Why it matters what a nation manufactures

Not many of us would sit and ponder just how Australia, until the end of the Nineteenth Century a basically agricultural-cattle-sheep farming nation, became part of Western manufacturing processes that enabled the West to become such a dominant political and industrial culture; so much so that all other cultures are still measured against our achievements.

Not many of us would even consider what it is that allows nations, particularly the United States, to develop such sophisticated technology that other nations, such as Russia and China, through lack of financial incentive and government restrictions on private ownership, must steal Western innovations rather than develop their own.

Not many of us would realize that what we have all come to accept, and to now expect, from our own nation – such as medical care and a standard of living so high that even our so-called poor, when compared to other cultures, such as some African nations, can be considered to be wealthy in comparison – has been due to the efforts of preceding generations of Australians that invested their money and built up a manufacturing base that for the size of our then population was one of the most productive in the developed world.

During World War One it was realized that if this country was to survive the tyranny of distance from those markets we were then dependant on for goods used in this country we did not make ourselves, we would need – and through necessity brought about due to the war – to produce our own products. One of the biggest steps taken during that war was the steel-making enterprise of BHP at Newcastle, New South Wales, which proceeded to produce nearly all the steel products such as railway lines, sheet metal for fabrication of ships, etc. that until then had to be imported from British steel mills.

With the upsurge in manufacturing our own requirements, and becoming less reliant on distant markets for the same products, our standard of living rose (please note: it is not the author’s intent to dwell on how living standards rose which was due to a number of factors coming into play as this would require quite a lengthy discourse, but only to impress the thought that living standards overall generally rose due to the opportunities made available by having a manufacturing base) over the decades to the 1960s which was a time of full employment and availability of nearly everything that was manufactured within the West, including much being made here]. Products such as air-conditioners, refrigerators, stoves, washing machines, motor vehicles, radios, television sets, and a multitude of home appliances, and these items were made to such high standards that many products made in the 1960s still function today. How long does the average TV or microwave oven last now?

During the 1970s two things occurred that has had far reaching consequences for our future as a productive nation and that of own standard of living and for the future of our children. One of those things was that minerals began to be discovered and exported, and the other was that government began to dismantle trade protection barriers and adopt ‘free trade’ agreements with other developing nations.

The gradual reduction of trade barriers which were originally put in place by government to protect our manufacturing base from cheap, and generally at the time inferior imports, such as those products from Japan, began to affect some companies which had been previously protected by the benefits of a closed market. As some companies began to adjust to the challenges that international trade posed with the importing of cheap products, they were also forced to downsize and lay off employees. During the mid-1970s welfare, as we now know it, was put in place due to the effects of manufacturing companies going bust and coal mines closing due to the low prices being paid for underground coal and the high costs in extracting it, which closed many underground mines in New South Wales. Some families are now into a third generation that has never worked and probably never will. The social implications of this ‘sit down money’ as implemented by the Whitlam government is far reaching, and which really requires an essay to be written about the problems it has generated, but this is not the author’s intent here. While underground mining began to become more expensive during the early to mid-1960s, some mines managed to withstand the economic pressures into the early 1980s and even into the new century, but the biggest impact on unemployment by far, was the lowering of trade protection barriers which has had a domino effect on all of our manufacturing.

It has been estimated that in the period from 1966 – 1995, 120,000 manufacturing jobs were lost due to companies becoming bankrupt, moving overseas or just winding up the business because it was uneconomical to continue. In 1966, 1.23 million people were employed in manufacturing which fell to 1.12 million by 1995. In a period of around three decades 40,000 people lost their jobs every ten years in a nation that in 1966 barely topped the ten million mark! By any measure of common sense the government at the time should have recognized the catastrophe of unemployment that their own policies were producing and fixed the problem. Instead the government chose to do nothing! Free trade and trade agreements became the mantra of the day and bugger the unemployed and loss of our own manufacturing base!

And that mentality has managed to trickle down to our current political class without revision or even hope of revision.

Australia managed to weather the fiscal storm of 2008 solely because we had a mining sector that virtually pulled us out of an economic mess even though the then Rudd government tried so very hard to push us into it with its economic madness of stimulus spending. But the mining sector has more boom and bust cycles than the financial sector and cannot be relied upon to keep our economy strong. Only a solid manufacturing base which employs millions, and can operate in a closed market, can guarantee a strong economy!

Total employment in 1966 was 4.8 million jobs, with 1.23 million being employed in manufacturing, which was around 25% of the working population who worked in positions that produced those items we now have to import. In 1995, total employment was 8.1 million jobs with 1.12 million being in manufacturing, which is a little over 12% of the workforce. So in a little under three decades manufacturing had effectively halved in its employment rate. Today those who work in manufacturing jobs are an endangered species that are constantly aware that their occupational position in this country is under constant threat. There is no job security for these people and we have become reliant on Communist countries, such as China, to import most of what we use, including light bulbs. Does anyone realize that this nation does not even make its own light bulbs anymore?

It should be of concern to those individuals who know their history that being reliant upon other nations, particularly in time of war, for our basic consumables places our nation in a very precarious position, especially when our armed forces start to run out of ordinance that we are also reliant on from other nations for. The situation this country now finds itself in is nothing short of Alice in Wonderland thinking that has either been created by those with a globalist agenda who don’t care if our nation collapses economically or by some kind of collective insanity that has caused those who have control over our daily lives to forgo their own common sense when legislating those policies into existence that even a four year old child would reject as unworkable and dangerous for our own existence as a sovereign nation.

Whichever reason you the reader may conclude is that which has caused this crisis of economic malaise to cast its shadow over our nation, it surely must be appreciated that we cannot continue on this path if we are to survive the next 100 years as a sovereign nation that should not be reliant on any other nation for its own survival.

Comments

  1. Hasn't the mad grab for cash by CEO's had an inpact?. Hasn't the rediculous price of housing had an inpact.?
    When I was young , a working Australian was able to afford a roof over his family's head, he was happy to work and live a simple life. The "Boss" recieved a few dollar more and a few perks. Now the Boss earns millions more and everyone in the family has to work to pay the mortgage. Banks and greed have a lot to answer for.How can we be competitive when we need to pay rediculous wages to CEO's and Banks and land developers.And don't forget the thousands of migrants that were bought here for cheap labour. Privatizing road construction and railways has resulted in a tenfold increase in costs. Loyal gov. workers were on basic wages. Now we pay huge amounts to multinationals.

    • mjazzguitar says:

      What kills me is these CEOs get million dollar bonuses for running companies into the red!
      To me, they are ripping off the stockholders- that money had to come from somewhere.

  2. Reschs Monkey says:

    The Australian Greens are currently introducing bills into both houses of parliament for 'country of origin' labeling of all food. Regardless of what the Greens policies may be on multiculturalism, etc. the APP should get behind the Greens and support these bills.

    Currently much of the apple juice sold in supermarkets is labelled 'Made in Australia from local and imported ingredients'. In effect the juice concentrate comes from China (and you never know what additives are included), whilst the only Australian component is the water used to dilute the juice.

    Truth in country of origin labelling, will not only support our own primary producers, but our food manufacturers as well. How many products these days are labelled 'Made in Australia from local and imported ingredients'? I for one, refuse to buy anything not clearly labelled.

    Do we know where the imported components are sourced, No. If you buy a product that states 'Made in Italy' or 'Made in the USA', you know its origin. What the importers are shoving down our throats tells us nothing.

    There have been too many scares in relation to food sourced from certain countries, particularly China, Brazil and India, where substitution occurs, such as melamine in baby milk, as well as unhygienic cultivation, harvesting and manufacturing, e.g. vegetables grown in untreated human excrement.

    Let's support our farmers and manufacturers, and in this case support the Greens bills. PS I'm not a member of the Greens or supporter.

    • I agree. I'm no lover of the Greens either, but they do have the right idea here. The APP should throw its weight behind these bills; not to do so would be opposing for the sake of opposing at its most churlish.

  3. Terrence Odgers says:

    For all those interested in researching why the Western world gave up its industrial might a look at the Lima Declaration might shed some light for you. You might ask yourself this question; why is it that ALL Western nations gave up that which made them the envy of the world? Looking into how the United Nations fits into all this can also be an eye opener.

  4. Further adding to this madness is this government's taxation of carbon at approximately $23/tonne whilst we are exporting LNG at rates that are almost giving it away! Rather than exporting all our raw materials to be imported after value adding at grately inflated prices we should be adding the value here. Re-introduce tarriffs, get our car maker to build cars to run on LNG then export them to SE Asian markets, convert our powerstations to run on the stuff, and get our navy to run on it. Thus we almost illiminate our need to import oil and rely on the Oil nations whilst re-invigorating our manufacturing sector.
    Meanwhile we need to re-invest in the buy Australia campaign and get people proud to buy and own stuff thats made here. Just my two cents.

  5. Having been privy to the operations of the company and having a rudimentary grasp of economics it is my opinion that the Australian public has had the wool pulled over its eyes when it comes to the sales pitch of the so called "level playing field". There is no such thing! How can there be a 'level playing field' when Chinese workers are paid 1/100th of what Australian workers are? How can there be a 'level playing field' when we are paying $23approx per tonne for carbon when China is paying around $1.50? (Note that this government intends to tie the carbon price to Europe's which will see it rise to $50 per tonne or thereabouts) And how can there be a 'level playing field' when our import tarriffs are nearly zero and China's is around 30%? What benefits there are in a 'level playing field' are small change in comparison to the price.

  6. I'd like to add my two cents on this topic if i may. I have worked in the manufacturing industry (automotive sector) for over 15years now at the same company. In that time we have gone from a company working 3 shifts 6 days a week and employing over 30 people, to barely scraping enough work together to employ 13 people on a 36 hour week. In order to survive my employer has had to build a factory offshore. Today we had a meeting about the future of the company because the current state of manufacturing in this country is in dire straights. There is simply no work. Period.

  7. There's an important issue of factories, machinery etc – should the inventors of these things allow them to be exported? Should there be royalty payments, perhaps? There's a conflict of interest between the people who want to sell as many factories as they can, and the resulting competition. There seems to be no way to conceptualise such power struggles; there's just no vocabulary and no way to assess the results. Thus for example the Jewish-run Soviet Union copied and imported and stole western technology, with of course some collusion. What were the net effects of this? Obviously some benefitted, other didn't. Similarly shipbuilding companies worldwide collaborated in cartels to keep production down – and they seem to have used trade unionists secretly to damage some shipyards, in Scotland and N Ireland, to give a reason to close them. What was the net effect? Just as there are arguments to pay out to unemployed people indefinitely, there must be a case for subsidising industries and inventors. Unless there's a sound theory taking into account all the subsets and interest groups, there will be groups who can make money by subverting nations. I'm not claiming to have such a theory, or analytical method; I'm just saying there should be one!

  8. As a country we used to be totally self-suffcient, with only importing some luxury items. Fair enough there is more to import now days but did we have to stop making everything?

  9. Russell Hawkins says:

    Having been a Production Engineer in the Automotive Industry back in the 60's and 70's I could not agree with you more, I remember our management getting together with other Major Manufacturers and Government on an annual basis to consult on "Industrial Mobilisation" in the event of Major Conflict. Vested Interests and total ignorance on the part of of our Governments will ensure that one day we will rue the day that we chose to live in a fools paradise and we become a "Third World Nation".

  10. Yes I agree…..as a nation we have cut our own wrists, & are doomed to a wage level ( for those who still have jobs in manufacturing…& eventually…any wage earner.) equal to the worlds lowest common denominator ie…bugger all!. It's obvious: in a market place mentality every one is selling the same product & in this case it is LABOUR…& I don't mean that bastardised political party(!) If we dont get smart & start producing very smart / almost unique products & getting good value for them then it's only a matter of time until we run out of raw materials or the price we get for them will be peanuts. bf

  11. The suicide of lover profit is occurring into to democratic country, the products from China cost low price that encourage the business people moving the company to China with cheap laborer, so its home land lost job. However, the most product label" made in China" being poor quality, poison couldn't excite the consumer, the trend boycott China product being spread world wide.
    The most profit lovers are facing the tragedy while the stores selling the China product, people are not interest and they don't buy. Actually the electrical appliance, China made creates anger when the product doesn't take long, the tourist want to buy the native products from the visit country, but they meet the product" made in China", then they refuse to purchase, because the tourist could find the same product of China at their homeland. The most famous store are such as Coles, Myer…lost profit, because they import the product from China or manufacture by a company in China. The profit lovers have to pay the consequence by China product, they kill the national economy and also commit suicide their business.

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