free trade between the states

This series of posts begins with Part One: trade off
followed by Part Two: who's listening?

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Three professors were shipwrecked on a desert island, with nothing but a can of baked beans to survive on. They had no can-opener, but believed that if they were all reasonably intelligent academics they should be able to work together and find a way to open the can.

The nutritionist was able to describe in great detail the benefits each would derive once the can was opened and they were able to eat the contents;

The physicist explained that a fire of a specific temperature would be able to generate enough internal pressure to blow the can open – without burning the contents – but could not think of a way to stop the contents being scattered across the beach and therefore un-usable;

The economist waited til the other two had finished, then smugly announced the solution to the problem was simple: ‘All we have to do”, she said, “is assume the can is open”. 

Theories about free markets are built on as many assumptions as other economic theories. One assumption is “buyers make rational decisions”, and another is "buyers and sellers have perfect information".  [When Adam Smith came up with the latter assumption in 1776, he'd obviously not tried getting served in a large department store.] 

Australia at its best was a country founded on a good mix of government and private market investment though, as we have seen in recent times, it is moving increasingly and rapidly towards the goal of a totally free market – despite the fact that no such market can exist in practice.

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The Australian Constitution was a product of its time, its primary purpose being to find a way several individual colonial governments might work together. To oversimplify, it was believed a federal government could deal with three pressing issues of late 19^th Century Australia:

• Mutual cooperation for the purposes of defence;
• Mutual cooperation to get rid of non-white labour which could only undermine the white standard of living; and
• Free trade between states.

In the 1890s, free trade would mean that the cattle barons could move fattened cows from Queensland to their own meat markets in other states without paying excise to cross borders. Stuff like that.

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Labour and human skills are market products. That’s it in a nutshell.

Mr Abbott likes to rabbit on about how bludgers should be told to move west and fill all the job vacancies in the mining sector, or have their dole payments cut. [At the rate things are going, cuts to unemployment benefits would mean unemployed people should start making payments to the government, but I digress.]

In a free market place – assumed to be an efficient one – the free movement of labour and skills across state borders would seem to be essential.

It is only in this sense that the Prime Minister’s vision of Australia-wide qualifications has some merit – if only she and her mates could get their act together.

The states punish people who move across borders. Relocation costs include transfer of motor registration and driving licences, roadworthy certificates for cars, security deposits for rental accommodation, connection fees for utilities, and stamp duty and bank fees if buying or selling houses.

It would seem, from people I’ve spoken to and from letters to newspaper editors, that a lot of people from eastern states have run themselves ragged trying to work out how to actually get a job in the mining industry. Yet we now learn that Gina Rinehart has been given the go-ahead to import 1,700 unskilled workers to help her get a mining project off the ground.


This announcement made by Immigration Minister Chris Bowen has put just one more pin in the voodoo doll of Gillard, as they had a public spat about whether or not she had been given notice of the decision or a chance to review it before it was announced. 
Here I was all this time, hoping the Coalition would implode and replace Abbott as an alternative Prime Minister before the next election but, here too, Julia Gillard is letting me down by competing with Abbott to see if the Labor Party can't self-implode first.

Excuses often given to mining job applicants from the eastern states include 

• not the right experience
• no experience
• not the right training

I don't for a moment presume everyone on unemployment benefits is free to leave family commitments, or is healthy enough to work in the mining industry. But what is so wrong with Australia's unskilled workers - the scapegoats of Abbott's social security plans - that there is no mining company or TAFE course in the east, and no way in for those willing and able to get on the mining bandwagon? 


Perhaps it doesn't matter, and we can still trust that decent, hard-working Australians all have a chance to get ahead - in spite of our government if not with its help.

Part Four: hot potato, hot potato