Manufacturing proves the political issue that unites Australians

The Toyota car plant closing down this year
Contributed by Joe Montero

Mike Wade and Josh Gordon penned for The Age (6 February 2017) on the impact on the thinking of many Australians, b rough about by the demise of the manufacturing industry. With this, they assert, that 83 percent of Australians have in common a “desire for more goods to be made in Australia” and that the likes of Pauline Hanson and Nick Xenophon are united in this. They also draw a link between this and Donald Trump.

There is also the untold story of why we are here and how it can be different. I will touch on this.

The evidence for the wish for more Australian made is provided via a survey, from the Political Persons Project, billed as one of the most comprehensive attempt to profile different types of Australians, based on lifestyles, social values and politics

A combined 82.5 per cent of respondents in a representative sample said they strongly agreed (42 per cent) or agreed (40.5 per cent). Only 6 per cent disagreed.  It outranked all other issues by a long way. Pro manufacturing opinion crossed income groups, age, gender and locality.

Fairfax media conducted the survey, with the collaboration of the Australian National University. And the Netherlands-based political research enterprise Kieskompas.

Manufacturing has been in decline since the 1970’s

Seven types of Australians, representative of the seven most dominant patterns of thinking in Australian society. One in four worked in the sector then. Now it is about one in thirteen. Victoria has been affected the most, because the state was the traditional centre of Australian manufacturing.

Last week Toyota confirmed that it will close on 3 October, with the loss of another 26,000 jobs. Toyota follows the exit of Ford and General Motors.  There will be no more real car industry in Australia to speak of. The impact will be much wider, because much of what does exist of manufacturing in Australia is linked to the car industry. Take it away and a major supporting pillar is gone. And it will have a multiplier effect through the economy.

To those who think that this might mean fewer cars on the road, it will not pan out that way. They will be imported instead, having being made in Third World countries. Not that it will help them much either. In the longer run, they are locked into a race to the bottom. In those circumstances, the industry will contribute to locked in poverty. Ford for example, will make cars in Thailand, not to sell in Thailand, but to export to countries like Australia.

In 2015 Australians paid for $246 billion of foreign made imports.

We have been told for years that this does not matter, because we are moving away from a manufacturing economy to a service economy. Critics of this point of view have pointed out that somebody making a financial deal over a computer provides little of value. The have argued that add on value is what drives real economic growth and provides jobs. The financial deal might make someone some money, but it does not create anything that was not there already. What it does do is pass ownership from one hand to the other. We do need services to make the world go round. We must also acknowledge that they exist in a context that should act as a support for a healthy real economy of making things.

To properly understand this, there must be a definition of value. In the most basic terms, this exists when one or more human beings alter what is provided by nature into something that is more useful for them. Something new that wasn’t there before has come into existence. Value has been created. Items that have been created can be transformed into new items. This creates value too.

Those who disagree will point out to the creative role of investment capital and entrepreneurship. Investment capital in inanimate and does nothing. Certain people do make decisions, because they manage funds or manage work. In these capacities, there is another form of work, specialised, but not too different to any other type of work.

The experience over the decades backs this up. Existing statistical methods may give a somewhat different story, but three things are very clear. One is that it is much harder to get a job, because they just aren’t there. Back then, one could find several choices by lunch time, on the first day of looking. Now it could take years. It is very clear is that an  average household of two adults and two children could be maintained on a single wage then. Now it takes at least two wages. This means that collectively we are considerably worse off. Most people who had a job then, had a full time and permanent job. Now the proportion of the workforce in either part time, contract or casual work makes up more than thirty percent of the workforce.

No amount of claiming that we are a growing economy can cover up that there is less work and we are getting poorer. The economy has not been growing. It has been shrinking.

People are hurting and they don’t see no better prospect around the corner. Most don’t need clever Dicks to tell them it’s okay. They have the evidence of living life as it is.  They want Australia to go back to making things and want the politicians to listen.

This is not a matter of left or right politics. The understanding goes across the board. Trump and his backers have been able to take advantage of a similar situation in the United States. Pauline Hanson has done so in Australia.  Several unions have been pushing the issue for years, as have political organisations on the left.

Manufacturing can be built again. But the market will not do it. If it was going to, it would have done so already. Australia needs a national plan.

Nor should we be expecting to return to the industries of the past, based on the technologies of the past. In an economy of limited size, new industries need to be built rationally, to first of all to service our needs, and then to earn export income. They need to be based on state of the art technologies. They need to be clean. This will protect the future, not only in terms of safeguarding the environment.  It will also ensure that does not get left behind in the dark ages, in terms of knowing how to make things.

We have the capacity. All that is needed is the political will to ensure that the dollars we contribute to the government are used properly, that all of us contributes our fair share and that the involvement and initiative of that Australian population is given reign to bring about change.

This is the issue that can unite Australians in a wonderful joint endeavor. It should be high on the political agenda and the politicians must be made to either listen or stand aside.

 

 

 

 

 

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