A primitive economy.

Is Australia in danger of becoming one of the world's primitive economies??

We have lost, or are going to lose, most of our manufacturing ability and much
of our computer work is now outsourced. It looks as though our ability to can
fruit is going to be lost.

This is the country that was the third to launch a satellite, the one that first developed
digital technology, only to have it shelved because of a timid government. We have
skited much about our solar research and development, but has it got us anywhere?
We seem to be too bloody stupid or laid back to adopt more green technology.At one
time we had an aircraftindusrty

What do we do at the moment? I contend that we are a nation of hunter/fisher gatherers.
We dig blood y great holes in the ground to gather coal , ion ore and iron ore. We fish the
ocean. We gather wheat and wool and we gather up cattle for export.

How do we overcome this position??

I don't think canning peaches is any sort of real manufacturing is just primary produce processing like refining alumina into aluminium or copper or gold ores into metal (whoops it looks like I didn't put a tick against Al)
Manufacturing involves substantial value adding like motor vehicles or electronics.

Anyway, for those that are interested here are the numbers.
The ticks are essential primary production
Only two of the top 10 are not primary production.
#4 is the income from international students - this is not going to last forever either as countries with insufficient educational institutions increase the number and quality of their own educational resources.

https://www.woodworkforums.com/attach...d=303018&stc=1

Interesting to see natural gas up there! OK, here is an energy resource we have in abundance. Please don't say it will run out tomorrow, it won't! Use it to develop clean, renewable energy while we can. Bob,mate, we still are the lucky country. The cure for cancer will come from us. Technology is a hidden asset now days but it is still there.

Agreed Bob, canning is not exactly manufacturing in the true sense.

However it seems utterly ridiculous to have what was once a thriving
and important rural/regional industry die, thus effecting the lives of
hundreds, if not thousands. The orchardists will remove trees, as
happened in the MIA when Leeton closed. Where then do we get our fruit?
Much will be imported from sources of dubious quality and hygiene.

When Golden Circle closed in Brisbane the idea was to can in NZ. Is it really
better economy to ship raw products to another country and import the
processed product back?? This is what has happened to car manufacturing
and iron production here.

I was listening to Paul Howes today as he addressed the National Press Club.
An interesting and rather illuminating speech, to say the least. I am very much
of the same view as he is. Our industrial relations system has a huge amount
to answer for. He talked of the sea-sawing battle between unions and business
and while I didn't get to hear all the questions it was apparent that, from at least
one early question, positions are so entrenched that we never get away from
the warfare, or the "them and us" mentality.

Quote:

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Originally Posted by artme

How do we overcome this position??

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I dont know - keen to see some debate - some suggestions

As long as there are countries where labour is much cheaper, then I believe attempting to do any value adding manufacturing would be difficult without some sort of artificial govt controlled protection.

Will there be a period of "levelling" of standards of living ? Lasting a couple of decades ? Wages and standards of living in previously 'poorer' countries catch up to Australia/Britain/Canada/USA/Europe/What countries have I missed out ? - With less people working for $10 per day then there will be less incentive buy foreign goods because its no cheaper ? If its not possible to import something for cheaper than we make ourselves then there is incentive to make things here.

I backpacked around Indonesia 33 years ago and the Indonesia I saw on TV a few nights ago was nothing like what I remembered. Big surprise.

Are there niche markets that are worth exploring - ie trying to do something to incredibly high quality so that people know that products are expensive but don't mind because of stunning quality ? Vaguely remember 20-30 years ago this idea being promoted as a model that had worked in Norway or Denmark or Sweden

Have read a few posts recently about Australian businesses struggling against foreign competition - have seen some posts from some people on this forum running businesses but having difficulty matching internet shopping prices.

In the spirit of the Euro, should there be a "Worldo" ? A single currency all over the world might sort out some of the banking business based on money changing and futures that makes huge profits but adds little value - Naive I know but a thought nonetheless.

Are we short of people ? - Is there a critical mass of people required in order for us to be "self booting" and "self sustaining" cycling our own raw materials around an internal economy ?

So in short - I havent got a clue and would really like to see some opinions from people with appropriate experience in economics/business/manufacturing ............ ummmm is that why we elected those politicians ?

Anybody recommend any good web pages on this topic ?

What did Germany do to be such a strong economy ?


Bill

Quote:

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Originally Posted by steamingbill

Anybody recommend any good web pages on this topic ?

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If you want to see how we sit relative to other economies this is a very interesting website.
It's called the "observatory of economic complexity" and displays graphically imports and exports for 127 countries
The Observatory of Economic Complexity :: Australia Exports, Imports and Trade Partners
It also generates and plays time based series - (e.g. The Observatory | What does Australia export? (2010)) The data stops at 2005 but it is still very interesting

Australia ranks 78th - ie we lack diversity and export too much of one type of thing and we export to much to just a few countries.
If and when things go pear shaped economically we will have limited resilience compared to other countries.

Quote:

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What did Germany do to be such a strong economy ?

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Located in the middle of a large market
Already have made and have ongoing massive govt and private investments in infrastructure (roads rail airports ports etc)
Invest in (technical) education and take it seriously
Innovative
Savings mentality
Hard working
Sensible levels of Govt spending and control especially in finance
Low levels of corruption
And they do this with a 19% GST
Not litigation free, but lawyers are very limited in what they can cream off from cases thus reduces frivolous litigation.

You might add to that list of what Germany does better:

Unions in "partnership" with employers and government, not the old English adversarial system of us against them (scr*w the bosses or scr*w the workers in other words).
They have learned that they depend on each other for prosperity.

Quote:

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Originally Posted by Big Shed

You might add to that list of what Germany does better:

Unions in "partnership" with employers and government, not the old English adversarial system of us against them (scr*w the bosses or scr*w the workers in other words).
They have learned that they depend on each other for prosperity.

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This is almost exactly what Paul Howse was saying, not in relation to Germany in particular, but as a means of ensuring industrial stability, improving productivity
and remaining prosperous.

I think a long hard look should be taken at 'penalty rates'.
Work styles have changed.
If you work in an industry where your core work hours are say 10.00Pm to 06.00Am 5 days a week then I do not believe you need to have penalty rates!
If you are required (asked) to work "over' those times then yes some form of overtime rate should apply.
But your core hours should only be at the standard award rates.
Penalty rates are a reason many businesses do not prosper.

Working mums who want the taxpayer to subsidise their childcare. Another bugbear. If you cannot afford the costs then either don't work and stay home and look after your own child, don't get a huge mortgage based on dual incomes.
In other words live within your means and plan ahead.


That should get a few comments.

As an employer I categorically state that it is not penalty rates, not for me anyway. Staff on-costs, well thats a different matter. Super, various types of leave, insurances, etc add up to 40% on to the wages bill in my business.

But it is not the wages that are the problem IMO. The problems are scale and access to markets. We compete with companies in countries with much larger populations and much shorter distances to market. Tighter margins mean you need to sell more and we haveplenty of everything here. It is just plain difficult in a country of 25 million to compete with countries that are multiples of our size. Personally I have been watching this decline for decades. I cant see any way of stopping it.

While we're talking about Germany here are their typical penalty rates
A normal work day is 8 hours a day, above that 25% overtime applies up to 10 hours above that a mandatory rest period applies
No Saturday Penalty rates
Sundays and Holidays are @ 50% overtime.

Work for peanuts till we drop dead into our graves..what a wonderful world :C,So then ,if every worker took a pay cut immediately,would the cost of living REALLY come down?? I don't think so!!The net result would be more hardship for the average Joe...MM:2tsup:

Quote:

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Originally Posted by artme

This is almost exactly what Paul Howse was saying, not in relation to Germany in particular, but as a means of ensuring industrial stability, improving productivity
and remaining prosperous.

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I think Mr Howes has had a conversion on the road to Damascus:rolleyes:

He is, and always has been, a very radical unionist of the old school. He wasn't even democratically elected to his job but anointed by his predecessor, Bill Shorten.

He is the very man that fancied himself as a non-elected king and queen maker and the main instigator in the downfall of 2 of our elected Prime Ministers.

I don't think I would trust too much of what Mr Howes says, he tends to say things to further his own ambitions, not in the interests of his own members or indeed in the interest of the nation.

Quote:

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Originally Posted by artme

Is Australia in danger of becoming one of the world's primitive economies??

<Snip>

What do we do at the moment? I contend that we are a nation of hunter/fisher gatherers.
We dig blood y great holes in the ground to gather coal , ion ore and iron ore. We fish the
ocean. We gather wheat and wool and we gather up cattle for export.

How do we overcome this position??

---

Germany has already been discussed, how about the rise of Japanese manufacturing after WW2 ? How did that work, didnt they have very little in the way of natural resources as raw materials. Any other examples out there ?

Bil

Quote:

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Originally Posted by steamingbill

Germany has already been discussed, how about the rise of Japanese manufacturing after WW2 ? How did that work, didnt they have very little in the way of natural resources as raw materials. Any other examples out there ?

Bil

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The rise of manufacturing in Japan was fuelled largely by American dollars after WW2, it was in the US interest to rebuild the Japanese economy as a bulwark against Communist China.

They did the same in Germany, remember the Marshall Plan? In this case it was to build a bulwark against Communist Soviet Union.

Yes Fred, one of the reasons I sat and watched/listened to Howse was because I know a little
of his history, down to being a keen singer of "The Internationale".

I was quite stunned by the approach he took but it was an enlightened one considering his left
wing leanings and thorough backgrounding in the union movement since the age of 18. maybe
your road to Damascus conversion analogy has some substance to it.

Already the hackles have been raised by government and industry spokes people. I think his idea
of a grand compact may have already been scuttled.

One point I did wonder about was his oblique reference to the state of industrial relations in the USA.
He views that as the labor force and the bosses getting on for the good of all. I wonder!:?

Bill, I believe much of the rise of the Japanese after the war was to do with
the drive by the Americans to change the whole nature of the country.

Maybe we should pick a barny with the US so they can help us to re-construct!!:D:D:D

Quote:

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Originally Posted by artme

Bill, I believe much of the rise of the Japanese after the war was to do with
the drive by the Americans to change the whole nature of the country.

Maybe we should pick a barny with the US so they can help us to re-construct!!:D:D:D

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Phew, Japan paid a very high price to get that re-construction aid:o

Quote:

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Originally Posted by artme

Is Australia in danger of becoming one of the world's primitive economies??

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Australia is an emerging economy. We might be economically strong but we have the hallmarks of a primitive emerging economy...I.e no manufacturing industry, reliance on raw material exports, minimal trading partners (3 cover 90%), unskilled labour (mining), a large current account deficit and a rapid uncontrolled rise in consumer prices (housing).

We are subject to the successes of our partner economies for exports.

We won't BECOME one of the great primitive economies, we ARE a primitive economy.

Quote:

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Originally Posted by artme

We have lost, or are going to lose, most of our manufacturing ability and much
of our computer work is now outsourced. It looks as though our ability to can fruit is going to be lost.

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This is simply a reflection of the anti-business, protected market duopolies that really govern this country. There IS NO competition. Small business is disincentivised. Technology in all forms is driven off shore. Those businesses that do remain are reliant on subsidies for their very existence. Licensing and rent-seeking behaviours dominate business and investment. Protectionist policies guarantee monopolies. Taxes are complex and finally, socialism is the underlying support structure for all businesses that are not mining oriented.

The ASX reflects this.

Quote:

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Originally Posted by artme

This is the country that was the third to launch a satellite, the one that first developed
digital technology, only to have it shelved because of a timid government. We have
skited much about our solar research and development, but has it got us anywhere?
We seem to be too bloody stupid or laid back to adopt more green technology.At one
time we had an aircraftindusrty

What do we do at the moment? I contend that we are a nation of hunter/fisher gatherers.
We dig blood y great holes in the ground to gather coal , ion ore and iron ore. We fish the
ocean. We gather wheat and wool and we gather up cattle for export.

How do we overcome this position??

---

Australia is doomed. Let me restate this...Australia is utterly, completely and irretrievably doomed.

It cannot be fixed...it can be delayed and it will look "fixed" but the market will force the recorrection.

The real rot set in in the 80's. This is studied at Uni in economics. Australia has an insanely complex tax system, intense bureaucratic inertia, a paralysed government (regardless of party, it's a reflection of our system) an ageing population, a demographic nightmare and personal levels of debt that are the highest in the world.

It is discussed at almost infinite length on the many free newsletters from The Daily Reckoning. Authors have published on this too, especially Harry Dent. While they are "doom enthusiasts" they outline their positions with clarity and conviction.

You would be right to think my words are pretty strong and they are. I'm typing this with a cool head and not trying to look like I'm ranting. BUT, it's time people opened their eyes and saw what was really happening...not from the government news, papers and TV, but from businesses, household debt (look at the huge number of debt management ads on TV. Hhhmmmm?????) and rapid industrial contractions we are seeing daily (mine closures, infrastructure pullouts, Holden, ford, Toyota, spc....that's only this week). Just read the financial news and ask yourself "why". Ask why all these things are happening.

Join your own dots.....you can feel it in your guts. You know you can.

The volume of money heaved around by our government during this process will be spectacular. All levels of Government will be bailing out everything left right and centre. Families will be issued with enormous cheques. Taxes on the wealthy will hit 75%. Government tax collection will be fuelled by angry mobs demanding "they" pay "their fair share".

Unemployment will go stratospheric, we will experience a very rapid series of hyperinflation/debt-deflation events, followed by a long term unstoppable bi-flation recorrection (basic item prices rise, capital items universally deflate).

These last two events will level the playing field, but it will be written about for a thousand years.

It makes me sad and I hope it doesn't end this way. But, hope won't solve the problem, only the markets can and the markets are now controlled by interventionist agendas.

An interesting view Evan. Not sure I agree with all you say but the general pessimism you express is certainly warranted.
Where are the subsidies you talk of? One thing this country has done , and other countries have not, is to abolish subsidies and tariffs.

I think a number of things have cost this country dearly over last 40 years, and governments on both sides are to blame.
We are going to have to grit our teeth and suffer a huge amount of pain and angst if the country is to be sorted out.

Looking at Economies like China, planned, and India -not so deliberately planned - we can see that both have benefited
from very low wages and a vast workforce. These are luxuries we don't have.

Brasil is an interesting case. It has a young population and a low wage large workforce. It is moving ahead rapidly despite massive
corruption and a staggering burden of bureaucracy. For instance they have the 3rd largest aircraft manufacturing operation in the world.
Of course they help themselves with tariff barriers and huge imposts for sending money out of the country _ something like 23% for overseas bank transfers.

Argentina has a crap economy but at least they manufacture motor vehicles on a pretty fair scale.
Chile, like Australia, relies heavily on mining for its income. I can't say much about other Sth. American countries except that Paraguay is quite stable.

The big benefit for these countries is market size and the fact that they have pretty good trade agreements.

Another affliction for this country is greed. Many years ago now I saw a (4 Corners ?) program in which the case of an electronic control box for a Caterpillar
diesel engine was used to illustrate this point. The manufacturer in the States got $12. The part here cost $480.!!

Quote:

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Originally Posted by Evanism

Australia is an emerging economy. We might be economically strong but we have the hallmarks of a primitive emerging economy...I.e no manufacturing industry, reliance on raw material exports, minimal trading partners (3 cover 90%), unskilled labour (mining), a large current account deficit and a rapid uncontrolled rise in consumer prices (housing).

We are subject to the successes of our partner economies for exports.

We won't BECOME one of the great primitive economies, we ARE a primitive economy.

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Hey Evan,

Until I read the above I always thought we were something more than an emerging economy, maybe a declining economy, however if it is the case surely Artmes question becomes "How does an emerging economy grow ?"

I guess most emerging economies would have far lower wages and standards of living than we do ? Are the rest of the Commonwealth countries similar to us, that is emerging economies that used to be stronger ?

Do we need a heap more people to give us a critical mass that will make and buy things from itself ? We've got the raw materials and the potential to feed ourselves.

I get the daily reckoning and stopped reading it as I thought it was all "scary scary scary but wait ! buy our newletter and YOU will be okay."

I dont particularly follow politics so forgive the naive question - Where should I look to find the relevant policies and wise thoughts on this issue from the various political parties ? WHats the right terms to put into a google search ?

Australian Labour Party Manufacturing Policy - this gives some interesting hits

Australian Liberal Party Growing the Australian Economy -this too gives some hits

Off to play with Google for a while ............. EDIT ........................... I found this http://www.innovation.gov.au/industr...ufacturing.pdf

Am wading through the exec summary, its a bit verbose for a summary ...................

Bill

"we're from the government. We are here to help".

These according to Ronald Raygun are the 9 most terrifying words in the English language.

Steamingbill, the government is never the answer. Regardless of policies, whether benign or otherwise, will be overtaken by greed, manipulators, rent seekers and favouritism. Churchill said basically this when he said that democracy is the least worst form of government (as well as a 5 minute conversation with the average voter will show how bad an idea it is).

Government is ultimately a means of trying to correct the failures of the market.

I don't subscribe to politics, as a generalisation, simply because they become mainstream. They try to accommodate everybody and this fails. Democracy is a terrible system of delivering outcomes as it leads to public debt and entitlement.

Look at The Greens. Their basic idea when they started was simple: stop destroying stuff, look after the environment, it matters. Now they are basically communists pretending to be environmentalists. They will fail.

Like greenpeace. Same thing. The originator left as it was taken over by "Ratbags". They tried to ban Chlorine. It is an atom. They honestly tried to ban part of the periodic table.

Liberals are trying but will ultimately fail because they cannot accommodate small business, creative destruction and the evolution of ideas. Their mindset is narrow. I can tell you more but this isn't the place.

Labor, well, less said of them the better. Communism is a proven failure. Handouts leads to corruption and free public money....well, we all saw the result of the kids in charge of the candy store.

How does an economy emerge? Simple. Almost trivial.....IT MAKES THINGS.

It makes high end, technological items that met a market demand at a market price.

This isn't about iPhones when I mean tech. It's biochemistry, sciences, technical manufacturing, aerospace, consumer goods, education, art, design, focus of mind.

It isn't about consumerism, but As BobL pointed out: limiting rent seeker behaviour (lawyers), education, hard work, savings (there is a trap there too), manufacturing, economic diversity, non reliance of government subsidies.

Once these are genuinely put in place then genuine growth occurs. A society grows and becomes richer, both materially and monetarily (not "dollars", whatever they are), culturally sophisticated and resilient.

Unfortunately, we...the west, us...Australia, have become lazy with the easy option of selling the stuff we rape from the land. We are not the clever country, or smart, or sophisticated. We are a farm. A hole in the ground. A woodchip supplier!

This country has been taken over by The Bogan. A selfish, uncultured, uneducated, entitled, government handout recipient. Opinion without education, rich without effort, uncultured ("I dun gon to Bali!") and expectant that the government will provide all their answers...like mum and dad would....

We have lost our way.

There is too much inertia to correct it willingly. The market will do it. It will be a white hot seering agony that will burn everyone in the process. Some will become rich, but the vast majority will become vastly poorer. The market can be held back for a time, it can even be controlled to an extent, but it can never be tamed. It reverts all back to the mean.

It is a reflection of nature itself. We can no more control the market any more than we can ban chlorine.

Ergo, Australia is utterly doomed. Doomed to be the worlds quary. Forever suppliers to the Chinas of the world and the buyer of Other People's Stuff.







.

It sounds as though the feelings in Australia are similar in many ways to the popular sentiments among the middle class here.

I just finished a very interesting book by Vaclav Smil entitled 'Made in the USA: The Rise and Retreat of American Manufacturing'. Smil presents a chronological perspective of the origins, rise and decline of the manufacturing base of the US. He attributes part of the decline to the commonly accepted idea that off-shoring of low skill manufacturing is part of the normal development of an advanced economy but he also details the precipitous declines in many areas of high tech manufacturing. He points to the tax advantage that the US government confers on overseas corporate profits as a major force in the decline.

I see other drivers, the most fundamental of which is: High tech manufacturing relies on the existence highly skilled and highly educated workforce and producing such a workforce takes time. In addition, high tech manufacturing depends heavily on intellectual property, discoveries and know-how that is the product of the skilled workforce, call it 'intellectual capital'. Producing intellectual capital also takes time and is subject to the vagaries of happenstance.

Capital on the other hand is seeking the maximum return in the shortest possible time. For example in the form of quarterly revenue and earnings reports. The creation of a skilled workforce and intellectual capital takes years to decades or in some cases generations. For instance, Gregor Mendel did his pioneering experiments on inheritance in peas between 1856 and 1863. Watson and Crick published the structure of DNA in 1953. The first wave of biotechnology companies came around in the 1980's. Would any modern investor put money in a century long development cycle?

Investors in the US have been driving a steady trend of disinvestment in research in many areas, it is just too uncertain and has too long a time scale to attract their interest. The drug companies here have been dumping R&D programs and personnel for at least 15 years. These functions are now being outsourced to India and China along with raw materials and finished product manufacturing.

As a result students in the US are often finding that their skills are not wanted as the market for them has disappeared while they are in school. The US is heavily focused on extractive industry, especially hydraulic fracturing for gas and oil. There has been a shift in employment from productive occupations to so called service jobs - unfortunately the bulk of this service is waiting tables, stocking shelves and other customer service occupations. The average wage in the US has now regressed to levels of the 1980's. The middle class is dying. Walmart, one of our major retailers and the biggest private employer in the world, recently lowered its projected earnings because they expect the recent government decision to decrease food aid to the poor will cut into their bottom line. It has also been reported that Walmart pays its workers so little that many rely on public assistance and food aid to get by.

Overall, I see that the dictates of capital are driving the US economy down and likely yours too. I feel that the US is headed to a more primitive economy, much like that described by Charles Dickens.

Rob, from what I read and the commentary I hear on TV and radio you have confirmed my general thoughts about both economies.

I wonder what influence on the flow of capital and the constant chasing of ever higher profits is provided by TV reports and the greater
access to detailed stock market and financial analysis. Couple this with an ever increasing desire to be rich and famous and we are on a
very slippery slope indeed.

Quote:

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Originally Posted by artme

Rob, from what I read and the commentary I hear on TV and radio you have confirmed my general thoughts about both economies.

I wonder what influence on the flow of capital and the constant chasing of ever higher profits is provided by TV reports and the greater
access to detailed stock market and financial analysis. Couple this with an ever increasing desire to be rich and famous and we are on a
very slippery slope indeed.

---

I think the advent of high speed information technologies is the key enabler for high returns of investments. Even a century ago there were stock tickers that enabled traders to work off of the trading floors and now we have high speed traders who operate on milli/nanosecond timescales. These companies actually jockey for prime real-estate that is closer to the exchanges so that they can get an edge on others by being just a little closer and therefore faster.

I also see the loosening of capital controls, such as the North American Free Trade Agreement and the Trans-pacific Partnership as methods by which capital can more easily transit and thereby overcome national boundaries and laws.

I wonder if the money managers' model may be to raid the economy of a country, extract all of its accumulated value and then flee the jurisdiction.

In the early 2000's our then vice President, Dick Cheney, re-denominated a significant portion of his assets to euro's from dollars. This happened when the euro was still trading at about $0.80US. Shortly thereafter the euro was up to $1.25US. Now of course he didn't exploit his position to get some inside information now did he?:no: All perfectly legal.

In terms of Exports there is a BIG difference between the US and AUS.
In the following diagrams the main manufacturing areas are coloured in pink and blue, the rest is basically primary products.
This is 2010 data so if anything the Australian situation is probably even worse

https://www.woodworkforums.com/attach...d=303299&stc=1

There are many similarities in other aspects of the economies like, huge imports of trashy stuff from China, wasteful energy usage and rampant consumerism.
As well as major manufacturing industries the US also gets external income from services and other products like education, software and entertainment so it has a much more diversified economy than AUS.

Quote:

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Originally Posted by rob streeper

I wonder if the money managers' model may be to raid the economy of a country, extract all of its accumulated value and then flee the jurisdiction.

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This is the Carry Trade. It's a huge part of how the banks operate here. They have a massive dollar position that regularly unwinds violently so they hedge with other currencies. When they increase in value, the banks sell, often causing another violent price change. The AUD is one of the most traded currencies in the world, which is madness. We are a country of 23 million.

We have also had a spectacular example of a raid.

It was called the Myer Debacle. Effectively, one of our biggest retailers was privatised, stripped for cash, loaded up with debt, floated and an enormous sum was creamed off and sent to tax havens on the very day of the float. Offices were closed and private jets left the country the next morning. It was one of the most spectacular acts of corporate bastardry I've ever witnessed.

It put a tear in this capitalist eye. Purely magnificent.

Quote:

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Originally Posted by BobL

In terms of Exports there is a BIG difference between the US and AUS.
In the following diagrams the main manufacturing areas are coloured in pink and blue, the rest is basically primary products.
This is 2010 data so if anything the Australian situation is probably even worse

https://www.woodworkforums.com/attach...d=303299&stc=1

There are many similarities in other aspects of the economies like, huge imports of trashy stuff from China, wasteful energy usage and rampant consumerism.
As well as major manufacturing industries the US also gets external income from services and other products like education, software and entertainment so it has a much more diversified economy than AUS.

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Hi Bob,

I agree, in many of the ways in which economies are quantified the differences between Australia and the US are enormous. As I mentioned in my above post, there is one element that is not well accounted - the intellectual capital of society. I know my definition is crude but I think the concept captures the essence.

I am reminded of a documentary I watched recently. In it a US factory owner was interviewed. The company formerly made plywood. The business functions were outsourced to China and the equipment was sent over to them too. The company employees trained their Chinese successors. The owner said that he was selling product cheaper than it could be made here and indeed at the cost to make it in China. He made his money however through a 17% subsidy (kickback) from the Chinese government. Thus his equipment and the experience of his employees had effectively been exported to China. I don't believe that the accounting presented above includes such exports.

Smil wrote that one of the major US exports to China was waste paper. Now one could argue that waste paper is the byproduct or waste product of an intellectual service economy but through a different lens it could also be seen as a scrapper/scavenger collecting the refuse of a dying economy.

Australia is different. Your country is closer and you have a lot of the feedstocks that Chinese industry needs. I see similarities in that extraction is extraction, whether it is the intellectual capital of a society or it is coal and iron ore.

Cheers,
Rob

Quote:

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Originally Posted by Evanism

This is the Carry Trade. It's a huge part of how the banks operate here. They have a massive dollar position that regularly unwinds violently so they hedge with other currencies. When they increase in value, the banks sell, often causing another violent price change. The AUD is one of the most traded currencies in the world, which is madness. We are a country of 23 million.

We have also had a spectacular example of a raid.

It was called the Myer Debacle. Effectively, one of our biggest retailers was privatised, stripped for cash, loaded up with debt, floated and an enormous sum was creamed off and sent to tax havens on the very day of the float. Offices were closed and private jets left the country the next morning. It was one of the most spectacular acts of corporate bastardry I've ever witnessed.

It put a tear in this capitalist eye. Purely magnificent.

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Sad thing is that everybody excepting the capitalists and the politicians they employ get the hind tit and the bail-out-bill as happened here with our "too big to fail banks".

Quote:

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Originally Posted by rob streeper

. . . I don't believe that the accounting presented above includes such exports. . . . .

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Unless outsourcing a process to another country generates a net direct $ return from that country (e.g. licence fees for using IP) I can't see how that is considered as an export.

Aside from giving away IP voluntarily there's lots of illegal IP transfer, software and media piracy comes to mind.

Not that I am a Microsoft fan or that BG needs any more money, but at one stage in the late 1990s there were something like only 9 times more Windows PCs being sold worldwide than there were Windows licences.

Quote:

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Originally Posted by BobL

Unless outsourcing a process to another country generates a net direct $ return from that country (e.g. licence fees for using IP) I can't see how that is considered as an export.

Aside from giving away IP voluntarily there's lots of illegal IP transfer, software and media piracy comes to mind.

Not that I am a Microsoft fan or that BG needs any more money, but at one stage in the late 1990s there were something like only 9 times more Windows PCs being sold worldwide than there were Windows licences.

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Outright theft is a problem too of course. I am however talking mostly about the willing transfer of know-how/IP/IC. Such transfers undoubtedly have value but are not counted as exports. I argue that if the value of such items of knowledge were counted or, more properly, accounted then the value of exports could arguably be much higher. I would imagine the same holds for Australia and Europe. It is much easier to co-opt, borrow, buy or steal existing IP than it is to invest the time, funds and effort needed to create it de novo.

ABC news site has an story regarding Mr Howes followed by forum discussion

Beyond the straitjacket of unions vs business - The Drum (Australian Broadcasting Corporation)

Thanks for that post Bill!!!:2tsup::2tsup::2tsup:

I hope others will see why I was so interested in this address by Paul Howes.

Let's hope his "road to Damascus conversion"( See Fred's post) is permanent.

I painfully watched Mr Howes speech on the A.B.C the other day.Couldn't change the channel as i was gobsmacked listening to his verbal fart :oo:..putrid,putrid man.I must be from another planet if this chump is human...MM:2tsup:

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Originally Posted by artme

Thanks for that post Bill!!!:2tsup::2tsup::2tsup:

I hope others will see why I was so interested in this address by Paul Howes.

Let's hope his "road to Damascus conversion"( See Fred's post) is permanent.

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Well Art, I would say that his conversion has more to do with advancing the political career of Mr Howes than it has to do with advancing industrial relations in this country.

He is working very hard to invent a new image after his rather disastrous foray in to the political big time.

I, like a number of you probably are, am wondering if he is a leopard trying to change his spots, or simply a chameleon
trying to camouflage himself.

Still, one of the most intriguing and interesting speeches I have heard in a long time.

BTW; loved Clarke and Dawe last night!!!1

The US National Science Foundation recently released a report discussing world trends in R&D, education, high technology manufacturing and so on. See nsf.gov - S&E Indicators 2014 - US National Science Foundation (NSF).

Interesting numbers come out of this.

Between 2003 and 2012 Chinese high-tech manufacturing increased five-fold. China's share of global R&D went from 8% to 24%. The US leads with 27%. How long will it be before China's 4.5-fold demographic advantage puts it into the leading position?

Among persons holding doctoral level science and engineering degrees 37% are employed by firms having 100 employees or less. Approximately equal numbers are employed in academics and businesses. I interpret this as showing that big business, i.e. business that are established and have built up their product lines, employ a minority of research workers. Thus big businesses are focused on extracting the value of IP, not creating it. The average age of US researchers is also increasing and the median is 44 years old. South Korea doubled and China tripled the number of researchers they educated between 1995 and 2007. The US number increased by 36% and that of the EU increased by 65%.

The US still spends twice as much on R&D as does China, but the trend is downward in the US, Japan and the EU and strongly upward in China for global share of R&D expenditures.

From my preliminary reading I perceive that the East is catching up rapidly to the West. Given the much larger population of China I predict that, as its stock of researchers matures and achieves full potential, China will come to dominate the areas of enterprise that we think of as high-tech.

Toyota to exit Australian, 30,000 jobs could go

If there is any doubt now, I'll eat my old work boots.

This country is now officially doomed. The collapse is going to be vicious.

I have no idea how big the economic problems are for Australia. What I do see is NO rain, HOT weather and no sign of rain. The cocc\kies around here are doing it tough and they have been for a while. This hot dry spell will have repercussions as we get into the colder months. The first will be a shortage of grain. It is so dry they can't plant winter crops because there is no moisture available. I am talking in the Tamworth area. I know we are not alone!! Other states would be in a similar problem. The levels of meat animals is also going to fall due to no feed.
As far as the car market goes .....should we rest some blame back onto the government (either Labor or Liberal) They should not allow imported cars in to under sell the local product. We are digging Australia up and sending it overseas at an astonishing rate and what are we left with?
The Australian economy can not suffer tens of thousands of workers on benefits. Who will raise the money needed to pay them? Are we heading for another Depression like the 30s had? (Might be sooner than we think)
Our politicians need to get some long term direction to get Australia on a better level of productivity in every sector! (Ok I will wait outside in the shade for the black unmarked car from ASIO to pick me up and take me to the salt mines)

So the car industry and SPC called for government assistance - free money - and both were knocked back.

Bill Shorten, the invisible man, screams his face off and accuses the government of all sorts of destructive behaviour.

Has the said Mr. Shorten said anything aout the mining industry here in Qld. where thousands have lost their jobs?
Has he suggested we subsidize mining? Don't recall a word from him on these losses.

I was talking to a jewellery shop owner a few days ago.As she said, no one subsidizes her or will offer her money to
keep her business alive.

Where do the subsides and handouts begin and end??

I can see us getting into the position I saw last time I was in the States where in some places virtually every shop in some
shopping centres was closed. People were walking the streets with signs saying they would work for food.

As for tariffs, well who knows what would happen if they were reintroduced??