The case for the restoration of tariffs

Fri, 2008-04-25 21:34 by admin
This discussion is, in a sense, a continuation of a in response to an online opinion article by Senator Kim Carr.

Comments

James Sinnamon

Sun, 2008-04-27 15:47

I think the restoration of tariffs is an excellent idea although I need to be convinced of the details. I don't think that there is a cost-free painless for us to emerge from the terrible self-reinforcing downward spiral that the globalising free-marketeers have led us into.

Anonymous (not verified)

Sun, 2008-04-27 18:46

Needs to be explored more. There was a good article in the Age last Saturday by Kenneth Davidson that talked positively about protectionism and a small population for Australia. Your site has some interesting and possibly valuable takes on the stuff we read everywhere else.

James Sinnamon

Mon, 2008-04-28 01:26

Thanks for the encouraging feedback. I could not find the article through the Age web site, but, fortunately, someone had already sent me the link. The article is . Here's some of what Kenneth Davidson wrote:
Economic scenarios might involve revisiting the protection debate. There are meagre returns from further reductions in protection for manufacturing industry but the finance industry gets fabulous assistance. When push comes to shove, the central banks exist to prop up the financial system when the banks lend to the point of self-destruction in a deregulated financial market. It is happening now. Should the banks be re-regulated? What quid pro quo should the community demand for its largesse? Are financial markets sacred?

dave

Mon, 2008-04-28 09:57

The argument against tariffs has always been that they lead to anti-competitive situations - especially in countries with smaller populations like Australia. A manufacturer sets up behind the protective wall of tariffs. Wages and conditions are protected but the manufacturer achieves monopoly status simply because Australia doesn't have the population to support the kind of competition that can be achieved on a global scale. On the other hand, unrestricted free trade pitches Australian workers into a race to the bottom against slave labour countries, as writers on this site have pointed out. But at least we get competition. So the story goes. Well, at the risk of sounding like the Mexican girl on the Taco ad; why can’t we have both? Or the benefits of both anyway, without the disadvantages? What about a system where tariffs were applied on a sliding scale depending on the wages and conditions prevalent in the country of manufacture? So goods mostly manufactured in Norway attract a 0% tariff, whereas those manufactured in any place where subsistence wages apply attract the top rate? A medium rate could apply to countries where wages and conditions were moderate. The ILO could be the arbiter. Such a system would provide bigger markets in which genuine competition could flourish, among true equals. The incentive to move manufacturing to low wage countries would be killed stone dead. If the system were sophisticated enough, companies in low wage countries paying higher wages could apply for special status, recognising their better treatment of their workers and rewarding that with favourable tariff status. Given that the protection vs free trade debate is common to all developed countries where workers enjoy a reasonable standard of living, I think this notion would find support around the world. It’s a concept worth thinking through in more detail….

James Sinnamon

Mon, 2008-04-28 17:41

Good , Dave. Although 'thinking outside of the box' has become a popular catch phrase these days, it is not that often put into practice in the way you have. I also to the above mentioned Online Opinion discussion on Australian Manufacturing in a transparent attempt to arouse interest in this site. I trust that that is OK by you. It is hard to comprehend how the free-trade globalisers were allowed to get their way over the last three decade when ordinary common sense and intuition would have told us that abolishing tariffs would, in a world with so many living on subsistence wages, only lead to the off-shoring of most of Australia's manufacturing sector as did occur. Notwithstanding their promises to the contrary, the globalisers would have understood perfectly well that this would be the result, but it suited them because they stood to gain at our expense. Some reasons why they got away with it include:
  • The strident absolutely self-assured way in which their propaganda was relentlessly pushed by the newsmedia;
  • Opponents views were dismissed as quaint and old fashioned and they were given little voice;
  • As may workers lost their livelihoods, others, not so exposed to competition from slave wages, gained from cheaper imports;
  • That much of the left opposed, rather than supported, tariffs. Part of their rationale was that tariffs were somehow reactionary and served to divide, rather than unite workers across national boundaries and accordingly would lead to trade wars and ultimately more inter-imperialist wars such as the First and Second World Wars
, if you , you won't need to await the approval of the administrator before your comments are published. Whether you do or not, your comments will still be greatly appreciated.

Add comment