Bert Kelly, The Bulletin, December 25, 1984 / January 1, 1985, p. 89.
Eccles is a sad sod and he likes being like that. When I told him about the public opinion poll which showed that most Australians wanted our wage fixing machinery left unaltered — thus leaving Bruce, our industrial relations dinosaur, eating his head off while the exporters in the Rough Cruel World had to feed him — I expected Eccles to burst into tears. But he just smiled benignly and said: “Don’t worry, Bert; economic laws will win in the end as they always do. We might have to wait a long while and suffer needlessly, but nothing is more certain than that our present centralised wage system will have to be altered radically. I have been proved right about tariffs and I will be proved right about poor old Bruce. Being right is what makes me so unpopular.”
Then Eccles gave me one of his long lectures. He says that if wage costs continue to rise as they do now with the cost of living, instead of with productivity as they should, then the share of the economic cake going to management will fall as the share going to wages rises. Then less money will be invested, so the economy will slow down; unemployment will rise and this will force down the real value of wages until they are in line again with productivity.
I suppose this sounds logical, but it hardly seems fair that owners of capital should have the right to say whether they should invest it or not. Indeed, I toyed with the idea of asking the government to pass laws to make them invest their money where the government thought best, but Eccles warned me that capital is funny fluid stuff and if it does not find a happy home here it will just quietly melt away and go to other places where returns are greater. You may say that this is unfair, that capital should do what it is told. You may be right, too, but capital will continue to go where its return is safest and greatest.
Eccles then put the lid on his argument by saying that it was once usual to compensate secondary industry for uneconomic wage rises by giving them tariff increases. Indeed, I have a letter before me written written on November 7 to a company that makes heavy earth-moving machinery, which asks them to join in a campaign to persuade the government to come to the rescue of the industry. The letter is from the chairman of the Machinery and Metal Engineering Council — none other than John Halfpenny who last year was a powerful official in the metal workers union which bullied the metal employers into giving in to wage demands that made it inevitable that the industry would need help. He says: “The Council has sought emergency assistance from the government to maintain a viable engineering industry in Australia.” This is pretty rich, coming from one who had more than anyone else to do with making it unviable.
Giving tariff increases to compensate for wage rises once was the usual way to behave, but everyone knows that exporters can no longer carry increased tariff burdens. The Bureau of Agricultural Economics tells us that farmers’ incomes will be down by 29 percent this financial year, the miners are slipping further behind all the time and most secondary industry exporters are in trouble. They say that nothing clarifies a man’s mind like the knowledge that he is to be hung in the morning. Will, the exporters are in that position and the government knows this at last — so tariffs can no longer be used to compensate for wage rises.
Eccles then said something that I found strange, coming from such cold fish. He says that the good young leaders in the unions — particularly those in the Australian Council of Trade Unions — because they are well educated and sensible must know that a gradual movement toward a more flexible wages system that is responsive to economic forces is inevitable in the end, so we ought to help them explain this to the community in general and to their unions in particular.
Because I was once a member of parliament, I can understand that argument. When I addressed apathetic Liberal Party audiences, I lost marks if I was not giving the unions a bit of stick; people feared that I might be getting soft on the unions. The young Labor leaders (who are often under suspicion, anyway, because many of them have not been through the painful union mangle from the shop floor up) must feel threatened that they may lose their influence — even their positions — if thought to be going soft on the bosses, if they were to cease beating the class warfare drum and so on. So Eccles says we ought to try to understand the bind they are in and help them if we can.
I realise that Eccles is a know-all, but because he is certain that economic laws will win the wages argument in the end he is going round like a cat that has been at the cream. He knows that Bruce’s time is quietly slipping by, but, after all, that is the common fate of dinosaurs.
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- 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
- Boring economics worth a smile

Let’s try the chill winds « Economics.org.au
October 22, 2011 @ 5:12 pm
[...] wrote comparatively cheerfully recently because Eccles insisted that economic laws, with industrial relations as with other economic [...]