Beware the allure of protectionism

Letters to the editor

Robert Findley’s idea that we should go back to protectionism as an economic policy (edition 241) is too simplistic even to warrant mention.

The removal of protectionist barriers and the adoption of international trading on the basis of competitive advantage have been the main reasons for the rise in Australian living standards over the past 30 years.

When we were aiming at “self-sufficiency”, we were hamstrung with inefficient sheltered industries and a stultified economy, and it would be a ridiculous error to return to those policies or anything like them.

Where should we be if other countries were to erect barriers against our exports, using the same nationalistic justifications as he proposes?

This is not to say that we shouldn’t have a strategy of preparedness for international events that will impact on our society.

We should not be at the mercy of international supply chains for essentials, if those links can be easily disrupted in a crisis.

However, this does not mean that we need a full array of industrial capability: we need a sufficient industrial capacity of an agile nature that can be adapted to emergency requirements and we need a strategic reserve of supplies to feed this industrial machinery on a short-term basis.

Of course, there will also be items beyond our capabilities to produce, such as fuel and medicines: these need to be stockpiled, just as we already stockpile flu vaccine.

Any government worth the name would have a preparedness plan in place already.

As for his suggestion that we should bring our country back to full employment, this is just a platitude: it is easy to say, but, if it were easy to do, every country would have full employment.

Similarly, with his call to “use our farms for our benefit”, when we clearly already do that.

We only consume about a third of our farm produce, and the rest is exported to bolster our trade balance.

It doesn’t matter who owns a farm (fewer and fewer Australians want to own a farm), what matters is that agricultural policies should safeguard our food security and support income-earning output for the international market.

Admittedly, governments with an ideological obsession for free trade at any cost have put us in difficulties in the past, e.g., the natural-gas disaster, but surely, we are not incapable of learning from our mistakes.

With every Australian politician converted to Keynesianism (except Pauline Hanson, I suppose, who probably has never heard of Keynes), it will be hard for any government to revert to economic fundamentalism, at least for another generation, and we should be pressing now for economic fairness within our society, not wasting our time resurrecting discredited, tribalistic slogans that put us at economic odds with the world at large.

We shall need every international connection that we can muster, if we are to recover the ground lost in the current pandemic.

Email, May 12
Bruce Hyland, Woy Woy