Tuesday, 11 February 2014

You can’t drive a Toyota with a cloth cap

If you had a dollar for every time a local unionist or union supporter was heard to say that higher Australian wages are due to greater union militancy (as if all that extra capital Australian workers have to work with were  irrelevant), you’d have enough money to pay all of Matt McCarten’s outstanding debts.

Sure, unions can push wages high. But sustainable wage levels are generally a function of capital and its productivity – push them higher, and they soon become unsustainable.

Latest example: Toyota Australia, joining Ford Australia and General Motors Australia on the scrapheap.


Killed, not just by protectionist businesses (so eager to farm subsidies they forgot their actual bottom lines) and not just by governments keen to pluck a good-looking golden goose (which helped reduce their profits) but by ongoing and crippling union activism (which helped raise costs beyond what could ever be sustainable).

And with this, says the Macrobusiness blog,  The Australian disease enters a terminal phase

ScreenHunter_1162 Feb. 10 17.51



  1. Unions are economic terrorists, plain and simple. Laws against terrorists, subversion, and criminal conspiracy should be applied in all force both in Oz an NZ.

    And meanwhile, we can wish that the 1951 referendum had been passed!

  2. Hi PC Slightly off topic but is it correct that Putin has executed the technician that botched the Olympic ring display.?

  3. This outcome was inevitable once Ford had decided to cease car manufacturing in Australia. That decision made the Holden decision unavoidable and then Toyota's announcement was merely a matter of when. Now comes a major recession in Victoria and South Australia as tens of thousands of jobs disappear permanently and specialist capital equipment is sold for cents on the dollar, exported or scrapped. All supporting sectors of the economy will suffer, even ones that you might not at once identify. For example, in the tertiary education sector the TAFEs and Universities will lose (no industry support, nowhere for specialist engineering and materials graduates to go for jobs). The great unwinding is going to play out over several years and the end result is going to be a significant loss of standard of living. But do not worry, the government is there to help. Do not worry, nothing like this could ever happen here.


  4. Capital has no productivity-its inert by nature.Productivity comes only as function of organic biology,i.e human blood,sweat,and tears-guess you think bankers are the peak of our intellectual evolvement as well.

  5. @ Radio Dead

    On the one hand you're stating the obvious. Of course productivity is a result of human activity. But if you think this belies the importance of capital deployed productively, you're really missing the point.

    A simple example - let's say a large hole needs to be excavated, and it's a 1000 m3 in size. You can either employ someone to dig that hole with their hands, or employ the same man with an hydraulic excavator. By hand 1 man can perhaps do 1 m3 a day - so 1000 days to get the job done. With an excavator you can have 1 man do the 1000 m3 in one day (and sitting in an air conditioned cab, so less sweat and tears). Surely you can see the excavator operator can be paid more than the hand digger? It's capital deployed productively that makes the difference.

  6. Don W: http://dailycurrant.com/2014/02/08/man-responsible-for-olympic-ring-mishap-found-dead-in-sochi/

  7. Yeah after car value estimator australia announced their closure, Abbott said that Coles were offering new jobs. Whoopee, jobs in Coles.please visit http://goo.gl/eicQCr


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