Trade Imbalance

A funny thing occurred to me last night whilst I was contemplating my fondness for free market economics. It became evident to me that the Australian Liberal Party, dislikes, it seems unwittingly, some of the consequences of its economic ideals. For those who do not know, the Liberal Party are an amalgamation of liberal economic ideals and social conservatism. To make matters more odd, they are in a coalition with a party (the Nationals) with strong a protectionist sentiment.

To look at a micro example: There are two Ethiopian bakeries in Footscray, now, obviously, these bakeries would not exist without a strong east African presence in the area. Because of this presence, not only is there a demand for these products, but the demand for the ingredients to produce them increases as well. Now one might say that if the population was the same, but those of east African origin weren't present, the demand for bread and the ingredients to make bread would remain them same. However, this argument overlooks the fact that Ethiopian bread is made up of different ingredients to other types of bread and the fact that the area already has enough bakeries (and supermarkets) to cover the bread needs of the non-east African residents. It's fairly safe to say that if those two Ethiopian bakeries did not exist there would not be two other bakeries there in their place. This is something that a free market economists would love; the diversity of the population providing for the diversity of products available, and increasing the demand for the components of these products. So for the Liberal Party's economic ideals this is an excellent phenomenon, however, the presence of people of east African origin clashes with their conservative beliefs about social cohesion, as we saw last year with then Immigration Minister, Kevin Andrews, launching a scare campaign against Sudanese refugees and their perceived lack of "integration".

A good example of how this perspective works within the Liberal Party can be found in the Howard Government's handling of the Tampa incident and their Pacific Solution. Whilst Howard kicked the shit out of a small number of defenseless refugees, as the Liberal's conservative base looked on in glee, he sneaked in behind their backs the highest levels of immigration since the post-World War Two period. Proving to them that he hates people of difference and stimulating economic growth simultaneously. It is examples like this that had Howard regarded as such a cunning political operative.

Another problem within the psyche of the Liberal Party arises in regards to homosexuality. We all know that social conservatives hate gays, but free market economists love them. With cultural items like magazines, music, fashion and television programmes (like Queer Eye for the Straight Guy), the progress towards public tolerance that homosexuality has made has diversified existing industries or created new ones. The pink dollar was something that had limited ability to purchase anything outside convention until recently, however now it is in the process of becoming a valuable revenue stream. One could say that capitalism brought homosexuality out of the closet. And yet this phenomenon splits the Liberal Party in two, on one hand it likes the wealth generated by diversity, yet on the other it dislikes anything outside traditional societal norms.

These are small, but significant, examples of the contradictions that are present in the Australian Liberal Party. Someone with a lot more political and economic nous than I would be able to explain further how the process of globalisation (trade liberalisation, free movement of labour) are undermining social conservatism on a more macro level. However, I'm very interested in how long the party will be able to sustain these opposing ideals before it (hopefully) implodes.