Jess Irvine pretends to care about freedom

The Age’s Jessica Irvine is suggesting Australia needs to avoid a Trumpian trade war with China at all costs, dumping the textbook “free trade is always good, everywhere” excuse without even considering a nuanced – or assertive – middle ground approach. To wit:

Trade wars are dumb. That’s why it’s usually politicians who start them.

Because tariffs give domestic producers an artificial leg up. Great, some might say. Let’s help our own. But history shows – including the recent history of Australia’s car-manufacturing industry – that propping up domestic industries doesn’t really help them or their workers. Ultimately, workers are kept in jobs with no real long-term prospects – at least not without costly taxpayer support – and domestic consumers pay higher prices for the imported cars they clearly prefer.

Rather than sheltering unviable industries behind high tariff walls, workers and capital tied up in those industries are better off redeployed to industries where we do have a “comparative advantage” over the rest of the world – that is, where we can produce products better than other countries.

As a nation, we took a punt that we’d rather run the risk of interrupted supply than continually protect industries that weren’t truly competitive and pay higher prices as a result. We’ve enjoyed higher productivity and wages as a direct result.

To their immense credit, Australian politicians have so far held the line, refusing to retaliate against Beijing’s increasing bellicosity. That’s despite some rumblings from Nationals MPs that some retaliatory action – possibly through the imposition of tariffs on China – is required.

Yes trade wars are dumb, but so is insuating that ANY restriction on trade will lead to an outright war. Furthermore, history has shown quite clearly that the hollowed out manufacturing industry has not led to lower prices – particularly for cars – or other products, but it’s been the terms of trade via sending vast swathes of commodities to China that has created a once in a generation economic return. And last time I checked, wage growth has barely kept pace with official inflation since the mid 1990s…let alone productivity

And she only makes one off hand consideration of the longer term strategic positioning of the economy in the wake of a pandemic that has exposed the fragile “free” “just-in-time” “let others make the stuff we need to live on” consumption behemoth:

COVID-19 has led many to question this rejection of domestic self-reliance, but the gains to ordinary Australians from cheaper imports over the past decades are undeniable.

What is undeniable is the ability of economists to discard the truth in front of their eyes as they prop themselves up on big chairs with textbooks that are out of date.

Australia needs a firm hand in dealing with the Chinese and that includes using whatever weapons – including trade – that is has, let alone the biggest one which is creating partnerships with other nations who have suffered the same “free trade is awesome all the time” nonsense espoused by neo-liberal economists for the last twenty years.

Latest posts by Chris Becker (see all)

Comments

  1. Actually, I thought destroying the car industry dumb… but maybe that’s just me? Don’t understand that comment “workers are kept in jobs with no real long-term prospects“, don’t we still buy cars? Won’t we still buy cars in 20 years???

    • happy valleyMEMBER

      +1 And quoting Jess: ” … that is, where we can produce products better than other countries.”

      So, we can produce submarines better than other countries? LOL?

      Next, Jess will be telling us that because we could produce cheap gas, it was sensible to export all of the Gladstone project gas at cheap prices and pay far higher prices domestically? LOL?

    • ErmingtonPlumbingMEMBER

      Every time I see a foreign made Hyundai or BMW police car, I like to imagine being the guy who gets to throw the switch, that powers the electronic chair Hockey and Abbott are strapped into for treason.

    • Mining BoganMEMBER

      She’s done some stupid stuff…really mind-boggling wear a helmet when you go out stupid stuff…but that is just plain offensive. Her career is built on rimming the captains of industry and she bags jobs with no supposed future?

      I wonder what time of the day her notification comes in saying this is what you write today, before or after she cleans the sh!t off her tongue.

      Tumbrils.

  2. “Trade wars are dumb?”

    Trade wars involve trade. The clue is in the name. One way economic warfare involving ideology, influence and glass jawed dragons is not a ‘trade war’.

    We did not have a trade war with apartheid South Africa and Nazi Germany.

    What’s happening here is that we are being asked to accept that trade is more important than any principle; free speech, democracy, dignity, human rights and security etc.

    “…the gains to ordinary Australians from cheaper imports over the past decades are undeniable.” So that’s fine then?

    This is not a Trade War. It is the elite asking us to sell our sovereignty now that they have sold everything else.

    • ErmingtonPlumbingMEMBER

      But being able access cheap shyte at the absolute lowest price possible is a fundamental human right and the new moral basis of our Society.

      • Every time we visit a $2 store a small prayer should be offered up to the god of mass production and planned obsolescence. Similarly, open-cut tips deserve the status of graveyards to lost utility. The only problem is that only a finite amount of shyte can be crammed into your average concrete dog box. Solution: more dog boxes and more dogs.

        Our Jess in effect communicates the Good News – that It is every Australian’s god damn right to help suck resources from the planet and turn it into cheap shyte. She helps spread the message via cheap shyte journalism that erodes souls enough to become hollow economic vessels inside human bower birds.

  3. migtronixMEMBER

    “that’s why they’re usually started by politicians”

    Usually? Name one that wasn’t or how that’s even possible? Trade wars ARE politics Jess, the kind that keep hot wars from breaking out…

  4. working class hamMEMBER

    “As a nation, we took a punt that we’d rather run the risk of interrupted supply than continually protect industries that weren’t truly competitive and pay higher prices as a result. We’ve enjoyed higher productivity and wages as a direct result.”

    I think she meant to say that Aust politicians sold off all public assets in the name of “efficiency”, mostly to foreign buyers, and allowed the decimation of manufacturing by offshoring. Whilst centralising the profits and kickbacks created, accordingly.

    • Jumping jack flash

      Outsourcing lets our wonderful politicians, those beacons of intelligence and skilled masters of the economy and everything else, get on with doing the important jobs rather than their amazing intellect and mad skillz getting bogged down with trivial things like, i dont know, governing the country and the economy and providing the essential services for their people?

      Pfft. There’s so many more important things for them to do! Its a good thing they sold it all off to the private sector. Look at how much more they’re getting done, and the quality of life of their people is simply amazing and improving all the time.

    • Mining BoganMEMBER

      Does anyone in media ever point out that Scummo did absolutely nothing about the WuFlu? Anyone?

      Bueller?

      • Not to be the cultural police on this one, but he never says ‘Anyone’ and ‘Bueller’ together in the one sentence. It is two different scenes. We have been programmed to accept the meme of a merged reality, just like the one about immigration being good for the country …

    • working class hamMEMBER

      “And if China turns on us, ordinary Australians hurt — just ask wine makers or crayfish farmers.”
      A little out of context, but is this guy serious?
      The battle cry for all of the CCP sympathisers is think of the ordinary Australians, think of the jobs! Pure BS
      Corporate laziness has got us here and greed will make sure we remain at heel. Chinese made heel if these sycophants get their way.

    • Stan is full of theoretical blah blah. He should follow his own advice and disregard his own ideology in aboriginal affairs.

  5. Jumping jack flash

    “But history shows – including the recent history of Australia’s car-manufacturing industry – that propping up domestic industries doesn’t really help them or their workers”

    She doesnt consider that at the time we lost the car industry debt acquisition was sucking out all spare capacity from the economy. Disposable incomes cant be used to buy cars and at the same time be saved to obtain debt, or spent on debt service.

    Also consider the fantastic run-up in cost of living due to the same reasons.

    Propping up the industry is fine if that prop feeds back into the industry. We were propping up the industry and that was being redirected to the banks for debt.

    • ErmingtonPlumbingMEMBER

      The entire taxi fleet was adopting Australian made Toyota Camry hybrids without coercion and the serious uber drivers were prefering them also.
      Toyota was exporting these Australian made cars as well
      Our Government could easily have kept production here with guaranteed government procurement contracts.
      I would go a step further and mandate the entire taxi fleet had to be Australian made hybrid or electric vehicles including Uber and any other silicone valley, private tax farming, ridesharing “services”.

      • working class hamMEMBER

        Logic has no place in Aust.
        In 96′ when our school excursion arrived at parliament house, with a “Howard’s a wanker!” protest in full swing, all pollies turned around at the front door were in Aust made commodores. Public sector contracts alone could have subsidised the car industry in Aust.

      • Jumping jack flash

        Definitely. There’s certainly more they could have done to fight to keep the industry alive.

          • Jevons ghostMEMBER

            But but but! The Highway Patrol coppers get to drive Beemers! What’s not to like! Straya!

            (and Chrysler 300SRTs as well. Bonzer!)

    • chuckmuscleMEMBER

      Or that every other country with a car manufacturing base subsidises them. Or that the only reason Chinese goods are cheaper is because they trash their labour market and environment AND the government subsidises industry. People like our Jess have drunk so much neolib Kool-aid.

  6. Polite suggestion for Jess
    Stick to discussing subjects that you know a little bit about
    This sure as F does not include Car manufacturing, nor from what I’ve seen does it include Global Politics or for that matter macro Economics, best keep the conversation on a level that matches your skills, like um like grocery shopping dockets.

  7. She really has no clue. The law of “comparative advantage” just like the “efficient market hypothesis” is so past its use by date its outstanding. It comes from a world where you couldn’t invest in overseas countries easily but you could buy their products – i.e. I can set up a business that I have a comparative advantage in and my dollar adjusts to make it an absolute advantage. In previous times any extra wealth accumulated was easier to invest locally due to capital barriers and the need for local know-how. This is no longer the case due to globalisation.

    With foreign debt financing and capital keeping our dollar artificially higher than it should be for most of that period, and with capital now able to set up show quite easily in any country a lot of arguments for “free trade” at least in Australia’s context are invalid. It also assumes everyone else is playing by the same rules – which as we know isn’t the case.

    Would I rather a slightly worse car (Ford, Holden, etc) and have a secure job for life? Or buy a latest Hyundai/iPhone/etc but risk hollowing out the whole economy and destroying our manufacturing skill base? For most workers in the Western World free trade has been a losing proposition balancing wealth to places with worse working conditions; where to compete you have to live their lifestyles.

    • chuckmuscleMEMBER

      +1000 many of the trade ideologies were formed during the 18th and 19th century when it took months to move goods and capital and there was a risk that you got robbed along the way. Now it takes nanoseconds, completely different paradigm, yet using the same textbooks to push an outdated ideology.

    • 100% agree. These are theories that work very well in the abstract theoretical academic space but trying to apply it in reality leads to devastating consequences since not everyone plays by the same rules.

    • ErmingtonPlumbingMEMBER

      “In 1975, with no public consultation, the ALP government of Gough Whitlam signed Australia up to the United Nations inspired Lima Declaration which required Australia to reduce its manufacturing capabilities by around 30% and to commit to import that amount from other preferred countries.

      The Declaration also mandates that we import as much primary produce as we can consume; such as fruit, meat etc.

      After the ALP committed us to these requirements, Australians were told this agreement would “flatten the world’s production to redistribute wealth to give all nations a “fair share’”.

      https://dlp.org.au/dlp-calls-for-review-of-the-1975-lima-declaration/

      45 years later, working class Australians are still being told to keep their privilege in check.

    • Fantastic observation, but what does it mean?
      Capital account flows are disrupting Trade account flows, but logically what’s not in the Trade Account must be somewhere in the Capital account, it’s kind-of how the Current Account is defined.
      For me the difference centers around the willingness of all participants to engage in Capital transfers that put this capital are outside their direct control. But surely this isn’t a new phenonium?
      How did previous generations address this problem?
      How did the British maintain the value of their investments in China? (HK / Macau anyone, Shanghai partitioning …)
      Basically previous generations extracted their right to live and work and profit in the new lands as a cost for providing both capital and manufactured goods.
      With this in mind, what costs are we paying for Chinese capital?
      Are we all willingly paying these costs? or is someone making this decision for other Australians?
      If you ask me our big 4 Banks are making the decision for all of us and our individual greed is allowing them to profit from our very enslavement.
      But as other have said before, No one will ever accuse us of being the Clever country!

      • It means that effectively that through both our government’s and China’s policies we’ve effectively allowed capital to transfer to their countries – that being our wealth. Our cheaper goods aren’t actually cheaper at all; some of the costs is simply not paid by the buyer and instead paid indirectly/subsidized by our foreign debt increasing. You can’t tell me that when this started China was half the price because the Chinese machine making it was twice as efficient as the Australian’s machine – the advantage came from financial engineering (i.e. debt) that indirectly subsidized every foreign good you bought from them.

        It’s like as a whole country we all signed up for the “buy now, pay later” deal at your local Harvey Norman/Jb Hi Fi thinking its cheaper because we forgot the “pay later” part. Worse local goods were not offered the same deal (e.g. tariffs, debt rationing at banks, etc) making it a “selective promotion” in store that favors foreign brands only. That iPhone/Android phone your holding, that computer I’m typing on – its all financed on that deal though our high house prices.

        It’s also why I always say to millenials complaining about high house prices – you can have cheap holidays to Bali/Europe/Japan, etc and the latest phone OR a cheap house BUT NOT BOTH.

        What is means is that as a country we have a choice. We can have cheap foreign goods and embrace globalisation or become more localised with the tradeoff I’ve just stated. Personally I would rather a more localized society if it means more stable jobs and local industry, my 4 weeks off a year, and the Australian lifestyle to enjoy with my family over the latest gadget, car, etc even if it means slightly less economic activity. If that means less electronics, and the aviation industry has to shrink, and trade reduces so be it.

  8. CCP wants to create a perception in the minds of Australians of inevitability that they will prevail, so resistance is futile. The left fell easily because they are mostly cucks to begin with.

    As for trade retaliation, I’d save that card for a little bit longer. For now, hitting back at their influence operations is needed, i.e.:

    – WeChat/Tiktok ban
    – Identify and arrest CCP operatives and their helpers.
    – Pass federal legislation to tear up BRI agreements and the like.
    – Close all Confucius institutes.
    – others?

    • the same psy ops they use for taiwan – “we could beat you easily” (even though most PLA generals would be nervous about the invasion – and wouldn’t want their kids in the first or second waves …)

      Where is that little jewish boy with the slingshot when you need him …