More great stuff from Dan Mitchell: the Narcotic of Government Dependence

I’m sure many Cats follow Dan Mitchell but this story particularly caught my eye and I thought it would be of interest, particularly in the context of the debate about the taxed and the taxed-nots.  (Mind you, Morrison is not planning to do anything about this imbalance.)

It’s interesting to think of some of this stuff historically: for my grandparents and parents, there could be no greater shame than relying on what they called “susso”.  I remember when the age pension was briefly made universal by the Whitlam government, my grandparents were very reluctant to put up their hand – I’m not sure they did and there is now no one around to tell me what actually happened.

One of the interesting points that Mitchell highlights is that the corrosive impact of welfare takes some time to emerge but after a while, people’s views change and an entitlement mentality becomes embedded.

Nordic Nations Show How Welfare and Redistribution Weaken the Human Spirit

Statists occasionally get very angry about some of my views.

My support for “tax havens” periodically seems to touch a raw nerve, for instance, though I guess I shouldn’t be too surprised since some people are so crazy that they have even urged military action against these low-tax jurisdictions.

I also get some angry responses when I praise Ronald Reagan’s achievements. I’ve even had a few leftists get all agitated simply because I occasionally share a hypothetical poll from 2013 showing that Reagan would beat Obama in a landslide.

But what really gets these folks angry is when I argue that recipients of welfare and redistribution should feel shame and embarrassment. As far as they’re concerned, I’m being a heartless jerk who wants to inflict emotional pain on vulnerable people.

Though, to be fair, their anger usually dissipates when I explain that my real goal is to protect people from long-term dependency on government. And it’s also hard for them to stay agitated when I point out that I’m basically making the same argument as Franklin Roosevelt, who famously warned about welfare being “a narcotic” and “a subtle destroyer of the human spirit.”

In other words, I don’t like the welfare state because I care about both the best interests of taxpayers and also about the best interests of poor people. And this is why I repeatedly share data showing how American was making impressive progress against poverty before there was a welfare state. But once the federal government declared a “War on Poverty,” the poverty ratestopped falling.

But that’s only part of my argument. I also think there are very worrisome implications for overall society when people start thinking that they have a “right” to welfare and redistribution. At the risk of sounding like a cranky libertarian, I fear that any nation will face a very grim future once too many people lose the ethic of self-reliance and think it’s morally and ethically acceptable to be moochers.

Indeed, my theory of “Goldfish Government” is based in part on what happens when a sufficient number of voters think it’s okay to steal from their neighbors, using government as a middleman. Short-sighted politicians play a big role in this self-destructive process, of course, along with unfavorable demographic changes.

And when people want examples, I just point to nations such as Greece, Italy, andFrance. Or states such as California and Illinois.

At this stage, a clever leftist will usually interject and argue I’m being unfair. They’ll say that Nordic nations such as Denmark and Sweden are proof that a big welfare state is compatible with a prosperous and stable society.

Au contraire, as our French friends might say. Yes, the Nordic nations may be relatively successful big-government countries, but there are three very important things to understand.

  1. The Nordic nations became comparatively rich in the 1800s and early 1900s when economic policy was dominated by free markets and small government.
  2. The adoption of high taxes and big welfare states (particularly an explosion in the burden of government spending starting in the 1960s) weakened economic performance.
  3. In recent years, Nordic nations have sought to undo the damage of big government with pro-market reforms and limits on the fiscal burden of government.

But let’s specifically focus today on whether the Nordic nations are somehow an exception to the rule that welfare and redistribution have a pernicious impact on a society. In other words, does welfare in nations such as Denmark and Sweden undermine “social capital”? Is there a negative impact on the work ethic and spirit of self-reliance?
Fortunately, we have some very good data from a new, must-read book by Nima Sanandaji, who grew up in Sweden. Entitled Debunking Utopia: Exposing the Myth of Nordic Socialism, Nima’s book is a comprehensive analysis of public policy in that part of the world, both what’s good and what needs improvement.

One of his 11 chapters is about “The Generous Welfare Trap” and it’s filled with very valuable information about the human and societal cost of the welfare state.

Though I can’t resist pointing out that he starts his analysis by citing President Roosevelt.

Franklin D. Roosevelt…was concerned that the institution he was fostering…might destroy the spirit of self-reliance. Two years into his presidency, he held a speech to Congress…the president warned that…”continued dependence upon relief induces a spiritual and moral disintegration fundamentally destructive to the national fibre. To dole out relief in this way is to administer a narcotic, a subtle destroyer of the human spirit.” …In today’s political climate, Franklin D. Roosevelt’s view on public benefits would seem quite harsh.

Nima then looks at whether the Nordic nations somehow might be proof that FDR was wrong.

Yet there has been a persistent conviction among the modern proponents of welfare states that it is indeed-somehow-possible to create stable systems with generous benefits and high taxes. The main line of reasoning is based on the Nordics. The welfare states in this part of the world seem to, at least at first glance, succeed in providing extensive services and generous cash benefits without eroding personal responsibility. If generous welfare works in Sweden and Denmark, why not also in the rest of the world?

The problem, as Nima points out, is that these policies don’t work in his part of the world.

And not just because of the fiscal burden. His main point is that the welfare state is weakening people’s integrity.

…the World Values Survey shows that erosion of norms is very much a thing in the Nordics. In the beginning of the 1980s, 82 percent of Swedes and 80 percent of Norwegians agreed with the statement “Claiming government benefits to which you are not entitled is never justifiable.” …However, as the population adjusted their behavior to new economic policies, benefit morale dropped steadily. In the survey conducted between 2005 and 2008, only 56 percent of Norwegians and 61 percent of Swedes believed  that it was never right to claim benefits to which they were not entitled. The survey conducted between 2010 and 2015 only included Sweden out of the Nordic countries. It found that benefit morale had continued to fall, as merely 55 percent of Swedes answered that it was never right to overuse benefits. …Over time even the Nordic people have changed their attitudes as social democratic policies have made it less rewarding to work hard and more rewarding to live off the government.

By the way, at the risk of nit-picking, I would have advised Nima to use the term “benefit morality” rather than “benefit morale.” Though I assume almost all readers will understand the point he’s making.

Returning to our topic, Nima also cites some scholarly research that basically echoes my “Theorem of Societal Collapse.”

Martin Halla, Mario Lackner, and Friedrich G. Schneider performed an empirical analysis of the dynamics of the welfare state. They explained that…”the disincentive effects may materialize only with considerable time lags.” ..However, after some time the expansion of welfare programs leads to a deterioration of benefit morale. The three researchers concluded that “the welfare state destroys its own (economic) foundation and we have to approve the hypothesis of the self-destructive welfare state.”

The bottom line, he explains, is that the Nordic nations have been the best possible example of how a welfare state can operate.

But even in these nations, the narcotic of government dependency has slowly but surely done its damage.

Although Nordic welfare states seemed initially able to avoid this moral hazard, today we know beyond doubt that this was not the case. Even the northern European welfare states-founded in societies with exceptionally strong working ethics and emphasis on individual responsibility-have with time caught up to Roosevelt’s harsh predictions.

The good news is that Nordic nations are trying to undo the damage of the welfare state. Many governments in the region are scaling back the generosity of handouts and trying to restore the work ethic.

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160 Responses to More great stuff from Dan Mitchell: the Narcotic of Government Dependence

  1. Kurt

    This is very much the case in Australia too. My grandparents generation were very proud to declare they never got a cent from the government. People out of work would sometimes not apply for the dole because of the stigma. Today however, if you don’t take every cent you can from government, you are considered a fool. It would be nice if social historians actually did some social history sometimes and reminded us how we used to be.

  2. 1234

    This is nothing but ignorant and stupid moralising. There’s not much point feeling ashamed and embarrassed when the economy is unable to generate employment for all. In Australia the private sector is unable to provide jobs for the 1.7 million who are in/underemployed. In this context what purpose is served by feeling ashamed or embarrassed? It’s just another take on blaming the unemployed. In WA pre GFC unemployment was 3%, indicating that most preferred a job to welfare. It’s now 6% – so why should those who are unemployed now feel ashamed or embarrassed given in the past they worked when there were jobs? It’s not an individual failure, it a market failure.

  3. Bh

    Back in the late 70s/early 80s, I belonged to a disability club, where members’ ages ranged from mid teens to 60s/70s. Every single person then had a job, except for those 60+ or who had young children. Some of them worked in disability workshops, and some in the normal workforce, but everyone in a situation to work, did work. Recently I attended the funeral of a member of the club, and caught up with everyone again. Of those of us still of working age, only 4 of us still work (out of around 20 or so). Everyone else is on some kind of pension.

  4. duncanm

    Numbers — who’s speaking of the (genuinely) unemployed?

    Why is there 30-40% of households on net welfare, when unemployment is down below 10% ?

  5. miltonf

    Judith, my recollection is than when Whitlam abolished the means test for the OAP, everyone received a cheque in the post regardless on income.

  6. Dave Wane

    One can only imagine how any Australian government would even go about broaching the subject of undoing welfare dependency and “somehow” creating a work ethic.

  7. Ragu

    In Australia the private sector is unable to provide jobs for the 1.7 million who are in/underemployed.

    Bullshit. In 2007 the unemployment figures were around 3.7% and still heading down when the Atlantic credit crises hit.

    The overwhelming majority can see the value of being employed vs $500 a fortnight.

  8. Dave Wane

    And even if the subject was fully broached, would it ever be possible to successfully implement such a policy?

  9. H B Bear

    Bullshit. In 2007 the unemployment figures were around 3.7% and still heading down when the Atlantic credit crises hit.

    Yep – individual Australian Workplace Agreements provided the highest level of labour market flexibility ever seen in this country. Naturally these were the first to go as R-G-R rewarded their union paymasters and took labour law back into the 70s.

  10. Ragu

    What complete brain dead morons like one to four don’t realise is that our progressive tax scales punish people who work longer hours. When you absolutely need to work back on a weekend and your take home pay is worth an extra hundred bucks for twenty hours of hard slog, it becomes a bit of a joke.

    So when a man in a suit with an office in Canberra offers free money ™ you make a decision to either accept the monetary penalty or just remain pissed orf.

  11. Ragu

    Naturally these were the first to go as R-G-R rewarded their union paymasters and took labour law back into the 70s.

    The most perverse outcome has been people working in retail and hospitality getting no more than 36 hours a week.

    No wonder the median wage in this country has slide back to about $40k from $48k or even $52k at the height of 2007

  12. stackja

    Giving a hand up should not be a handout. If there is a real need then help.
    Bill Hayden’s single mothers payment has been abused.

  13. Lem

    The good news is that Nordic nations are trying to undo the damage of the welfare state. Many governments in the region are scaling back the generosity of handouts and trying to restore the work ethic.

    The trouble is, how do you restore the habit of working to pay your own way once it has been lost (or never acquired in the first place)?

    My estimation is that it is going to take some very hard times.

  14. Eddystone

    stackja
    #2130771, posted on August 28, 2016 at 11:52 am

    Giving a hand up should not be a handout. If there is a real need then help.

    I reckon the State should not be in the welfare game at all. (I know that is politically impossible.)

    If people really need help, there is no need for the gov’t to be involved, as private charity will fill the need. And private charity is more likely to be a hand up, rather than an endless handout, since there is much more likely to be a requirement for some sort of reciprocal action by the recipient.

    I see the results of welfare dependency in my work, and the loss of human potential is a tragedy.

  15. stackja

    Eddystone
    #2130782, posted on August 28, 2016 at 12:09 pm
    stackja
    #2130771, posted on August 28, 2016 at 11:52 am

    Giving a hand up should not be a handout. If there is a real need then help.

    I reckon the State should not be in the welfare game at all. (I know that is politically impossible.)

    If people really need help, there is no need for the gov’t to be involved, as private charity will fill the need. And private charity is more likely to be a hand up, rather than an endless handout, since there is much more likely to be a requirement for some sort of reciprocal action by the recipient.

    I see the results of welfare dependency in my work, and the loss of human potential is a tragedy.

    In early 1900s private charity was the norm.

  16. Eddystone

    I think public welfare has a very long history, maybe not so much in Australia.

    Maybe we should re-instate the 1601 Poor Laws. 🙂

    Main points of the 1601 Act

    The impotent poor (people who can’t work) were to be cared for in almshouse or a poorhouse. The law offered relief to people who were unable to work: mainly those who were “lame, impotent, old, blind”.
    The able-bodied poor were to be set to work in a House of Industry. Materials were to be provided for the poor to be set to work.[9]
    The idle poor and vagrants were to be sent to a House of Correction or even prison.[5]
    Pauper children would become apprentices.

  17. will

    This is nothing but ignorant and stupid moralising.

    The brain dead moron comes to spew his stupidity and ignorance again.

    It’s not market failure, its government intervention that causes economic problems. If the compliance burden was removed from business, and the labour market deregulated, the private sector would employ almost everyone willing and able to work.

  18. Mayan

    Whatever is subsidised or provides some shelter from taxation, at least relative to other endeavours, is what will be done to excess. Witness the inability of people in this country to think of investments other than residential real estate.

  19. RobK

    Lem,
    “My estimation is that it is going to take some very hard times.
    I agree. To me, the only logical place to start would be to unshackle development from red and green tape so there is an alternative to dependency. Where the choice is certain welfare dependency due to precautionary principles in environmental or administrative control vs self determination, wealth creation and prosperity, the latter should win out every time.

  20. Rococo Liberal

    It would be wonderful if the Commonwealth government could set up some free enterprise zones in regional parts of the Country (say, Adelaide, Newcastle, Hobart), where regulations were cut to the bone and tax was set at tax haven rates.
    We could then see if the laissez faire style of government works or not.
    The problem is the Constitutional ban against taxing people differently in different States or different parts of States. But I’m sure that a bit of creative legislation could fix that.
    As to the welfare issue, it is quite clear from reading the works of Theodore Dalrymple and James Bartholomew (he who invented the phrase virtue signalling) how awful welfare is.
    But perhaps I wouldn’t mind paying for people to be on welfare if every so often the welfare recipients and their vociferous middle class supporters and enablers expressed a bit of gratitude to we taxpayers for providing the necessary readies for the indigent.

  21. cuckoo

    No doubt that book also covers the problem of building a welfare state in a nation initially characterised by strong cultural cohesion, shared history and values, etc. once you start mass importation of a foreign underclass actively hostile to those values.

  22. Art Vandelay

    Fixed that for you:

    It’s now 6% – so why should those who are unemployed now feel ashamed or embarrassed given in the past they worked when there were jobs? It’s not an individual failure, it a market government failure.

  23. Rococo Liberal

    Numbers, like many lefties, is stuck in the 19th century where employment was all about master and servant, and Marx had told us that capital and labour were forever to be divided. Thus the call goes up throughout the land for “jobs, jobs, jobs!”
    That call in itself breeds a dependence too, because most people are really forced to do something they don’t enjoy. They usually do it in a mediocre fashion whilst whinging about the boss or the company and dreaming about the weekend. This is welfare of a different sort. The sort that unions have created.
    Maybe the focus should not be on selling labour but on making wealth.

  24. Piett

    The big problem with the long-term unemployed, at least in my part of the country, is not the usual stereotype of teenagers lounging on the sofa with a joint in one hand and the Playstation control in the other.

    The big problem is people — mainly men — in their 40s, 50s, or early 60s, who used to work, but have been laid off and can’t find a way back into the labour market. The “Job Network” agencies are chock full of such guys.

    Some are still bright eyed and eager to find work. Some have become demoralised by countless rejections, and are just going through the motions of pretending to look for work, focusing their lives instead on volunteering, or helping with the grandkids, or whatever. Quite a few have health issues of some sort that fall beneath the threshold for DSP.

    In general, the labour market is not interested in such people. Their main hope of finding work is through a personal contact — a family member, friend, former colleague. If they don’t have such networks, they’re screwed.

    1234 is absolutely right when he says that long-term unemployment is an economic failure, not a personal failure, in most cases. However, I’m sure he wants some kind of socialist solution to this problem. Personally, I think labour market deregulation and economic growth are far more promising.

  25. I’m happy to put more people on, heck I could do with some more work getting done.

    But I don’t hire any extra, no more than the bare minimum I can absolutely get by with.
    1234 may wish to reflect upon why that may be.

  26. Why are there no jobs Judith?

    Coz tonnes of regulation, all of it anti-employer.
    Then there is a climate in which investment in enterprise is retarded, due to lack of expectation of profit, finance sector wariness of small business, and high barrier to entry/expansion due to oppressive government regulation, high entry costs to first time operators due to up front taxes and a tax system that slugs start-up businesses.

    That’s why.

  27. Zulu Kilo Two Alpha

    There are no jobs now – right?

    Garbage. Maybe not in metropolitan Australia, but if you’ve ever run a farm or business in rural Australia, you would soon realize you are wrong.

  28. Megan

    Why are there no jobs Judith?

    Here’s why I use an onshore virtual assistant. The complete and utter stupidity of the hoops I have to go through to hire someone in Victoriastan. The inability to sack them…even when they do something I have specifically spent wasted time training them not to do, the prohibitive cost of workers compensation, long service leave, carer’s leave and quite possibly in the near future, domestic violence leave. I’ve only drawn a sketch of the tiniest tip of the iceberg here. The Sicilian Prince also runs a business and has made similar decisions to not employ permanent staff despite there being a clear need. It means long hours for both of us but so does the angst and conflict of managing employees when all the rights are theirs and we are treated as exploitative bastards out to get them. Which we most definitely are not.

    I am a similar age to you and grew up in the true working class suburb of Fitzroy where people did anything they could to avoid taking welfare. And my battler parents and grandparents rammed it into us that education and hard work would get us ahead and handouts were an absolute last resort. And so it has proved.

    Get out there, start a business and employ staff…then you might have something of value to add to the conversation.

  29. No Eynestine

    To Warwick Alderton,

    The jobs are right under your nose. Don’t blame Judith, your mum and dad, the baby Jesus or anything else.

    You could start with issues such as the minimum wage. Government and Union regulations that stop easy firing that in turn prohibit easy hiring. You could look at government crap such as the poverty rate which in turn helps fix the dole rate. You could look at issues that involve any national standard whether it be wages, living standards, hours, penalty rates.

    These issues are just a start. But this is the society we live in. Warwick your problem is you not Judith and when you start looking at things as a ‘free’ man self determining and not the subject of government. Then and only then you may start to find the genuine answers. Not the bullshit that government comes out with.

    Robert Menzies was wrong. If it comes out of the mouth of one whose income is derived from your servitude then it is bullshit.

    You have the answer Warwick, be a man and stand up for yourself.

  30. Piett

    Garbage. Maybe not in metropolitan Australia, but if you’ve ever run a farm or business in rural Australia, you would soon realize you are wrong.

    About a decade ago, while I was at uni, I applied for a bunch of farm jobs in the Adelaide Hills over the summer break — jobs that were close enough that I could drive to and forth from my abode. Apple picking and the like. But I had zero experience. My applications weren’t successful.

    I thought about applying further afield, but the logistics seemed a difficult puzzle. Where to sleep at night, without accommodation costs chewing up most of what I earned during the day?

    Do rural employers these days offer a solution to this question of accommodation?

    Also, are they just looking for fit youngsters, or would they consider older and flabby blokes, who (I believe) constitute the most intractable part of our unemployment problem?

  31. Zulu Kilo Two Alpha

    Do rural employers these days offer a solution to this question of accommodation?

    We had unoccupied housing on the place, so that wasn’t a problem.

    FWIW, we always took the viewpoint that, if you weren’t prepared to “show someone the ropes” then you couldn’t complain about lack of skilled staff, and as long as they could do a days work, age and girth weren’t a problem.

  32. And to the numpty who says there are jobs out back. You got to be joking right? What jobs? Milking cows?

    Holding your nose at the thought of a job milking cows eh?
    Please inform us of who should be milking cows.
    Please inform us if there are any other jobs that are beneath you.

    Then you may get back to moaning that there ain’t any jobs.

  33. Do rural employers these days offer a solution to this question of accommodation?

    I have never seen a rural job that did not provide accommodation. The only rural jobs I’ve seen that did not also include food were some farming jobs.

  34. Zulu Kilo Two Alpha

    And to the numpty who says there are jobs out back. You got to be joking right? What jobs? Milking cows?

    Those jobs that are currently filled by South Africans, New Zealanders and backpackers, because your average Australian displays that attitude, that’s what jobs there are “outback.”

  35. Mayan

    Please inform us of who should be milking cows.

    In some places, this is automated. The systems automatically test milk for quality and signs of infection in the cow, automatically ordering treatment for her and cessation of milking until the infection has cleared.

    Come to think of it, university lecturers are easy prey for more efficient delivery. It’s the tutors, who are lower down the hierarchy of a university, who are less easily replaced are whose performance is more important to students’ learning. I’d even suggest that pilots’ jobs aren’t long for this world (at least airline pilots, of whom there is an imminent global shortage), while cabin crew will still be with us for a long time to come. It’s easy to picture many doctors’ jobs being automated (computer systems are increasingly better and more consistent at diagnosis), while nurses will continue to be in demand. All of this will improve productivity, quality and safety.

  36. Mayan

    s/replaced are/replaced,/

  37. Zulu Kilo Two Alpha

    You can’t create wealth in the bush so because most of us are smart we tend to move to the city and the beach and leave the cows to those who know nothing better than Wake in Fright.

    And sit round bawling about how there are no jobs?

  38. Lem;

    The trouble is, how do you restore the habit of working to pay your own way once it has been lost (or never acquired in the first place)?

    The short version toward restoration of the work ethic is – “If you don’t work, then go hungry in the cold and dark.”

  39. You can’t create wealth in the bush so because most of us are smart we tend to move to the city and the beach and leave the cows to those who know nothing better than Wake in Fright.

    Okay, we’ve gone from;
    1/. There’s no jobs!
    2/. Okay, jobs, but they’re not alongside Bondi Beach.
    3/. Okay, jobs, but they’re not as classy as CEO of Toyota.
    4/. Unless a job is adjacent Bondi Beach it is “not aspirational” and is worthless.
    5/. People who take jobs that aren’t adjacent Bondi Beach are inbred nutters & should be in “Deliverance”

    Right.

  40. Zulu Kilo Two Alpha

    The short version toward restoration of the work ethic is – “If you don’t work, then go hungry in the cold and dark.”

    Overcoming the attitude that “there are some jobs that are beneath my dignity to do” would be a start…

  41. duncanm

    You can’t create wealth in the bush

    FMD you’re stupid.

  42. Zulu Kilo Two Alpha

    You can’t create wealth in the bush

    I’m sure Gina Reinhardt and Andrew Forrest would disagree.

  43. Ragu

    You can’t create wealth in the bush

    Every farmer I have ever spent a weekend with has, at a minimum, about a quarter tonne of meat in a chest freezer. Compared to your average city dweller I’d say the bloke out past the mulga is doing alright.

  44. Joe

    I’m sure Gina Reinhardt and Andrew Forrest would disagree.

    They might be creating wealth, but to assert that they will create jobs as a result is presumptuous.

  45. Ragu

    Joe, how do they get the shit out of the ground?

  46. JC

    You can’t create wealth in the bush

    Broadly true. I’d remove mining from “the bush” because it’s really a very high tech industry with lots of participation in terms of lots capital and high level education coming from the cities.

    According to this ABS report, rural production is around $26 billion. It’s minuscule compared to the rest of the nation’s industrial and commercial might, representing around 3% of GDP.

    Like seriously, who gives a toss.

  47. Mayan

    Perhaps, if there are so many jobs in rural areas going unfilled, the cause might in part be that the wages on offer are too low to attract applicants. If the required wage is uneconomic, then automation might be required. If neither allows for profitable operation, then perhaps it is a sign from the market for those affected farmers to liquidate and move their capital unto a profitable industry.

  48. jupes

    Like seriously, who gives a toss.

    Big Al Jones for one.

  49. Joe

    They use tractors – what you think they employ people to dig shit?

    Trying to find non-existant jobs in primary production when our history has been one of removing labour from primary production is just idiotic.

    All production is heading the same way. Automation is encroaching in all areas of production. This is a GOOD thing, because it lowers the cost of production and allows price competition.

    A consequence of this is that jobs as we have known them are an extinct species. We are in the midst of a new industrial revolution that will see almost all jobs automated. The difference from previous revolutions of this type is that there will be no new mass job market created by the new technology.

    Numbers is right in calling out the ideas as being irrelevant to todays and tomorrows problems.
    The problem to be addressed is: How do you distribute goods and services when no one works?
    How are people to be valued by society when their labor value to society is zero?

    I think our political systems are pointing the way. People want their free stuff and it’s going to incumbent on us thinkers to find a way to give it to them WITHOUT stealing from others.

  50. JC

    How are people to be valued by society when their labor value to society is zero?

    How about not using the term “valued to society”, when it’s a socialist/fascist concept. You have zero value to me and I to you. The only we should look at is if an activity has a net pos’tive rate of return.

  51. JC

    Not as much as you are Ragu, if you ignore the ABS numbers showing the rural sector produces 3% of GDP… almost a rounding error.

    In fact the error rate would be larger.

    If you have anything to refute that other than an insult then present it, otherwise STFU and live with that fact.

  52. Ragu

    Go start a pissing contest somewhere else old man.

  53. JC

    I didn’t start any pissing contest. You did by calling me an idiot because irrefutable evidence the rural sector is broadly meaningless to the rest of the country’s annual production.

    You can’t refute it, obviously, so fuck off yourself.

    (In fact let me go a little further, if you take all the spending that goes into supporting the rural sector such as welfare, subsidies, infrastructure spending that sector is a net drain on the rest of us. It costs us money.)

  54. Joe

    How about not using the term “valued to society”, when it’s a socialist/fascist concept. You have zero value to me and I to you. The only we should look at is if an activity has a net pos’tive rate of return.

    You can’t have a net positive rate of return if no one has any money to buy stuff with.

  55. Ragu

    Erm, you are JC. If you raised your eyes an inch you would have seen the commenter above you on the thread has self identified as Joe, to whom I was responding.

    Now go out the back and hit it with a cold spoon

  56. JC

    You can’t have a net positive rate of return if no one has any money to buy stuff with.

    You really have to explain, because you’re modeling an economy that has either collapsed, or a hunter gatherer group. You’re not modeling an economy which is a going concern.

  57. duncanm

    Well I guess we know JC’s first name now.

  58. JC

    Okay, no problem. Ignore the comment. Perhaps your 6.58 comment should have been your 6.47 one, no?

  59. JC

    Well I guess we know JC’s first name now.

    Not really.

  60. In fact let me go a little further, if you take all the spending that goes into supporting the rural sector such as welfare, subsidies, infrastructure spending that sector is a net drain on the rest of us. It costs us money

    Yeah.

  61. JC

    Let me repeat, you really are an idiot, Joe.

  62. Joe

    You’re not modeling an economy which is a going concern.

    When automation takes all the jobs, there are still goods and services being made, but no one with money to buy them. Standard economic thought at this point says that the value of the goods and services are zero – no one to buy them.

    What we have to address is how to enable people to a. afford, b. limit the consumption of free goods and services that automation provides.

    If we don’t come up with a suitable scheme, the wars of the past will seem like mere spats amongst siblings.

  63. JC

    Don’t take up the argument with me, Basil, you innumerate, take it up with the ABS.

    The ABS shows the rural sector, not including mining produces $30 billion of value added production. The total production shown on the link is just over $1 trillion.

    I’d guess that $30 billion a year is taken away from city slickers and handed over to cockies. Yea, it’s diabolical.

  64. Fisky

    I think our political systems are pointing the way. People want their free stuff and it’s going to incumbent on us thinkers to find a way to give it to them WITHOUT stealing from others.

    There are two ways this can go. Either we go down the path of a universal basic income, or a state job guarantee at the minimum wage. I prefer the latter as we really do not want large numbers of people doing nothing.

  65. There’s a Joe, a Ragu, even a Ducanm, but there’s no Basil on this thread.
    That’s twice your eyesight has failed you.

    You did make mention of subsidies to the rural sector. A comprehensive list of subsidies available (need not be exhaustive) would assist in our education.

  66. Is Joe the Bird?

    Could be, he’s certainly making the same degree of sense.

  67. Ragu

    Oh dear.

    It’s gunna blow again

  68. Is Joe the Bird?

    Lol, Ragu addresses bird by name, so JC responds to the whistle, all het up.
    Roflololololol.

    *screenshot *

  69. Joe

    There are two ways this can go. Either we go down the path of a universal basic income, or a state job guarantee at the minimum wage. I prefer the latter as we really do not want large numbers of people doing nothing.

    The problem I see with the state job solution is that there would be evermore busy-bodies interfering with individual rights. I’d much rather give people income to stay at home or do whatever they want – that do not come with state powers to interfere with other people.

  70. JC

    When automation takes all the jobs, there are still goods and services being made, but no one with money to buy them.

    We’ve experienced 250 years of automation, you feather headed twit. Population and jobs have grown exponentially. Sure, there have been job losses like the makeers of buggies and buggy whips for instance. But so fucking what?

    Automation complements employment in the aggregate. It doesn’t destroy jobs on aggregate.
    Shut up as you’re making an idiot of yourself.

    Standard economic thought at this point says that the value of the goods and services are zero – no one to buy them.

    Standard economic thought says you’re an imbecile.

    What we have to address is how to enable people to a. afford, b. limit the consumption of free goods and services that automation provides.

    It can never be zero unless you believe capital cost will have a zero cost.

    If we don’t come up with a suitable scheme, the wars of the past will seem like mere spats amongst siblings.

    The nature of work will change like it changes all the time. Technology may not apply just to the machines we create it would also apply to humans. Who says genetic therapy wont allow IQ to rise to 5000? In some ways it would be easier to “renovate” the human brain than attempting to make one from scratch.

    You’re projecting countless of years into the future which is just sad speculation.

  71. Zulu Kilo Two Alpha

    You did make mention of subsidies to the rural sector. A comprehensive list of subsidies available (need not be exhaustive) would assist in our education.

    I’m curious to know what I might have missed out on, too.

  72. Piett

    You can’t create wealth in the bush

    I’m sure Gina Reinhardt and Andrew Forrest would disagree.

    Mining is now an enclave of a relatively small number of jobs for a very, very highly-skilled bunch of workers. Getting a job in the mining sector is like suggesting one become a QC or a high-flying stockbroker. You need qualifications + exactly the right experience + exactly the right professional networks.

    Even in the boom years, it wasn’t as easy to get into mining as a lot of people thought. I remember that the SA newspaper The Advertiser ran some articles on people who, back before the GFC, had done some TAFE mining courses in the hope of getting a job in the sector. They didn’t, of course. Why not? No experience + no networks in the industry = no job offers.

  73. Fisky

    The problem I see with the state job solution is that there would be evermore busy-bodies interfering with individual rights

    I think there is a danger of societal pathologies developing because of the UBI. People need to work or they become mentally ill. So I’m flexible about what outcomes are attached to the state job guarantee (work, study, joining the priesthood, whatever) but we need to keep people busy.

  74. Joe

    You’re projecting countless of years into the future which is just sad speculation.

    Yep, That’s me ever the bleeding prophet!

    Consider yourselves warned.

  75. JC

    The problem I see with the state job solution is that there would be evermore busy-bodies interfering with individual rights. I’d much rather give people income to stay at home or do whatever they want – that do not come with state powers to interfere with other people.

    The Saudis already do that. Employers there, realizing the average Saudi is the laziest human being on the planet pays the fuckers to stay home. This allows eg. construction firms to hire very productive foreign labor at a few dollars an hour while maintaining quotas. Perversely, this makes Saudi more productive than Germany! See latest Scott Sumner blog post. The whole thing is hilarious.

  76. I’m curious to know what I might have missed out on, too.

    Probably a free land title document, designating the land as “Prickly Pear Lease” or something like that

    JC is an expert on comparative land titles.

  77. Ragu

    You need qualifications + exactly the right experience + exactly the right professional networks.

    100% correct. The only other backdoor is being aboriginal that can make a humpy

  78. JC

    Yep, That’s me ever the bleeding prophet!

    Consider yourselves warned.

    Warned about what you idiot? You’re not warning us about anything we don’t know. Goods are relatively dirt cheap compared to what they were say a generation ago. It’s been occurring at an accelerating rate through our lifetimes even.

    As I said, the nature of work will change, as it has over oceans of time.

    You’re not a prophet – just a false sad one.

  79. Can’t do that on a job milking cows or picking onions.

    Never mind princess, someone is sure to give you a job within a stroll of the beach and pay you enough to buy a house, car & all the stuff that people with money can afford.

    You’re entitled to it. It is your right.

  80. Piett

    Either we go down the path of a universal basic income, or a state job guarantee at the minimum wage. I prefer the latter as we really do not want large numbers of people doing nothing.

    The first sentence is exactly right, Fisky. And the universal basic income (which was, more or less, the LDP policy until recently) avoided the problem of the “state job guarantee” — which will inevitable lead to an army of regulators wasting their lives, and yours, in pointless “compliance activities”.

  81. JC

    The first sentence is exactly right, Fisky. And the universal basic income (which was, more or less, the LDP policy until recently

    That may eventually happen and if you’re going to continue with a welfare state it would be a more efficient way of redistributing the loot.

    I’m against any form of welfare, however a universal basic income is a good way .

  82. Piett

    I think Fisky is some kind of Zen master of politics. He says things which are outrageously wrong, but it is in understanding why he is wrong, and refuting him, that one approaches perfection.

  83. Tel

    Has anyone attempted to start a union of the unemployed?

    Would be a bit like opposites day I guess. Joining fees would necessarily be low given that the members have little income, but perhaps we could charge a leaving fee instead.

    Admittedly, organizing strike action would be difficult … but with sufficient agility, we could organize that all members simultaneously apply for jobs with any employer that fails to meet our demands.

    Hmmm… the idea needs some work, but it could get there.

  84. JC

    No subsidies and welfare to the cockies. None

    Rural and remote Australians – external site

    If you live in a rural or regional part of Australia, there is a range of options available to make it easier to access government services, payments and support.
    More

    Payments – external site

    Department of Human Services

    A national online and phone service that provides practical information and resources to support carers. An interactive service finder helps carers connect to local support services. Call 1800 422 737.

    Healthdirect Australia Ltd
    Drought and rural assistance – external site

    Provides programs to support farm families and farm businesses in hardship.

    Department of Agriculture and Water Resources
    Farm Finance Concessional Loans Scheme – external site

    Available in Queensland, New South Wales, Victoria, South Australia, Western Australia, the Northern Territory and Tasmania.? Provides loans tailored to meet the needs of each jurisdiction’s farming sector.

    Department of Agriculture and Water Resources
    Rural Financial Counselling Service – external site

    Provides grants to state and regional organisations to provide free rural financial counselling to primary producers, fishers and small rural businesses who are suffering financial hardship and who have no alternative sources of impartial support.

    Department of Agriculture and Water Resources

  85. jupes

    Perversely, this makes Saudi more productive than Germany!

    Are you trying to break the record for the most crap written in one day?

  86. Fisky

    The first sentence is exactly right, Fisky. And the universal basic income (which was, more or less, the LDP policy until recently) avoided the problem of the “state job guarantee” — which will inevitable lead to an army of regulators wasting their lives, and yours, in pointless “compliance activities”.

    The trade-off is there will be higher crime, drug abuse, poor hygiene, and other pathologies under a UBI. So we have to decide which problems we want to have. I think socialism is generally better than welfarism on balance, so a state job guarantee should absolutely be on the cards.

    However, I should emphasise that the real purpose of the state job guarantee – aside from keeping people busy – is to create a rationale for wholesale private sector and labour market deregulation. The idea is that we are providing a workfare safety net for employees in order to lift the burden of regulation from the private sector.

    And that might help kickstart private sector job creation in the short to medium term even in the context of long-term secular decline in what we call “employment”.

  87. Tel

    It’s not market failure, its government intervention that causes economic problems. If the compliance burden was removed from business, and the labour market deregulated, the private sector would employ almost everyone willing and able to work.

    Ha ha, yeah three minutes before the passing of new regulations the “Progressives” all solemnly line up and say, “Oh this new regulation has no effect whatsoever on jobs!” then about five or six minutes after the regulation is passed and there are a bunch of unemployed people around the place we get, “economy is unable to generate employment for all.”

    The hope is that the voters never make that connection… and so far it seems to be working 🙁

  88. Diogenes

    We caught a train home from Sydney today. It was a real eye opener for Mrs D, as two young dumber than dog shit young girls (16-17 yo) sat in front of us.

    All they were interested in were looking “hot” (Mrs D laughed out loud when I muttered the next step when they applied makeup was the paper bag for the head) , f’ing anything with a willie, getting pssed and smoking cones. They were then discussing the refuge they were living in and the DOCS case workers they were dealing with. They were both on Newstart & were complaining about not being able to afford makeup. One said she was going off the pill so she could fall pregnant & get more money , and get that “dumb bitch” from the JSP off her back.

    Mrs D always thought I was exaggerating some of the stories I come home with, and when they finally got off, she asked if I was pleased to be subsidising their lifestyle.

  89. Piett

    “Warwick Alderton” has got to be Birdy.

    1) Weird name.
    2) Distrust of the free market.
    3) Posting while Sinc is away.

    Hey Warwick, is there any particular ethno-religious group — any “chosen people” — who are primarily responsible for the economic problems we face?

  90. Mayan

    very productive foreign labor at a few dollars an hour while maintaining quotas. Perversely, this makes Saudi more productive than Germany

    If you’re bringing cost into productivity, then slave labour is the most productive.

    Productivity is about how much (both quantity and quality) you get out for each unit of labour worked. Sure, there is cheap labour in the third world, but it is largely unskilled and unco-ordinated, and hence very often far less productive than labour in the developed world.

    It is also that improvement in equipment, technology, production technology, and co-ordination that has brought us higher real incomes and a higher standard of living. A more productive society is, other things being equal, a wealthier society.

    It’s worth pondering the high level of free-riding in the world. This has historically been considering an evil to be eliminated by economists, but it seems to be quite the opposite. Vaccine prices aren’t linked to the individual recipient’s likely lifetime benefit, but we are all better off for them (and indeed vaccination is aided by the herd effect, but that’s another matter). Few services on the internet even approach a price that captures each user’s personal gain, and so on and so forth.

    Methinks it likely that the value of network effects in a modern economy is vastly greater than reckoned by most models.

  91. Fisky

    I think it would be much easier to sell labour market deregulation (taking out awards, relaxing unfair dismissal, etc) and the abolition of most red tape affecting the private sector, if we have a back up state job guarantee in place so that people can’t claim they are being thrown to the wolves.

  92. JC

    Are you trying to break the record for the most crap written in one day?

    Hard to believe, but it could actually be true on a PPP basis. Notice I didn’t say Saudis. I said Saudi as in Saudi Arabia. They seem to hire Bangladeshis etc for pittance, run quotas for their lazy, fat useless citizens and the non oil sectors becomes more productive on a PPP basis than Germany.

    Here: Contest this

    http://www.themoneyillusion.com/?p=31908

    then this

    http://www.themoneyillusion.com/?p=31909

    You need to read the last one, as you would have zero understanding what PPP means, you eggnog.

  93. jupes

    Hard to believe, but it could actually be true on a PPP basis.

    Oh right, the old ‘PPP basis‘ LOL.

    Meanwhile in reality, it is probably the most stupid statement posted on this site since your bum-boy tried telling us there are only 200 Muslim terrorists on the planet.

  94. Hmmm, I’d say we’re not going to see a comprehensive list of these subsidies available to cockies.

    Gee, wonder why not?

  95. testpattern

    ‘Mining an enclave…small number of jobs’

    Very few independent prospectors left too. In wa the law was changed to force you to renew a lease after 5 years or drop it. Whereas you need to keep it until the investment cycle peaks. To be successful you need to show progress to declaring a resource. Nobody wants to do that, you then have to prove your resource is commercial or not. If not, you lose not add value and can’t trade out. Use it or lose it should be ten years to better coincide with the investment cycle. What it does at the moment is promote corruption. Leaseholders threatened with losing a tenement will hand it over to a friendly party to dummy for them. There was only one legal partnership that wouldn’t process friendly agreements and they were forced out of business by the cartel. Amec does nothing to represent independent prospectors.

  96. JC

    If you’re bringing cost into productivity, then slave labour is the most productive.

    No Mayan. I brought up comparable PPP. PPP is not productivity which means something else entirely in economics.

    PPP means purchasing power parity something economists use when making comparison across different currency and economic zones.

    Those foreign workers are there of their own volition, so it’s hardly slave labor.

    We should do it to build our infrastructure, which because of union shackles costs us a fortune. It would also release the savings into the private economy that requires loads of capital.

    In fact when you think about it, it should be almost compulsory to build our infrastructure by cheap foreign labor. A bridge, a road is great but it’s a cost on us.. We should have the best in the world but it costs us a fortune because of union dominated sector.

    The cost savings would be huge and less of the burden giving us the possibility of tax cuts.

    Our union dominated labor sector building infrastructure here in Australia would be comparably lazy and as useless as Saudi citizens.

  97. Piett

    I think socialism is generally better than welfarism on balance, so a state job guarantee should absolutely be on the cards

    Spoken like a true Trump supporter!

    However, I should emphasise that the real purpose of the state job guarantee – aside from keeping people busy – is to create a rationale for wholesale private sector and labour market deregulation. The idea is that we are providing a workfare safety net for employees in order to lift the burden of regulation from the private sector.

    Once you get people into the pyramid of public-sector employment, they’ll want to climb the pyramid. Trust me, I’ve been there. The way to climb it is by more regulation — the more you create, the better you enforce it, the faster you climb.

    The beauty of the universal basic income is that there’s no pyramid, and no incentives to make life hard for your fellow man (or chick). You can write poetry, or play computer games, or comment on blogs, all day long, and at least you’re not getting in anyone’s way.

  98. JC

    Meanwhile in reality, it is probably the most stupid statement posted on this site since your bum-boy tried telling us there are only 200 Muslim terrorists on the planet.

    Refute what was said (and the links), don’t go solely into dumbo zone insults because it’s hard to understand. Try. If you really haven’t understood it then come back and ask questions nicely. We’re hear to help you, you eggnog.

    Remember, if you’re going to insult people explain why.

  99. Fisky

    Once you get people into the pyramid of public-sector employment, they’ll want to climb the pyramid. Trust me, I’ve been there. The way to climb it is by more regulation — the more you create, the better you enforce it, the faster you climb.

    And that’s fine. If people want to become Regional Managers of Government Make Work units, who cares? They could be doing that. They could also be watching porn at home. On the other hand, neither of these things need affect the private sector at all.

  100. JC

    Oh right, the old ‘PPP basis‘ LOL.

    You know what the trick is.

    Let me explain it to you. It’s the same trick used by those small European states that show up in tables with massively over the top GDP per capita compared to other countries. Luxumbourg would be a good example.. Switzerland less so.

    When you spread GDP around the citizens, but have a massive foreign labor force, the production gets to be allocated to the citizens and distorts the allocation. You didn’t know this, so I’m trying to help you, Jupes, you eggnog.

    Having said that, the Saudis are actually getting a bigger bang for their buck by paying pittance to the foreign workers. We should do it, especially in construction.

  101. jupes

    If you really haven’t understood it then come back and ask questions nicely.

    And if you really believe that Saudi Arabia is more productive than Germany then you are a gullible twit.

    PPP or no PPP.

  102. JC

    Hang on, we can’t do it, because you don’t like thems foreigners. You’re such and eggnog, jupes.

  103. Mayan

    JC: You wrote in your post #2131122, posted on August 28, 2016 at 7:22 pm:

    The Saudis already do that. Employers there, realizing the average Saudi is the laziest human being on the planet pays the fuckers to stay home. This allows eg. construction firms to hire very productive foreign labor at a few dollars an hour while maintaining quotas. Perversely, this makes Saudi more productive than Germany! See latest Scott Sumner blog post. The whole thing is hilarious.

    There is no mention of PPP anywhere in that. The first appearance of PPP on this page came from your post #2131151, posted on August 28, 2016 at 7:47 pm, 25 minutes later.

    Productivity is about what you get out compared to what you put in, not the cost of what you put in. The cost of inputs vs the cost of outputs affects ROI.

  104. JC

    And if you really believe that Saudi Arabia is more productive than Germany then you are a gullible twit.

    OCED and IMF GDP stats based on PPP are generally considered pretty good, you closed minded oaf. They arent that complex.

    If you’re going to dis the Saudis because of your affliction then also consider this, they have perhaps the most efficient oil production in the world.

  105. Fisky

    Something I’m not quite getting here. Libertarians often claim that the welfare state is the worst thing ever. Destroyed the black family structure (in a way that not even segregation could), causes massive disincentives to work, undermines the quality of the workforce, leads to demoralisation and mental illness, etc. So I’m not quite sure how a Universal Basic Income, which is the welfare state on steroids, is going to be a solution.

  106. JC

    Productivity is about what you get out compared to what you put in, not the cost of what you put in.

    And so, what does a GDP/PPP based comparison / population tell you? It certainly doesn’t express the number of widgets people make in a given amount of time( productivity). It does tangentially suggest that, but it’s not the way to do it.

  107. Piett

    And that’s fine. If people want to become Regional Managers of Government Make Work units, who cares? They could be doing that. They could also be watching porn at home. On the other hand, neither of these things need affect the private sector at all.

    No, no. What you have to understand is that the movers and shakers of the public service actually have quite a strong work ethic. One of my mates is a lawyer who moved from a private firm to the state A-G’s office: he comments that the latter works him much harder than the former used to.

    The pyramid climbers won’t be watching porn at home, they’ll be working their butts off to make life hard for the productive sectors of the economy — for all the right reasons (as they see it) — “fairness”, “environmental protection”, “racial equality”, any number of reasons.

    What we must do as a society, is understand and affirm the virtues of idleness. Rather than obsessing over KPIs and productivity, we have to appreciate the virtues of reading, thinking, smelling roses. We are fast approaching a world in which we don’t all have to work at fever pitch to sustain life: we could spread out work, work less, and enjoy life more.

  108. JC

    So I’m not quite sure how a Universal Basic Income, which is the welfare state on steroids, is going to be a solution.

    It’s not the solution. It’s a more efficient way of redistribution. For instance, you’d get rid of a ton of Canberra tax hoovers that way, as you wouldn’t need the mendacious layabouts.

  109. Fisky

    What we must do as a society, is understand and affirm the virtues of idleness. Rather than obsessing over KPIs and productivity, we have to appreciate the virtues of reading, thinking, smelling roses. We are fast approaching a world in which we don’t all have to work at fever pitch to sustain life: we could spread out work, work less, and enjoy life more.

    Right, well we haven’t figured out how to do that ever.

  110. jupes

    If you’re going to dis the Saudis because of your affliction then also consider this, they have perhaps the most efficient oil production in the world.

    And Germany has the most efficient Porsche production in the world.

    What is your point knobjockey?

  111. What we must do as a society, is understand and affirm the virtues of idleness. Rather than obsessing over KPIs and productivity, we have to appreciate the virtues of reading, thinking, smelling roses. We are fast approaching a world in which we don’t all have to work at fever pitch to sustain life: we could spread out work, work less, and enjoy life more.

    Been hearing that for the lats 60 years or more.
    No closer to fruition.

  112. Piett

    Right, well we haven’t figured out how to do that ever.

    Just follow the instruction of us libertarians and classical liberals, and you’ll be fine. We’ve thought these things through.

  113. Mayan

    OCED and IMF GDP stats based on PPP are generally considered pretty good

    If you are talking about labour productivity, then you are talking about how many physical units of production you get out for each hour of labour. That’s not hard, is it?

    You are talking about cost of production. If you are talking about dollars in from production to dollars out that is paid to labour, then slave labour is awesome.

    Also, were the price of oil to go up tenfold, would that mean Saudi labour productivity also goes up tenfold? Of course not (assuming the same amount of oil were produced). They would still be producing the same amount from the same amount of labour, hence labour productivity would not have changed.

    Or, to put it another way, a German factory worker is very likely far more productive than one in the same industry in Bolivia, because they are well-trained, have advanced equipment at their disposal, works in an efficient process, and the company they work has superior organisation. The German worker will produce far more in an hour or a day than the Bolivian. That is productivity.

  114. Tel

    If you are talking about labour productivity, then you are talking about how many physical units of production you get out for each hour of labour. That’s not hard, is it?

    But most economists measure labour productivity in units of $ per hour, which is to say if workers are producing something that represents a lot of physical units, but the product sells poorly and few people want the stuff so the price is quite low, then this is NOT high productivity.

    If the same workers make the same amount of stuff but for some reason a lot more people want it, then it sells at a higher price and productivity has gone up. Sadly, this implies that Keynesian demand stimulus can indeed raise labour productivity (for a some time at least, until other problems become apparent).

  115. Mayan

    But most economists measure labour productivity in units of $ per hour

    Which is one of the problems with economics.

    There is also a tendency by many of them, and those whose thinking they have influenced, to assume that the $Revenue/hour figure is solely or mostly the responsibility of the employee, when it really depends upon a very larger number of things, as does units_of_output/hour. Those things run all the way from which industries investors entered into, the (in)competence of management, the level of technology open to them, and so forth.

    It’s not hard to see how that indicator of something than productivity, along with a misunderstanding of responsibilities, leads to very flawed decision making, to which higher unionisation rates in some industries has been the response.

  116. Boambee John

    For those like Numbers Minor and Warwick A, who bemoan the lack of jobs in the economy, even for the unskilled, do you support ending immigration of unskilled people?

    If you do not, and if you support a large intake of unskilled refugees, you are in favour of exacerbating the problem you so bemoan.

    I think the word is hypocrites!

  117. motherhubbard'sdog

    People who can’t find jobs should find customers instead. If they can’t work out how to sell anything else, they can always sell their bodies. Probably still better than selling your soul.

  118. 1234

    Boambee John – my you are quick to call me a hypocrite. I don’t support a large intake of unskilled people. Immigration of unskilled people, excluding refugees, ended decades ago. It’s all 457 now.

  119. Immigration of unskilled people, excluding refugees, ended decades ago.

    1234, I think you’ve sorta stumbled onto Boambee John’s meaning, rather than grasped it.

  120. Nerblnob

    Immigration of unskilled people, excluding refugees, ended decades ago. It’s all 457 now.

    457 is a temporary work visa. Usually for two years, and not usually extended more than once. So for 4 years.

    Family members of unknown skills comprise at least 32% of regular migration now, and it was more in the past, certainly more recently than the “decades” (i.e at least twenty years ago) asserted by the poster 1234.

  121. Fisky

    The implications of technological displacement on the immigration program are only just beginning to be understood. It means the permanent exclusion of open borders and low-skilled immigration from public debate.

  122. Nerblnob

    Personally I don’t mind an intake of ambitious unskilled people willing to work their way up. You need that dynamism versus credentialism.

    It shouldn’t take long to see what immigrants from which sources are the most dynamic. I’d even consider Saffers to be up there.

  123. Fisky

    The future is going to be one of large-scale state employment and closed borders. Classical liberals will just have to get with the program!

  124. Zulu Kilo Two Alpha

    I’d even consider Saffers to be up there.

    There are a lot of South Africans employed in rural West Australia – where I used to run a farm. It was always rather comical when they assumed that speaking Afrikaans over the two way radio was a form of communications security – “Cheer up boys – the job might be slavery, the boss is a ####, the machinery is crap, but we’ll all be back in Jo’berg for Christmas.”

  125. Denise

    Heh heh ZKTA. Where would they have bought Boere-baroque gifts for their wives in WA?

  126. Nerblnob

    Workwear supplier we use in Perth is a black South African.

    It’s not just the whites who want out from under the ANC’s small business hating regime. They must be sick at seeing Australia going the same way.

  127. Zulu Kilo Two Alpha

    It’s not just the whites who want out from under the ANC’s small business hating regime. They must be sick at seeing Australia going the same way.

    “We found out the hard way, didn’t we, that the African National Congress was just as corrupt and self seeking as the Afrikaners ever were.”

    The speaker was obviously African, in an eatery in Fremantle..

  128. Nerblnob

    Everyone bidding for a supply contract there , or even opening a business, has to have a partner who is deemed “black” by the authorities. The partner might be a good business person but all the cases I’ve come across have been unproductive coupon clippers.

    I jumped through all the hoops, even ticking the boxes for ” black disabled female” on one of our parent companies, only to find that as a foreigner with desired technology i was exempt.

    But gave me an insight into what locals have to do.

  129. JC

    The implications of technological displacement on the immigration program are only just beginning to be understood.

    This is incredible Fisk.

    Tech displacement has been occurring for the past 250 years. In past times, places like Australia and the US saw enormous amounts of immigration. Why should demand for labor stop now?

    Here:

    Back in 1967, the US steel industry employed about 780,000 workers, and produced about 115 million tons of steel. By 2015, employment had fallen to 90,000, producing about 79 million tons of steel. In both years the US consumed about 130 million tons of steel. (I’m not sure these figures are exactly right, but I think they are close enough.)

    The bottom line is that even if we still produced 115 million tons, or even upped it to 130 million, the level of employment in steel would be in the 120,000 to 150,000 range. The vast majority of those 780,000 steel jobs were lost to automation, and they aren’t coming back.

    In 1967 147 tons per employee
    In 2015 877 tons per employee.

    Lets say Trump closes steel imports. At current production the US would only need perhaps 50,ooo more people.

    Those 780,000 jobs will never come back no matter what Trump says.

    Meanwhile the US is now at around the 2005 rate of unemployment based on U6.

    Automation has been massive – in the steel industry productivity has been running at around 4% compounded.

  130. JC

    Which is one of the problems with economics.

    There is also a tendency by many of them, and those whose thinking they have influenced, to assume that the $Revenue/hour figure is solely or mostly the responsibility of the employee, when it really depends upon a very larger number of things, as does units_of_output/hour.

    Mayan

    Productivity is not measured in the labor cost -dollars per hour. It’s the unit of labor used to produce a unit of output.

  131. James Gibson

    Modest welfare states can work well in racially and culturally homogeneous nations. Norway and Sweden used to be this, until they started excepting large numbers of immigrants from cultures other than their own.

  132. Fisky

    Tech displacement has been occurring for the past 250 years. In past times, places like Australia and the US saw enormous amounts of immigration. Why should demand for labor stop now?

    Because just as primary industry and secondary industry were automated, so too will tertiary industry be automated. Unfortunately, there is nothing above tertiary industry. That’s it. Once services are automated, the historical process of releasing labour ever further up the chain is stopped. There is nowhere else to go.

    So again, rather than thinking about this ideologically, we need to look at it practically. There will be a reduction in demand for labor in the future (it’s already happening). Deal with it.

  133. Fisky

    Libertarians need to grapple with the prospect that their ideology will probably be out of date very soon, just as socialism and communism are out of date. There is no reason why a particular economic system need exist forever. When fundamental conditions change, so too must our schema change.

  134. john constantine

    The house of saud doesn’t pay people to stay at home and grow fat because saudis are lazy, the house of saud pays protection money because the lynch mobs of saudi arabia will waddle out into the streets and string the royal family up the second the free stuff stops.

    The free money is so the wahhabi morals police will keep the roads open to the airfields with the learjets parked, so the airlifts to London and Paris can go ahead as planned.

    Productivity: the saudis have the worlds biggest, shallow sponge, filled with high pressure, high quality oil- all they had to do was let somebody find it, let somebody push a straw into it, then let the world pay them rent for it.

    Compare that to the shale oil of North America, where obsolete Americans have innovated ways to get oil out of cement, and do it at a price and volume that would have bankrupted the crony kleptocracy of the house of saud without the corruption of the American political system that saudi oil money has paid for protection.

  135. JC

    Because just as primary industry and secondary industry were automated, so too will tertiary industry be automated.

    Some areas of tertiary could be automated, but so what? The nature of work will change, just as it’s changed for 250 years. Who says that the 37.5 hour week can’t come down to 20 hours with even more pay as productivity rises?

    Unfortunately, there is nothing above tertiary industry. That’s it. Once services are automated, the historical process of releasing labour ever further up the chain is stopped. There is nowhere else to go.

    Fisk, we’ve seen one of the largest upheaval in the economy since the advent of the Industrial revolution with the use of the internet and shit like mobile phones. What these things have done is complement our work.

    So again, rather than thinking about this ideologically, we need to look at it practically. There will be a reduction in demand for labor in the future (it’s already happening). Deal with it.

    What reduction is demand for labor are you talking about? There hasn’t been any!

  136. Fisky

    Yes, there has been undoubtedly a reduction in demand for labour. This is reflected in the fall in the US labor force and the decline in average household incomes since 2009. In spite of Obama’s on-paper job creation record, incomes are lower and participation is lower, and this tells you that demand for labour has fallen.

  137. Fisky

    (CNSNews.com) – The number of Americans not in the labor force last month totaled 94,044,000, 562,000 more than in March — and the labor force participation rate dropped to 62.8 percent (near a 38-year low), following four straight months of slight improvement.

    When President Obama took office in Janaury 2009, the labor force partipation rate was 65.7 percent, after hovering in the 66-67 percent range for much of the George W. Bush presidency.

    The recession inherited by the Obama administration officially ended in June 2009, but the labor force participation rate continued to drop during Obama’s two terms, hitting 62.4 percent in September 2015, its lowest point in 38 years.

    This is a bust for the labour market. An absolute bust. Combined with the falling real incomes over 8 years, it is clear that demand for labour is falling.

  138. JC

    John

    The Saudi Vs Germany exercise is simple. Take GDP/PPP, then take the number of people each for country. For the Saudis, exclude oil, and then divide that number by the number of people. For Germany you don’t exclude anything obviously, but the same calc applies.

    The Saudi non oil sector makes it look like the Saudis are more productive. The reason is that their GDP is boosted by the foreign worker stat, which is excluded by the IMF and OECD when working out this number. Should it be? I’m not sure. I’ve thought that Luxembourg’s GDP per cap should be adjusted for the foreign worker element of people living and working across the border. But again. I’m really not sure you should. Having said that, if you’re not adjusting it for Luxembourg why should you adjust it for Saudi Arabia?

  139. JC

    Fisk

    We know the participation rate is well down. We don’t know why and it could be a combination of people who were in their advanced work years never tried again to get a job and took early retirement after they were laid off during the GFC.

    Labor market economics is not as simple as a blog comment.

    U6 is the best gauge for US unemployment. It’s high – around 10%, but it reached almost 20% during the worst of the GFC and it’s now back to 2005 levels.

  140. Kurt

    “My grandparents generation were very proud to declare they never got a cent from the government. People out of work would sometimes not apply for the dole because of the stigma.”

    Liar or stupid. Read this quote from Menzies when he introduced unemployment benefits for the silent majority. “People should be able to obtain these benefits as a matter of right, with no more loss of their own standards of self-respect than would be involved in collecting from an insurance company the proceeds of an endowment policy on which they have been paying premiums for years.”

    Wardick Aldertin,

    Did you even read your own quote? Menzies was saying people should not be ashamed of accepting the dole. Why would he say that unless the prevailing ethic was that it was shameful to have to accept handouts? He was trying to tell people that it was ok to accept help when needed.
    And you call me either a liar or stupid?

    No one would argue that there are cases when people need help but my point was that in the past people were reluctant to take it unless absolutely necessary. Socialists like yourself have very successfully turned that ethic around so that now people expect and feel entitled to handouts. Quite a difference from the independent can-do attitude of previous generations.

    As for my grandparents generation, I was referring to my grandmother who had three children immediately after the war with a husband who was alcoholic and discharged from the war with war neurosis. Unfortunately, he suffered a motorbike accident in the late 40s and spent almost 2 years in hospital. My grandmother, then in her 20s worked full time while raising the three kids, essentially alone. Guess what? She didn’t get a fucking cent in child support, single mothers pension or any of the other shit you socialists now hand out.
    I am really only passing on how she felt when she saw all the single mothers get endless handouts. That generation has pretty much passed on now and it’s a shame imbeciles like you didn’t take a bit more time to learn from them while they were here.
    So as for your ‘stupid or liar’. Why don’t you go fuck yourself. Ignorant fool.

  141. Combine Dave

    Perhaps, if there are so many jobs in rural areas going unfilled,

    Nope.

    Two words.

    Seasonal workers.

    Much like SSM, there’s never any reason for mass unskilled migration.

    Especially not now with Australia’s super high wages and ever present threat of automation making such proposals instant welfare recipient generators.

    There’s no upside.

  142. Tel

    Menzies was saying people should not be ashamed of accepting the dole. Why would he say that unless the prevailing ethic was that it was shameful to have to accept handouts?

    Because he is a politician and grandstanding.

    There’s always been shame in accepting handouts and probably always will be. However, what’s happening now is the various sides are now saying “screw you” to the other side… even though they kind of know it’s wrong. This includes the tax payers too, minimizing tax is just playing the game. What’s changed is not that we know right from wrong, it’s whether anyone cares about it.

  143. Tel

    We know the participation rate is well down. We don’t know why and it could be a combination of people who were in their advanced work years never tried again to get a job and took early retirement after they were laid off during the GFC.

    The theory of “older workers retiring” is completely busted, the statistics are available in demographic bands and what we see is more older workers staying in jobs while it is the younger workers who are dropping out.

    https://fred.stlouisfed.org/graph/fredgraph.png?g=6RUY

  144. David Brewer

    It’s not just welfare that undermines self-reliance, but also taxation.

    Once the number of taxes, and the height of taxes, reach levels that make it difficult for the vast majority to do well financially, it’s only logical for them to take back whatever they legally can.

    There is also the effect of the inevitable irrationalities and unintended consequences from having both scores of taxes and scores of welfare benefits. Once people come to see the system as just a vast schemozzle lacking any real logic or moral justification, why would they stop to think which benefits they “didn’t need” or “would feel bad applying for” etc.?

    The system is even designed to undermine such a principled stance. Think of all the “incentives” through the tax and benefit system to do this or that that the government wants – install pink batts, install solar power, become a home owner, put money in super, “invest” in a rental property yadda yadda yadda. How could any government expect autonomous restraint in regard to government benefits when the very purpose of all its financial carrots and sticks is to condition behaviour?

  145. Combine Dave

    “I am really only passing on how she felt when she saw all the single mothers get endless handouts. ”

    What a resentful bitch eh? So you are not Christian then?

    What other religion could she be?

    Remember, Christians believe “God helps those who help themselves”.

    That doesn’t lend itself to supporting welfarism.

  146. Kurt

    Warwick,

    What a nasty piece of work you socialists are. My grandmother was no fool. She worked hard her whole life and suffered fools poorly. I know it would be astounding for people of your intellect to discover but during the great depression and the second World War they didn’t have ‘safe spaces’ or jazz hands. Somehow they even managed to survive without a national obsession over gay marriage. Even though they only had two genders back then, she was actually quite progressive for her time. She was prochoice and would have been quite happy to see a waste of space like you aborted. What a shame you made it past the vacuum and bucket.

    Oh well. Can’t win them all I guess.

  147. calli

    Remember, Christians believe “God helps those who help themselves”.

    No they don’t Dave. Christians believe that God helps the completely underserving. That’s the core of The Gospel.

    Romans 5:7-8. Very rarely will anyone die for a righteous person, though for a good person someone might possibly dare to die. But God demonstrates his own love for us in this: While we were still sinners, Christ died for us.

    Jesus demonstrated the principle in his story of The Prodigal Son.

    On the handouts issue, “If a man will not work, let him not eat.” (2 Thessalonians 3) pretty much addresses the problem of laziness and entitlement.

  148. john constantine

    The internet has made a difference for some people, in the old days those like martin bryant and warwick had to buy seats on airplane flights so the people trapped sitting next to them had to pay them attention.

    Nowadays, martin bryants sock-puppet warwick can hop on the internet and compulsively make obsessive files about people and boast that this is the same as making the friends he never had in real life.

    [keeps him from drowning kittens in his bathtub though, so there is an upside.]

  149. Entropy

    Remember, Christians believe “God helps those who help themselves”.

    No they don’t Dave. Christians believe that God helps the completely underserving. That’s the core of The Gospel.

    Romans 5:7-8. Very rarely will anyone die for a righteous person, though for a good person someone might possibly dare to die. But God demonstrates his own love for us in this: While we were still sinners, Christ died for us.

    Yes, it was called mercy. In the justice system mercy is when you do not receive what justice determined you deserve.

    Of course mercy has religious connotations so these days getting what you do not deserve is called social justice. The twist is it now is considered a right rather than a gift.

  150. calli

    What about women? Can they eat if they don’t work? What is work. Should they sell themselves in one hour stands or marry for money like Lizzie did.

    Z grade trolling.

  151. kurt

    My grandmother had servants.

    Ha. It was pretty obvious you were middle class prat parading around like some champion of the working class. Isn’t it always like that? You morally superior middle class socialists who wouldn’t know deprivation if you fell over it trying to save the ignorant masses?

    My grandmother married my grandfather before he went to war. This was the time of Nazi-Soviet Pact when you socialists were sabotaging the Australian war effort on the docks. Incidentally, you socialists changed your tune big time after June 1941. Wasn’t that amazing? Anyhow, getting back to family history. In those days people had responsibilities not just entitlements. The men’s job was to go off to war, fight, and possibly die. Of course many men returned deeply scared. Her brother actually returned from the war suffering from fits; took one while fishing in Sydney harbour and drowned while still in his 20s (in the late 1940s). I think that was what you called, ‘hurty feelings’ and ‘imaginary illnesses’.

    Anyway, moving on from your middle class socialist values, and getting back to responsibilities.

    ‘So why did she hook up with a loser then?’

    The men went off to war and were sometimes killed. If they did come back, they were often psychologically damaged. They did their duty so society took an extremely dim view of any woman who simply upped and left. He had sacrificed his health for his country; she was expected to stand by him. Remember this was before ‘equality’ when women also had responsibilities.

    With your superior middle class socialist values, it must be hard to understand why she stuck by him for the next 65 years (45 of which was spent working in laundry mats) but I guess not all women were lucky enough to have servants.

    And lastly, Warwick, I recognise a loser when I see one. Middle class Trots are about as big as they get.

  152. kurt

    Calli,
    Are you seriously trying to discuss religion with a guy like Warwick?

    The guy is as shallow and pig ignorant of civilisation as they come.

    Dont waste your time.

  153. Gab

    He had sacrificed his health for his country; she was expected to stand by him. Remember this was before ‘equality’ when women also had responsibilities.

    She also made a promise on the day they got married, “in sickness and in health, to death do us part”. As did he to her. Sounds like equality to me.

    Best to ignore the dickhead “warwick”. He gets off on people responding to his inane comments and loves the attention. He’s not here for serious discussion.

  154. kurt

    Gab,
    Yes very true. Marriage actually meant something in those days.

    And again yes. Warwick comes over as conceited and narcissistic.

  155. Combine Dave

    What do you want the stupid and lazy to do?

    I think Fisky addressed this point above.

    See –

    The future is going to be one of large-scale state employment and closed borders. Classical liberals will just have to get with the program!

    They’ll do what such people have always done. – Find public service jobs.

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