One Finite Planet

One Finite Planet

Limits to free trade: moral outcomes

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environmental-problems-pollution-42__880Tariffs have almost universally been declared a bad idea.  My point is that while it may be true that tariffs do not normally produce positive economic outcomes, tariffs may be necessary to achieve positive moral outcomes.

Almost every regulation we place on business hopefully achieves a positive moral impact, but does come at an economic cost to business.   Consider that the effect of every regulation is to place the business at an economic disadvantage compared to competitors in a country without that same regulation. No child labour, no pollution, or simply ‘use of this chemical is banned’? A tax system that funds a scheme to help those with disabilities, universal health care or education?  Safety regulations such a fire prevention,

All such regulations create an economic penalty for those bound by the rules when competing against competitors without the same restrictions.  Should our society give assistance to the disabled, even if this requires taxes that place businesses at a disadvantage compared to businesses in countries with no assistance for the disabled?  There are times when one country has a natural cost advantage over another for a particular industry, but in this age of globalisation, can free trade simply move all the jobs to locations with the least regulation and moral aspirations?  Is life really all about economics. Can free trade allow a double standard of committing to moral goals but eliminating the cost of those moral by consuming products produced elsewhere and avoiding the cost of those moral goals.In cases where jobs do simply move to locations without the restrictions or regulations we choose,  then the moral goal of the original regulation is defeated.   If you believe ‘no production worker should be exposed to this chemical in order to produce XXX’, then a national regulation will ensure no workers in the country where the law is enacted are exposed.  But if ‘XXX’ production moves offshore, the same number of workers may be exposed, and jobs have simply been moved offshore.

The ultimate effect of globalisation is to move all economic activity to least regulated jurisdictions.

Even with no trade restrictions, access to markets, transport costs and some other factors still can favour goods produced within national boundaries. There are ‘natural advantages’ for production in one country over another.  But there is a trend towards a more uniform globe and the as all else becomes equal and the globe ‘shrinks’, eventually the lower cost is the location with the least social and moral goals.  A free market would eventually result in every industry moving to the location with the lowest costs, and all else being equal, that means the location with the least morally motivated regulations.  Ultimately, even putting in place new regulations requiring fire safety for employees could force relocation of businesses offshore.  Without some trade restrictions or tariffs,  regulations designed to protect workers and the environment could become nothing but means to move the problems offshore, and the jobs offshore with the problems.

We may feel great that we can intrude a new safety standard with no cost impact on what we buy as production will simply more offshore, but in the long term there is a price to pay as industries are lost.

A classic case is climate change.  Moving to sustainable production can raise costs.  How do we ensure the result is not simply to move high CO2 industries to other countries?

The Touted ‘Level Playing Field’.

It is often stated that to have a ‘level playing field’ with respected to competitiveness, it is necessary to have the same access to markets with the same tariffs.  However, to understand the cost of our moral, social, ethical and safety standards is to understand that a ‘level playing field’ only applies when competing with jurisdictions matching those same moral, social, ethical and safety standards.

Compromising Our Society.

Free trade can place limits on the aspirations of our own society. “We must lower taxes to keep our corporations competitive, so we cannot afford universal health care or education.”  When our politicians tell us lower corporate tax rates are required, is this because without these lower rates, national business will be unable to compete for foreign competition?  This means no country can pursue ideals unless every trading partner country sets the same goals.  The result is a compromised society.

Solving the problem

We could attempt to ensure we only have free trade from countries following the same regulations as we follow.  However a consideration such as minimum wage, may seem unreasonable to impose on another country.  Or should we impose a tariff only where the standard not met by the trade partner is determined by us as not reasonable?   In any event a greater problem is that a country may impose a similar standard for safety, environmental or other goals in order to achieve free trade status, but have no intention of actually enforcing the standard.


The problem is not easily solved.  It may very well be true that tariffs never achieve economic outcomes, but as natural barriers to trade come down, it seems we do require tariffs in selected cases to achieve moral outcomes.

Table of Contents


Crime: A litmus test for inequality?

Around the world, many countries have both a battle with equality for some racial groups and minorities and also a battle with crime-rates within and by those same groups.

Should we consider crime rates the real sentinels of problems and a solution require focusing on factors behind crime rates? Or is the correct response to rising crime rates or crime rates within specific groups an adoption of being “tough on crime”, thus increasing rates of incarceration and even deaths in custody for oppressed minorities and racial groups?

This is an exploration of not adjusting the level of penalties and instead focusing on the core issues and inequalities behind crime-rates. It is clear that it is “damaged people” in general rather than specific racial groups that correlate with elevated crime rates, so why not use crime rates to identify who is facing inequality?

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Influence: There’s no free lunch and they use your data to make you pay.

It can seem all those tech companies are so dumb giving away services for free.

I recently read another comment containing the “I don’t want Google getting more of my data to sell” and it reminded me of the question, ‘why is your data valuable?’ people too rarely ask. The common myth is that Facebook and Google etc want your data so they can sell it, but even with companies that do sell your data, it still requires someone to turn data into money, and enough money to fund the “free” services of the tech companies and allow them enough spare to make profits beyond anything seen in the world previously. So how does the data turn into so much money?

There is no such thing as a free lunch. Google and Facebook etc make their money from advertising, not from selling data, and unless they use can the data to persuade you to buy products at prices inflated by advertisers paying part of the sale price to Facebook/Google etc, they would lose money.

Your data is used to inflate the cost of living and earn votes for politicians with an agenda that gives them a budget to spend. They (Google/Facebook etc) don’t want to sell your data, but the reality, is more sinister: they use it to have to change your thinking, so more of your money will go to make them richer.

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The Power struggle in Australia.

From “the biggest corruption scandal ever” in Brazil, problems in Venezuela, human rights in Saudi Arabia and Iran, to the problems caused by lobbyists against action on climate change, an abundance of fossil fuels is a source of political power, yet rarely force for good, and Australia, with a wealth of coal and gas, is not spared.

The current crisis in Ukraine not only drives up energy prices globally, but it also creates a dilemma for gas producing nations.

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Fragile Democracy: Was Scott ‘Scomo’ Morrison autocrat of Australia?

Democracy collapses when a leader, who is able to bypass the checks and balances, uses their position to retain power.

Steps by recent leaders Scott Morrison and Australia and Donald Trump in the USA, raise questions as to whether current reliance on conventions and constitutions reliably protects democracy.

China, Russia and even North Korea are all technically democracies, and all proof of how technically being a democracy does not necessarily deliver real democracy.

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Ukraine: Putin and China, method or madness?

What if Russia and China both intended that the invasion of Ukraine would trigger global inflation and food shortages, and a potentially new financial crisis?

That Putin sees himself in the image of Peter the Great and restoring the Russian empire is no secret, and is generally portrayed as evidence that Putin has completely lost the plot. But what if there is a bigger plan involving both Russia and China that starts with triggering a global financial crisis? A dangerous game by two desperate leaders needing to bring others with them as their own economies collapse.

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