Published on 25 Feb 2015
What is comparative advantage? And why is it important to trade? This video guides us through a specific example surrounding Tasmania — an island off the coast of Australia that experienced the miracle of growth in reverse. Through this example we show what can happen when a civilization is deprived of trade, and show why trade is essential to economic growth.
In an economy with a greater number of participants trading goods and services, there are more ways to find a comparative advantage and earn more by creating the most value for others. Let’s dive right in with an example from our new friends, Bob and Ann.
August 24, 2015
May 21, 2015
Strategy Page reviews a new biography of Australia’s General John Monash:
The centennial of the First World War has brought forth renewed public interest and additional scholarly study of that still controversial conflict, variously the last 19th century imperial war and the first modern war. When its great generals are enumerated, one named by relatively few outside the Antipodes is Australian Army Corps commander John Monash (1865-1931), this despite Field Marshal Viscount Montgomery’s declaration half a century after the Armistice that Monash was “the best general on the Western Front in Europe,” and historian Sir Basil Liddell Hart’s even stronger accolade as “the greatest general of World War I by far.” Yet in the three-volume Cambridge History of the First World War, there is not one mention of him.
Monash, it must be said, has not been entirely overlooked. He was knighted in the field by George V (as a Knight Commander of the Order of the Bath) and subsequently given the title Knight Grand Cross of the Order of St. Michael and St. George, and in his homeland his name graces a university (indeed, the publisher of the book under review), a scholarship, a town and even a freeway. Nevertheless, in Maestro John Monash, former Australian Deputy Prime Minister Tim Fischer argues that Sir John has been wronged by history and not given his due. In a breezy hagiography (Fischer vehemently denies that characterization, protesting that his biography is “warts and all,” however, he downplays or dismisses most of the “warts” cited, e.g., other generals also had mistresses, and while he made mistakes at Gallipoli, he learned from them) and advocacy piece, he makes a justifiable case for Monash’s posthumous promotion to field marshal (backdated to 1930). Had he been promptly promoted postwar, rather than in 1929, to general (that is, full or four-star general), Fischer points out logically, he likely would have been promoted by the king one step up in rank to field marshal.
In his account of Monash’s life and military career, Fischer details the many obstacles faced and surmounted by “the most innovative general” of the war. His sobriquet for Monash, “maestro,” comes from Sir John’s comparison of a “perfected modern battle plan” to a “score for an orchestral composition.” Indeed, while some British and French generals were still thinking in terms of cavalry charges, sabers and bayonets, drawing on his engineering background, Monash made concerted use of infantry, artillery, tanks, aircraft and radio in (to quote him) “comprehensive holistic battle plan[s].” His strategy’s success became evident in thwarting Germany’s final westward push and smashing through the Hindenburg Line, in the 93-minute Battle of Hamel and the second Battle of Amiens, which German General Ludendorff later called “the black day of the German Army in the war,” victories achieved while Monash was still a lieutenant general (three stars). “Never has a general who did so much to help win a world war … been so unacknowledged,” affirms Fischer, returning to his theme.
May 1, 2015
Published on 30 Apr 2015
Completely underestimating the Ottoman army at the Dardanelles, the British commanders decide to let the ANZACs take the Gallipoli peninsular as a gateway to the Bosporus and Constantinople. After the landing in ANZAC Cove and on Z Beach one thing comes clear though: Mustafa Kemal and his troops will fight for every inch of this piece of rock.
April 11, 2015
I’m 41 years old, which doesn’t feel that old to me (most days), but history is short. With the exception of those trapped behind the Iron Curtain, the world as I have known it has been remarkably free and prosperous, and it is getting more free and more prosperous. But it is also a fact that, within my lifetime, there have been dictatorships in Spain, Portugal, Greece, Poland, India, Brazil, Argentina, Chile, South Korea, and half of Germany — and lots of other places, too, to be sure, but you sort of expect them in Cameroon and Russia. If I were only a few years older, I could add France to that list. (You know how you can tell that Charles de Gaulle was a pretty good dictator? He’s almost never described as a “dictator.”) There have been three attempted coups d’état in Spain during my life. Take the span of my father’s life and you’ll find dictatorships and coups and generalissimos rampant in practically every country, even the nice ones, like Norway.
That democratic self-governance is a historical anomaly is easy to forget for those of us in the Anglosphere — we haven’t really endured a dictator since Oliver Cromwell. The United States came close, first under Woodrow Wilson and then during the very long presidency of Franklin Roosevelt. Both men were surrounded by advisers who admired various aspects of authoritarian models then fashionable in Europe. Rexford Tugwell, a key figure in Roosevelt’s so-called brain trust, was particularly keen on the Italian fascist model, which he described as “the cleanest, most efficiently operating piece of social machinery I’ve ever seen.” And the means by which that social hygiene was maintained? “It makes me envious,” he said. That envy will always be with us, which is one of the reasons why progressives work so diligently to undermine the separation of powers, aggrandize the machinery of the state, and stifle criticism of the state. We’ll always have our Hendrik Hertzbergs — but who could say the words “Canadian dictatorship” without laughing a little? As Tom Wolfe put it, “The dark night of fascism is always descending in the United States and yet lands only in Europe.”
January 26, 2015
In Cosmos, Andrew Masterson investigates what is still an art and what has been codified as science:
“With commercial yeast you get certainty – you can sleep at night,” says Bicknell. “But how do you make wine more interesting? You exploit the metabolic processes of different yeast species.”
Bicknell’s faith in wild yeasts adds stress at fermentation time, but the pay-off is multi-award-winning wines regularly acknowledged as some of the best in Australia. “The wines do taste different, even if there’s no way you can show that statistically,” Bicknell says. “The only way to really know is to taste.”
Exploiting the diverse and fluctuating populations of wild yeasts found on the plants, fruit and in the air of vineyards is “the new black” (not to mention red and white) in oenology. The practice is becoming more commonplace among artisan winemakers. Even some of the giant commercial wine corporations are investing in the method.
Wild fermentation, says Bicknell, represents the intersection of science, craft and philosophy. But it could also form the basis of a profound shift in the narrative of wine. The more we study winemaking’s microbes, the more it appears they might explain one of the wine industry’s most beloved, but vaguest, terms: terroir.
“Terroir is a wonderful marketing term,” says David Mills, a microbiologist at UC Davis, who studies microbes in wine. “But it’s not a science.”
The French word terroir is difficult to translate. The closest translation is “soil”, but that is just one of its components. Terroir connotes the unique sense of place – the soils, the topography and the microclimate. It’s what makes the wines of Bordeaux or Australia’s Coonawarra so distinctive, and so inimitable.
Sommeliers like Ren Lim, former captain of the Oxford University Blind Tasting Society (and a PhD biophysics student) will tell you merely from swirling a mouthful of Cabernet Sauvignon which Australian winery produced it.
“The ones from Margaret River often give off a more pronounced green pepper note, a note found commonly in Cabernets grown in regions which experience pronounced maritime influences. Coonawarra Cabernets are somewhat different and unique in their own way. They are often minty and have a eucalyptus or menthol note in addition to the usual ripe blackcurrant notes. The green pepper note is often suppressed under the menthol notes. Nonetheless, the Cabernet structure remains in both these wines.”
It’s a feat that Mills does not question. “I don’t doubt regionality exists, but what causes it is a whole other set of issues.”
November 14, 2014
Last Sunday was the 100th anniversary of the first major naval victory of the Royal Australian Navy, when Australian light cruiser HMAS Sydney fought against one of the Kaiser’s most effective commerce raiders, SMS Emden in the Indian Ocean:
November 9 is when the light cruiser HMAS Sydney met the light cruiser SMS Emden in action in the Indian Ocean, dispatching a surface raider that had taken a heavy toll on Allied merchant and naval shipping since the guns of August rang out. R. K. Lochner chronicled Emden’s exploits in the late 1970s, dubbing her “the last gentleman of war.” Lochner awarded the cruiser this title to acknowledge skipper Karl von Müller’s and his crew’s scrupulous fidelity to the laws of cruiser warfare. The Germans’ enemy paid homage to Emden’s gallantry as well. Two days after the engagement, for instance, the London Daily News saluted the “resourceful energy and chivalry” displayed by the raider’s crewmen throughout their voyage. That, of course, was an era when knightly conduct was in decline on the high seas, yielding to unrestricted submarine warfare. Striking without warning, as U-boats commonly did in the Atlantic, left mariners and passengers scant prospects of escaping an attack.
The battle, then, helped mark the passing of an age. Emden had remained behind at the onset of war, after the German East Asian Squadron quit Southeast Asia to return home. Hers was not destined to be a prolonged cruise. Cut off from logistical and maintenance support, Captain Müller had to forage for coal and stores. The cruiser coped with this hand-to-mouth existence — for a while — and in the process sank or captured twenty-five merchantmen, destroyed two Allied men-of-war at Penang, and bombarded the seaport of Madras, along the seacoast of British India. That’s quite a combat record. It’s especially noteworthy when compiled by seafarers who were unsure where they could refuel next — if anywhere at all — and were sure that equipment that suffered a major breakdown would never be repaired for want of spare parts and shipyard expertise.
No ship can keep going for long without putting into port or tapping resources from nearby fuel or stores ships. Heck, U.S. Navy commanders — like their counterparts in other fleets, no doubt — get antsy when the fuel tanks drop to half-empty or hardware fails at sea, hampering performance or reducing redundancy in the propulsion plant or other critical machinery. And that’s in a navy accustomed to having logistics vessels steaming in company to top off the tanks, replenish stores, or transfer or manufacture spares when need be. Imagine being altogether alone in some faraway region — at risk of running out of some vital commodity or suffering battle damage and finding yourself dead in the water. Such loneliness and doubt were constant companions to Emden officers and men during the fall of 1914.
It takes extraordinary pluck to seize the offensive amid such circumstances. And yet the Germans did. In November, nonetheless, Sydney found Emden in the Cocos (Keeling) Islands, where Müller had decided to attack a communications station that was aiding the hunt for his raider. Like so many naval actions, it was a chance encounter. The station got off a distress call, and Sydney — which happened to be in the vicinity while helping escort a convoy transporting Australian and New Zealand troops to Europe — responded to it. Emden gave a good account of herself, landing several punches before Sydney’s heavier main guns began to tell. Hopelessly outgunned, Müller ultimately ordered his vessel beached on North Keeling Island to save lives. Of the crew, 134 seamen fell while 69 were wounded and 157 were captured.
September 14, 2014
A few days ago, news reports indicated that the next generation of submarines for the Royal Australian Navy would be bought from Japan, rather than built in Australia. Kym Bergmann says the reports are probably misleading:
There has been a flurry of public commentary following yesterday’s News Limited claims that Australia is about to enter into a commitment to buy its next generation of submarines from Japan. The local submarine community has been concerned about that possibility for some time, and senior members of the Submarine Institute of Australia have been writing to Defence Minister David Johnston — and others — since January of this year warning against such a decision.
Understanding what’s happening is difficult because the speculation appears based on remarks apparently made by Prime Minister Tony Abbott to his Japanese counterpart Shinzo Abe about such a course of action. The concerns have been reinforced among some observers by Abbott’s interest in strengthening Australia–Japan–U.S. defense ties — something in turn being driven by the rise of China. Yesterday Prime Minister Abbott did nothing to dampen the speculation, stating that future submarines were about capability, not about local jobs. As an aside, those sorts of comments also serve the PM’s aggressive political style, jabbing a finger into the eye of the current South Australian Labor Government.
However, the chances of the Federal Government making a unilateral decision to sole source a Japanese solution seem low — and if the Prime Minister were to insist on that particular course of action there could be a serious Cabinet and back bench revolt. Not only would such a decision constitute another broken promise — the word “another” would presumably be contested by the PM on the basis that no promises have been broken to date — but it’d almost certainly lead to the loss of Federal seats in South Australia (Hindmarsh for sure, perhaps Boothby and Sturt), as well as generate enormous resentment within institutions no less than the Royal Australian Navy, the Department of Defence, trade unions and a stack of industry associations, amongst others.
Australia is similar to Canada in this regard: military expenditure is almost always seen as regional development/job creation/political vote-buying first and value-for-money or ensuring that the armed forces have the right kit for the task come a very distant second. This means that the RAN, like the RCN, often ends up with fewer hulls sporting lower capabilities for much more money than if they were able to just buy the best equipment for their needs whether overseas or at home. But that doesn’t get the government votes in “key constituencies”, so let the sailors suffer if it means shoring up support in the next federal election…
July 29, 2014
Shikha Dalmia looks at Australia’s recently abandoned carbon tax scheme:
Environmentalists had a global meltdown last week after Australia scrapped its carbon tax. They denounced the move as “retrograde” and “environmental vandalism.”
They can fume all they want, but Australia’s action, combined with Europe’s floundering cap-and-trade program, signals that “mitigation” strategies — curbing greenhouse gases by putting economies on an energy diet — are not winning or workable.
Australia leapfrogged from being an environmental laggard (initially refusing to even sign the Kyoto Protocol) to a leader when its Green Party-backed Labor prime minister imposed a tax two years ago. It required Australia’s utilities and industries to pay $23 per ton of greenhouse gas emissions.
But the tax was an instant debacle.
Australia has the highest per capita carbon dioxide emission in the world and the main reason is that it’s even more coal-dependent than America. Coal supplies 75 percent of its energy needs (compared to 42 percent in America). But contrary to green expectations, the tax didn’t prompt companies to rush toward renewable sources, because they are far costlier.
Rather, utilities passed their costs to households — whose energy bills soared by 20 percent in the first year. Other industries that face hyper-competitive environment such as airlines suffered massive losses. (Virgin Australia alone reported $27 million in losses in just six months.) The tax also made Australian exports globally uncompetitive, deepening the country’s recession.
This spawned a backlash that brought down the Labor government and catapulted into office the Liberal Party’s Tony Abbott, who made a “blood promise” to ditch the tax, which he did promptly once elected, despite warnings that Aussie lowlands are more vulnerable to rising sea levels and other dire consequences of global warming than other countries.
June 25, 2014
June 9, 2014
Australia has similar military issues to the ones Canada faces, but unlike our own government (who view military spending primarily as the regional economic development variant of crony capitalism), Australia is amenable to economic sense when it comes to building the new support ships for the Royal Australian Navy:
The RAN is about to bring 3 large Hobart Class destroyers into service, but it’s the new LPD HMAS Choules and 2 Canberra Class 27,500t LHD amphibious assault ships that are going to put a real strain on the RAN’s support fleet. Liberal Party defense minister Sen. Johnson didn’t mince words when he announced the competition, early in their governing term:
“With the large LHD’s [sic] – 28,000 tonnes each – we must have a suitable replenishment ship to supply and support those vessels going forward, the planning for this should have been done a long, long time ago.”
The Australian government is explicit about needing “fuel, aviation fuel, supplies, provisions and munitions on these ships,” and they’ve short-listed 2 main competitors to build the ships outside of Australia:
Cantabria Class. The Cantabrias are an enlarged 19,500t version of the Patino Class replenishment ship. Fuel capacity rises to 8,920 m3 ship fuel and 1,585 m3 of JP-5 naval aviation fuel. Throw in 470t of general cargo, 280t of secured ammunition, and 215 m3 of fresh water to round out its wet/dry capabilities. These ships also carry a crew medical center with 10 beds, including operating facilities equipped for telemedicine by videoconference, an X-ray room, dental surgery, sterilization laboratory, and gas containment.
Spain already uses this ship type, and Navantia S.A. is already building the Hobart Class and Canberra Class, giving them a deep relationship with Australian industry and the Navy.
Aegir Class. The government named Daewoo Shipbuilding and Marine Engineering (DSME), who are currently building Britain’s MARS 37,000t oiler/support ships based on BMT’s Aegir design. The concept is scalable, and Australia’s government sized the variant they’ve shortlisted at around 26,000t. BMT’s Aegir 26 design offers up to 19,000 m3 of cargo fuel, and 2-5 replenishment at sea stations for hoses and transfer lines. The design itself is somewhat customizable, so it will be interesting to see what the offer’s final specifications and features are.
Recall that HMAS Sirius was also built in South Korea, albeit in a different dockyard. That isn’t surprising, because South Korea arguably has the world’s best shipbuilding industry. Norway and Britain have each purchased customized versions of the Aegir Class ships.
Both the Royal Navy and the Royal Australian Navy are willing to buy ships from Korea. Why not the Royal Canadian Navy’s next ships? Because the government would rather spend many times more money and get smaller, less capable ships as long as they get to spread the money around to cronies:
They won’t be built in Australia, because the government doesn’t believe that the industrial infrastructure and experience is in place to build 20,000+ tonne ships locally. Britain has made a similar calculation, while Canada provides a cautionary example by building smaller supply ships locally at over 5x Britain’s cost.
To add insult to injury, the Royal Fleet Auxiliary, the civilian-manned support ships for the Royal Navy, are purchasing 4 replenishment vessels under the MARS tanker program to be built in South Korea by Daewoo (arguably the foremost shipbuilder in the world). These ships are slightly larger than the Berlin-class. What is the British government paying for these 4 vessels? £452M or about $686M USD. Not per ship but for all four. The per unit cost is around $170M. If we somehow manage to keep the cost for the JSS at $1.3B per unit, that will still be over 7.5x what the British are paying. If the cost goes up to ~$2B per JSS, we’re looking at almost 12x the cost [though the RCN’s JSS is supposed to have some additional capabilities (already much reduced from 2006 to now, and see the very optimistic timeline here) — but how many of them can the government afford?].
June 5, 2014
It’s been a year since the name Edward Snowden became known to the world, and it’s been a bumpy ride since then, as we found out that the tinfoil-hat-wearing anti-government conspiracy theorists were, if anything, under-estimating the actual level of organized, secret government surveillance. At The Register, Duncan Campbell takes us inside the “FIVE-EYED VAMPIRE SQUID of the internet”, the five-way intelligence-sharing partnership of US/UK/Canada/Australia/New Zealand:
One year after The Guardian opened up the trove of top secret American and British documents leaked by former National Security Agency (NSA) sysadmin Edward J Snowden, the world of data security and personal information safety has been turned on its head.
Everything about the safety of the internet as a common communication medium has been shown to be broken. As with the banking disasters of 2008, the crisis and damage created — not by Snowden and his helpers, but by the unregulated and unrestrained conduct the leaked documents have exposed — will last for years if not decades.
Compounding the problem is the covert network of subornment and control that agencies and collaborators working with the NSA are now revealed to have created in communications and computer security organisations and companies around the globe.
The NSA’s explicit objective is to weaken the security of the entire physical fabric of the net. One of its declared goals is to “shape the worldwide commercial cryptography market to make it more tractable to advanced cryptanalytic capabilities being developed by the NSA”, according to top secret documents provided by Snowden.
Profiling the global machinations of merchant bank Goldman Sachs in Rolling Stone in 2009, journalist Matt Taibbi famously characterized them as operating “everywhere … a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money”.
The NSA, with its English-speaking “Five Eyes” partners (the relevant agencies of the UK, USA, Australia, New Zealand and Canada) and a hitherto unknown secret network of corporate and government partners, has been revealed to be a similar creature. The Snowden documents chart communications funnels, taps, probes, “collection systems” and malware “implants” everywhere, jammed into data networks and tapped into cables or onto satellites.
May 2, 2014
In my mundane jobs, occasionally filler text is accidentally included in an otherwise ready-to-publish piece of work. Much more rarely, someone on staff uses placeholder headings that are never meant to go beyond their small circle of fellow scribes (sometimes funny, often scatological, risky-but-stress-relieving kind of things). When I was working for [defunct international telecom equipment manufacturer], a fellow writer included the instruction “If you find an error in this document, please dial 1-800-EAT-SHIT” on a cover page. The divisional VP was not amused when that hit his desk.
This is bad when it escapes to the internal audience outside the working group, but it’s much worse when it somehow goes out to the general public:
The financial newspaper which accidentally published a front-page headline reading “World is Fukt” apologised today to its readers for the error-ridden edition.
The respected Australian Financial Review, in a message from editor-in-chief Michael Stutchbury, said the mistake was due to a production and printing error.
“The Australian Financial Review apologises to Western Australian readers for the obviously unacceptable state of the newspaper’s front page on Thursday,” he said in an apology in Monday’s newspaper.
The accidental front page quickly found fans on Twitter, who approved of the headline which read in full: “Arms buildup – Buys planes, World is Fukt”.
They also enjoyed the fact that the headline for a story about a major budget speech by Treasurer Joe Hockey was empty of meaning, reading “Three lines to come here”.
H/T to my best source in Oz, Roger Henry.
March 31, 2014
Mark Collins links to this Washington Post graphic showing a comparison of military spending in the top five NATO countries and Russia (counting Soviet spending 1988-1991). Note that the United States and Russia now each spend the same proportion of GDP on their respective military forces:
For reference, Canada’s military budget doesn’t crack the top 10 in NATO: we spend about US$16.5 billion per year (not even in the top 15). Mark also points out that Australia spends proportionally more than Canada … about 50% more, in fact. But it should also be noted that while Canada and Australia have a lot in common, our defence needs are significantly different: Oz is in a much more dangerous part of the world than Canada, and they don’t share a lengthy border with the world’s biggest military spender. You could probably make a viable case that Australia isn’t spending enough given the rough neighbourhood they’re in.
January 6, 2014
The Australian is reporting that the US Coast Guard’s Polar Star is enroute to assist the Chinese icebreaker Xue Long and the chartered Russian ship Akademik Shokalskiy:
The US Coast Guard’s Polar Star accepted a request from the Australian Maritime Safety Authority (AMSA) to help the Russian ship Akademik Shokalskiy, which has been marooned since Christmas Eve.
It will also aid the Chinese icebreaker Xue Long, which was involved in a dramatic helicopter rescue of the Shokalskiy’s 52 passengers last Thursday before also becoming beset by ice.
AMSA confirmed the Polar Star, which was on its way from Seattle for an Antarctic mission, had diverted course and was on its way to help.
It will take about seven days for the icebreaker, with a crew of 140 people, to reach Commonwealth Bay after collecting supplies from Sydney today.
The AMSA spokeswoman said the Polar Star had greater capabilities than the Russian and Chinese vessels.
“It can break ice over six metres thick, while those vessels can break one-metre ice,” she told AAP on Sunday.
“The idea is to break them out, but they will make a decision once they arrive on scene on the best way to do this.” AMSA will be in regular contact with the US Coast Guard and the captain of the Polar Star during its journey to Antarctica.
Twenty-two crew remain on board the Shokalskiy, which sparked a rescue mission after a blizzard pushed sea ice around the ship and froze it in place on December 24.
January 4, 2014
Remember the story about the Australian climate researchers trapped in the Antarctic ice? The good news from a few days back — that all the passengers of the MS Akademik Shokalskiy (including researchers, tourists, and journalists, but not the crew) had been successfully transferred to the Australian icebreaker Aurora Australis is now overshadowed because the Chinese icebreaker Xue Long which also responded to the SOS call is now itself also trapped in the ice:
The saga just keeps going. The Chinese Icebreaker is now also stuck, and has asked for help so the Aurora Australis with 52 extra passengers rescued from the Russian Charter boat have to stay nearby to help. Twenty two Russian sailors are still trapped on board the Russian boat — the Akademik Sholaskiy. Plus other scientists in Antarctica still don’t have their equipment. Costs for everyone involved are continuing to rise.
In The Australian, Graham Lloyd‘s paywalled article begins with this:
TAXPAYERS will foot a $400,000 bill for the rescue of a group of climate scientists, tourists and journalists from a stranded Russian research vessel — an operation that has blown the contingency budget of Australia’s Antarctic program and disrupted its scientific work. The Antarctic Division in Hobart said it was revising plans and considering airlifting urgently needed scientific equipment that could not be unloaded from Aurora Australis before the ship was diverted from the Casey base to rescue the novice ice explorers just before Christmas.
The Sydney Morning Herald posted this short video earlier in the week, before the Aurora Australis had gotten close enough to take on the passengers from the Akademik Sholaskiy:
Update: The head of French antarctic research is unhappy with the tourists’ disruption to actual science work:
The head of France’s polar science institute voiced fury on Friday at the misadventures of a Russian ship trapped in Antarctic ice, deriding what he called a tourists’ trip that had diverted resources from real science.
In an interview with AFP, Yves Frenot, director of the French Polar Institute, said he had no issue at all with rescuing those aboard the stricken vessel.
But, he said, the trip itself was a “pseudo-scientific expedition” that, because it had run into difficulties, had drained resources from the French, Chinese and Australian scientific missions in Antarctica. “There’s no reason to place Antarctica off-limits and to keep it just for scientists, but this tourism has to be monitored and regulated so that operators can be sure of getting help if need be,” he said.