The one thing the recent conversations about energy, free markets and free trade has exposed are the myths, lies and political double speak attached to each. The one question that is being forced upon our political class and the commentariat with respect to free trade, free markets and the likes of AGL gaming the energy market is this: Are free markets about promoting competition or restricting competition as AGL seeks to do?
How does the AGL tactic move the needle with respect to the ethos of competition that supposedly infuses the philosophy of free and unfettered markets? The truth is that the political class talking heads have so swallowed the purist ideology and so tied themselves in conflicting, confusing and ambiguous knots, they have no idea what they believe or think and just go with the bureaucratic talking point.
With AGL’s gaming of the market and dog in the manger intransigence over Liddell, we are fed the talking points that it would be backing winners and interfering in the market for the government to finance and build a coal fired power station which, the purists say, should be totally free and unfettered.
Somehow though this same purist logic doesn’t apply to the proposed government financed Snowy 2.0 and conveniently overlooks the fact that it’s the government with its thumb on the scale, totally distorting the market and tilting the playing field by paying subsidies to the purveyors of renewables.
With respect to the myth of free trade, the best example is that of the Jeep Wrangler revealed in the New York Times last year. Produced in the US for $40,500 and exported under a free trade agreement, the Wrangler on the showroom floor in China can cost $71,000 because of the various taxes Beijing charges on all imported vehicles.
This is but one example of what we’re NOT told when free trade deals are inked and announced to great fanfare and that we only find out about years later.
This is the nub of the problem Donald Trump and the West generally are wrestling with in the looming trade war with China.