Has anybody actually indicated that?
How do we measure costs? What’s the value of employing people to do things that might not be economic in the Neoliberal sense? The question is complicated. We’d need to take into account the value of having skills and capabilities available. Of course, the measure of that would be subject to ideology.
I came across a little slogan from the middle of last month that struck a chord:
Make Australia Make Again
The acronym works too. 
Well yes, we have calls for protectionism upthread without considering if the consumer wants to pay extra for the protected goods.
I am no fan of laissez faire economics. The question is if you are going to depart from what market forces have been doing for the last 40 years how do you decide what industries to support, how much and then how do you sell it to the electorate.
The car industry is a good example of where public money was spent over a long time to maintain jobs and skills. What did we gain, was it worth it?
The cost of protected and subsidized industries and can be measured fairly easily, you are right that determining the benefit from doing so that is the hard part.
As soon as there was any whiff of dollars being available the rent seekers would descend on Canberra in hordes crying, “me, me, I am the most deserving”. Ideology might play a role in deciding who gets it but my bet is that lobby power would play a bigger one.
Hi @mark_m @syncretic. Here’s link to an ABC news article that examines the issue and explains it in a far more coherent manner than I could ever do.
At the end of the day I would be happy, as a consumer, to pay extra for those items the experts deem essential. The more likely scenario, I think , is that is would be across the taxpayer base.
The more likely scenario is that it has been 100 years since the last major global pandemic and how long to the next?. Noting that this one may not realise the same potential as the last if all the controls being implemented prove effective…which indications they are.
How much time to the next one and the one after that. It could be 10 years…or a thousand. I don’t have a glass ball like anyone else to know when it may occur either. Say it is 50 years (half time of that shown by history), this is almost two generations.
Also, how disruptive has the supply chain ‘problems’ been to the community or impact on the ability to fight the pandemic locally. One could argue that the theoretical impacts have not eventuated. Australia has not been without food or other essentials, and we (royal one) have been very effective in fighting the pandemic with the resources available (we should pat everyone on the back for this fact).
Many countries are envious of the way Australia (and NZ) have approached and managed the pandemic, ensuring its control and limiting potential mortality from the disease. This all achieved eventhough Australia is supposedly having chronic and severe supply chain issues that those supporting protectionism and nationalisation have alleged. How disastrous these alleged supply chain issues have been.
I would say, and possibly not alone, that Australia has no had major supply chain issues and that any loss of supply is because of induced behaviour of consumers caused by unwarranted panic (such as overbuying toilet paper or medical masks …even though masks have not needed by all). There are arguments about ventilators needing to gbe imported as Australia makes limited quantites, but latest thoughts are they may make little difference to the serious and chronically ill…and I am not aware if patients dying due to ‘lack’ of ability to import additional ventilators quickly.
Managing behaviour of the masses will be one of the lessons which will be learnt for future pandemics, but there is no conclusive evidence which relation to Australia’s supply chain which would trigger radical or dramatic economic changes.
Would I pay more for bring back protectionism, nationalising key industries, imposing more government regulation on industries or businesses; or supporting unviable/uneconomic ‘essential’ industries? The clear answer based on the current pandemic is no…as there has been no proven supply chain impacts which would need intervention of any sort…and it may be many decades until a similar event occurs.
Winding back by introducing radical economic measures would have far greater long term impact than the short term inconvenience caused by COVID-19?
Hi @phb, I think we have now moved into a new era. I agree that the shortages we have seen were caused by fear / panic buying and that if that had not occurred the shortages we experienced would not have occurred. The social movement restrictions by the various state governments prevented over running the ICU’s hence we had no problems with the number of ventilators available. And so we have been ok so far.
Nonetheless the next crisis to hit Australia may not necessarily be medical. I’ll leave it to the experts to determine the scenarios. What this crisis has shown is that countries are not willing to share. They need to look after their own and as we have seen any excess is sold off the highest bidder.
That’s why I think it is imperative that our Government needs to look at our vulnerabilities by being overly reliant on one or two countries supplying essential goods. Stockpiling may be a partial solution; however I think that rejuvenating our manufacturing industry will also be part of the solution.
I think there needs to be a degree of protectionism. For example, I hated seeing those truckloads of oranges and bananas being dumped because we could get cheaper from California (or wherever). Australian growers need protecting. Try buying an Aussie orange from a supermarket this week. I believe its Valencias which are in season, but the supermarket is chockers with Californian navels. You might get a valencia from your local fruit and veg shop.
Australians need protecting from rapacious multinationals with demanding shareholders. Its all about how much profit, and making things cheap, so we will buy more, and more often. This applies to clothing for sure. It applies to cars, too. I was guilty of wanting a new car every couple of years… and it was an easy thing to do, with Japanese cars being so cheap by comparison with our Australian manufactured vehicles. (I’m going back quite a few years now, gave that nonsense up several decades ago, before the advent of Hyundai ,Kia, Great Wall and the rest).
If we had not been “trained” to want to buy and buy and buy, we wouldn’t be in this mess. Back in the day, we would buy something and know it was going to last for a long time. Spend more, get better quality… and Aussie wages need not take a dive. But they have… and it all started happening long before the much feted FTA.
I know… I am rambling
Being a ‘rambler’ is great for your health and well being apparently. 
On manufacturing one poignant example in the end of made in American, is the history of the car brand ‘Rambler’, and it’s aptly named manufacturer AMC (American Motors Corporation). After flirting with Renault, AMC was bought out by Chrysler. Jackpot with the Jeep brand going on to lasting Chrysler greatness (tongue in cheek). The for the USA compact Rambler which had been introduced in the 50’s with many modern production line values slipped quietly away.
The lesson for Australia in manufacturing is there is economy in scale and in the most efficient use of resources. Australia compares poorly with the manufacturing giants of the globe, the USA, the PRC (People’s Republic of China), the EU, etc. Australia at around 1.6% of global GDP is a minnow. Do we need to choose carefully if at all?
For many products, more self reliance suggests an economy in which the choice needs to be of only one product from one manufacturer. The history of our car industry suggests while Australia can be resourceful, and Aussies are very innovative, we are not that great at economic sustainability.
For everyday needs and a little luxury, can the average Australian afford to pay more for locally produced product?
The notion of consumers willingly shouldering the burden of national self reliance by paying more with less choice, seems so much ‘not like choice’. Does this even align with the values of that other Choice, the consumer organisation?
Bananas were dumped due to out of specification with the big supermarkets (Coles, Woollies, Aldi).
Oranges have been dumped but not due to imports, but over production in Australia…
One can’t force Aussies to eat more oranges during a glut or change quickly their perception of the perfect banana. Having protections would not have changed these fruit being wasted instead of used.
Fresh bananas currently can’t be imported due to disease concerns and oranges are imported often to meet out of season demand. In relation to oranges, if consumers only ate in season fruits, their would be less of a need to import fruits to meet 24/7 demand.
This article brings up more than security against possible future disaster. We have a difficult relationship with China in particular. We are very big trading partners, we rely on China to buy our iron ore and coal and to sell us manufactured goods including specialty items like solar panels and lithium batteries.
Yet beyond being a trading partner China has shown clear evidence of wanting more influence here and in the last week has threatened retaliation if we persist in supporting the move for an independent enquiry into the origin of COVID19.
There is much more to this question of independence and security than restoring the local manufacturing base. No such industry could soak up all our exported ore, we would still be dependent on other countries for that. Some dependencies are accidents of nature, like another country has deposits of a rare mineral that we need and we do not have any. Humans have been trading the most desirable goods over very long distances for thousands of years, the silk road wasn’t invented lately.
Cost aside there are other practical and political issues with doing away with globalism or even reducing it much.
This is very true, and rushing into goverment policy to ensure Australia can manufacture medical supplies and equipment…or other essential products may have no influence over the outcome of the next major global event. Spending taxpayers money to support such ventures could prove an enormous waste of time and monies.
Do we predict that there will be a major global war? Or how about another Krakatoa sized or bigger eruption which could through land surface cooling (due to ash cloud shading and solar reflection) impact significantly on global food production? And different scenario lists go on. Each one would have different responses, different essential products and services and different government/community responses.
If one supports the argument that Australia needs to be self sufficient in production of all potential essential products/services, Australia would have massive redundancy in manufacturing/the economy to protect it from any future global event. There would be excess capacity hoping that one day it would be utilised. It would be a bit like tradie buying a prime mover and trailer instead of a ute, just in case truck drivers go on strike and are unable to deliver building materials. It doesn’t make economic sense.
The costs to satisify perceived impacts of any potential global event would be significant and be a burden to all future generations.
A glut of oranges which, IIRC was caused by the import of tonnes from CA.
Yeah I had forgotten about the bendy banana issue.
Not quite. There was a glut due to the season and inability of Australia to export excess oranges to traditional markets. Maybe if these other countries stopped the import of all oranges from other countries other than Australia, Australia may have had a solution to the orange glut.
This website has import tonnages of oranges…and the size of the Australian industry. Australia exports about 20% of citrus grown and imports about 3% fresh oranges compared to the total production.
3% did not cause the glut and for oranges to be wasted.
Facts about the Australian citrus industry can also be found here:
https://citrusaustralia.com.au/growers-industry/our-industry
Thanks for the info.
My guess is that Capitalism’s best-before date was some time before 1970. The energy crisis of the 1970s opened some of the cracks, but the flaws of extreme Capitalism were already there.
I prefer to think of it as engineering the economy.
Manufacturing is part of the picture. The labour market is, I reckon, a bigger part. That raises issues like a Universal Basic Income and Jobs Guarantee. Totalitarian Capitalism is unhealthy. We need to be looking after the welfare of the nation as a whole.
Beyond our own borders, we should be investigating regional cooperation opportunities.
I agree that some balanced combination of a market and state management is required for a reasonable future. As my favourite left-leaning economist Ross Gittins put it, a society is not an economy.
I went searching for the author’s justification for saying the pandemic will bring it about: didn’t find it. The same for the death of market fundamentalism, he explains that in his view it is an act of faith not well supported by evidence (true) but as for this being the end of it - nothing substantial.
Wishing alone will not make it so.
We’re often not spoon-fed every detail. I find engaging my mind constructive. What I come up with isn’t necessarily what the author intended, but that doesn’t matter. The reference is a start, not an end.
There are several reasons why manufacturing moved offshore. The cost of labour (high wages, holiday pay, leave loading, sick pay, limited hours) that are not experienced in SE Asia. Then there is the high cost of energy here. What assistance will federal & state governments offer to establish manufacturing here? Most states have high levels of debt which limits what they can do. And of course, China has seduced manufacturers here to setup there.
Better questions are why should they and what will be achieved if they do. The car industry was propped up for decades and that only put off the day when it collapsed. This cost the taxpayer a great deal, for that we got some jobs for a time. I can accept that in some cases money can be spent in that way but before doing so there must be a clear plan in mind about what is going to be achieved by it and how long it is going to last. Throwing money at manufacturing without answering those questions and considering where it would be best spent is not a good policy.
