I am vaguely acquainted with someone whose grandfather was, in the era of the Bolte Premiership, a politician and a major protectionist. From what I have been told about this chap, the nicest thing that could be said about him was that he owned a company which made radios and TVs locally in Australia.
That is a lovely thing, is it not?
The first TV my family owned was from a brand made locally in that chap’s factory. Within a few years, the dial to change the channel broke, so we had to change the channel with pilers. Reception with a reliable signal, even with a rooftop antenna in a flat area close to the city (ie Footscray), only allowed us to watch channels 7 and 9. Vertical hold, causing the picture to jump constantly, was also highly unreliable.
And the TV broke down regularly, requiring a TV repairman to constantly visit and fix it.
After ten years of this, my mother had enough and insisted that my father buy a new TV. My father and I visited Mighty Muirs in Footscray (a precursor to the Good Guys) and picked out a National Panasonic colour TV.
It had push button channel selection. No vertical hold issues. The TV could pick up reliable signals from all five of the free to air TV stations available across Melbourne, including the newly rebadged Channel 10 and the newly launched SBS (this was January 1981 after all). With sudden access to the ABC, I could finally watch Countdown every Sunday night.
And most importantly, this Japanese made TV did not break down even once for about 20 years. It lasted almost long enough for the transition to digital TV signals which would have made it and other Cathode Ray Tube TVs obsolete.
I get the feeling that politicians like the owner of that TV factory were very vested in using their political influence in opposing free trade and supporting the existence of tariffs, not so much as to protect local manufacturing jobs, but to compel their fellow Australians to buy inferior locally made products when far superior and arguably cheaper imports would otherwise have been available.
We don’t make TVs in Australia anymore. We import them and we export agricultural produce and minerals. This is a good thing, as we now, as do other countries who have converted from protectionism to free trade, follow the more sensible Theory of Comparative Advantage first articulated by David Ricardo in 1817.
Put simply, we focus on what we do best, and trade that with other nations who do something else best, and we are both richer for it.
Ironically, the grandson of that TV factory owner turned politician is not a protectionist. During the many years that I have had a vague acquaintance with him (he is a close friend of a former friend), he has been a very vehement free trader, and has supported removal of tariffs from the comfort of his armchair. He has a family trust to ensure that he has not had to fend for himself, or to hustle for the luxuries of life, so in a way, he is indirectly protected by tariffs, or at least the profits incurred from a long forgotten tariff on electrical goods.
My childhood experience mentioned above with our family TV sets is a good reason for anyone to oppose tariffs, although it was only as an adult when I learned about free trade and free markets and the like that I actually formed an opinion on the subject, one which I have adhered to for all of my subsequent adult life.
The announcements this week by President Trump of a wide range of tariffs on friend and foe alike have been met with a range of emotions – derision, anger, concern.
It is interesting that Australia’s subantarctic external territory the McDonald and Heard Islands, where the only permanent occupants are penguins, have been slapped with tariffs. After all, there are no exports or imports from or to there.
There is a lot of cause for anger. There have been many years of friendship and mutual trust and support between the US and many of the nations now hit with tariffs. The vilification of Canada, the friendliest and closest neighbour to the US, is uncalled for and puerile. We in Australia have plenty of cause for disappointment, anger and distrust.
There is also much cause for concern. Allow me to indulge in a quick history lesson: the Smoot-Hawley Tariff Act of 1930 converted the Wall Street crisis which had mostly just been the bursting of a share market bubble into a full blown global economic depression which then was a major cause of the Second World War.
The kind of ignorant and troglodyte economic policies currently being imposed by Trump not only will shake the world economy severely, but also are part of an irresponsible and short sighted program which will do much to damage, if not destroy, any trust that the free nations of the world have in the leadership of the US.
I can only see one positive in all this. There are many people, mostly centrist or left of centre, who usually support protectionism and oppose free trade. They will now have to reflect, when they observe Trump as the greatest champion of tariffs in at least 95 years, whether they will have to change their position on free trade.
That could be a seminal paradigm shift in political and economic consensus.
Lost For Words! 