With lots of legal protections for workers gone, and an openly hostile government, new strategies and organising methods are needed. Cleaners face particular difficulties working in isolated conditions and prone to all kinds of exploitation, especially as so many organisations have sacked their cleaning staff and replaced them with contractors. The Liquor Hospitality and Miscellaneous Union international campaign to improve working conditions for cleaners. You can read more about the Clean Start campaign here.
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John Quiggin 
Fair enough regarding Humphreys’ paper. Not sure though whether publishing Humphreys’ email address on this site is allowed. Perhaps forwarding the question to John Humphreys could work.
If you wish to contact John then go to the following webpage. Johns email address is referenced in the bottom text box.
http://www.gravett.org/yobbo/quiz/graph.php
If you want to get there the long way you can do the actual quiz first at the following link:-
http://www.gravett.org/yobbo/quiz/quiz.htm
The quiz will pigeon hole you politically based on a narrow set of questions and a bit of inference. You may not enjoy the process.
Thank you, thank you for this entertaining thread.
(1)which is why the ALP has a political problem. It’s largely unionist membership (can’t be a member unless your a union member, remember)
I’m not sure that this is correct. My mum, that frothing 84-year-old overthrower of the social order, joined the ALP a couple of years ago. I’m pretty sure she doesn’t qualify to be in any union, other than the Feisty Old Grannies union.
I told her she was wasting her time joining what has become really the alternative Liberal government.
(2) Ernestine, that is a brilliant idea. Why have toilet seats that go up and down, and have to be cleaned underneath, in a public toilet that is “woman-only”? Totally unnecessary! I think you are really onto something here.
And Terje’s dogged pursuit of the subject, while not allowing any of this undignified levity to creep in, is hilarious.
Helen, you can have more entertainment if you click on the second web-site listed by Terje. There are 10 questions. There are pre-selected answers that are said to represent the current state of ‘politics’. There is a sort-of Pavlovian click on box titled “Please judge me, Dear Leader”. When pressing this Pavlovian click on box, a diagram appears. For the pre-selected answers the program shows ‘your’ position as being just a little to the north-east of a box labelled ‘ALP’ but quite a bit to the south-west of a box labelled ‘LP’. Interesting. I would have expected that the current state of ‘politics’ on the 10 questions would have to result in ‘your’ position corresponding with the box labelled ‘LP’.
One could write a treatise on the questions. But, lets just focus on one. The economics question on the share of Gross Domestic Product under the control of the government is interesting – at least for me – because an option, which I would consider sensible, is not an option – so much for ‘freedom of choice’. The sensible option I have in mind is “it depends on the circumstances”. The available choices are percentages or a range of percentages; a bit like recipies in cookbooks.
I wonder if anyone here has cleaned toilets for a profession. Anyone who cleans a toilet properly is lifting the lid. (Helen, don’t come to me looking for a job cleaning toilets)
Terje – I would be interested in your score. I got 18 and 14.
Andrew,
I primarily posted the link because it offered a contact email address for John Humphreys.
However I have done the quiz and my score is:-
Quizes like this one are interesting provocations. However they are only ever going to be good for a little fun. In terms of labels I do think Liberal Democracy is a better description for what I believe in than the others available.
Another quiz of a similar nature is available here:-
http://www.self-gov.org/quiz.html
Regards,
Terje.
I’ve always found the political compass quiz to be one of the better ones, although its not Australia specific.
The Political Compass
Anyone who cleans a toilet properly is lifting the lid. (Helen, don’t come to me looking for a job cleaning toilets)
You have misinterpreted Ernestine’s invention, Steve. The idea is not to have a lid that lifts at all.
Of course, rather than glueing down toilet seats, you’d have a toilet with the seat nicely incorporated into the structure.
Ernestine, get down to the patent office before someone else does.
As for the implication I’d even be interested in a job cleaning Steve’s toilets, I can only give a mystified look.
Which is all nice and innovative, but way off the originial topic in which Steve Munn said:-
Steve Munn was encouraging sabotage as a wages and conditions bargaining tool rather than toilet seat innovation as a productivity booster. Ernestine offered cover for Steve by mudding the waters and effectively changing the topic whilst keeping the toilet seat example. A clever form of argument rather than an intelligent one.
It would be interesting to see if Helen and Ernestine will come clean and tell us their views on sabotage as a bargaining tool. Do they condone it? Do they think sabotage should be legal. Do they think it should be encouraged in the way that Steve Munn does?
Terje: Well put.
Helen: No surprise to learn that getting your hands dirty is anathema to you.
No, no, no Terje, this is not the way to go.
Contrary to your assertion, I did not offer ‘cover for Steve Munn’. I don’t know Steve Munn but I assume he is enough of a man to not need cover from anybody.
I did not muddy the water. I provided an answer to your question. The question was: “If people are paid to clean toilets and instead they spend their time glueing them down, then how is this worthy behaviour?� You correctly say that my answer contains an example of a productivity gain.
You say my answer was “A clever form of argument rather than an intelligent one.� I have to correct you. My answer involved no more than applying economic concepts, drawn from the non-dogmatic literature (known as mathematical economics) to provide an answer to your question – a kind of routine job, if you like.
Frustrating as it may be, I am not going to be fool enough to bite into your rhetorical challenge.
Ernestine,
I said:-
This comment was unnecessarily flippant and I apologise. I pretty much concede all your points (which are divergent to the point made by Steve Munn).
What I should have said was that “the discussion with Ernestine has muddied the waters and provided cover for Steve Munn”.
When I said:-
I was being unnecessarily bitter about the distraction that I encountered in your divergent point. In practice the distraction was largely my fault because:-
1. I failed to explicitly limit my original question to the issue of sabotage.
2. I failed to grasp the essence of your divergent parable in the first instance.
My frustration stems from this waste of time and it was wrong of me to pin this waste on you. You have been more than patient in explaining your point and so projecting this bitterness at you is unfair. So again I apologise.
If you will accept this apology then I would like to get back to my point about the comment by Steve Munn and the use of sabotage as a bargaining tool. A discussion that you may or may not wish to involve yourself in.
Regards,
Terje.
P.S. Thanks for hanging in there until I got your point.
Terje, no need to apologise so profusely. I would suggest all of us extent thank you to John Quiggin for setting an example in allowing open debate on a respectable blog-site.
Today’s the big launch date – Here’s hoping John you can attend your local launch – and report to your many readers.
If you are looking for the exact details of the Clean Start rallies across Australia and New Zealand today go no further than:
http://www.lhmu.org.au/lhmu/campaigns/Clean_Start/
Helen: No surprise to learn that getting your hands dirty is anathema to you.
*Whistling noise as the point I was making sails right over SATP’s head*
Oh, and I clean toilets frequently at home without getting my hands dirty. It’s all about rubber gloves. You clean toilets bare handed? obviously we have vastly different standards of hygeine. Remind me not to drink anything served up in your establishment. 😉
Apparently there are less germs on your average toilet seat than on your average kitchen benchtop. I think it has something to do with available nutrients. In essence licking the toilet seat in most houses would be safer than licking the kitchen bench.
Regards,
Terje.
P.S. I don’t bother with rubber gloves when I clean the loo unless I am using some nasty cleaning agent.
St Mary’s Catholic Church South Brisbane hosted the launch of the Fair Deal for Cleaners Campaign in Brisbane today. The campaign was also supported by the Community of St Francis Church in Melbourne as well as religious and community leaders, including Bishop Patrick Power of the Catholic Archdiocese of Canberra and Goulburn and Sister Libby Rogerson, a Loreto sister currently working as the Coordinator of Social Justice and Director of Caritas in the Diocese of Parramatta.
In South Brisbane, Father Terry Fitzpatrick blessed the campaign banner in the presence of a large number of members of the Liquor, Hospitality and Miscellaneous Union (LHMU) and supporters. The union has its Brisbane Office across the road from St Mary’s. South Brisbane is on the edge of the Central Business district which employs many of the cleaners whose positions and working conditions are the focus of this campaign. The banner which was blessed as part of the campaign launch was in eight languages reflecting the cultural diversity of those in the cleaning industry
Fr Fitzpatrick said:� As a Catholic community we are called to promote Catholic Social Teachings and action on behalf of the rights of the worker are part of our tradition�
A recent the research paper from the LHMU, A Clean Start for the Property Services industry, states that in Australia and New Zealand, traditionally it was the cleaning industry that offered one of the prime ways for immigrants to enter the mainstream – to build a future for themselves through hard work in cleaning. Now the industry has become a workplace kept behind locked doors where the most vulnerable are kept in an unending cycle of exploitation and marginalisation.
Fr Fitzpatrick said “ Catholic Social Teaching reminds us that it our duty to reaffirm that the remuneration of work is not something that can be left to the laws of the marketplace; nor should it be a decision left to the will of the more powerful. It must be determined in accordance with justice and equity; which means that workers must be paid a wage which allows them to live a truly human life and to fulfil their family obligations in a worthy manner. Mother and Teacher, #71�
Contact: Rev Terry Fitzpatrick 0738449122
Tony Robertson ( Images of event ) 0417792509
It’s not actually clear to me what the campaign is attempting to achieve. Is it regulatory interventions or merely social awareness?
Terje, I understand you are in favour of advocacy – don’t you like competition?
Helen: I do not compel people to drink, only to pay. You are free to spill/ignore/etc as you wish.
Lots of things fly over my head Helen, just now it was a succession of potted palms, then some chairs. Just so long as what is flying over doesn’t connect with my jaw I consider it a good day. Did I miss a point?
My toilets are as clean as those at Planet Hollywood, (however sans attendant brushing collars whilst the “job” is in progress) In fact, if Terje were inside my toilets, & in the interests of science got the urge to lick the place, there would be no adverse effects on Terje’s health.
In a break from domestic circumstnaces the same would apply to licking my kitchen, except for the stove hotplate, licking of which would cause agonising burns to Terje’s tongue.
Terje the Norwegian says: “If you will accept this apology then I would like to get back to my point about the comment by Steve Munn and the use of sabotage as a bargaining tool.”
Where people are being grossly exploited, for instance by being paid less than a living wage, I have no problem with them using sabotage to improve their position if all else fails.
We live in an era where the Government forces companies in certain industries to fine workers 4 hours pay for stopping work for a few minutes to collect money for a dead colleague. F*ck one sided fairness.
The Government and industry representative bodies have declared class warfare. Let them cop some of the pain they happily dish out.
This campaign first came to my attention today while I was watching the late news, after completing two jobs cleaning, firstly, professional offices and, secondly, a rather large office and plant in the boonies.
My natural sympathies lay with the workers; I know exactly how they feel – tired, often exhausted, and sometimes left wondering why on earth they work so hard for so little return on their efforts. Where my situation diverges from many of them is that we, my family, took a commercial risk and purchased a franchise. It’s been interesting and hair-pulling to see all the smiles and gladhandling evaporate after we handed over a rather hefty cheque. The kinds of contracts we identified as fitting our business model, and which we were assured would be ‘fine’ are still not forthcoming. In fact, with the exception of one contract we are spending hours each day in back-breaking labour on exactly the kind of work we identified as being totally unsuitable. Caveat emptor.
The hourly rate in the contracts is generally fine, but in our experience and opinion the only way to make a go of things is to work at a fever pitch. We get to know our clients and enjoy great relationships with them; they think we’re human dynamos and they’re right, but we have to be. After franchise fees, administration fees, chemical costs, and everything else that goes into it we’d be making babysitting money unless we moved fast. Honouring the agreement with our clients means that we refuse to take shortcuts in quality, so governed by that and the fixed contract rate all we can do work as quickly as humanly possible; anything less and our hourly rate plummets – we effectively become volunteers.
We’ve often discussed expansion, not only as a way to make more money (we took large salary drops to become self-employed) but also with a real regard to creating worthwhile employment for others. We’ve noticed that the contract cleaning world has a large proportion of people who don’t speak English as a first language and often lack the confidence and skills required to negotiate a better deal or a better livelihood. They probably don’t have a great deal of knowledge about their rights, because often they come from countries that don’t enjoy our brand of freedom and democracy, and in some cases unions may be outlawed. Then there’s the cultural background to consider; making money is good, paying union dues are incomprehensible.
I believe that a strong union movement that is fair and equitable is an absolute must, and it must reach out and be representative of anyone who has the right to live and work here. There’s a huge job cut out for the unions in that.
It’s a bit naive to expect that most business people and large companies have a care and a sincere and practical interest in the well-being of their own staff, let alone contract staff who are largely invisible. Obviously, I am for the worker. I will employ as many as I can under as fair a system as I can, not because I’m a good bloke but because I am human. Labor and Liberal both seem to forget that their decisions and actions have far-reaching consequences and often impact the most on those who can adequately represent themselves the least.
To put into perspective what a small employer like we wish to be would make, based on our current contract rate less franchise fees and costs, and travel (currently 280km a week) expenses (not including our time), if we paid a worker, say, $16.50 per hour on our current contracts we would make after expenses but before tax $1.50 per hour. And that’s before we take administration and statutory reporting time into account.
Heaven help the employed cleaner! Without representation I suspect we’ll see the continued erosion of what little they earn and what small amount of benefits they get. And heaven help the employer! Unless we can find staff who’re prepared to work as quickly, efficiently, conscientiously and cleanly as us, we’ll actually lose money on each contract.
Steve,
Do you honestly believe that sabotage is going to improve their situation? If I had hired a cleaner that came in and wrecked equipment, particularly that of a client, I would like to make sure that I sacked them before every other cleaner I employed lost their job because I went out of business.
Grow up. Vandalism is a crime for a good reason.
I’m a pretty easy person to track down. My e-mail address is posted on my personal blog — http://www.chapter5.blogspot.com
The issue of whether the labour market is efficient has been covered by more emperical studies that I would ever want to read. Nobody claims that the IR market (or any other market on earth) is perfectly efficient, especially according to static equlibirum analysis. But it’s close enough. If the studies (which overwhelming show the market following behaving like a relatively efficient market – ie price floors lead to excess supply) aren’t good enough for you — I suggest common sense, which will lead you to the same concluion.
John Humphreys,
1. The paper, J. Humphreys, ‘Reform 30/30: rebuilding Australia’s tax and welfare systems, ‘Perspectives on Tax Reform (10)’, Centre for Independent Studies Policy Monograph 70, Sydney, December 2005, was submitted to the Government. This paper contains a statement which corresponds to a theoretical result (marginal product = price) from a body of theory known as the ‘marginal productivity theory’ but it is written as if it would be an empirical fact or self-evident truth.. I have quoted the relevant excerpt from Mr Humpheys’ paper in an earlier post on another thread.
Where is the evidence for the statement of ‘self-evident truth’ regarding the relevance of the marginal productivity theory (including evidence that the minimum wealth constraint is ensured) and that prices (wages) at not below the marginal product.
2. You refer to “IR market” I understand there are money making opportunities for “IR” (industrial relations) consultants. Please provide empirical evidence that the marginal product of industrial relations consultants is at least equal to their consulting fees.
3. Please provide evidence that the ‘marginal product’ of HIH directors was approximately equal to their income.
4. Please explain how you measure a ‘marginal product’ in the presence of ‘transfer pricing’.
5. Please explain how the marginal productvity theory is relevant at all, given that markets are incomplete.
6. Please provide evidence that Solomon Islanders (in particular people employed in the fishing industry) were paid their ‘marginal product’.
7. How do you measure the marginal product of public relations people.
“price floors”
There was a prolonged period of excess supply of office space in the Sydney CBD. I take it that it was ‘price-rigidity’ in the rental market which prevented ‘market clearing’. By ‘price-rigidity’ I mean the rental price did not fall to ‘clear the market’ as assumed in Humphreys’ preferred theory.
Why is there no legislation against ‘price-rigidity’ (price floor) in the market for office space?
Why is there no legislation against ‘price-rigidity’ in to debt market?
I am not sure I understand this question. Are you implying that the point of the “Fair Deal for Cleaners Campaign” is advocacy? And if that is the point then fine, I have nothing against advocacy. However I am still interested to know what the advocate is trying to achieve.
Regards,
Terje.
Just so you know, I am not a Norwegian. I was born in Gosford District Hospital in 1970. My mother is Norwegian but you can leave her out of this.
Do you limit your support of sabotage to the glueing of toilet seats or are you in favour of car bombs and burning down buildings?
So why blame the company? If their hand is being forced then surely you should be targeting the government that is forcing their hand.
I fail to see how glueing down toilet seats will inflict pain on the government.
Andrew Reynolds says: “Do you honestly believe that sabotage is going to improve their situation? ”
I think you will find that sabotage is as old as industrial relations itself. Sometimes it succeeds, sometimes it doesn’t. Without wanting to be seen as supporting the worst excesses of construction workers, things like snap strikes before a concrete are I suppose an effective form of sabotage. Such tactics also undoubtedly account for the construction industry being in the vanguard of workers’ rights.
You say grow up. Do you also say grow up to employers who deprive their workers of an income through an aggressive lockout, sack workers without just cause or seek to ramp up profits by screwing down the wages and conditions of workers?
John Humphreys wrote : Nobody claims that the IR market … is perfectly efficient, especially according to static equlibirum analysis. But it’s close enough.
With a massive global over-supply of labour (and a looming under-supply of non-renewable resources) there may be no practical limit as to how low the wages of cleaners and other low-skilled workers can go, unless some constraints are placed on the operation of the markets.
I think those who advocate unrestrained free market determination of wage levels should have the honesty to state just how much more than the miserable remuneration paid to workers in third world countries, cleaners in Australia are entitled to.
By what measure is there an oversupply. Roughly speaking there is a pair of hands for every mouth which would seems to me to be about the right ratio.
I think the real problem is a lack of capital in many regions of the world and a lack of capital overall. Capital is the lever that means the worker does not need to till the soil with his/her naked fingers.
The ratio of capital to labour is highest in the most developed nations. Those nations that are without capital are now adopting policies that offer an opportunity for the owners of mobile forms of capital. In so doing they threated to reduce the capital to labour ration in the developed world.
The supply shock posed by China (and other nations) will have ramifications thoughout this century. It is much better than the human waste that would be created by perpetually impoverished China.
Cleaners in Australia are unlikely to be threated by competition from labour in China. Until buidings and houses can be flown to China for a quick tidy up, cleaners in Australia will be competing only with other Australian resident cleaners. A better example might be factory workers.
One thing the government could do to both help marginal workers and to advance the cause of economic freedom would be to increase the tax free threshhold.
Out of interest how much do you think the cleaners working in China are entitled to, and what do you think stops them from getting it?
Terje, traditionally Chinese used to crap in their gardens. I doubt if the sanitation industry has reached equilibrium yet.
Terje,
Your response does not appear to be a serious one. The flaws in your logic should be self-evident and I should not have to point them out.
As I wrote in another thread there are more than 1 billion human beings alive in the world who have no economic role and are forced to live miserable existences on shanty towns on the outskirts of sprawling third world metropolises. Much of this is has been caused by mechanisation of agriculture based unsustainably upon non-renweable peteroluem.
It is because of this surplus of human beings that unscrupulous employers have been able to move much of the world’s economic activity to these countries where people are prepared to work for so little, and in doing so, have massively reduced the demand for less skilled labour in Australia.
This in turn has made it possible for unconscionable Australian employers backed by this objectionable Coalition Government to pay their workers less and less and less (and don’t believe Howard’s fraudulent statistic about wages having risen 14% since he came to office in 1996) for working harder and harder as so well described in Elisabeth Wynhausen’s excellent “Dirt Cheap”.
James,
We have missed you. We needed reminding that, in some way, we need to get rid of a quarter (or more) of the world’s population. Personally, one child per family smacks of us all moving to China. I like the food, but not the system of government that would come with that move – or the force needed to implement it.
BTW – you should tell the unskilled labourers up the north of WA that they are being paid less than they were. Over 100K, with living expenses covered by the company, is truly awful pay. I just don’t know how they survive. It must be hell.
Andrew Reynolds wrote :
You should know perfectly well that that is an unusual situation based on a distorted and increasingly dysfunctional world economy, and cannot last. Those workers engaged unsustainably in the extraction of non-renewable minerals are being paid highly at the expense of our planetary environment and of future generations. There is no possible way that all workers in this country, let alone the whole planet, could hope to enjoy that kind of income in the long term.
What is far more typical are the kinds of working conditons described in “Nickel and Dimed” and “Dirt Cheap“
James,
At current projected extraction rates, I think in the 1 to 2 centuries that it takes to exhaust the iron ore resources up there we may have identified a solution. Even for beings as silly as humans who seem to want to breed in such an inconvenient fashion.
As we have had this argument ad nauseum before I will just say that I regard your position as overly pessimistic. I take it you would say I am overly optimistic. We shall just have to differ.
As for this bit
it is wrong on so many levels it is difficult to know where to start – perhaps some basic trade theory revision may be in order. If you can disprove comparative advantage I can smell a Nobel Prize for economics in your future. This was said about it, quite accurately –
My guess is that you are one of those thousands.
The rest is a normal anti-Howard diatribe, and so can be ignored. The man may have faults, but he is not evil – despite the eyebrows.
Andrew Reynolds,
I don’t agree with your advice on international trade theory.
1. The international trade theory result, known as ‘comparative advantage’ is conditional on a set of assumptions. These may not be valid in all empirical circumstances.
2. A distinction is to be drawn between ‘gains from trade’ and the distribution of gains from trade between ‘countries’. That is, even if there are gains from trade empirically, these gains are not necessarily ‘fairly’ distributed between ‘countries’.
3. A distinction is to be drawn between the distribution of gains from trade between ‘countries’ and the distribution of gains from trade within a ‘country’.
4. A distinction is to be drawn between ‘international trade’ between economies where the ‘minimum wealth condition’ is approxiately fulfilled (eg all working people are ensured an income such that they can raise a family in a ‘decent’ way – exact wording may differ) and economies where this is not the case.
5. Empirically, international trade is carried out by multinational firms, many of which are also ‘multinational producers’. Distribution of ‘gains from international production’ raise additional problems.
6. The comparative advantage trade theory (Ricardo) totally ignores ‘negative externalities’ in the form of air and water pollution which is associated with transport.
Note, even your wiki- reference uses the term “can be” rather than “is”
“In economics, the theory of comparative advantage explains why it can be beneficial for two countries to trade, even though one of them may be able to produce every kind of item more cheaply than the other. What matters is not the absolute cost of production, but rather the ratio between how easily the two countries can produce different kinds of things. The concept is highly important in modern international trade theory.”
So, your economic theory advice makes no sense to me.
As EG hints, this discussion of comparative advantage is based on the false premise that it is “countries” that trade with each other. “Countries” hardly ever trade with each other.
Classically, international trade takes place between business entities that are taxed and are subject to the legal and other institutional circumstances of diverse polities.
All this has less relevance when:
1. Much “international” trade takes place between different branches of the same multinational corporation. Transfer pricing enables a disguise of the actual profitability of the activities of these branch offices.
2. Free floating exchange rates make more uncertain the calculation of relative levels of efficiency.
Firms begin making certain products because they believe that they can turn a profit. They continue making those products when those beliefs turn out to be true. Comparative advantage helps to explain past success. The concept does not pattern current behaviour of firms.
One has become three of the thousands. Are all of the thousands here?
Comparative advantage also works all the way down to the individual level. Think about it. What is the difference between a person, producing their own output and a country doing so?
Ernestine’s point 6 is about the only one that makes sense; negative externalities are a problem. That is what government are there to deal with and, as an individual, you are free to highlight this problem to get changes. That process works quite well in developed countries, but the lack of a free press in many underdeveloped countries is a problem that needs to be addressed.
.
The reason behind the “can be” is because there is one case where it does fall down – where there is no difference in the “…ratio between how easily the two countries can produce different kinds of things.” This is a unique, and trivial, case in that is is so unlikely as not to be worth considering.
.
I have a few minutes, so I will deal with each of the points.
EG-
1. It is not conditional on anything other than the ability to trade freely. All restrictions to trade therefore limit its ability to work and therefore reduce wealth. QED.
2. Define ‘fair’. Trade happens between individuals, and so it depends on the individual’s ability to deal. I have found that some of the least educated people can be the best at dealing, so I do not see this as a problem.
3. See my point on individuals above.
4. Why? This makes no sense to me, Surely the gains are more important where the minimum wealth conditions are not met? This is shown by the numerous studies showing the greatest gains are for poor countries that open up.
5. The vast bulk of international trade is not carried on within these firms, but between them, other firms and individuals. Unless you are suggesting some vast conspiracy between all these firms against everyone else, this point is simply wrong.
6. Discussed above.
.
Katz.
1. See above. Transfer pricing is a problem where tax rates are substantially different. Other than tax revenue, there is no other problem.
2. Why do you need to calculate this? The price mechanism does this seemlessly and is dealt with literally millions of times a day.
Andrew,
you wrote : As we have had this argument ad nauseum before …
Perhaps you should respond, some time, to Greg Wood’s excellent post in a previous thread, “Yet more nonsense on global warming” which comprehensively demolished your neo-liberal case against limits to growth.
Andrew Reynolds wrote : At current projected extraction rates, I think in the 1 to 2 centuries that it takes to exhaust the iron ore resources …
One or two centuries, even if we were to accept your estimates, is a blink of the eyelid in terms of total human history. No-one knows what will replace iron ore, let alone other vastly more scarce materials (fossil fuels) when they are exhausted, so to advocate the continuation of this at current rates, let alone at exponentialy increasing rates is reckelessly irresponsible.
it is economically absurd to suggest that one group of workers should be worth $14.00 an hour or less ($29K per annum) whilst another group on a different part of the continent with roughly equivalent skills should be worth $100K per annnum (let alone the remuneration paid to the HIH directors). The only reason this is possible is the extreme distortion in the world economy, partly as a result of the current minerals export boom which, even in the case or iron ore, will be extremely short-lived in terms of overall human history.
To return to my original point, the advocates of total freedom of of the markets to determine wage rates have been, and are continuing to be, extremely duplicitous towards ordinary Australians. On the one hand they try to fraudulently assert that all Australians have derived benefit from the past and continuing globalisng neo-liberal economic ‘reforms’. One example is the patently absurd claim by Peter Saunders of the (so-called) Centre for Independent Studies that living standards have more than doubled since the 1960’s, (which I believe I demolished in an Online Opinion forum). Another is John Howard’s claim made last year that ‘real wages’ have risen 14% since he achieved office.
On the other hand they tell the Australian workers, such as, most recently, the QANTAS maintenance engineers, that they will need to accept cuts to their wages and working conditions in order to stop the QANTAS managers from choosing, instead, to have maintenace done by Malaysian workers working for far less.
The simple fact is that part of the supply and demand equation is the huge over-supply of labour caused by, amongst other factors, the billion human beings living with no econoimc role.
John Howard, and his apologists on this forum, as much as they try to obfuscate on this point, are more than happy to use this surplus to take away from ordinary Australians what they had come to take for granted in previous generations, whilst further lining their own pockets.
They would happily have them work on-call 7 hours per day evenings, afternoons and days without holidays, workers’ compensation, superannuation, sick pay or meal breaks.
Andrew Reynold’s wrote : The rest is a normal anti-Howard diatribe, and so can be ignored. The man may have faults, but he is not evil – despite the eyebrows. vote for this person?
Something was lost in at the end of my last post. Here it is again :
Andrew Reynold’s wrote :The rest is a normal anti-Howard diatribe, and so can be ignored. The man may have faults, but he is not evil – despite the eyebrows.
He allowed nearly $300 million dollars of Australian money to go in to the pockets of a regime that he told us in 2003 was such a dangerous threat to the world that we had no choice but to immediately attack that country. It was either astonishing incompetence or worse. Please tell me, Andrew, where you stand on this question. Is such a man fit to be Prime Minister?
Do you actually intend to vote for this person?
Andrew,
1. Writing ‘QED’ is not the same thing as proving something (you seem to be at risk of practising ‘text’). Apparently, you are not even aware of the work done many decades ago by Australian Professors, M. Kemp and A. Woodland regarding transport costs – not to mention externalities. Professor Kemp has been awarded the v. Humboldt prize. Why don’t you at least read the labels on the axes of diagrams which illustrate Ricardo’s (late 18th-early 19th century) ‘comparative advantage’ trade theory. You might notice that it is assumed that both ‘goods’, which are considered for ‘international trade’, are locally available in the two ‘countries’. Until such time when you provide empirical evidence to the contrary, I maintain the hypothesis that elevators for 20, 30, 50 or more storey buildings are not uniformly produced or used across the ‘global economy’ at present and not for the foreseeable future. For example, I maintain such elevators are not locally available in many parts on a continent called Africa and they aren’t available in central NSW either. You might also notice that the ‘countries’ in these diagrams have no location. Upon reflection, you might notice that the diagrams are the same as those illustrating two individuals swapping say apples for pears over the fence. In other words, the label ‘country’ is substituted for the label ‘individual’. (I developed and used this method of detecting ‘re-labelling jobs’ for the purpose of examinations in my undergraduate time – it worked like a charm because I could reduce the amount of ‘stuff’ to be available for recall tremendously. This was before I considered economics as a serious and important discipline).
2. Wonderful. You now agree with me that Ricardo’s ‘comparative advantage’ trade theory result represents trade between two individuals across the fence and not between geo-politically defined ‘countries’.
3. See 2 above.
4. “Why? This makes no sense to me, Surely the gains are more important where the minimum wealth conditions are not met? This is shown by the numerous studies showing the greatest gains are for poor countries that open up.� I believe you that it makes no sense to you. But there is nothing I can do about it because the literature you advised me to read does not contain any theoretical result where the term ‘minimum wealth condition features. My hypothesis is that you have not read any economic theory where the abbreviation ‘QED’ is used by ‘non-text’ people.
5. “The vast bulk of international trade is not carried on within these firms, but between them, other firms and individuals. Unless you are suggesting some vast conspiracy between all these firms against everyone else, this point is simply wrong.� Andrew, you misquoted me, most likely not deliberately. Setting this aside, I don’t need any conspiracy theory. But one needs more than the economics texts you tell other people to read. We’ve been there before. In desperation, so to speak, I am considering a version of ‘experimental economics’ which involves ‘learning by doing’. On 22 April I wrote an outline what you can do to live in your preferred world (ie one that corresponds to the theory you promote). While being at it, I thought it was a good idea to also allow for the preferences of those who advocate ‘no taxes’ and preferably ‘no government’ and no restrictions on ‘monopoly’. I refer to my post on https://johnquiggin.com/index.php/archives/2006/03/30/rock-against-workchoices/.
Incidentally, the said experiment also provides an opportunity to learn about the distinction between inflation and relative price changes. If there is no other way to learn about the main-stream economic method of knowledge creation and dissemination, involving empirical observations, new theoretical results, empirical tests of hypothesis while keeping a sceptical mind about the certainty of ones knowledge at any time, then maybe this ‘learning by doing what one preaches’ is the way to go.
I have no difficulties with Katz’ points. Knowledge of late 20th century economic theory on incomplete markets is helpful in this regard. Note, the authentic (as distinct from the nonscience-social science ‘text’) ‘QED-literature’, has been translated – at least to some extent – into words and diagrams (eg Krugman and Obstfield’s textbooks on International Trade, available since the early 1990s)
As for ‘transfer pricing’ – it is an assumption on your part that the only reason is differential tax rates. But, before going into this part, lets see how the ‘learning by doing what one preaches’ project is going.
James,
Please point out Greg’s “demolition” of the case by reference to a single comment. That thread is long and there is a lot of verbage of dubious value in there, including some long comments by Graeme Bird. To link to a comment, use the url under the date and time of the comment. I cannot find any such demolition, but perhaps you believe you have it.
As for voting, I will vote for the person that I believe is best suited of the options. At the last elecion that was him, as I believed that Latham and the Labor Party, were unstable and unfit to rule. The majority of Australia agreed and I believe that subsequent events have further proved the case.
I am not, and never have been, a great fan of our current PM. He is a nationalist as opposed to a federalist and, particularly as treasurer under Fraser, leaned too far to the conservative and anti-free trade positions, where I believe his true sentiments really lie. It speaks volumes that Keating was a more free-trade liberal treasurer than he was. The current attempts to free up the labour market, while an improvement, are far to bureaucratic in nature. I could go on, but you get the picture.
As for the resourses boom – if one to two centuries is the blink of an eyelid then what is the development time period that has taken us from mechanical calculators to the internet? Significant developments happen very quickly and, on current projections, world population will have levelled out and commenced to drop in the two centuries to come.
Ernestine’s comments deserve some more time, so I will deal with them when I have that.
Andrew,
Perhaps you should have a closer link to my previous post. In it, you will find a link to the post by Greg Wood to which I was referring and to which you had not posted a response.
So, you believe that a man capable of allowing the AWB bribery scandal to occur may be ‘best suited’ to be PM.
Why?
Surely, assuming that you don’t believe him to have been so inept as to have not known what was happening, you must be saying that you are not troubled by the fact that he must have knowingly helped to arm a regime that was a menace to world peace?
In fact, I don’t buy the argument that the Hussein regime, for all its corruption and brutality to its own people, has been a threat to world peace since 1991, and I don’t believe that Howard bought that argument either. But wherever the truth lies, John Howard, one way or another, helped to start that conflict which has cost at least tens of thousands of lives and hundreds of billions of dollars.
I cannot, at the moment, think a single more heinous act committed by any Australian political leader.
The last sentence in my previous post should have read : “… think of a single more heinous act …”.
My apologies.
James,
Wow. Our PM such a major player in the world. Considering the billions that Saddam made from exporting oil to Turkey and Jordan, that 300 million must have had some real impact.
Back on the main point – of course I am troubled by this. At best, it indicates that the government was less than vigilant (and no-one even put it all into a spreadsheet). It is easy to be wise after the event, however and I am prepared to wait for the enquiry to finish before judgement is passed.
As for best suited – Latham’s instability is now well known, and decried, even by his previous supporters. He is also currently on a couple of sets of criminal charges relating to physical assault – which, of course, we have to wait for the courts to pronounce on. The first (the instability) at the very least would have made him very difficult as a PM. I remain convinced that we (the nation) made the right choice.
As for whether the oil for food program finds, as a matter of fact, that he knew about this, or should have known, lets wait for the report, as we must wait for judgement on whether Latham is a common criminal.
.
BTW, no need to correct for the dropped word, I understood without the correction. We all make the occasional spelling or grammatical error in here.
AR
“2. Why do you need to calculate this? The price mechanism does this seemlessly and is dealt with literally millions of times a day.”
But don’t you see that the theory of comparative advantage makes no allowance for the possibility that the relative efficiencies of different industries are subject to change?
If producers organised their productive efforts accrding to calculations made on the following basis:
“What matters is not the absolute cost of production, but rather the ratio between how easily the two countries can produce different kinds of things. The concept is highly important in modern international trade theory.â€?
Then producers would never change what they made and what was traded between producers and consumers in different polities.
The state of affairs assumed by this statement of the theory of comparative advantage is fairly reasonable when environmental and climatic impediments stand between (let us say) Norwegian farmers and a flourishing banana industry. But it is much less so for capital intensive and knowledge intensive industries.
In short, what is required is not a theory that explains and justifies why producers shouldn’t change what they happen to be most efficient at producing at a certain time. What is required is a robust explanation of the circumstances that encourage and enable producers to stop making low value-added goods and services and start making and selling high value-added goods and services.
The theory of comparative advantage tends to do the opposite based on a rationale that is becoming, for reasons hinted at above, less compelling over time.