Australian Lefty on Politics, Governance, Science and Info Management

Getting a mandate for WorkChances Mark 2

Posted by Dave Bath on 2007-11-11

The statement by the Reserve Bank Governor that wages growth "has been contained" is perhaps the pretext for even more radical IR reform if Howard/Costello manage to win the coming election, and claiming the Australian people want it.

Despite the neutral statement by the Governor of the RBA, the Coalition is touting wages growth as the main contributor to inflation (without mentioning the inflationary pressure from dramatically rising profits noted by the ABS or the push for up to 90% increases in remuneration for the top end of town).

This looks like the coalition is putting together a rationale for even more radical changes to wages and conditions of ordinary Australians if they win the election, by the paper-thin rationale that the Australian people will have given them a mandate to fight inflation by further putting the screws on workers (especially if they have been turned into serfs, oops, "independent contractors").

And inflation will rise: the credit squeeze will get much worse, prices for non-discretionary items will go continue up, up, up (The Economist Commodity Price Index for Food Items has gone up 30.2% in the year to 2007-11-10 – even more than non-food agriculturals).

Even Piers Akermann on the ABC’s The Insiders 2007-11-11 acknowledged that the ALP policies to control inflation address the middle-term, and don’t do anything in the short term.  Never mind that nobody can do much in the short term, that both the major parties have very similar policies except on productivity through increasing skills!

Yet Piers the Pontificator, the Tabloid Touter for the Liberals, continued inferring that wages are the evil that pushes up inflation.  As usual, Piers is reciting from a songsheet with The Lodge letterhead.

Of course, the Liberals, if re-elected might (shock, horror!) keep their promise not to extend Work Choices.  They may even abolish it!  But their are lining up the ducks for an excuse to bring in even more radical legislation that they’ll probably call the "Building a Better Economy Bill No2 (Inflation Control) 2008"


5 Responses to “Getting a mandate for WorkChances Mark 2”

  1. Stephan said

    “by the paper-thin rationale that the Australian people will have given them a mandate to fight inflation by further putting the screws on workers” – When you say putting the screws on workers, are you sure you don’t mean: Taking back govt ‘protections’ that should have never existed in the first place?

  2. Dave Bath said

    Stephan. One of the key metrics for assessing a civilization is the protection it gives the least powerful from those of the ruling classes (in modern Australia, the plutocrats). To my mind, the primary element of a civilization are real persons, then the state, and finally commercial entities (which are neither necessary nor sufficient for a livable, sustainable, civilization) – yet the Howard/Costello team removes protections from real persons while granting favors and dispensations to entities that cannot feel pain, and have no intrinsic right under natural law to exist.

    Of course, if the government gave a decent social wage, guaranteeing non-discretionary items like a roof, food, healthcare and education, then there would much less need to legislate protections from predatory companies.

    Perhaps you’d think that government protections (such as hygeine regulations covering restaurants) are an unnecessary burden on business? I’d hope you aren’t such a right winger.

    It’s worth quoting from this week’s Economist discussing the "higher they fly, the bigger the parachute" conditions of the top end of town:

    Since the barbaric "breaking wheel" was replaced by guillotine in 18th-century France, methods of execution have increasingly south to end life speedily rather than inflict long agony.  There can, however, be few decapitations less painful than those at big American banks.  On November 4th Chuck Prince left the boss’s office at Citigroup, the world’s largest bank, with the tremendous support and respect" of the board ringing in his ears, even though the firm had to write down $8bill to $11bill in October alone.  A week earlier, Stan O’Neal lost his job at Merrill Lynch after leading the investment bank to a loss of $8.4 bill of write-downs.  He too entered retirement not on a tumbril but in a limousine, with $160 million to soothe his discomfort.

    Enough money to life comfortably for the rest of your life for totally screwing the company, compared with the little guy who can be thrown on the scrap-heap without ceremony?

  3. Stephan said

    Hey Dave

    Well when we’re talking about protections, they should be based on actual rights that people have yeah? And what right does one person have to another’s property? None.

    How would you define, “enough money”, and under whose definition is it? What makes one persons definition of “enough money” better than another’s? There can be so such thing as a “fair price”, there is only the price set by the market. Otherwise consumers could equally argue that any price above zero is too high, and businesses could argue that any price is too low.

    Govt protections are an unnecessary burden on both businesses and people. No regulation is going to be able to make businesses pay more (without creating unemployment), the money doesn’t just come from nowhere. The reason businesses pay the amount they do, is because that’s the market price. Paying more than what they have to, is bad for not only themselves, but its bad for the economy’s price mechanism. This harms the overall economy, which includes everyone.

    As for the stuff about businesses not feeling pain, I think this is a bit of a dodge. Aren’t all businesses ultimately owned by people? Aren’t those the owners of those businesses being coerced to do things by the govt against their will? Doesn’t this seem immoral to you?

  4. Dave Bath said

    OK (1): As for determining “enough” money, or more accurately “enough resources” for a comfortable life, I’d use something akin to the UNHDP indicators: mortality, health, education, etc, and add that in a world community, sustainability (not impinging on others) is also worthwhile. Only Cuba manages to meet acceptable criteria for both human development and environmental sustainabilty in Global Hectares per Person.

    (2) Government regulations for the purposes of real persons (as opposed to constructs like corporations) are very important, and luckily CSR issues (Corporate Social Responsibility) are getting some attention. Philosophophically, where do you stand on regulations not merely on the abuse of “externalities” in company balance sheets, but on regulations that protect the public from corner-cutting in production of food, cars and medicines. I don’t think anyone could argue that unrestrained companies like Philip Morris and the rest of the tobacco peddlars have a right to exist. I’d note that I have less objection to pure heroin being peddled than impure and more harmful varieties – and remember, it’s only the black market that actually operates in a pure capitalist manner.

    (3) The “coercion” argument is to my mind specious compared to the idea that in the larger view, many people are coerced into long hours of working in return for little more than a hand-to-mouth existence, if not frank starvation and ill-health, because of the lack of constraints put on the largest profiteers who control the greatest resources. The GINI coefficient is in practical terms, a correlate of more people being coerced, and inversely correlates with freedoms. Aaaah, the Nordic Nannies – highly regulated, high-functioning economies. Read the back pages of The Economist every week and see whether economies perform better with lots of regs or not.

    The data here is a bit old, but shows pretty clearly which countries have the best functioning (in cash/employment terms) economies. The data here factors in environmental footprint – the coercion each country puts on all others if you like – which is where the EU starts falling down and Fidel Castro deserves praise – even from The Economist, which as I point out here, says

    Governments are moving in this direction. Energy-efficiency regulations, already tough in California and Europe, are tightening further. The European Commission and the Australian government are planning to ban incandescent light bulbs. Whisper it quietly, but in this they are following a policy pioneered by a man who never had much faith in market mechanisms for any purpose: Fidel Castro.

    We’ve forgotten that money and profit are not necessary for "The Economy", which is really about the distribution of resources – and indeed – if you know your greek roots – originally concerned with ensuring that everyone within your area of responsibility had food, clothing and shelter. Gift economies, to my thinking, offer hope of a less wasteful economy and a nobler population. (Hmmm, the internet would have died in the crib but for the gift economy among usenetters in the 80s and early 90s).

  5. Stephan said

    1. You haven’t said what makes one persons definition of “enough” better than another’s. You still haven’t said that some people have a right to other people’s property, against their will of course. If you can’t justify why, then any right to welfare is obviously false and immoral.

    2. While we’re on the topic of constructs, the govt itself is one too. The govt should not exist either, if we’re going to be consistent there.

    As for where I philosophically stand on govt regulation, I am an anarcho-capitalist. Free markets are self-correcting and do not need regulation. If products are bad/unsafe, they will not be purchased. No company can continue to produce bad/unsafe products in the long run. My argument runs deeper than this though, govts are immoral because they are based off non-universal principles. Why should one person be able to set the rules for another? What gives you the right to force other people to do with their property as you wish?

    3. People are not ‘coerced’ into working one particular job, they are free to choose from any job. If it is the case that people do not wish to employ you, whose fault is that? Once again, you do not have a right to other people’s property. The solution is to take responsibility for yourself and to either get some skills that are in demand, or start your own business. Failing that, there’s private charity, which is the only moral kind of charity. Welfare is coerced via govt violence, and is therefore immoral.

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