‘ju:femaiz

In another turn of events showing a move away from _competition_ market theory by our pre-eminent “economically responsible” federal government, the Prime Minister John Howard has hinted that the “national airline” QANTAS should merge with Singapore Airlines to create a ‘great regional airline’. I’m interested as to when Mr Howard moved away from the concept of competition to that being touted by the largest companies in the world - that the only way forward is to amalgamate into larger companies with even greater market power. Surely he cannot believe that this is in the best interests of Australians, or the flying public in general, for the number of competitors to be reduced in a region that can sustain said competition.

Then again, his views on collectivism are far from uniform. Howard has time and again voiced support for small businesses to be able to trade as a collective with larger businesses. The basis for this comes from a problem associated with bilateral trading. If a big power bilaterally trades with a smaller power, then the trade is inherently unfair (under the economic theory that all parties are self interested). The larger power (be it a company with greater capital, or a stronger trading position) can use this power to prevent the bilateral trade from occurring on an even footing. This, in many respects can be seen as a fair position to take, since it allows small businesses to work together for the benefit of them all and bring some parity to the trade. However, his support for collectivism extends only so far. Howard, with his new Industrial Relations policies, has ruled out entirely the option of collectivism for the small power (the employees) in their bilateral trade (contract negotiation) with the larger power (the employer) leaving the trading partners having positions at the bargaining table that are far from equal. No other non-fascist/communist nation in the world with a strong economy does this. The EU, UK, USA, Japan, Canada and NZ all allow a workplace to choose whether or not they bargain independently or collectively.

With a name like Work Choices, you’d think that’d be the case with Howard’s legislation too. Far from the case, he has now shown exactly what he wants for Australia - a nation where the working poor exist, and a “race to the bottom” in terms of wages will occur. This is despite the head of US retail chain Walmart recently coming out to say that the low minimum wage in the US should be increased to reflect real costs of living (noting he has a substantial stake in this, with most of his shoppers from the lower wage earners). Given that he cannot economically increase the wages of his staff far beyond the base level set by the US government due to competition, one wonders whether those in charge will listen.