Bert Kelly, October 8, 1971. Economics Made Easy (Adelaide: Brolga Books, 1982), pp. 117-19, as “Cheap Labour (2)”.
The other day I was grizzling away in parliament about the high duties on textiles and someone from the other side of the chamber interjected, “Don’t you believe in protecting us against imports from cheap labour countries?”
This rather floored me. I must admit that most interjections floor me. Often I think of some splendid answer: indeed I sometimes nearly kick the end out of the bath, laughing at my splendid replies. But this is usually about a month later, which rather spoils the effect.
This jibe about “cheap labour” was intended to hurt. A few years ago the word “black” would have been added to “cheap”. It is the justification used by many protectionists. What does it really imply?
We know that low money wages do not necessarily mean cheap real wages. But in many cases, real wages are often much higher in Australia than in Asian countries. The question is whether we should try to stop the importation of goods from these countries for this reason.
Let us take as an example the action of the government on shirts and knitted garments. The Minister made it clear that he thought the Tariff Board was right in principle to lower the duties, but to do this would mean exposing our industries to competition from Hong Kong, Taiwan, China and South Korea where labour costs are lower. So negotiations are to begin to limit imports from these countries.
Well, there are a few points that ought to be made. One is that Fred and his fellow farmers have to compete on equal terms in export markets with countries whose labour costs are less than ours. For instance, no one gives us more for our wool because our labour costs are higher than South Africa’s, or for our dried fruits when we sell in competition with Greece. It is evidently thought to be fair for Fred and his friends to compete on equal terms with cheap labour countries, but only if you have a farm and not a factory.
And, second point, if we limit imports from Asian countries, we limit their ability to buy from us. The greatest need of these countries is foreign exchange. An important reason they don’t buy more from us is that they just haven’t got the foreign exchange to do it.
In the case of these four countries, Hong Kong, Taiwan, China and South Korea, in 1970-71 we exported to them $203m worth of goods, yet we only bought from them $121m, leaving a balance in our favour of $82m. I wonder how much more they would have bought from us if we had bought more from them?
Thirdly, putting blocks in the channels of trade with Asian countries is always likely to unnecessarily irritate them even if they have the foreign exchange to buy our goods. I don’t think it would have been exactly helpful to the wool market to have the Australian manufacturers of woven man-made fibre cloth going to our best wool customer, Japan, earlier in the year, asking her to cut down on her supply of textiles to us; particularly when last year we sold to Japan $614m more goods than we bought from her. I hope Fred doesn’t get to hear about this.
Fourthly, everyone knows what industrialisation can do for a country. Again, look at Japan. A short while ago she was regarded as an undeveloped country, now she is our best customer. These other countries might one day become as good a customer as is Japan, if industrialisation is successful. We want it to be successful, but we don’t like buying the products of the process.
Fifthly, everyone knows that trade is indeed more important than aid, that aid alone destroys the morality and the economy of poor countries. So we urge self-help on them in eloquent speeches. But when they start to do it and to sell us something cheap, we say, “Oh, no, we didn’t mean that. Sell it to America or to the U.K., or to someone else. Not to us. We can’t allow our industries to meet the competition of cheap labour countries.”
So the next time that chap interjects across the chamber he will cop it between the eyes. All I need is time!
- Bert Kelly on Journalism
- Move for a body of Modest Members
- Modest Members Association
- Bert Kelly's Maiden Parliamentary Speech
- Government Intervention
- 1976 Monday Conference transcript featuring Bert Kelly
- Petrol for Farmers
- Some Sacred Cows
- Experiences in Parliament
- Spending your Money
- Who needs literary licence?
- A touch of Fred's anarchy
- Supply and Demand
- Bert Kelly on Disaster Relief
- Bert Kelly Wants to Secede
- Under Labor, is working hard foolish?
- An Idiot's Guide to Interventionism
- Bert Kelly Destroys the Side Benefits Argument for Government
- Bert Kelly gets his head around big-headed bird-brained politics
- First Modest Member (Bert Kelly) AFR Column
- Second Modest Member (Bert Kelly) AFR Column
- Third Modest Member (Bert Kelly) AFR Column
- Fourth Modest Member (Bert Kelly) AFR Column
- Fifth Modest Member (Bert Kelly) AFR Column
- Sixth Modest Member (Bert Kelly) AFR Column
- Bert Kelly on the 2011 Budget and Australia's Pathetic Journalists and Politicians
- Bert Kelly, Bastard or Simple Sod?
- Liberal Backbencher Hits Govt. Over Import Restrictions
- Bert Kelly feels a dam coming on at each election
- Bert Kelly Enters Parliament
- Why take in one another's washing?
- Bert Kelly breaks the law, disrespects government and enjoys it
- Gillard's galley-powered waterskiing
- Can price control really work?
- Should we put up with socialism?
- We're quick to get sick of socialism
- Time the protection racket ended
- Can't pull the wool over Farmer Fred
- People not Politics
- Bert Kelly admits he should have had less faith in politicians
- Labor: a girl who couldn't say no
- Why leading businessmen carry black briefcases
- Ludwig von Mises on page 3 of AFR
- Mavis wants the Modest Member to dedicate his book to her
- Time to Butcher "Aussie Beef"
- Bert Kelly reviews The War Diaries of Weary Dunlop
- Bert Kelly reviews We Were There
- Tariffs get the fork-tongue treatment
- Bert Kelly reduces government to its absurdities
- Politician sacrifices his ... honesty
- It's all a matter of principle
- Bert Kelly Destroys the Infant Industry Argument
- Bert Kelly Untangles Tariff Torment
- Bert Kelly resorts to prayer
- Eccles keeps our nose hard down on the tariff grindstone
- "Don't you believe in protecting us against imports from cheap labour countries?"
- Even if lucky, we needn't be stupid
- Great "freedom of choice" mystery
- Small government's growth problem
- Tariffs Introduced
- More About Tariffs
- Sacred cow kicker into print
- Modest Member must not give up
- Traditional Wheat Farming is Our Birthright and Heritage and Must be Protected!
- Bert Kelly brilliantly defends "theoretical academics"
- The Society of Modest Members
- John Hyde's illogical, soft, complicated, unfocussed and unsuccessful attempt to communicate why he defends markets
- Modesty ablaze
- Case for ministers staying home
- The unusual self-evident simplicity of the Modest Members Society
- Animal lib the new scourge of the bush
- The Association for the Prevention of Cruelty to Krill
- Repeal economic laws, force people to buy new cars and enforce tariffs against overseas tennis players
- Thoughts on how to kill dinosaurs
- Let's try the chill winds
- Taking the Right's road
- Bert Kelly: "I did not try often or hard enough"
- Bert Kelly "lacked ... guts and wisdom"
- A look at life without tariffs
- The Gospel according to Bert
- Tiny note on Bert Kelly's column in The Bulletin in 1985
- Why costs can't be guaranteed
- Hitting out with a halo
- Paying farmers not to grow crops will save on subsidies, revenge tariffs, etc
- "The Modest Farmer joins us" | "How The Modest Farmer came to be"
- Bert Kelly Destroys the Freeloading Justifies Government Argument
- Government Intervention
vs
Government Interference - Bigger Cake = Bigger Slices
- Bert Kelly on the Political Process
- Charabanc: Part 1
- Charabanc: Part 2
- Charabanc: Part 3
- Relationships with the Liberal Party
- Tariffs = High Prices + World War
- Bert Kelly's Family History
- Bert Kelly's Pre-Parliament Life
- Why Bert Kelly was not even more publicly outspoken
- WEATHER IS USUALLY UNUSUAL
- How to stand aside when it's time to be counted
- How the Modest Member went back to being a Modest Farmer
- My pearls of wisdom were dull beyond belief
- Bert Kelly on Political Football
- Ross Gittins Wins Bert Kelly Award
- Interesting 1964 Bert Kelly speech: he says he is not a free trader and that he supports protection!
- This is the wall the Right built
- Has Santa socked it to car makers?
- Is the Budget a cargo cult?
- Will we end up subsidising one another?
- Do we want our money to fly?
- Can a bear be sure of a feed?
- How to impress your MP -
ambush him - The time for being nice to our MPs has gone ...
- Don't feel sorry for him -
hang on to his ear - Trade wars can easily end up on a battlefield
- Tariffs Create Unemployment
- Bert Kelly recommends Ayn Rand
- Bert Kelly's Satirical Prophecy: Minister for Meteorology (tick) and High Protectionist Policies to Result in War Yet Again (?)
- Bert Kelly in 1972 on Foreign Ownership of Australian Farmland and Warren Truss, Barnaby Joyce and Bill Heffernan in 2012
- Parliament a place for pragmatists
- Of Sugar Wells and Think-Tanks
- Bert Kelly: "I must take some of the blame"
- A Modest Farmer looks at the Problems of Structural Change
- Government Fails Spectacularly
- Know your proper place if you want the quiet life
- Bert Kelly on political speech writers
- Perish the thawed!
- Modest Farmer sees his ideas take hold
- Max Newton: Maverick in Exile
- Why no-one nails the Big Green Lie
- A case for ministerial inertia
- Why politicians don't like the truth
- Ominous dark clouds are gathering
- Better to be popular than right
- Crying in the wilderness
- Ivory tower needs thumping
- Bert Kelly asks, "How can you believe in free enterprise and government intervention at the same time?"
- Rural Problems
- Unholy state of taxation

thetrureal
September 22, 2011 @ 6:05 pm
Well who is going to stop it? You? ALP? Liberals? Greens? All this started from the invention of the NAFTA “extreme capitalism” in the 1970’s and was forced onto every western country. Now the west is crying about it, but it is too late as the damage is done.