Industrial relations reform

Consensus is “the process of abandoning all beliefs, principles, values, and policies in search of something in which no one believes, but to which no one objects; the process of avoiding the very issues that have to be solved.”

Margaret Thatcher

The quote is from the first of the two following letters to the editor at The Australian published on May 29. Both letters are in relation to the approach being taken by The Government on industrial relations “reform”. I’ll come to those letters in a moment, but first want to mention The ACTU/ALP Accord which I spent a good deal of my working life in trying to contain its excesses. Yet the document was one of the most sensible documents ever undertaken in Australia.

Although he would be surprised to hear this, I have always admired Bill Kelty and especially for having directed the writing of the background document to the Accord that became the fulcrum that IR policy was to be based on. Following the Wage explosion in 1982, a union delegation had gone to Sweden and a number of other European countries where they had discussed how to raise workers’ wages and living standards. In Sweden, the trade unions had explained that their policy had been based around doing what they could to improve business productivity, which they recognised was the only way to raise real wages while also making jobs more secure. It was why so many outstanding international brand names originated in Sweden, brands such as  H&M, Volvo and Electrolux. It was virtually the policy of the unions to foster business growth.

It also mattered that the Labor cabinet was filled with vast amounts of sound practical good sense, from the PM, through Paul Keating to Peter Walsh and even to this day from whom you can still hear its last last echoes, through Graham Richardson on Sky News. I fear that none of these could end up even on the back bench of a Labor Party Parliamentary party today.

I will also say that there was much too much dead weight in The Accord, such as the formalisation of full wage indexation (even with the “Medibank Pause”), and the Productivity Case of 1986 which led to the Superannuation Guarantee. But the recognition of the role of business as the vehicle for increasing living standards was miles ahead of the deadness from the neck up across the ACTU today. Sally McManus is the last person in the world to understand any of this or for the Government to trust. So to the letters from The Oz. First this:

Margaret Thatcher said that consensus was: “The process of abandoning all beliefs, principles, values, and policies in search of something in which no one believes, but to which no one objects; the process of avoiding the very issues that have to be solved.”

That’s what Scott Morrison’s plan to bring together unions, big business and governments will do — avoid the things that need to be done. We need significant deregulation, tax cuts and cheaper energy to encourage investment, energise small business, boost productivity and create jobs.

His proposed consensus group will lock in workplace regulations, stifle competition and siphon billions more from the productive parts of the economy to the unions.

And then this that followed next.

History shows the only chance for industrial relations reform is if it is at the initiative of a Labor government because a Labor government can count on the support of a Coalition opposition for worthwhile reforms.

Conversely, a Coalition government cannot count on the support of a Labor opposition that habitually opposes for the sake of opposing.

History also shows that Labor and the gaggle of odds and ends in the Senate will do anything to thwart a Coalition government even if it means damaging the public interest.

If the government thinks it can negotiate with the union movement without a goodly array of people from the employer side of the divide – and I especially mean Steve Knott of the Mines and Metals Association and others like him – then they will certainly be fleeced.

On the union side, the people who rise are those who start out inside an enterprise and at branch level, almost always because they gain the confidence of their co-workers, usually by being the most belligerent, find themselves elected show steward before moving higher. In this way, step by step, by gaining confidence of their peers and coming to be noticed by those above them in the union hierarchy, they gain more power and influence. Those that eventually get to the top are, through natural talent and further training, phenomenally persuasive, ideologically committed and as tough as nails. There is no room for sentimentality in any negotiation with a union. They know what they want – MORE – and what they are willing to give up to get it – NOTHING.

The only reform I am looking for is to make unions negotiate in good faith and an industrial relations system that will make both unions and employers adhere to their agreements. For a union leader also to understand the role of productivity in creating wealth and who wish to work with employers to achieve it are rare, but it is such union leaders that are an absolute necessity if real earnings are to grow along with an economy.

Do people generally know what the initials CCP stands for?

The initials CCP stand for Communist Party of China.

The CPC is officially organised on the basis of democratic centralism, a principle conceived by Russian Marxist theoretician Vladimir Lenin which entails democratic and open discussion on policy on the condition of unity in upholding the agreed upon policies….

The CPC is committed to communism and continues to participate in the International Meeting of Communist and Workers’ Parties each year. According to the party constitution, the CPC adheres to Marxism–LeninismMao Zedong Thoughtsocialism with Chinese characteristicsDeng Xiaoping Theory, the Three Represents, the Scientific Outlook on Development, and Xi Jinping Thought. The official explanation for China’s economic reforms is that the country is in the primary stage of socialism, a developmental stage similar to the capitalist mode of production. The command economy established under Mao Zedong was replaced by the socialist market economy under Deng Xiaoping, the current economic system, on the basis that “Practice is the Sole Criterion for the Truth”.

The government of China is a communist tyranny. It is complete nonsense to believe that the majority of the Chinese population lives in any other way than in poverty and are politically repressed. If you would like to see alternate ways in which Chinese people can order their social, political and economic lives on their own, see Taiwan, Singapore and while you can, Hong Kong.

Everyone would like to see China prosper. But because and so long as they manage their economy under the idiotic guidance of Leninist principles, they will remain a poor country. But if they were content to sit home and ruin their own people it would be a tragedy but beyond that, of little concern to us, along the same lines as North Korea. But they are a concern because they have ambitions that stretch beyond their own borders. Why that is and what they want are major questions today. How to respond and deal with the CCP government of China are the next set of questions. Every time I hear some local politician defend China, I have very dark thoughts about their intellect and then much worse. There is much to fear from modern China and not a thing to learn from either their political or economic structures.

There was then this the other day (May 24): Chinese Troops Cross Into India, Fortify Positions. And then there was the photo of these people being arrested in Hong Kong today.

Good luck to them, but also good luck to us if we don’t recognise danger early enough to do something while we can.

AND LET ME ADD THIS FROM INSTAPUNDIT:

CHINA SHOWS ITS TRUE TOTALITARIAN COLORS ON HONG KONG: It was always a fable, Issues & Insights reminds us this morning, the idea that by growing closer in trade with the West, Red China would grow more like us politically. Instead, the Chinese Communist Party (CCP) shrewdly and in so many ways took advantage of our abundant naivety to grow their power and resources.

Now, as they move troops into the disputed border area with India (which is, let us not forget, a nuclear power), lawlessly expands its military presence in the South China Sea, clamps steadily tighter its totalitarian grasp on Hong Kong, moves invasion forces nearer Taiwan, and threatens the U.S. in manifold ways, America faces a new Cold War. We can either face this reality or continue blindly with our liberal globalist fables.

12Posted at 6:59 am by Mark Tapscott 

Only supply constitutes demand

Other than straight out socialist plunder, no better way to comprehensively ruin an economy is to think public spending and monetary expansion can raise living standards and promote employment growth. Here’s an article by Richard Salsman published at The Hill in the US that tries to point out just that: Fiscal-monetary ‘stimulus’ is depressive.

Politicians, policy wonks and pundits like to classify as economic “stimulus” the $6 trillion in recent deficit spending and Federal Reserve money creation. But subsidies for the jobless, bailouts of the illiquid and pork for cronies are purely political schemes — and they depress the economy.

What is the case for “stimulus”? Many economists believe public spending and money issuance create wealth or purchasing power. Not so. Our only means of obtaining real goods and services is from wealth creation — production. Under barter no one comes to market expecting to buy stuff without also offering stuff. A monetary economy does not alter this key principle. What we spend must come from income, which itself must come from producing. Say’s Law teaches that only supply constitutes demand; we must produce before we demand, spend or consume. Demand is not a mere desire to spend but desire plus purchasing power.

Believers in “stimulus” also claim that government spending entails a magical “multiplier” effect on aggregate output, unlike most private sector spending. They tout a government’s greater “propensity to consume.” But consuming is the opposite of producing. Welfare states certainly consume and redistribute wealth. They divide it up. But math teaches that nothing – wealth included – can be multiplied by division. The so-called “multipliers” imagined by today’s economists are, in fact, divisors. Many studies have verified the principle.

It should become a pre-req for anyone to become a political leader to have successfully run a business for at least five years. Speaking of which I must also say how much I loved Tafkas’ post today.

Camus’ The Plague

Not a single person I once was friends with back in Canada has changed their political position in all the years since I’ve known them, not a single one, and I’ve known them all for more than fifty years. It really is weird. Most I am happy to see when I go home but we seldom discuss politics; some I can still talk politics with but it is always through gritted teeth (theirs) and I never bring politics up. Some I do not bother seeing when I am there and why I avoid them is always for political reasons. And not one of them I see more frequently than once every two years since I hardly ever get back. As I say, weird. Yet why dealing with the coronavirus is a political issue is hard to explain, but it is. The virus will never disappear, it will always mutate, and I do not expect us to stay in lockdown forever. And while perhaps I should be, I am not frightened by it even though I am in the high-danger zone according to age and “co-morbidities” and it may get me yet.

Just finished Albert Camus’ The Plague. It was written in the 1940s as a political allegory about radical political views being akin to a virus. Today it reads just like a story about a plague-ridden population put into lockdown. The political allegory is near invisible. The horrors of an epidemic are made very clear.

The point of the story is to use the virus as a metaphor for totalitarian political repression. The irony today is that actual existing political leaders have used the spectre of a virus as a means to repress populations all around the world by arguing they have done so to protect them.

As for The Plague, it is only a story:

Oran was decimated by the bubonic plague in 1556 and 1678, but all later outbreaks (in 1921 – 185 cases, 1931 – 76 cases, and 1944 – 95 cases) were very far from the scale of the epidemic described in the novel.

Brilliantly written and well worth reading, especially now.

Daniel Andrews is an economic fool

For sheer hypocritical moronic stupidity, it’s hard to beat this from Mr Lockdown Victoria about his putting the state into hock to the Chinese:

Victorian Premier Daniel Andrews has defended the state’s relationship with China, saying any cooling of the partnership would cost jobs.

He cannot see what’s wrong with China because they are doing just what he would do himself if he could. The people of Victoria have with blind faith in miracles, put the state’s economy into the hands of the person least capable of directing us towards growth and prosperity. The last line of the story is pure enchantment:

Mr Andrews travelled to China to sign a second BRI deal in October last year, agreeing on areas of co-operation including increasing the involvement of Chinese companies in Victoria’s $107bn infrastructure program.

Infrastructure spending – such as the tunnel and the train – literally means public spending on loss-making projects. Economic ignorance comes at a very high price and we are going to pay it. The Federal Government, if for no other reason than to protect itself never mind Australia’s future, must prevent this communist jerk from ruining the economy.

The kinds of forecasts we are dealing with seem similar to this: Australia’s coronavirus response avoided about 14,000 deaths, Chief Medical Officer says. That is the story from just today!