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Loathing Turnbull Isn’t Enough

Bert Kelly’s Ghost

Jan 03 2016

3 mins

turnbull juliaIt seems likely that disgust at the Turnbull coup, as well as Turnbull’s various leftist, Islamophilic and crank-Green pronouncements, will mean an increase in small right-wing parties at the next election. They might get up a senator or two. Nothing wrong with that. I intend to vote Australian Liberty Alliance in the Senate myself. But — and it is a big “but” — many of these small groups, well-meaning and patriotic as they are, remain afflicted with McEwenesque economic irrationality.

I have before me a pamphlet which one of these groups has sent me. Its policies include:

  • “Stop imports of various products which we can easily make here from superior materials under Australian workplace laws. We look to reintroduce tariffs on imported goods.”
  • “Support Australian farmers and producers. Protecting Australian jobs.”

These policy points are printed one after the other. Yet they are mutually contradictory and, taken together, prove once more that a really bad idea never goes away. Quadrant Online readers will not need the fallacy pointed out, but I will outline it briefly for the benefit of irregular visitors: The whole point of tariffs is to put prices up for consumers. A tariff on shirts, for example, means shirts cost more. This does not bother the importer, who can pass on the cost to the customer, nor does it trouble the local producer, who it is meant to help. It means he can put up the price of his shirts as well. It does not even (much) directly hurt the worker, whose wages are adjusted — though, of course, it does hurt the pensioner and others on fixed incomes.

But when it comes to the farmer who buys and wears the shirt, while he has to pay more for it, he cannot pass the cost on by putting up the price of his wheat. He is exporting that wheat and has to sell it at competitive prices on the world market. If he puts the prices up, buyers will simply go elsewhere.

Thus tariffs, deceptively packaged as a tax on imports, are in fact a tax of exports. During the Great Depression, Western Australia was driven to vote for secession by the economically illiterate Scullin Labor Fovernment in Canberra putting up tariffs on fencing wire and other necessities for the export-producing industries – in effect hosing down a fire with petrol.

No country ever became rich by closing its borders to trade – doing to itself in peacetime what a blockading enemy would do in wartime. Countries which have striven for “self sufficiency” by closing their borders to trade have only achieved bankruptcy and starvation.

I am sure my readers are aware of this, but it cannot be repeated too often. If the little right-wing parties wish to achieve intellectual respectability they will take note.

The late Modest Member’s ectoplasmic emanations were recorded for posterity and the public good by the agile and innovation Hal G.P. Colebatch, who transcribed with one hand the above wisdom from the Great Beyond while operating his Ouija board with the other

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