Stronger, not cheaper. | Josie Pagani



Stronger, not cheaper.

We’re not just falling behind in building our infrastructure. We are falling behind in the politics of sorting it out.

The world is changing around us, and we’re not keeping up.

Elsewhere, governments are putting more emphasis on making things work, less on making things at the lowest cost.

Globalisation is in retreat, bilateral and regional trade deals are on the rise. Economics and trade are no longer decoupled from domestic politics or values. There’s a turn to protecting your own manufacturing. That’s why Joe Biden argues that buying stuff closer to home reduces risk and creates local jobs. He knows that people expect growth to deliver jobs where they live, or what’s the point?

Free markets didn't lift all boats. Some sank. No-one in any town anywhere said: “Well, I lost my job, but at least aggregate incomes have gone up.”

The age of globalisation is over. We have spent the higher incomes that came with it on paying more for houses instead of on the power, pipes and services we needed.

A new era of protectionism is scary for us. But it’s a wake-up call to look at our own manufacturing.

China, Germany and Japan have shown that promoting manufacturing leads to more knowledge-based innovation, R&D, skills and training.

As we rebuild after this cyclone, we have to be better prepared for all the ‘storms’ heading our way. That means a muscular industrial plan to build better roads, power stations and communications networks.

Our future wealth needs to come from being stronger, instead of cheaper.

Josie's post Cyclone Gabrielle column is here.

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