted by pelican, Thursday, 19 August 2010 8:51:43 AM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
There's nothing wrong with a bit of idealism, GilbertHolmes.

>>Personally I am in favour of a directly democratic, decentralized system of government that can be tiered upward from the small neighbourhood to the global scale. So within that context, I am in favour of world government.<<

Sadly, human nature will never allow this to come to pass.

Again, I think the European experiment can teach us a great deal about the reality of a supranational government.

Instead of remaining a "tiered upwards" arrangement, it rapidly morphs into a command-and-control structure. Bureaucracy becomes an end in itself, endlessly defining the processes by which the various countries - and factions within countries - can reach an unsteady compromise on their individual wants and needs.

And as more join, the problems become exponentially greater. So much so, that the concept of any form of political union rapidly disappears under the weight of those - necessarily - disparate wants and needs.

Sometimes it is possible to say "this will never happen" without being branded a nay-saying pessimist.
Posted by Pericles, Thursday, 19 August 2010 9:11:21 AM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
Pericles:
<Sadly, human nature will never allow this to come to pass.>
Dear Pericles,
What would you know about "human nature" when you have never experienced it and have no conception of it?
What we take to be human nature is derived from an empiricist metaphysic that is itself unfamiliar with human nature; indeed the subject/object split is its very obverse. And since in this "objective" intellectual paradigm, findings are ludicrously considered rigorous (in fact taken on faith), human nature is reviled commensurate with its impoverished condition.
Human nature is both essential and product of its social dispensation. Under capitalism the essential self, and its culture, are twisted and deformed by a vicious economic dynamic. Human nature has probably never realised its potential (culturally), but is has probably never been so systematically degraded as it is under capitalism---denied even the saving grace of being able to "imagine" a fulfilling life and self-respect. Such notions are non sequitur, deemed utopian. I see that mind-set as entrenched and "actual", that is "living", cynicism. Which other species are capable of such a cynical life?
Of course such talk is "quite rightly" laughed to scorn in these "enlightened" times.
Posted by Squeers, Thursday, 19 August 2010 9:57:48 AM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
Pericles,

You mentioned human nature, but exactly what is the nature of that human nature is in some dispute. Some say that we are essentially self-interested, some that we are essentially benevolent.

Personally I am with the school of thought that says that paradox lies at the centre of our being. Springing from what I call the 'third fundamental polarity' between separateness and connectedness, we are both self-interested (motivated to control our surrounds) and benevolent (motivated to commune with our surrounds). Subsequently, interactions between us (including economic) occur in a framework that has both competitive and cooperative aspects.

You seem to be assuming the old 'cult of the individual' version of human nature, (separate, self-interested and competitive), and I think it is this that limits your hope for the possibilities of democratic governance.

Looking at ourselves, we can see that the extremes of aggressive and weak are negative. If we take something good from each of these however, we can be both intensely strong and intensely gentle without compromise. The same is true for governance and freedom. If we take the good from each, we have the potiential to combine them in a way that is trully awesome.

I would say that the first step in bringing about this trully awesome state of affairs is to start believing that it is possible. Who know's what 'we' can do!
Posted by GilbertHolmes, Thursday, 19 August 2010 10:06:40 AM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
Pelican
All government involves a claim to a legal monopoly of the use of force or threats of force. As shown in my ‘desert island factorial’ article, there are countless ways we can take collective action. What attracts people to collective *policy* action is the fact that they don’t have to bother getting other people’s consent. They can just use force or threats to bully people into submission and obedience. Policy means police-y. Ultimately if you don’t submit and obey, a group of men armed with weapons will come around to your place, Taser or handcuff you, and lock you up in a cage. Those arguing for a policy response are always and necessarily arguing for the use of aggression to get what they want. Democracy makes no difference to this fact, and majority opinion does not make the use of violence or threats right.

“Imbalances of power and potential to exploit the vulnerable is as equally undesirable as a totalitarian regime.”
You have not established that voluntary transactions involve imbalances of power, or exploitation; nor that your aggression-based solution would be less imbalanced or exploitative than consent-based solutions.

“Using your logic I could easily ask why you wish to use force or threats to impose your will on others.”
I am not advocating the use of force or threats. That’s the whole point.

GH
Both money and non-money costs are self-evidently less than benefits in the case of voluntary transactions, otherwise people wouldn’t do them. It is only in coerced transactions that the difficulty in knowing them arises, which is why you can’t do it.

1. What transactions would not be caught in the exceptions to free trade that you argue for?
2. Who is “we”?
3. Please define “balance”.

You have not given any reason to think that your interventions will result in any greater fairness in cleaning the poo pit, and since you do not volunteer for it yourself, and cannot prove it’ll be better overall, why should anyone accept you using force to try to rig the result?
Posted by Peter Hume, Friday, 20 August 2010 4:25:30 PM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
Gilbert,

The biggest problem with Philosophic ideals (and OLO) with regards to many topics including this one is more fundamental. Idealism is fine as an aspirational goal.

The failing of a idealism issue in both its nature and creating methodology. Most OLOers see/discuss such topics from a (X-Y) two dimensional perspective.
As stated by others and agreed by me, there is nothing wrong with idealism per se. Unfortunately this tends to interpolate as a visceral competition between the two polarised extremes ( Labor V Liberals aka capitalism V socialism). Clearly what is missing are the Z axis dimensions.

This limited of linear thinking necessitated in many the need to over state the fit of their emotionally dominated opinion and filling the unknown with belief rather than facts.

This sadly is evident in this topic.

All the arguments thus far advocating either extreme are in fact based on faux logic in that they rely entirely on unsubstantiatable faith and belief. This in turn leads to the inevitable conflict.

The alternative that I favour is to respect the facts and the implication as they ARE discussable short comings and unknowns and avoid either extreme ( or absolutes).

Pedantry can only exist sensibly when facing extremes or absolutes.
Posted by examinator, Saturday, 21 August 2010 12:51:40 PM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
Examinator

You have not shown where true logic ends and faux logic begins in the argument on free trade. Is true logic, is Pythagoras’s theorem, is 7 x 7= 49, based on “unsubstantiatable faith and belief?”

> "The alternative that I favour is to respect the facts and the implication as they >ARE discussable short comings and unknowns and avoid either extreme ( or >absolutes)."

This assumes that the facts are not in issue. But sometimes the question is, what are the facts? Do trade restrictions reduce total net productivity and mutual shares, or not? Does increasing the money supply cause inflation, or not? Do rain dances increase fertility, or not?

Facts don't interpret themselves. That requires theory. Theory is to come up with an explanation of cause and effect based on logically necessary relations. Otherwise we couldn’t communicate about anything, because nothing would logically follow, everything would just refer back to more contingent variables.

At some stage the rubber has to hit the road, and we must have recourse to logically necessary relations. For example if a boiler explodes we cannot explain this by saying the pressure got too high, because it doesn’t explain why it was too high. Ultimately we have to sheet home the explanation in Boyle’s law.

All explanations of fact must ultimately refer back to some logically necessary relation in pure theory, otherwise they wouldn’t explain anything. For example, if we say there is a shortage of land, we are appealing to the universal knowledge that you can’t indefinitely increase the *physical* productivity of a piece of land just by adding more capital or labour.

Merely looking at ‘facts’ doesn't tell us which ones to ‘respect’ as cause, and which as effect. Government inflates the currency, and then we get a recession. But did we get a recession *despite* monetary policy, or *because of* it? Do living standards rise *because of* trade restrictions, or *despite* them? Merely looking at facts doesn’t tell us.

You have assumed that, just because there are opposed explanations, therefore they are extremes, and therefore the truth lies somewhere in between
Posted by Peter Hume, Saturday, 21 August 2010 2:06:50 PM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
But if there are four parties to an argument about achieving higher productivity: one advocating free trade, one advocating full socialism, one advocating witchcraft, and one advocating rain dances, it doesn’t mean the truth is somewhere in the middle and we should “avoid extremes”. That is completely invalid.

Ricardo has shown not the faux, but the true logic of free trade: it increases total net productivity and the shares of everyone who participates in it, on the conditions assumed. It is dishonest to assert that this depends on “emotionally dominated opinion and filling the unknown with belief rather than facts”, or “faux logic in that they rely entirely on unsubstantiatable faith and belief”. What faux logic? You haven’t refuted him.

No-one has ever shown how *restricting* trade increases total net productivity and the shares of everyone who participates in it, on the assumed conditions. They start from emotionally-dominated opinion – like “aint’ it awful that some hypothetical people have to clean a hypothetical poo pit?” – and work backwards from there to assert that government regulation is necessary and desirable.

Therefore there is no reason why such interventionism should be taken as one of the parameters within which explanation must restrict itself, because its proponents have not logically distinguished it from rain dancing and other irrational beliefs in the first place. How does restricting production cause greater wealth? It’s nonsense.

In arguing for a ‘balance’, none of the government apologists has been able to show that government *can* contribute a balance as they define it, nor that such interventions would consist of anything but arbitrarily and immorally making everyone poorer. The protectionist arguments represents a flight from reason.

One the one hand you accuse theory that you are unable to refute of ‘faux logic’.

On the other you have nothing to put in its place but appeal to your arbitrary opinion, based explicitly on nothing but the plethora of contingent variables, and a jumble of different models from the physical and statistical sciences that have no application to the issue in hand.
Posted by Peter Hume, Saturday, 21 August 2010 2:12:31 PM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
Part 1
Again, Peter you are delving into selective extremes to make your point.

Unlike you, I don't accept that there is a simple correlation between
your 3 grade multiplication and Free Trade Ideology

One is an arithmetical conclusion the other is a theory based on an abstraction.

FTI is fine as an aspirational goal but where the rubber meets the road there are innumerable externalities that contribute to the out come. Simply deducing that what is INDICATED in abstraction and therefore assuming that it in its simplicity can be applied with accuracy or impunity to the real world is nonsense. Common sense tells one that these un/ill defined externalities (other factors) wil distort and create problems beyond that of the theory.
To then cobble together add ons etc simply creates fertile ground for unexpected conflicts and failings.

Think of my point as a line of computer code...in its self it is good however put that line of code with 2-4million others in a program you will get .....windows Vista a set of unpredictable problems. The reason is clear, the compatibility, with other code, operating system, languages, components, permutations et sec.
In life, when applying an abstract theory the complications are exponentially more.

You point about witch craft in context confirms your selectivity of factor to meet your theory and indication of possibilities of the z dimension.
You focused on the ones to you that are nonsense. It all depend on your objective/goal You a suggesting that the only viable options are those that are determined by Capitalism (as it is practised now) and Socialism.
Posted by examinator, Saturday, 21 August 2010 4:48:02 PM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
What in effect I was saying you and your ilk have the tendency to not recognise that there may well be totally different and better systems available. Systems that may not include the current understanding of Capitalism V Socialism.
You are trying to prove that there is ABSOLUTELY nothing else other than C or S or varying degrees there of.( I.e. a negative ...good luck)

Economics (capitalism) has yet to meet the Scientific standards tests of objectivity, testability, repeatability and PREDICTABILITY.

I posit because of the un/ill defined conditions and externalities and their unaccounted influences on the the Free Trade Ideology.

All philosophies make the mistake espousing or assuming a GUT OATH (grand united theory of all things human) and come unstuck.

Have an acceptable nigh
Posted by examinator, Saturday, 21 August 2010 4:49:36 PM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
Your argument is intellectually and morally bankrupt and you know it.

If there is no way of knowing whether trade restrictions produce a net benefit, then there is no moral or technical justification for forcibly overriding people’s voluntary relations.

But if it can be proved, then what is the proof?

And if everything is mere “ideology”, and there is no possibility of rational knowledge, how are you in any better position? The absolutist GUT OATH ideology is all your own.

And if you can’t understand the disproofs of trade restrictions either from simple arithmetic, or the history of socialism, what makes you think you’re going to recognise it in any more complex form?

To talk of an unknown alternative is sheer dunderheaded ignorance. Either action is voluntary, or its not, fool. How can your smart-arsed alternative change that?

And unless you can show how your non-existent alternative is going to be in any better position to take account of externalities, have the honesty to admit that you have lost the argument.

I have shown how my argument could be falsified. You haven’t, because yours can’t be.
Therefore it’s not that I’m failing to recognize the possibility there’s a middle way. It’s that you are failing to recognize there isn’t.

Perhaps if we just keep trying socialism it might work eventually? That is the level of your entire argument. It’s idiocy like this that keeps falling for Great Leaps Forward, and Five Year Plans, and pink batt schemes, and buying school buildings worth $100,000 for a million dollars, thinking it makes everyone better off. Idiocy.

All forms of protectionism, socialism and interventionism amount to wishful thinking that physical laws and reason don’t bind us, and we can make up any economic reality we want by simply passing laws or redistributing property. We can’t, child.

Yours is nothing a culpable flight from reason, an embrace of perpetual credulity focused on the state. It is infantile narcissism, squalling for some responsible person to put a big tit of warm milk in your mouth, at someone else's expense.
Posted by Peter Hume, Saturday, 21 August 2010 8:58:12 PM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
Examinator,

"....idealism ........ tends to interpolate as a visceral competition between the two polarised extremes ( Labor V Liberals aka capitalism V socialism). Clearly what is missing are the Z axis dimensions."

The tendency of progress within nature to involve a swinging back and forth between archetypal negative extremes, as well as to sometimes find balance, is known as the dialectic. Originally described by GWF Hegel for a Western audience after meditation on yin/yang polarity, the idea was unfortunately made most famous by Karl Marx, who in my opinion significantly bastardized the idea.

I would say that the main dialectic tension that we have witnessed within the progress of human history over the last few centuries has been between the extremes of 'collectivism' and what I call 'separatism'. This tension has obviously been manifest in the struggle between capitalism and communism, but is also much wider than this, covering a range of subjects.

Being the optimist, it is my belief that we are moving into a time when that tension is dissolved.
Posted by GilbertHolmes, Sunday, 22 August 2010 11:53:49 AM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
Peter, Part 1

Your entire White Christian rational is based on a belief, a perspective, that limits the focus to the X-Y axis. Calling me names doesn't change the facts much less prove you are correct.

I'm not trying to prove anything more than there are always other/better options. As sentient people, our task is to find them.

e.g the neolithic man saw his food wax and wane with the sun. It was reasonable for him to worship it as a deity. But as knowledge rose rather than a capricious god it was a physical phenomenon.
What organises the the universe is still a mystery and like Alexander Pope's fleas the search for the God particle,GUT or TOE (the absolute) will continue ad infinitum.

History as a tool for prediction of the future is a blunt tool as it doesn't fully take into account the differences in contexts . Look at the 1927 stock exchange crash didn't prevent or will not prevent future clashes between economic applied theory and reality.

Show me where True *unadulterated* Free trade exists, where the externalities are taken into an account that results in 70% of the ideology? i.e. that it doesn't cause other problems that have greater reaching problems. Show me where it's enforcement hasn't been exploitative, benefiting the imposer to the detriment of the culture of people it is imposed on.

Consider PNG was full of 800 nations that were relatively stable for about 40-80000 years (depending on who you read). Look at it now, a basket case, a poster nation of all that is wrong with our capitalistic free market world.

Clearly your view/perspective is that of a WWCE (white western cultural enthusiast) likewise it filters you acquisition capacities. Sorry, I have lived and been part of alternative and they work to the *same* (limited) satisfaction of the individuals involved
Posted by examinator, Sunday, 22 August 2010 4:15:28 PM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
Part 2
The point I was making is a multilayer one, that incorporates moral (human sensitive) aspects.

- if you ignore the human aspect your theory of Free trade Ideology, which is based on WWCE benefit structures/concepts, economics (the blanks, unknowns are bolstered with beliefs and non universal constructs) naturally any argument won't gell for you.
That doesn't make it wrong just different. Right or wrong is subjective, a belief.

FTI is fine as an aspirational goal but it does currently fosters/thrives in an non level playing field. That has bugger all to do with Socialism V Capitalism.

Define, the aspects that are uniquely Socialistic....not in any other political ideology like conservatism or the Liberalism Menzies deliberately intended. et al
Posted by examinator, Sunday, 22 August 2010 4:18:17 PM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
Gilbert,
I agree in principle with what you say particularly with Marx.

The problem that seems to be missed it that a theory can be logical but from a White Christian perspective but not to others who aren't burdened that culturally imposed limitation on reasoning.

The question to me is does Free Trade Ideology benefit all concerned or as in the case of White Christian Logic, perhaps not.

If there are known 'victims' i.e. where the third world comes in contact with say Western corporations (coffee, coco, bananas) have all been subjects of substantial worsening of the malaise of the third world. Specifically buying cartels, exploitative pre market manipulation (GM Seed)

The ideologies of the afore mentioned are merely blunt tools to work on for "where the rubber hits the road".

Given that there are too many imponderables and a forced (mismatching) of cultural externalities where the overall benefit is dubious then one has to say imposing free trade on 3rd world countries is clearly Misplaced.
Ergo the headline is accurate.

Back to the philosophy. The problem is that western philosophy particularly economic can neither pass the scientific tests thus they are either flawed - woefully inadequate to explain the phenomenon - and or based/filled with faith and belief.

What they aren't is universally correct. therefore imposing it on a lessor equipt culture/nation is Misplaced.

So long as there are massive externalities any ideal must either be highly tailored to the circumstance/flexible or aspirational.

I am aware , perhaps not as well as you on the basis of philosophical thinking but to me it largely tries to box the human element.
Unlike Peter I believe the facts suggest the theory not the other way around.
Posted by examinator, Sunday, 22 August 2010 5:04:11 PM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
I've been away.
I am really irritated by the garbage being spruked here. Why can't you all just admit that don't have a bloody clue what you're talking about. Forget about Marxism and all the ideology you've all soaked up and parrot ad nauseam! Marx's whole edifice is built on the premise that human life under capitalism is a demeaned and wretched state of alienation, in every sense of the word. This is the mindset behind the triumphalism of Francis Fukuyama, for instance, who proclaimed "the end of history" with the fall of the Berlin wall. The human race had reached a state of consummatum est: Liberal democratic rational capitalism was our crowning glory as a species! Do any of you feel we've defined in practice what it is to be human?
Never mind that capitalism raises a minority to a state of supercilious conceit in their imagined achievements or their material glut, or that the rest of the "minor" bourgeoisie, puffed-up with worthless self-importance, worship at their shrine. Never mind that capitalism impoverishes ten times as many to the same obverse degree, or that it is destroying the planet (and will destroy us) in the process of maintaining its rapacious spread and its gross disparities. The key theory of Marx, and it is necessarily invisible to you lot (its truth or falseness) behind a veil of ideology (might as well be six inches of lead!), is that human beings are exploited and demeaned in their role as the means of superfluous production: for capital. Under capitalism, they do not produce or practice anything from their own spirit, in an uncompromised fashion; they do not experience productive life as something natural. They do not experience life as something spontaneous. You cannot appreciate the subtlety of this point without a little philosophy, or without stepping out of your cherished delusions.
..But that's your problem!
I'm finally persuaded that I'm wasting my time here and I won't disrupt your "deep" meditations further. GO FIGURE!!
Posted by Squeers, Sunday, 22 August 2010 6:32:38 PM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
What examinator is calling facts is nothing but his own prejudices going round and round in circles.

The structure of his belief system is this:
• assume socialist interventions are viable
• on seeing evidence to the contrary, blame the problem on free trade
• when tactic 2 no longer works, assert that there is an unspecified ‘third way’
• (on examination, the third way always turns out to consist of more government interventions)

But the original problems remain:
1. socialism is not viable because of the economic calculation problem
2. externalities cannot be resolved by just passing the decision-making to politicians or their delegates

Persistence in these irrational beliefs is no better than belief in rain dances and is sheer culpable ignorance.

Squeers religious devotions to Marx are laughable. Wake up and smell the coffee Squeers! Marx was wrong and you haven't got a clue!
Posted by Peter Hume, Monday, 23 August 2010 5:12:19 AM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
Well, this is interesting.

There are basically two conflicting imperatives that are being conflated here. The first is that of maximising productivity and the second is that of minimising individual disadvantage. They are not fully reconcilable, it seems to me.

On the one hand, if production is to be maximised, then there must be incentive for those in control of capital to invest that capital, whether the control is vested in individuals or in groups of various kinds,including Governments. On the other, there is no doubt that there are some people who lack the capacity (for various reasons) to be sufficiently productive to support their own life (not lifestyle).

All of our social democratic experiments have been attempts to reeconcile these two factors. The question then becomes "what part of our free-trade-generated productivity is to be used to support those incapable of contributing?", which inevitably devolves to a discussion about who gets what and a broadening of definitions of incapacity. For example, it is now deemed that having babies is an incapacity worthy of broad social subsidy, not a biological function that directly rewards the participants. Noone actually argues that the participants are not rewarded by the act, they claim that the act is a net disadvantage if one wishes to compete in other aspects of social endeavour. Where does this end?

If I decide (of my own free will) to do something else that is inherently personally rewarding (let's say taking a year or two off to sail solo around the world), does that justify a social subsidy? After all, by doing it I am reducing my capacity to compete in other aspects of life, such as having babies. Surely I should be compensated?

Where this all leads,of course, is that no matter how productive a nation (or the world) is, there needs to be a clear increase in the standard of living achievable by being productive. If there is not, then the productivity will eventually fall, as people make the decision that productive activity is not worth the effort
Posted by Antiseptic, Monday, 23 August 2010 6:23:48 AM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
Peter Hume “Persistence in these irrational beliefs is no better than belief in rain dances and is sheer culpable ignorance.”

But such is common, everyday socialist / collectivist bulldust, Peter

As politicians have said in the past

"Socialists have always spent much of their time seeking new titles for their beliefs, because the old versions so quickly become outdated and discredited."

So too the ideals of Gilbert, here are pure protectionism and we saw how that has failed especially in the “workers utopia’s” of USSR and eastern Europe, the places people risked their lives to escape from...

One big socialist prison camp.

Of course the “moderate socialists” (aka Lenins useful idiots) claim their theories could never lead to the horrors and mass murders of communism....

.....anymore than a maggot cannot turn into a house fly.

But you might consider yourself privilege to even get an opinion from Examinator. He mostly criticises the opinions of others and declines to express anything of his own.... after all on the “Economic Calculation in the Socialist Commonwealth” thread

Where he did say

“I repeat I have no interest in proselytizing any solution simply because of the level of defensive galloping inertia that abounds here.”

Which I think qualifies as “Pomposity personified”

As for Squeers... he is like a boxer trying to punch above his weight, he lacks the stamina to follow the reasoning, has a hissing fit and decides to find a different pond to paddle in... something shallower, maybe a Marxist forum would suit him well, there they just call each other comrade and pretend they will all have meaning after the revolution.

Which brings us to good old Karl, the fumbler. He lived in England, expecting his revolution to be fired by the English masses and considered the Russian peasantry as sub-human.

as is said of Marx and Engles

“Most people who read "The Communist Manifesto" probably have no idea that it was written by a couple of young men who had never worked a day in their lives, and who nevertheless spoke boldly in the name of "the workers".”
Posted by Col Rouge, Monday, 23 August 2010 8:20:03 AM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
With all this uncertainty in governmnet, I sure am glad things are now back to normal, with antiseptic and Col Rouge blessing us all.

Col, though you are Stern (and proudly so I am sure) I am happy with the return to Col Rouge.

Anti, welcome back. You have been missed by all here at OLO.
Posted by Houellebecq, Monday, 23 August 2010 9:20:36 AM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
Anti
"there needs to be a clear increase in the standard of living achievable by being productive. If there is not, then the productivity will eventually fall, as people make the decision that productive activity is not worth the effort."

Unless the productive activity is undertaken merely just to survive (which is an incentive in itself)- but I get your point in terms of innovation and risk.

Having babies is perceived as vital to supporting an ageing population and economic growth, sailing solo around the world is not.

However, there is a point where the cost of social incentives outweigh the good they purport to achieve such as overly generous middle class welfare schemes like parental leave. Contrast that to poorly paid child care workers and minimum wage standards in some cities barely meeting a living wage. Yet we are (potentially) asking taxpayers or employers to support people 'not working' who are earning up to $150k per year.
Posted by pelican, Monday, 23 August 2010 9:38:30 AM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
Part one
Yet again my critics are bound by the imperative (dubiously so) for WESTERN perception style 'advantages'.

They are all assuming that the indigenous culture has the NEED for a Western capitalist system.

It seems that one thing that is not clearly understood is that between Australia and PNG there was in excess of 1000 distinct NATIONS each with their own language and cultures.
Contrary to Western zealots these culture were/are all encompassing and sophisticated. Many involved democratic principals.

It is a myth that the likes of PNG and Australian Indigenous people weren't able to support their populations they had been doing so for the previously 40-80000 years.

In any logic there is a difference between a feature and benefit.
Any assessment of benefit is subjective to the individual who is affected (subjective)

i.e. banning contact sports might be fine to me ...it would offer arguably offer several less obvious, but in my perspective, significant benefits.
However, the average Collingwood fan would want to lynch me for such heresy , so who is Universally correct?

Those who favour a western capitalist system have set ideas. I'm not so sure. Psychologists would argue that the choice is conditioning formed.

If an indigenous person's cultural system is able to meet Maslow's hierarchy of needs then an incomplete abstract notion is not a benefit.

I have observed that Capitalism (Free Trade ideology) require significant (catastrophic often inhalation) to indigenous cultures to make C&FT to work.
The problem is that these changes often strip the culture of its evolved identities (place in the universe), their control, structures and unleash a dysfunctional hybrid.
Simply put the culture hasn't had the time to evolve internalise the new abstractions.

In this context I posit that FTI needing related externalities (western style capitalism) that are in 'their cultures' of dubious benefit. e.g. FTI insists on external access to indigenous 'resources' and survival mechanism, often with scant regard for Local Culture.
Posted by examinator, Monday, 23 August 2010 10:17:19 AM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
NB No sweeping ideology like C& FTI operates independently devoid of wider consequences or context.

C& FTI insists on their own understanding and negotiations (caveat emptor) being paramount. In many if not most instances, the indigenous fail to fully comprehend the consequences of assigning resource right away or even ownership. Not because they are inferior or stupid simply because it's beyond their cultural understanding the underlying principals and their consequences.

Therefore I state that FTI AS IT IS PRACTISED is indeed misplaced.

To the arch capitalists,
You are entitled to your views somewhat one-sided as they are and I'm entitled to mine.

I don't come here to proselytise rather to seek and give understanding that there are always different options...the trick is to recognize them and their contextual value.

On that note I bow out to continue would be to turn the topic into a competition in which neither side will change their view already some are beginning to add acrimony.

* Next topic *
Posted by examinator, Monday, 23 August 2010 10:18:51 AM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
"FTI AS IT IS PRACTISED is indeed misplaced."

Actually it is more than just the application of free trade that is flawed. As I've tried to show, the theory behind it is wrong, or at least it is only half right. Even if it was applied perfectly, 'free trade' would fail us drastically.

"....the ideals of Gilbert, here are pure protectionism...." says Col Rouge, and that is indeed the truth. I am suggesting that we need to find a balance between leaving our communities open to trade and protecting the local economies of those communites. With this balance in mind, I'm in favour of protecting our communities down to the neighbourhood scale.

Actually, if you have a look at Bob Katter's website, www.bobkatter.com.au/ you'll see that protectionism may have just become the flavour of the month.
Posted by GilbertHolmes, Monday, 23 August 2010 1:26:34 PM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
Houlle’ thankyou for your kind words. “Stern” has an historic meaning which I will not go into here... but CR is a far nicer fellow all round

Examinator “Contrary to Western zealots these culture were/are all encompassing and sophisticated. Many involved democratic principals.”

like it or not

Australia is a modern western democracy and all your hoo-haaing will not alter that fact and the “starting point” to any considerations is the existing “nature of the nation”.

“Those who favour a western capitalist system have set ideas.”

As do the intransigent minorities who feel that embracing “archaic tribalism” is the way of the future and anyone who cares to look in the direction of Africa and the fate of Rwandan Tutsi’s or Sri Lankan Tamils (who refused to assimilate into the wider Sinhalese community), can see what sort of benefits can be drawn from clinging to the millstone of such negative values.

“If an indigenous person's cultural system is able to meet Maslow's hierarchy of needs”

Your misapplication of Maslow is just plain silly to say the least and displays your gross ignorance prevailing over substance.

Maslow’s is an “individual” based self-assessment, regardless of the culture or social / ethnic constructs of the community in which a person finds themselves..

Two individuals in the same community will experience differing levels of “satisfaction”, regardless the cultural system which they share.
.
“significant (catastrophic often inhalation) to indigenous cultures to make C&FT to work.”

Wrong! “Capitalism” has existed for millennia between different but “trading” tribes

The “socialist” / “anti-capitalist” doctrine of “uniformity” is the real danger, eliminating tribal dress in favour of a single anti-individual uniform, which eliminates tribal allegiance in favour of the wider nation – example “Tibet the nation” versus “Tibet the province of China”

“FTI insists on external access to indigenous 'resources' and survival mechanism, often with scant regard for Local Culture.”
Wrong, when local people own local resources they decide. When central government owns everything the local need and expectation is subordinated or ignored.

examinator you are just spouting academic twaddle, which has no foundation in any measureable facts.
Posted by Col Rouge, Monday, 23 August 2010 2:04:43 PM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
No doubt you do, GilbertHolmes.

>>I would say that the first step in bringing about this trully awesome state of affairs is to start believing that it is possible. Who know's what 'we' can do!<<

But I still beg leave to doubt that the experiment is even worth the energy you expended in writing those words.

Motel conference rooms the length and breadth of the country are full of people - paying real money - listening to some hyped-up droid spruiking the "we can do anything" mantra.

Reality, both in the form of and articulated, workable theory, and in the form of centuries of experience, guarantees that they - and you - are completely wrong.

It is the fate of all governments to succumb to corruption. Whether that corruption takes the form of outright theft from the people, or in the form of allowing a bloated, irresponsible and patently self-interested bureaucracy make increasingly meddlesome and petty regulations, corrupt they will become.

To imagine for one instant that the people of the world will at some time in the future agree to a single, unified form of government, is to fritter away a small, but valuable, component of your lifespan.

And by the way, examinator, it's quite ok.

>>Pericles, I have not ignored you.....I just have other things to do at times and can't always answer immediately.<<

Quick recap:

>>It has been a long held view that production as it is currently measured doesn't accurately reflect the real (true) cost of production.<<

Long held by whom? On what grounds? Whose definition of "true"?

>>your [locality tax] plan in theory would certainly go a way to give a quantum to the real cost of production<<

In what way does the market not already factor in transport costs?

Whenever you have a moment.
Posted by Pericles, Monday, 23 August 2010 2:55:26 PM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
Gilbert "....the ideals of Gilbert, here are pure protectionism...." says Col Rouge, and that is indeed the truth. I am suggesting that we need to find a balance between leaving our communities open to trade and protecting the local economies of those communites. With this balance in mind, I'm in favour of protecting our communities down to the neighbourhood scale.

The balance is an economic one Gilbert,

People who produce nothing of value have no means to buy anything, thus they are forced, by circumstance, to become more self reliant and develop their own local economy.

But pretending that local manufacture is the be all and end all is to deny the economies of scale which enable large producers to supply at better delivered cost than local producers.
I am by nature a solid supporter of devolution and local investment versus both centralised authority/power and centralised production of anything but I see no merit in pretending that protecting any local activity against a distant competition produces any overall net benefit .

It clearly does not.

It just imposes additional price burdens on the local consumers of goods and services for those goods and services whilst simultaneously tending to discourage innovation and product/service development.

leading to the sort of moribund, economic and social stagnation experienced in UK in 1970s

Gilbert “Actually, if you have a look at Bob Katter's website... protectionism may have just become the flavour of the month.”

Bob Katter is a reneged “national”, unable to support or work with his political colleagues.
He promotes his own parochial farming interests, at the expense of everyone else. That is why he is an independent and that is why his electorate elected him.

But independents, when they make deals, tend to sell their soul for the short term gains of the moment.

I predict Katter will never support labor and he will fall into line with the Coalition which he used to be part of... as for the rest – if he is their independent leader, they will follow him.....

Of course, the solitary green will run with the rat-pack
Posted by Col Rouge, Monday, 23 August 2010 3:10:41 PM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
Pericles, Perhaps I did get a bit ahead of myself suggesting that we could create a 'trully awesome' system of government. Realistically, I think that an ideal government is about as possible as ideal beauty or ideal smelling armpits.

....but I do think that we can at least hope for what is relatively awesome rather than relatively bad. Assuming that all is bad and failing to advocate for what is better, you are helping to condemn us all to a crappier, smellier, more ugly future.

If you have no hope, or no vision, you could at least do us the favour of keeping quiet. At the risk of repeating myself, your cynicism about the possibilities of governance appears to spring from your "....'cult of the individual' version of human nature, (separate, self-interested and competitive)...."

Col, you come late to this discussion!

I refer you to my comment of the 18th aug at 11.57pm

...and what about, "Encouraging diversity and local self-reliance is obviously a significant shift away from our current focus on promoting specialization (which supports concentration of ownership ie big business ahead of small) and reliance on exports. I suggest, however, that it is a shift that we need to make." (Me - 16/8)
Posted by GilbertHolmes, Monday, 23 August 2010 4:13:29 PM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
Pelican
Subsidies and handouts do not come from some kind of calculation of whether they are socially beneficial or not, compared to their costs. They come from the political process. Politicians, to get marginal votes, need to pay bribes of whatever it takes. The process is completely arbitrary. That's why we've got, for example, publicly funded velodromes but not publicly funded surfing holidays. There's no reason in principle why it couldn't be the other way around.

GH
"As I've tried to show, the theory behind it is wrong, or at least it is only half right."

I think your demonstration of this consists, correct me if I"m wrong, of showing that economic calculation only takes in those things exchanged against money. It does not encompass so-called 'externalities'.

But that does not show that the theory is half right. All other alternatives will have exactly the same problem *and* will lack the faculty of economic calculation, and will therefore be worse.

That is why you have ignored answering the questions below because they disprove you:

1. What transactions would not be caught in the exceptions to free trade that you argue for?
2. Who is “we”?
3. Please define “balance”
4. How would any policy to achieve balance avoid catching transactions that do not come within its definition?

Examinator
What next? Separate logic for Jews and blacks?

The value of gold is not in the gold itself. It's in the human valuation of gold. The gold that is in other galaxies doesn't have a "real" or "true" value. It has a value of nothing, because humans can't use it.

Similarly, there is no "real" or "true" value of production, that is outside human valuations of production. You are just spouting garbled Marxism which was already garbled to begin with. The value of anything is in the value that humans put on it, which can only be known by their actions, not their words.

Look come on, you protectionists have been roundly thrashed. Do the decent thing and concede defeat so I can go on my publicly-funded surfing holiday.
Posted by Peter Hume, Monday, 23 August 2010 6:52:03 PM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
*"Encouraging diversity and local self-reliance is obviously a significant shift away from our current focus on promoting specialization (which supports concentration of ownership ie big business ahead of small)*

Gilbert, you show no good reasons why the market and consumers
cannot sort that out and decide for themselves. Each has their
niche and role to play. So your interfering tariffs are for
no good reason that you can justify.

Fact is that as technology becomes more complex and specialised, so
will production. That often involves incredibly large fixed
infrastructure costs, which it makes no good reason to try to
replicate. So the net effect of your policy would be that
the cost of consumer goods would skyrocket, quality would go
downhill and peoples standard of living would drop. That might
be your goal, but I doubt if too many Australians share it with
you.

*If you have no hope, or no vision, you could at least do us the favour of keeping quiet.*

Err hang on. We need the widsom of rational thinkers like Pericles
to stop some of you young dreaming kids from wrecking the
place, even if your claimed intentions are well meant
Posted by Yabby, Monday, 23 August 2010 7:57:37 PM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
Peter Hume,

"I think your demonstration of this consists, correct me if I"m wrong, of showing that economic calculation only takes in those things exchanged against money. It does not encompass so-called 'externalities'."

I am saying that comparative advantage ignores costs associated with adapting the society's productive capacity so that it is doing what it is relatively best at. This is a flaw in the applicability of the maths in the theory to real life. Because of this it is quite possible that a negative social/environmental outcome could result even if greater efficiency is achieved in production. I suppose that is what you could call an externality.

I also mentioned another major flaw with the theory, being that it only works if capital is not allowed to cross borders.

I have ignored your questions because you appeared to be asking them without thinking about what I had previously written to you.

"1. What transactions would not be caught in the exceptions to free trade that you argue for?"

Trade is not negative. It facilitates the ability to purchase what is not available locally or what is produced cheaper/better elsewhere (where there is an absolute advantage in production). It also exposes local producers to competition from outside helping to ensure that they are efficient, (part of Smith's invisible hand) and encourages specialization for individuals and regions in producing what they are relatively best at (comparative advantage).

If we pursue these outcomes too far, however, they drain the life out of our communities, (so we don't need or talk to our neighbours etc), undermine our evironment and the democratic process etc. Herman Daly calls a situation where we are attaining economic growth (through either using more resources, increasing efficiency in production or through gaining effeciencies through trade arrangements) but it is costing us more than we are earning 'uneconomic growth'.
Posted by GilbertHolmes, Monday, 23 August 2010 9:50:59 PM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
Continued…

So what I suggest, in the way of 'balance', is that while we try to gain the advantages that are available through specialization and trade, we do so in the context of first protecting our communities, and in that way encouraging interdependence and diversity within local economies. Balance between specialization and diversity. Balance between openness to trade and protected local economies. Balance between the competitive and cooperative aspects of the economy etc

"2. Who is “we”?"

Let me know where I used the word we inappropriately and I'll try to explain.

"4. How would any policy to achieve balance avoid catching transactions that do not come within its definition?"

How can a cohesive society not reduce personal freedom? How can power not reduce gentleness? My point with these rhetorical questions is to say that openness to trade and a protected community can actually support and nourish one another. But not if either of the extremes is allowed to dominate. Power without gentleness, for example, is just angry.

Hopefully my answers are relevant enough to your questions that you don't just repeat them.
Posted by GilbertHolmes, Monday, 23 August 2010 9:52:51 PM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
Hi Yabby,

Hope you have been listening to what the ever popular Bob Katter has got to say about free trade being bad for farmers!

"Gilbert, you show no good reasons why the market and consumers
cannot sort that out and decide for themselves. Each has their
niche and role to play. So your interfering tariffs are for
no good reason that you can justify."

The big are more powerful than the small. If you let the market decide, the big will win.

"We need the widsom of rational thinkers like Pericles
to stop some of you young dreaming kids from wrecking the
place"

Pericles offered no criticism, just cynicism.
Posted by GilbertHolmes, Monday, 23 August 2010 9:57:49 PM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
*Hope you have been listening to what the ever popular Bob Katter has got to say about free trade being bad for farmers!*

Yes Gilbert, I know that Bob is economically illiterate. Being
in politics is hardly a sign of wisdom. BTW, NZ dairy farmers do
very well by owning Fonterra. Our fellows have lots to learn from
them.

*The big are more powerful than the small. If you let the market decide, the big will win.*

So let lots of the small own a share of the big, then everybody
wins!

*Pericles offered no criticism, just cynicism*

Cynicism is quite healthy, in trying to get others to think and
examine other aspects of a problem. You are a newbe poster on
OLO and I would guess, pretty young. Trust me, Pericles is
one of OLOs wisest posters. Your underestimate his intellectual
abilities at your peril. But learn the hard way.
Posted by Yabby, Monday, 23 August 2010 10:39:14 PM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
I am a newbe. Nice to meet you all.
Posted by GilbertHolmes, Monday, 23 August 2010 10:50:34 PM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
Pelican:"Unless the productive activity is undertaken merely just to survive"

Well yes, but in that case the situation is hardly conducive to trade. Welfare perhaps, but not trade, which can only exist when someone has more of one thing than they strictly need and they want something that someone else has more of than they strictly need. It's the excess productivity (over survivial level) that matters, as well as the durability of the goods. Until refrigeration there was no scope for significant trade in fresh meat beyond the local market, but grain, tea, opium etc were traded over great distances.

Pelican:"Having babies is perceived as vital to supporting an ageing population and economic growth, sailing solo around the world is not."

But people actually want babies for the sake of having a baby of their own. It's a biological imperative. Should we also pay a "breathing bonus" to all those potential carers-for-the-elderly? Perhaps a "lavatory benefit" if one can show that one puts the lid down after each use in accordance with Government policy? Moreover, using a potential disadvantage at some other activity to justify a subsidy for this one is just dumb. As I said, where does it end?

On protectionism
I have a very small business. I compete directly with large corporations like Westfarmers and Boral, who have massive economies of scale, but also massive fixed costs. My business model would not work for such a corporation, since it relies on a low turnover at relatively high margins. My efficiency is relatively high due to low fixed costs and careful selection of products. I sell entirely locally, but I rely on parts, machinery, fuel, electricity etc, etc all sourced from elsewhere.

Protectionism would not assist my business in any way: all it could do is drive my costs of production up,thus making my business model less viable: since my upper limit of pricing is basically established by the larger players my margin would be necessarily reduced. Furthermore, my regulatory compliance cost would be relatively high, simply because of my low turnover.
Posted by Antiseptic, Tuesday, 24 August 2010 6:29:14 AM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
Hi Gilbert.... yes I am a “late comer”, don’t worry I catch up quick.

“If we pursue these outcomes too far, however, they drain the life out of our communities, (so we don't need or talk to our neighbours etc), undermine our evironment and the democratic process etc.”

I refer you to my previous post

“People who produce nothing of value have no means to buy anything, thus they are forced, by circumstance, to become more self reliant and develop their own local economy.”

Thus the “equilibrium” between “local supply” and “remote” is balanced at the point where people can no longer afford to buy it.

It happens on national levels too.... it is called the “exchange rate” and influences / is reflected in other things like “Terms of Trade” and other economic indices.

Pretending that “protectionism” benefits anyone, long term, is a hoax.

The only “benefits” of protectionism are purely expedient, invariable favouring a specific sector of the community, at the expense of the rest of the community and in the long term chronically detrimental.

Pelican “Contrast that to poorly paid child care workers and minimum wage standards in some cities barely meeting a living wage.”

I find it strange that people accept low wages rather than doing different work or training with scarcer skills, which pay better rates of pay. Admittedly factory work is not as “fun” as playing with babies but when it comes to earning a living, one has to do two things

Accept reality and
decide on your priorities... “fun” or “income”

with fewer people prepared to accept low wages in childcare the shortage will eventually cause wages to rise to the point where market economic need is becomes so high as to increase prices for the service.

All simple supply & demand economics, not rocket science.
Posted by Col Rouge, Tuesday, 24 August 2010 8:02:40 AM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
GH

Even if we take for granted all you assume, it still doesn't say how the alternative approach is going to be in any better position to know and to take into account the externalities. You assume that the alternative system you have in mind will be beneficial (as to values outside economic calculation) without any way to account for either the costs or the benefits. But that was the original problem you were trying to solve. It is not good enough to allege the problems of externalities in general. There is a need to show that the end result would be net beneficial for society.

Thus any alternative system will have all the same problems *and* will have the major defect that it displaces economic calculation, thus making both economic and “non-economic” conditions, e.g. environment, worse.

In other words, it won't and it can't produce a net benefit for society as a whole. All it can do is create forcible redistributions from A, the rightful owner of property, to B, a pet favourite of politicians.

From your first post:
"Instead of 'free trade', what we are actually looking for is balance."
This raises the question why we should not suspect that "we" is a cipher for a particular zero-sum interest in forced confiscations. Those whose property is to be taken, and everyone in society who loses by the reduction of the division of labour, and who lose by the attack on the principle of social co-operation, cannot be included in the expression "we". It includes only the beneficiaries of the privilege.

You also assume that there is an inherent conflict between the freedom of the individual, and society at large, justifying arbitrary violations of property rights. There isn't, that's the whole point. Assuming the use of force and fraud are illegal, there is no conflict between the interests of the individual, and those of the society. (Most externalities are generated precisely because the resource in question in owned in common, and we get a 'tragedy of the common' situation. *Extending* common ownership only makes the problem worse not better.)
Posted by Peter Hume, Tuesday, 24 August 2010 10:05:45 AM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
Antiseptic,

"I sell entirely locally, but I rely on parts, machinery, fuel, electricity etc, etc all sourced from elsewhere......Protectionism would not assist my business in any way: all it could do is drive my costs of production up...."

The locality tax system that I have suggested is only applied to purchases horizontally across the society. You could therefore purchase parts, machinery, fuel etc from larger producers (controlled by governments) from within a region within which you live. True that it could still drive your costs up to some extent, but it would also encourage more local people to buy your stuff.

Col,

"Thus the “equilibrium” between “local supply” and “remote” is balanced at the point where people can no longer afford to buy it."

The big are more powerful than the small, if we allow the market to decide, the big will dominate! Unfortunately then, your equilibrium will keep tipping further and further in favour of the wealthy.

Peter,

I am not against counting. I am talking about a judgement call believing that 'we' will be better off if we actively protect our communities against potentially negative external influences. Under the system that I suggest, we will lose some efficiencies, but we will also gain some. Through pitting each against all others, free trade causes the loss of efficiencies attainable through coperation and sharing within an interactive community.

By 'we', I mean our whole global human society, as in 'it will be in our favour if we protect the local economies of our communities.'

I look at extreme freedom as negative in the same way that I look at extreme social cohesion as negative, both are positive when we mix them together.

I'd like to note here that none of you has questioned the basic critique of comparative advantage that I have made:
-It doesn't count the costs associated with adapting productive assets to producing what we're relatively best at.
-the theory doesn't work if capital is allowed to cross borders.

Do any of you have any problems with these two points?
Posted by GilbertHolmes, Tuesday, 24 August 2010 9:25:35 PM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
*-It doesn't count the costs associated with adapting productive assets to producing what we're relatively best at.*

Gilbert, it seems to me that you are ignoring the fact that
most businesses are constantly changing. "Adapt or die" are
part of doing business.

Rupert Murdoch spent his life building a chain of newspapers
around the world. Now they are nearly worthless, for most
are losing money. Why? A few college kids in the US
became creative. A couple of them created a funny sounding
company called Google. Another teenage geek had an idea
called Facebook. Along comes another geek with an idea called
an I-pad. Rupert, powerfull as people think he is, has been
done over by a few innovative college kids. His business
adapts, or it dies.

Who benefits from all this, no matter what it costs?

Why, consumers of course. All of us.
Posted by Yabby, Tuesday, 24 August 2010 10:26:58 PM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
GilbertHolmes:"You could therefore purchase parts, machinery, fuel etc from larger producers (controlled by governments) from within a region within which you live."

Except that there is no local manufacturer of the things I need. I am in Brisbane. My sawmill parts come from Victoria. My truck parts come from JApan or China, my chainsaw parts come from Japan, my forklift parts come from China, my panelsaw parts come from Italy, my docking saw parts come from the US, all my other tools and equipment were made in some part of Asia. My fuel comes from who-knows-where, my electricity is produced in the Callide Valley, my logs come from anywhere within a couple of hundred km.

As for "contolled by Governments", please explain how this is going to allow me to keep my fixed costs low enough that I can compete with the much lower production costs of the large players? Further, how is it going to allow those large players to achieve the return on investment that they require to raise funds to improve their processes? Is the Government to also provide low-cost capital? If so, what's in it for me, as a taxpayer?

I could go on...
Posted by Antiseptic, Wednesday, 25 August 2010 7:13:56 AM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
If this is your justification, GilbertHolmes, no wonder your argument is being drowned in a sea of fact and logic.

>>The big are more powerful than the small, if we allow the market to decide, the big will dominate! Unfortunately then, your equilibrium will keep tipping further and further in favour of the wealthy.<<

There is so, so much wrong with that sentence, it is difficult to know where to begin.

First of all, there is a reason the "big are more powerful than the small". They have become big by providing the customer with value. Ultimately, they will become less powerful, as "the small" out-innovate them. Even Microsoft cannot maintain its anti-customer monolpolistic pricing tactics forever. And history is littered with the bones of once-powerful companies whose time has passed.

There is one rather telling exception to the above.

And that is where the "big" are provided with protectionist government policies. There is no opportunity in that environment for innovation to displace them, as potential competitors are disadvantaged from the get-go.

The market must decide. There is no other reliable mechanism by which supply is able, economically and efficiently, to meet demand. Tinkering with tariffs and disincentives on any basis, let alone the arbitrary one of "distance", can only serve to distort the picture.

Eventually, you will find suppliers holding the consumer to ransom through predatory pricing - logically, this is the only outcome.

If I produce shoes in my factory in Altona, and I'm protected through a range of geographic tariffs from competition (from Canning Vale, say, let alone from overseas) how do you suspect I will price my product?

This is also a problem:

>>I'd like to note here that none of you has questioned the basic critique of comparative advantage that I have made:
-It doesn't count the costs associated with adapting productive assets to producing what we're relatively best at.
-the theory doesn't work if capital is allowed to cross borders.<<

When you provide arguments to support your position, it will be possible to discuss them.

As it stands, they are just unsubstantiated observations.
Posted by Pericles, Wednesday, 25 August 2010 9:07:04 AM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
GH
Even if all you're saying were granted, there is no reason to think that government would be in any better position to fix the problem or produce a better outcome, and lots of reasons to think that
a) it couldn't, and
b) it ould only make matters worse.

I'm not saying everything has to be countable. I'm saying that, given that the most important values cannot be subjected to calculation, that problem inheres equally in any alternative system.

Even though economic calculation cannot take into account externalities precisely because they are not subject to economic calculation, free trade still has net benefits over protectionism with respect to such externalities.

For example pollution. The alternative to operating at a profit is operating at a loss. That is why people are not currently doing what you have in mind - because if they do, they'll be operating at a loss. Imperfect as operating at a profit is, operating at a loss uses more natural resources and is worse for the environment, not better, to achieve the same result.

For example social costs. Yes wagon-wheel makers become unemployed. Yes the farmer has to replace his old timber stockyards.

But this is a result of the far greater number of consumers preferring innovations which make all of society better off than the relatively small number of producers.

The division of labour is the very basis and reason for human society. Without it, we would have evolved to be a solitary species, like the snow leopard. Anything that cuts against it, makes everyone worse off in economic, environmental and moral terms.

The argument against interventionism is precisely that it makes matters worse *when viewed from the interventionists own standpoint.* But when they see the entirely predictable results of their interventions, eg unemployment, famine, domination by big corporations, they externalise the blame. Thus the protectionist approach is not balanced at all, it is biased against the only viable option at every turn.
Posted by Peter Hume, Wednesday, 25 August 2010 12:54:53 PM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
Col,

Your comment were well expressed. it proves beyond all doubt that you are incapable of objectively looking at anything without reference it back to your learned prejudices.

For your clarification, it is your prejudice that precludes you from seeing that the indigenous societies were nations by definition. Within this nations were clans and tribes, not a lot different to Australia today. All that has changed is the names, their goals and functionally were the same (save our obsession with Capitalism). Cearly neither Capitalism (as practiced) nor Socialism have all the answers and as such the full (correct answer) must lie elsewhere i.e. a third option.

Much of your argument are based on the above learned prejudice driven myopia and is devoted to proving your success in material biases.

In simple English, I agree with Gilbert that FTI is misplaced because it doesn't account for the reality i.e. It is a more a cause of friction than benefit to the third world, therefore misplaced.

The rest of what I said was merely clarification. How you extrapolated that into I want us all to going back to 'archaic tribalism' grass huts etc is a function of your prejudices not what I was saying.

My views DO NOT exclude a BETTER FTI.

Instead of defending the (in)defensible broken system how about looking at the areas that clearly need fixing.
Posted by examinator, Wednesday, 25 August 2010 2:46:23 PM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
Pericles
>" there is a reason the "big are more powerful than the small". *They have become big by providing the customer with value.* <"

What you say is theory but in practice it doesn't work that way.
That assumes that the supplier doesn't get engaged in a myriad of market distorting unfair competitive practices.

>" Ultimately, they will become less powerful, as "the small" out-innovate them."<
in niche markets ...perhaps
>"Even Microsoft cannot maintain its anti-customer monolpolistic pricing tactics forever."<
In the meantime those fledgling innovations are denied to the public. not to mention 'innovative' smaller companies are broke or forced to sell their innovation to...... the big predatory corps.

The history of Microsoft is that it was made by a large dominant multinational. Much of Microsoft's new found 'competitiveness' was due to "govt intervention".
"> And history is littered with the bones of once-powerful companies whose time has passed.<" like buggy whip manufacturers ?
That is an outrageously simplistic take on the reality.

You know that there are a blinding array why big corps go much has little to do with up and coming 'small companies'.
You also ignore the corrosive impact of externalities like big corps get the ears of Governments. Are you really saying that the company behind Bhopal went out of business because of competition or that Hardies didn't hide behind corporate structures. or that the company who made dodgy breast implants went out of business because of competitive pressure.

I understand the theory clearly but practice is some what different.
Posted by examinator, Wednesday, 25 August 2010 3:22:20 PM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
Ok, examinator, let's dig a little deeper.

>>The history of Microsoft is that it was made by a large dominant multinational.<<

Microsoft, along with Hewlett Packard, Google, Apple, Dell etc. were all founded from scratch, with just a couple of fanatics and an idea. It was their competition that were "large dominant multinationals"

>>Much of Microsoft's new found 'competitiveness' was due to "govt intervention"<<

You couldn't be more wrong. Microsoft's eventual stranglehold on the market was the result of marketing practices that they created when they were still quite small. Some people regard these as somewhat devious and unethical, but they were not the result of a monopoly situation, they were the cause of it.

And their "new found competitiveness" - if by that you mean the fact that they are less able to exploit their monopoly - is to some extent the result of the various governments, EU etc, dismantling those practices that were considered unfair.

>>"And history is littered with the bones of once-powerful companies whose time has passed." like buggy whip manufacturers? That is an outrageously simplistic take on the reality.<<

I did not actually have buggy-whip manufacturers in mind.

General Motors dropped out of the Fortune 500 earlier this year, having been there for a hundred years. RCA was at one stage one of the giants of the fledgling IT industry, along with IBM, GE and the "BUNCH" - Burroughs, Univac, NCR, CDC and Honeywell. There is quite a long list of multi-billion dollar, non-buggy-whip companies who were strangled by their own inflexible business model, beaten by more agile competitors.

I take your point about the fact that some large corporations use their market weight to stamp on competition. But government protectionism, of any kind, is as corrosive a force in business as any home-grown monopoly.
Posted by Pericles, Wednesday, 25 August 2010 5:34:56 PM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
Antiseptic,

There might, for example be a company run by the Australian govt that sells sawmill parts that you could purchase without paying the tax. There might be a global company selling petrol.

Perhaps a better question for you to be asking is, "What the hell has happened to the Australian manufacturing industry?"

As we pointed out earlier in the discussion, the cheaper manufacturing overseas comes in large part from a difference in wages and workplace rights rather than any genuine efficiency. Call that fair?

Pericles,

"no wonder your argument is being drowned in a sea of fact and logic."

What a classic! Unfortunately I don't credit you with the same wisdom as does Yabby.

"They have become big by providing the customer with value." Sometimes they have grown big by ripping off others!

"...with protectionist government policies. There is no opportunity in that environment for innovation to displace them, as potential competitors are disadvantaged from the get-go."

I am all for encouraging renewal and increasing efficiency within the economy through rewarding innovation in small business. Encouraging people to purchase from local businesses seems a good method to achieve this.

"If I produce shoes in my factory in Altona, and I'm protected through a range of geographic tariffs from competition (from Canning Vale, say, let alone from overseas) how do you suspect I will price my product?"

That is to your benefit. I am not suggesting however, that a tariff be set so high as to encourage continuing inefficiency or profiteering.

Comparative advantage doesn't count the costs associated with adapting productive assets to producing what we're relatively best at. That is a simple statement of fact.

"The theory of the international division of labour is one of the most important contributions of Classical Political Economy. It shows that as long as — for any reasons — movements of capital and labour between countries are prevented, it is the comparative, not the absolute, costs of production which govern the geographical division of labour." This is a quote from the website that Peter Hume was good enough to link for us.
Posted by GilbertHolmes, Wednesday, 25 August 2010 8:38:16 PM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
*There might, for example be a company run by the Australian govt that sells sawmill parts*

ROFL Gilbert :) The Australian Govt can't even oversee the
installation of pink batts. What would they know about making
sawmill parts? Try Cuba, it doesen't work. It didn't work
in Russia either, they gave up, so did the Chinese. Don't you
learn anything from history?

*the cheaper manufacturing overseas comes in large part from a difference in wages and workplace rights rather than any genuine efficiency. Call that fair?*

Yet the majority of our imports come from Europe, USA, Japan
and Korea.

Its called value for money. Only some people want el cheapo products.
Oops Gilbert, there goes your theory.

*Encouraging people to purchase from local businesses seems a good method to achieve this.*

So encourage them by all means Gilbert. Don't go increasing the
input costs of their businesses, so that they too become
uncompetitive in the real world. We tried all that stuff in the
60s, it was a dismal failure.

All that you will create with your theory, is a heap of small
monopolies, just like we used to have
Posted by Yabby, Wednesday, 25 August 2010 8:59:23 PM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
My thoughts on FT are well known so I won't repeat them here but I endorse Gilbert's approach and the idea that there really needs to be far greater scrutiny over the effects of free trade and some of the anomalies including the use of subsidies and cheap labour.

If we are to introduce tariffs within a generalised free trade system there is no harm in a tariff for goods deriving from those countries where subsidies are used to protect local agriculture or manufacturing industries or where cheap/slave labour is used; and even banning imports from those countries where governance is not strong enough in regard to pesticide use or other hygiene issues (or where there is a risk of pest infestation without the use of toxic fumigants at importation point).

This is one area where nation sovereignty is over ruled or dictated by international interests including disparities on foreign ownership laws etc.

It is an area where much more needs to be done and where Australia has to get out the 'only virgin in the brothel' mentality.
Posted by pelican, Monday, 30 August 2010 11:53:39 PM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
Thanks Pelican for the endorsement,

Rock on!

Did you see the bigger article that I put up on OLO titled 'Key to Power'? http://www.onlineopinion.com.au/view.asp?article=10886

It's about the potential for a green and independent alliance in opposition to the free market.

They also said that they would publish another article that I gave them this week about the 'invisible left hand and the invisible right hand', which looks at competition and cooperation as dual positive drivers within economics (so long as they occur in balance of course).

I'd love to hear your comments on those.

....and not to forget the rest of you of course!
Posted by GilbertHolmes, Tuesday, 31 August 2010 12:16:11 AM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
I've been a bit of a streaker on OLO lately Gilbert with competing priorites at the moment but will have a read very soon and get back to you.

The idea of an alliance sounds good but it will be a hard sell to the majors and to other groups in the short term. Many people see any form of protectionism as speaking with forked tongue. The whole issue has been grossly manipulated IMO.

One of the ironies is that often imports don't lead to cheaper prices for consumers in any case, it is the middlemen who rake in the profits while they wreak havoc behind and in front of them. Those items that do reach the consumer at a cheaper price come with a different cost and that is exploitation of a poor labour force.

No doubt there will have to be some tweaking and compromise but in the long term I think it will help Australia prosper and ensure the viability of our agricultural industry. It would be interesting to know the ratio of number of jobs lost to free trade compared to the number gained and which crops look like being lost totally to OS imports and the effects on biosecurity (not only here but where it affects the developing world).

More tomorrow if I get a moment. :)
Good night for now.
Posted by pelican, Tuesday, 31 August 2010 12:29:42 AM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
*One of the ironies is that often imports don't lead to cheaper prices for consumers in any case, it is the middlemen who rake in the profits while they wreak havoc behind and in front of them.*

One of the ironies of armchair critics, is that they commonly are
not aware of what is going on out there, in the marketplace.
I can assure you Pelican, that trading is very competitive. If
somebody is making too much money, somebody else will want a share
of that by undercutting them. Freer trade means more competition
not less. If you know of anyone making too much, just ring their
competitor and see how long it takes for them to cut in.

What amuses me is how you armchair critics view agriculture and
Gilbert with his notions of the peasants out there, growing
organic vegetables etc. How romantic, but the reality is
quite different.

Fact is that one of the biggest problems today is that the young
generation simply refuse to work physically, like the old generation
used to. Try and find people prepared to bend down all day in
a veggie patch. Its hard work and the young want cushy jobs,
not hard work jobs.

So its all about mechanisation these days and that is where our
niche is, for mechanisation makes labour costs largely irrelevant.
Posted by Yabby, Tuesday, 31 August 2010 8:04:43 AM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
Yabby you cannot undercut your competitor if by doing so you will make a loss? How can you compete with cheap labour? Mechanisation has an initial investment cost and then it has to be maintained or updated as technology advances.

Locally grown is better all round for communities and knowing what is happening to your food in the chain of production. I don't understand why you are so vehemently are against the locally grown movement. Movement away from food produced for local consumption has been disastrous for many in the developing world albeit it serves a few in the priveleged classes.

There is nothing wrong with importing goods/food that cannot be produced locally where our climate is not suited or water is not sufficient.

I am not sure how much the issue of lack of governance comes into play (eg. bribes) and how this is healthy in the FT economy.

References to armchairs serves no purpose. I have never been burgled but have a right to offer opinion about the legal system and the law. People are quite capable of making up their own minds about many issues and you also assume that no-one else on OLO but you has ever imported goods. There are many goods that cannot be sourced here but that is another issue.

You speak about opponents of free trade in quite derogatroy ways at times which fails to acknowledge many economists and other academics realisation about the myths and dangers in some aspects of free trade.

But you can continue to put your head in the sand if that makes you feel better. :)
Posted by pelican, Tuesday, 31 August 2010 11:12:33 AM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
*How can you compete with cheap labour? Mechanisation has an initial investment cost and then it has to be maintained or updated as technology advances.*

Pelican, it seems to me that you are out of touch with modern
farming. We had some of the world's most efficient rice farmers
in Australia, until we cut off their water supply. How did they
do it? Large scale mechanisation. Yes, harvesters cost half a million
Dollars. Large tractors another 300k$. Seeders another 250K,
SP sprayers another 400k$. But they can cover huge acres. Your
paddy planting labour force, no matter how cheap, cannot compete.

Its the same for all our broadacre crops. Wheat, oats, barley,lupins, canola,
lentils etc. Peas, beans, potatoes, wine grapes, sugar,
sown and harvested mechanically. What you pay the driver has
little bearing on the final price. But land cost matters, fertiliser
costs matter, energy costs matter, herbicide costs matter.

We produce meat efficiently, because our farmers run relatively large
herds per man, on land that is basically cheap, compared to other
parts of the world. We don't have to take them indoors when it snows.

We have also benefitted because in the past, because Govts spent money on
scientific agricultural research, so our farmers stayed ahead of
the global pack. That is less the case now. CSIRO etc do other
things.

Price is only one component of one part of the market. When I
was exporting seafood, I was competing directly with the Chinese,
even in places like Hong Kong. Yet places like the Hong Kong
Jockey club still bought my product, because when people go to
top restaurants, they want the best, not the cheapest. The
Chinese have still to learn to produce quality, not everyone wants
cheap and nasty.

I am not against local food production. I am against those of you
who are trying to make it compulsory, through punitive tariffs or
legislation. I am for consumer choice.
Posted by Yabby, Tuesday, 31 August 2010 4:12:51 PM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
To take it further Pelican. Regarding your favourite topic, garlic.

Since you raised this topic some time ago, I've been watching
the garlic market. What I found was a number of local farms who
do indeed produce garlic. They sell all that they can produce at
very good prices. Meantime Mexico is the place that more garlic
is bought from, as there is a lack of local production.

It even made me think. Could I produce garlic here? Sure I could.
A couple of roaded catchments would provide the water, the problem
is the rest, which is frankly backbreaking work, bent down all
day.

So why would I bother, if there are other options?

Most Australians do in fact have other options, that is the core
of it.

So my point really is this. You and Gilbert are seemingly both
pencil pushers. You do indeed express your opinions and you have
a right to do so. But IMHO you are also out of touch with the
reality out there. If you spent 8 hours a day bent down over
veggies patches, rather then your present cushy jobs, you might
realise why more Australians don't grow veggies locally, if they
have a choice.

For if the crunch came, neither of you would do that kind of hard
work for a living, day in, day out.

But of course it's easy to pontificate to others. That is your right.

There is indeed a local solution. Get some creative Aussie to
mechanise the whole chain of garlic production and you'll have all
the local garlic that you want. That is the sort of thing that
we are good at.
Posted by Yabby, Tuesday, 31 August 2010 8:14:31 PM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
"I am not against local food production. I am against those of you
who are trying to make it compulsory, through punitive tariffs or
legislation. I am for consumer choice."

What do you call competing with a country that provides farm subsidies? It is the same as competing with a 'punitive tariff'.

I am not against all imports, but the playing field is hardly level and I believe there are greater community and environmental advantages for local production. Would you rather food security be in our hands or in the hands of an overseas competitor?

You talk about consumer choice as though we have it with free trade. We do not when the government under private sector pressure refuses to support consumer pressures for more honesty in labelling.

A couple of examples in relation to choice. I have seen, in more than one major supermarket a container load of vegetables marked as "imported and local produce". When I asked one of the supermarket employees how do I know which ones are the Australian avocadoes (they were all sticky labelled the same) he could not answer and just said "well some of the are from Australia and some from OS".

A friend out of interest, called the ACCC and was told that the labelling was fine because it described the contents as local and imported. Can you tell me where the choices if for those who want to support local farmers?

I hate to break it to you but with advancements in technology and research, farmers are more and more becoming pen pushers whereas I am no longer a pen pusher - my role was never about just wielding a pen, it was very much an operational service oriented role. You seem to think all public service roles relate to pens. I would not call police or fire personnel pen pushers, nor nurses for that matter and so much more. But what is your beef about pen pushers? Pen pushers are consumers just as much as non-pen pushers. You really must do something about this prejudice.
Posted by pelican, Wednesday, 1 September 2010 9:43:08 AM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
* I believe there are greater community and environmental advantages for local production.*

Well that is fine Pelican, so buy local. Not everyone agrees with
you. I am all for consumer choice, its those who want to deny
me that choice, that I have a problem with.

* Would you rather food security be in our hands or in the hands of an overseas competitor?*

The biggest food security is in diversity of production. If
Aus has a drought, you should not starve. But as it happens,
we export around 60% of our food, so you have food security from
that very fact. Not growing ALL our food here, has security
ramifications too. If Aus has a problem with production, we have
relationships and supply pipelines from other sources, ready
to go. You should remember not to put all your eggs in one basket :)

*We do not when the government under private sector pressure refuses to support consumer pressures for more honesty in labelling.*

If the Govt, elected by the people, caves in so easily to every
lobbyist, perhaps we need better Govt, not putting up shutters
to trade. In other words, trade is not the problem, Govt is.

*Can you tell me where the choices if for those who want to support local farmers?*

Once again Pelican, the problem is not trade, but poor Govt! I
happen to agree with you, I think food should carry a label of
origin, being specific.

*I am no longer a pen pusher*

Ah but you were and it shows. On OLO I constantly read this stuff
from so called academics, about how the world should be. More
local manufacture, more peasant farming etc. If any of them spent
a month on a factory assembly line or a month bent down all day
picking vegetables, they might realise why people avoid these
jobs like the plague, if they can. They are frigging hard work
Posted by Yabby, Wednesday, 1 September 2010 2:59:13 PM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
I earn my income as a carpenter.
Posted by GilbertHolmes, Wednesday, 1 September 2010 5:41:27 PM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
Yabby:
<On OLO I constantly read this stuff
from so called academics, about how the world should be. More
local manufacture, more peasant farming etc. If any of them spent
a month on a factory assembly line or a month bent down all day
picking vegetables, they might realise why people avoid these
jobs like the plague, if they can. They are frigging hard work>

Almost word for word the same speech you gave me once, and I've worked on factory floors most of my life. You seem to have an uncanny ability to get it wrongs, Yabs.
Posted by Squeers, Wednesday, 1 September 2010 6:31:43 PM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
Squeers and Gilbert. I'm sorry that you took my comment personally,
but I mentioned neither of your names. I've been stating my opinion
on OLO for quite a few years now and I assure you that the place
is loaded with smartarse academics who don't know what hard work is.

BTW, there is a big difference between being a carpenter or
working on a manufacturing floor and doing the mindless repetitive
work of making cheap consumer products.

We still manufacture things. I'm told that the drill used to rescue
the Chilian miners is in fact an Australian made machine. When I
used to deliver airfreight to Perth airport, I was always amazed
at how many high value, specialised mining parts were being flown
out, to all sorts of destinations around the world.

Specialised manufacture can be quite interesting and indeed we
do it, from lasers to ferries. It is the mindless, boring,
repetitive stuff that we now have made in Asia. For good reasons,
the locals have other options.

As it is, our meatworks can't find enough locals to fill the jobs
on offer, they rely on 457 workers. Our manufacturers can't find
enough welders even now, as its not the most pleasant of jobs, if
you do the same, over and over, all day long. Specialised equipment
is a bit different.

So this notion that we will suddenly recreate a huge manufacturing
industry is flawed. You won't find the staff. Young people today
have other options. Even our shearing industry relies on New
Zealanders, as young Aussies simply don't want to do that kind
of hard, boring repetitive work.

Fruit and vegetables are another one. They rely on backpackers
these days, without them the industry would be stuffed.

But mechanise an industry, or have one where people get to sit in
front of a computer screen, then you will find willing workers.

That is the reality of it in Australia these days
Posted by Yabby, Wednesday, 1 September 2010 9:07:42 PM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
  1. Pages:
  2. 1
  3. 2
  4. 3
  5. ...
  6. 14
  7. 15
  8. 16
  9. All

About Us :: Search :: Discuss :: Feedback :: Legals :: Privacy