Saturday, August 27, 2005

Australia`s extreme Muslim Constituents

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The Australian government has asserted that Muslim extremists should leave Australia if they don`t accept that Australia is a secular state and that its laws are made by Parliament. See the Japan Times `Australia tells radical Muslims to depart Oz` (25th Aug 05).`If these are not your values, if you want a country which has Sharia law or a theocratic state, then Australia is not for you`.
Fair enough - but who is Australia for. I would suggest that the general populous is very disenchanted with the political process. They have little respect for any leaders. Why? Because they are self-serving, alligning themselves with political parties to shore up financial support. That does not ensure political integrity - but rather graft. Sure its not the form of corruption we see in the Philippines or Indonesia, but there is always a connection between money and power. Why? Because governments are given the power to intiate the use of force, just as a tyrant uses power to gain a value.

As long as Australian citizens have no recourse to question the law of the nation, governments or politicians will have a free rein. High court judges can play on the fringes of unjust laws by rationalising their interpretation of the Constitution, but really its the constitution that needs to be questioned. Its remarkable that we are helping the Iraqis design a constitution....but equally remarkable that anyone would consider a 200-500year old document as pertinent to current society. Values and knowledge have grown greatly since then. Whilst there is a certain stability in the status quo, there is a certain lunacy in the nation that the current system works.

Reason is the standard for debate.
- Andrew Sheldon

Thursday, August 25, 2005

The merits of gun control

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Despite my advocacy of small governments, in recent years I have become sympathetic to calls for gun control. I`ve not seen the Michael Moore film, since I`m confident it offers no insights.
My rationale for supporting gun control rested on several arguments:
  1. Lynch mobs: Ownership of guns should entail responsibility. Guns should be licensed, and licensees should be obliged to secure them safely in their house. They should be trained in how to use a gun, etc. Its argued that the role of police is to protect citizens. Just as dangerous as law-breakers are vigilantes that claim to speak for it where it lacks.
  2. Practicality: In what sense can gun ownership be said to be practical. For a gun to be a useful tool for self-defence, does it not need to be accessible. If its readily accessible by the licensee, then its likely accessible by others. eg. In a glove box, boot of a car, study of the house. If they are under lock & key, they are rendered less accessible. By the time you find your gun, the assailant has prevailed and stolen it from you. By comparison, policemen come in pairs rendering an attack less likely, and the activities of the assailant more easily traced.
  3. Tool: There is a compelling case that saids if guns are outlawed - why not kitchen knives. Its a reasonable point. Guns do offer a great degree of psychological power, since it would take several knife stabs to kill a person.
  4. Guns: If there are fewer guns, then there is a smaller prospect for murder & armed robbery. This argument needs to weigh up the counter-arguments for preventing opportunity vs preventing breaches of rights. Are there more neglectful, unsafe and unscrupulous users of guns, or are people generally safe and reasonable? I am reminded of the phase `Evil prospers when good men do nothing`.....or might that things carelessly.
This has been my rationale in recent times, but then the Libertarian Party in the US counters with the following statistics:
  1. If private gun ownership poses a threat, and gun ownership is rising, why has violent crime declined in America over the last 20 years? Since Liberals believe gun control reduces crime, why is violent crime declining? This is an over-simplification since it might well be due to other factors. eg. There has been an economic boom over the last 25 years making people less desperate. Availability of guns is just one issue.
  2. Do guns kill or save lives? Michael Moore saids that over 11,000 people die each year because of guns. He is impartial because he doesn`t discuss how many Americans have been saved by their guns. Regardless, I can`t say I`ve ever heard of any case of guns saving lifes. But it is likely to make criminals more cautious. But private gun licensees are only interested in saving their own lives, so don`t expect them to serve the general public - and nor should they.
  3. Why is the murder rate in England rising, since there are severe gun restrictions place? The answer to these questions are never so simple. Its conceivable that any number of issues could be the cause. eg. English borders are likely alot more porous than the USA, perhaps there was already an inventory of guns in the Irish economy? 

The only legitimate reason I can think for people to hold arms is if established nation states (say California) opposes the other states form of government, and sees the disparity in values as justifying the use of force. The notion of any individual fighting for the preservation of his rights is counter-productive because it cannot be argued that force will aid the situation, unless its his immediate survival.

Reason is the standard for debate.
- Andrew Sheldon

Plight of Australian farmers

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In Australia we often heard about the plight of farmers. Through the 1980s farmers achieved high prices for their product, and were encouraged to take on high levels of debt to buy adjoining properties or to finance expensive farm machinery. In some sectors like wool, wheat and milk, market prices were historically regulated, so the farmers understanding of market trends, cycles and unpredictability was probably not the greatest - though they can`t claim total ignorance. The reality is however that they acted in good faith. In many cases, farmers say they were talked into taking out expensive loans and derivatives contracts, products with which they were unfamiliar.
The question is - What responsibility do the bank`s have when selling these products? Capitalism is a wonderful system if there is an attempt to understand the customer - empathy as opposed to seeing the customer as purely a `profit target`. Business ethics starts with company executives. Sadly executives are just as blind as governments, customers and employees. Ethics (or the broader issue of philosophy) is not raised in schools and thus is seldom taken up in university.
Should there not be a responsibility of the farmer to understand the products he buys. Yes, but how does a farmer or anyone know if he knows everything? But the same question applies to the bankers. Did the bank executives or subordinates take legitimate steps to protect customers and understand their product?

The plight of the farmers is however mostly the result of falling commodity prices. Commodities have fallen in real terms for decades, and that trend is only likely to change in the short term when demand rallies. Farmers did not understand that trend, nor could they anticipate the adoption of protective tariffs and subsidies by the world`s largest industrial economies to shore up their farm sectors, resulting in the dumping of agricultural commodities on global markets at prices well below local production. If farmers are loosing from subsidies, then our manufacturers must be benefiting by not having to carry such imposts. So why isn`t our manufacturing sector more competitive? If they are benefiting, why is there no scheme to recoup their `winfall` and redistribute to farmers? Why is there no effort to apply punitive imposts upon those governments that profess to have free markets, yet distort market prices for the sake of their own farmers. Their strategy demands that our government have some strategy. Sadly there are measures, but its on the premise of charity or subsidies rather than justice. This establishes an ugly precedence, resulting in farmers seeking protection of their industries and looking to governments for solutions. This is all contrary to effective market mechanisms. A market is only as effective as its participants.

We see the effect on their psychology at a protest meeting in Gloucester, NSW. This community is largely better off than most because it has witnessed the rapid growth in coastal property prices as city retirees sell out their properties for rural lots. But these people are looking for government`s to respond, and certainly responses are warranted, but there is alot farmers can do. Why do Australian farmers insist on growing farm products in markets where they can`t compete, where their labour costs are excessive, where they are not able to generate the productivity gains to overcome those higher wage costs. They make a virtue of their hard efforts, but to work hard for nothing is not noble - its stupid unless there is the promise or expectation of long term substantial gain.

Not all Australian farmers are loosing money. The great majority of production comes from the higher capitalised farms with larger equipment and larger acreage. Those farmers struggling to make money are working long hours, have smaller farms that have tighter margins. Some of these farmers do OK because they are have supplemental off-farm income, eg. A wife or children working in the local town. There is nothing wrong with this strategy if it works for them, but there is no justification for these people to blame the markets. Their unwillingness to change reflects their unwillingness to incorporate. Profitability is an option to them - but they need to make a choice - either:

  1. Passive strategy: Rationalise their farm investment by amalgamating with neighbouring farmers, ie. By accepting a stake smaller stake in a larger farm
  2. Active strategy: Sell their farm and invest in Chinese farm production.
  3. Retirement: Sell the farm and invest the proceeds - in farming or elsewhere.
There is no necessity for Australia to be a farming nation - there are plenty of poor countries who will be able to do it cheaper. Farmers can however capitalise on their natural resources by investing their money and skills in these countries. The mining industry has displayed such flexibility - why can`t farmers? When did farming become an intrinsic elment of culture to be enshrined. Is that is the way - it will by necessity be in museums.

Not all food imports and substitution of our exports is the result of Asian supply. NZ has emerged as an important compeetitor because of its weaker currency and lower production costs. It really doesn`t matter. Its a market reality. NZ is not a protected market, and in many respects Australia production is subsidised. Australia offers subsidies for environmental maintenance, water, etc. Water is too cheap in Australia given its scarcity, which also means a great deal is wasted on low-value production because too many farmers have invested in lifestyle rather than income. Eventually these `water credits` will go to the highest bidder - vineyards and cotton farmers - producers of higher value output. These sectors of the economy are booming.

The reality is that Australia can compete in a great many agricultural sectors - generally the high value sectors, or those where food cleanliness and preparation are highly regarded. The message for farmers is that they have to move towards:
  1. Higher value export products
  2. Niche high value products
  3. Packaged food preparation

Traditionally farmers have lived autonomously, and displayed no applitude for working with their fellow men in a corporate environment. They are inclined to be head-strong and stoic, but there are just too many factors they can`t control. The reality since the late 1980s is that farmers are largely price-takers with seasonal surpluses driving prices down, allowing buyers to set prices. They have even resorted to downstream investment in raw supplies to keep prices low and to improve product quality. Farmers need to amalgamate and perhaps even move up the food chain to form relationships with restaurants and food distributors. Sadly because of their culture - the mainstay of which is inept people & negotiating skills - they are not prepared. Farmers have not responded to the increasingly sophistication of farming by learning a broader range of skills. Those that have - prosper eventually - usually at the expense of those who play the `victim` card with government - waiting for hand-outs. Global food retail groups are trying to reduce their product costs, and undercutting rival suppliers with in-house brands.

Australia remains highly cost-efficient in broadacre farming areas like dairy, beef, lamb and several grains, as well as some seasonal advantages. But NZ, Sth Africa, Sth America and China have emerged as significant competitors since Australia`s currency rose due to mineral exports. China is pinching NZ`s markets, so NZ is taking ours under the FTA agreement. Australian cost competitiveness is trailing NZ by 30% - let alone other competitiors.

- Andrew Sheldon

ConvinceMe.Net - Anyone up for a debate?