Protect us from ourselves

I got this email today, from a colleague.

“Joe Smith started the day early having set his alarm clock ( MADE IN JAPAN ) for 6am . While his coffeepot ( MADE IN CHINA ) was perking, he shaved with his electric razor (MADE IN HONG KONG ). He put on a dress shirt ( MADE IN SRI LANKA ), designer jeans ( MADE IN SINGAPORE ) and tennis shoes ( MADE IN KOREA ). After cooking his breakfast in his new electric skillet ( MADE IN INDIA ) he sat down with his calculator ( MADE IN MEXICO ) to see how much he could spend today. After setting his watch ( MADE IN TAIWAN ) to the radio (MADE IN INDIA ) he got in his car ( MADE IN GERMANY ) filled it with Petrol from Saudi Arabiaand continued his search for a good paying Australian JOB At the end of yet another discouraging and fruitless day checking his Computer (MADE In MALAYSIA ), Joe decide to relax for a while.. He put on his sandals ( MADE IN BRAZIL ) poured himself a glass of wine (MADE IN FRANCE.! ) and turned on his TV ( MADE IN INDONESIA ), and then wondered why he can’t find a good paying job in … Australia….. “

Is it just me or is protectionism so hot right now? “Buy local” campaigns are the new economic black. I think A Current Affair is running a story (or they have already run it) encouraging their legion’s of viewers to buy Australian made. It’s odd. And pretty stupid. In fact I think it’s just clever marketing and a nice, easy PR campaign to boot. Who’s not going to cover a story about keeping locals in jobs. It seems the first thing advertisers do in a recession is call for protectionism – buy local campaigns etc…

Magnetic Island is in the midst of a protectionism row at the moment after a local operator missed out on a tender to a Sydney based comments. This operator’s comments to the local paper that these fly by night Sydney operators would “be crucified” if they tried setting up on the island no doubt does our region a world of good as we try to attract investment and tourists. Here’s a message to you new businesses from the businesses on Magnetic Island… “die or we’ll kill you”. Nice.

The campaign to reverse the Townsville City Council’s incredibly above board tender decision took on new legs over the weekend with a protest group carting around signs that said “Beach Hire is un-Australian” and “local jobs for locals”… Apparently coming from Sydney is un-Australian now. Basically this guy thought the job was his by right – and barely even scraped together a tender (and submitted it after the closing date). He lost. That’s life. Move on.

I like to preface these pretty broad posts by saying “I’m no economist but” so here’s the standard disclaimer. I’m no economist but in the face of a global financial crisis it doesn’t make sense to be acting in the national not global interest – because to me, the bigger problem for Australian jobs is the rapidly collapsing resource sector. A collapse fuelled by slowing demand from overseas. That’s right. We export this stuff. So we need other countries to be in a financial position to buy our stuff.

This is why I think the fact most of the stimulus package being spent on things produced overseas is a good thing. Sure, buying local is good. But buying foreign made is ok. And why should we value employment in our prosperous country with better than adequate social security over jobs in other countries with non-existant unemployment payments?

I’ve had a few conversations with a few people who “don’t want the money from K-Rudd” on principle. That’s fine. Give it to me. I’ll spend it wisely.

These conversations go along these lines:

1. We should be helping big business that’s how to fix the economy
2. We should be investing in infrastructure that’s how to help the economy – we need to be ready for the next resources boom…
3. This money is only going to keep retail employees in jobs – and most of it will go overseas to China.
4. It’s a big debt that we can’t afford to pay now – and it will be a burden on future generations.

From my very, very laymans meta-analysis of the current economic situation the downturn in Chinese production fueled by the lack of demand for their products seems to me to be a pretty prime factor in our resource prices tanking.

Pouring money into Chinese manufacturers is a good thing because not only will it give us access to technology as they develop it to suit demand, it will also stimulate demand for our resources – there won’t be another resource boom if other countries don’t want to grow and develop.

Sure, we could have a locally driven resource boom. But then the Greens would get angry that we’re chopping down trees to pave paradise for multi-storey car parking.

The debt thing is an issue – but once we’ve decided to spend money saving the economy rather than letting it tank completely and picking up the pieces the solution is going to require spending money, and governments are really the only entities in a position to borrow.

So here’s the response I sent to my colleague… some of the points are a stretch – but I wish sometimes people would think a little bit past the obvious “that money’s going to support a Chinese person not an Australian person” bias.

“Joe Smith started the day early having set his alarm clock ( MADE IN JAPAN – using Nickel from Townsville) for 6am . While his coffeepot ( MADE IN CHINA (using aluminium mined in Australia) – (with coffee grown on the Atherton Tablelands ) was perking, he shaved with his electric razor (MADE IN HONG KONG ) (using technology developed in Australian universities). He put on a dress shirt ( MADE IN SRI LANKA – using cotton grown in Australia ), designer jeans ( MADE IN SINGAPORE – also using Australian cotton) and tennis shoes ( MADE IN KOREA using Australian leather ). After cooking his breakfast in his new electric skillet ( MADE IN INDIA from Australian steel ) he sat down with his calculator ( MADE IN MEXICO using components made from Australian resources ) to see how much he could spend today (based on Australian research). After setting his watch ( MADE IN TAIWAN using Australian components and sold to him by an Australian salesman ) to the radio (MADE IN INDIA and installed, repaired and serviced by Australian technicians ) he got in his car ( MADE IN GERMANY – sold in Australia by a local dealer who employs local mechanics – unless the locals are so lazy that he has to bring in workers from overseas ) filled it with Petrol from Saudi Arabia (shipped to Australia by an Australian company, transported by Australian truck drivers) and continued his search for a good paying Australian JOB (he wasn’t looking hard enough) At the end of yet another discouraging and fruitless day checking his Computer (MADE In MALAYSIA ), Joe decide to relax for a while.. He put on his sandals ( MADE IN BRAZIL – That is unAustralian – he should have been wearing pluggers) poured himself a glass of wine (MADE IN FRANCE.! – again, there’s plenty of good Australian wine) and turned on his TV ( MADE IN INDONESIA filled with Australian content), and then wondered why he can’t find a good paying job in … Australia….. probably because nobody wants to buy our resources anymore because we’ve stopped buying stuff, or he’s too lazy to do anything he considers “menial” or beneath him…”


Amy says:

Hear, hear from me (bet you didn’t think that would ever happen).

But honestly, we in a global economy – protectionism just doesn’t work anymore.

I would rather get a nice $900 tax refund (which is what it is) to spend then have my government throw millions at unprofitable car manufacturers in Sydney for example.

queenstuss says:

I think much of the protectionism isn’t so much about buying an Australian made TV as opposed to an Indonesian made TV, but about supporting local businesses. Buying coffee grown in Australia at a local coffee store, rather than coffee grown in Costa Rica at Starbucks.

Or maybe I’m entirely wrong, and that’s not the case and its the same issue.

And, the content on your tv made in Indonesia isn’t filled with Australian content.

Nathan says:

I’ll address some of those points (from Stuss) tomorrow) but first – 18 out of last week’s top 20 programs were Australian made.

Nathan says:

I’d say it’s fair to say TV at the moment is filled with Australian content.

queenstuss says:

Okay, at the moment there is a lot of Australian content, but I don’t think that is consistent across the year.

Another thing, too. All of the steel, nickel, copper etc used to make things in China, Indonesia, Malaysia etc, that we buy in stores here doesn’t come from Australia. How does that affect the situation?

Also, you’ve mostly talked about material objects. I’ve heard quite a bit about buying less stuff. For example, if you have credit card debt, pay it off, don’t buy more stuff. Or just don’t buy more stuff. At all. So, am I helping to ruin the global economy by putting my $900 towards my home loan rather going out a buying more shoes, a few Wii games, and a mountain of plastic toys?

I also like to buy food that comes predominantly from Australia, and that’s something that has always been a big factor in campaigns to buy local.

(I got up a bit early and have been distracted by noisy plastic toys made in China, and books written by authors of various nationalities, so I hope the above makes sense.)

queenstuss says:

Just something else I thought of, which doesn’t exactly fit with what you were talking about, but is related. There are ethical implications in buying goods made elsewhere. A big reason why companies shift that manufacturing off shore is that it can be done cheaper. Much, much cheaper. Which means the people doing the manufacturing aren’t getting a lot of money for the job. On one hand, it is good that some of these people are getting the employment at all. But on the other hand, sometimes these people are being exploited, and not receiving a fair wage. Or they are coming away from their villages and subsistence farming lifestyle to work in the factories and losing traditional skills. Which one outweighs the other?

Amy says:

Fully agree with queenstuss on the too much stuff point. Really, we don’t need 3/4 of the stuff we have. But detoxing yourself from a stuff addiction is pretty hard.

Buying Australian is a noble aim, but I think sometimes it becomes not so clean cut – especially when other things are taken into account. Australian made or Australian owned? – with groceries this has become pretty hard. There is not one major milk company now that isn’t owned by a foreign company. There is one (one only) brand of canned tomatoes that uses Australian tomatoes. Even Woolworths, an Australian company, forces Australian farmers to sell to them far below cost or they will import fruit/vegies from another country cheaper (inside goss there). BUT, saying that, I don’t think it is okay to buy Australian grown rice, because rice is totally unsuited to our environment and therefore needs far more resources than an imported product. Same as I wouldn’t buy an Australian made car, because the businesses that work here are not profitable/sustainable without huge government subsidies – and I would rather the Government spend it’s money on other things.

Found a site that may be of some interest though – this project has rated companies on all sorts of criteria – ethical (worker’s conditions, fair trade, environmental) etc and then given them a rating. Interesting reading:

Sorry, this is a rambling reply. I wrote most of it in my head and so I try and get it all down at once, without logic or style.

Nathan says:

I like stuff. Mostly gadgets. I also don’t like clutter. The two seem mutually exclusive.

I think the idea of a global economy means we need to change our thinking from parochialism to bigger picture thinking.

Sure, TVs made in China may not entirely use minerals mined in Australia – but the prices Chinese companies pay for their minerals from elsewhere effect the prices Australian companies get paid for their minerals. It’s all connected. When people stop buying stuff the economy falls over. This is a problem. Having an economy that is only sustainable if growth is achieved is a problem. But that’s the nature of an economy funded by share market trading, which in turn is built on confidence.

Protectionism is a counterproductive measure if your country is a net exporter of goods. Which Australia is. We can’t afford to have other countries not buying our stuff. Or bad things happen – like refineries sacking everybody because minerals prices mean they’re no longer profitable.

The purchasing equation will vary for everyone. But the idea of buying local because it supports local jobs doesn’t hold water. Buying global supports local jobs. You pull out too many sectors from our economy and it becomes like Jenga – a toppling pile of odds and ends. If all our resource workers lose their jobs and aren’t spending money on retail all our retailers lose their jobs and to use another board game analogy – there’s a domino effect.

queenstuss says:

In regards to rice, Amy, I’m in two minds about that, because I agree that it is an inappropriate crop for Australia, or at least for the parts of Australia where it is grown, but I’m not sure on the quality of conditions in other places where it is grown. If someone could assure me it was all good, I’d definitely buy foreign grown rice.

Nathan, I understand the whole Jenga/dominoes idea. But my limited understanding of this whole debarcle the world is currently in, is that people wanted too much stuff, indeed, more stuff than they could afford, and it overinflated world prices. So, I don’t think buying more stuff, no matter where it comes from, is the solution. I think infrastructure is a better idea than money to spend on stuff, but my understanding of economics is fairly limited. The global economy is, to some extent, built on materialism and exploitation of the poor.

One other issue that I see, is that so much manufacturing has been moved offshore, that there are fewer and fewer jobs in that area, so I think the problem of decreased jobs in resource and retail is increased.

And, one last point, I will continue to buy local where possible (which isn’t always possible, because my husband don’t earn THAT much), but not because of economic issues, but more for environmental (dare I use that word on your blog) reasons, and the ethical issues I mentioned in an earlier comment. And, I try and buy the best quality I can afford, because it lasts longer, so I have to buy less. But that doesn’t really help the economy much, does it?

queenstuss says:

I like that link, Amy. I’ve seen similar sites, but this one looks quite straight forward.

Amy says:

I like stuff. Mostly gadgets. I also don’t like clutter. The two seem mutually exclusive.

One person’s gadgets are another person’s clutter. And read person 1 = husband and person 2 = wife. :)


Aside from that, just wanted to put out there that maybe this economic downturn is needed – that the western world needs to live more simply. That maybe companies seeking ever greater profits and growth is wrong. That we don’t need so much stuff.
Of course, saying that, it is the ‘ordinary’ people who end up losing their jobs and houses in this sort of downturn – mostly at the other end people lose say, half their fortune – but that fortune started out at $50 million.

Amy says:

Did the giant smiley face happen for everyone else? Or just me?

Smiley – your coding ain’t quite right yet…

Amy says:

Sorry – am I allowed to still call you Smiley, Nathan?
You might hate it for all I know.

Nathan says:

I just had never envisaged anybody posting an emoticon. I thought I had a sophisticated readership.

Amy says:

Nup. Definitely not sophisticated.
At least on my part anyway.