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Scott Morrison's use of language is subtle, but crucial

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11.10.2019

So we have good globalisation and negative globalism, according to Prime Minister Scott Morrison.

He is right, up to a point, about the benefits of globalisation.

Scott Morrison's anti-ism-ism may be good speechwriting, but it is bad policy. Picture: Dominic Lorrimer

The IMF warned this week of the dangers of contracting international trade. Since David Ricardo in the early 19th century it has been basic economics that trade, especially international trade, is "a good thing" because it is a "win-win" in which both parties benefits.

But, and it is a big but, like most economics, it relies on assumptions.

On international trade, it assumes that the producers of goods and services do not have to pay for many of the earth's resources that they use. That might have been fine in the early 19th century when the earth's resources seemed limitless.

But now the world is getting smaller.

For example, Japan could use its superior technology to scoop up vast amounts of the oceans' fish. That does not make Pacific Island nations better off if they have to trade other products to buy Japanese canned fish.

Similarly, airspace is limited as is the broadcast spectrum. More broadly, so is the atmosphere and the waterways.

So the doctrine of free trade breaks down unless some rules are applied so that some nations do not get unfair advantage by producing things more cheaply because they do not have the cost of controlling pollution.

And then, we can ask, should some nations get unfair advantage by using slave labour, child labour or sweat-shop labour?

And should some nations get unfair........

© Canberra Times