Antinuclear

To most South Australians, Labor Premier Jay Weatherill’s plan for a vast outback dump to host imported high-level nuclear waste is dead, needing only a decent send-off.

Nevertheless, the Premier keeps trying to resurrect the scheme. Why?

Weatherill would presumably answer that the interests of South Australia demand fearlessness in seeking out new economic openings. “We are going to have to do some incredibly controversial things if we are going to turn South Australia around,” he told the ABC in 2015.

In an interview last September, as criticism of his dump scheme mounted, the Premier argued that his “courage” in tackling risky “reform” would eventually be rewarded at the ballot box.

We shall see. But there is no disputing that South Australia’s economy faces daunting prospects………

There is no denying Weatherill’s argument that bold new strategies are required. What might these be?

Neo-classical version

Blandy has played a leading part in this debate. Respected by Adelaide progressives for his exposure of the flawed calculations behind the nuclear dump scheme, the professor is at the same time a conventional neo-classical economist.

This shows up clearly in his general discussion of South Australia’s economic dilemma. “The requirement is to increase the private sector’s prospects of making — and retaining — profits,” Blandy said in a 2014 In Business article. “If this happens, businesses will invest more………

Might Asian manufacturers find South Australia an appealing site for their knowledge-intensive, high-paying design and research and development functions, as Blandy suggests? Already, the state has an impressive cluster of high-tech industries, with the associated workforce, technical services and university back-up.

The trouble is that this “cluster” is associated with South Australia’s status as “Australia’s defence hub”. Entry to the cluster is granted delightedly to US and European weapons’ corporations. Chinese firms, however, are kept out.

More fundamentally, inducements for Asian manufacturers to hive off their high-tech functions to countries like Australia have essentially evaporated. Indonesia now graduates highly qualified engineers in numbers much larger than Australia. For industry-related research, the universities of Shanghai are far more renowned than those of Adelaide. And as globalised firms have now discovered, siting knowledge-intensive functions remote from manufacturing limits opportunities for valuable feedbacks.

Modern capitalism, of course, is not only globalised, but increasingly financialised. Often without especially wanting it, developed countries have entered the post-industrial epoch. They maintain their privileged status not by making things — or even, to an increasing degree, by monopolising the knowledge-intensive, high-profit functions required for making them — but by controlling global financial flows. This enables them to cream off large portions of the value created by workers in the developing world.

Weatherill’s government looks for openings in this area, and plugs Adelaide vigorously as “a highly attractive, profitable location for financial and business services operations”. But here too, geography counts.

Of all economic sectors, financial and insurance activities show one of the highest levels of geographical concentration. This is because they depend on specialised technical and legal services, which are more accessible and yield greater competitive advantages when shared in strong local clusters. In the world’s financial districts, as in so much of capitalism, bigness begets profits, starving out lesser centres and leading to still greater bigness.

In Australia, the winners are Sydney and to a lesser extent, Melbourne. Cities like Adelaide are nowhere.

Well, there’s wine…

What’s left for South Australia? Well, there’s wine, though global warming, bringing higher temperatures and water shortages, threatens the longer-term prospects.

There’s also mining. South Australia is larger than France and Germany combined, and geologically is still relatively little explored. But major mineral discoveries no longer transform economies as they once did. Even large ore bodies are now torn from the earth in the space of a few years, using relatively tiny workforces. The profits accrue to firms whose headquarters, very often, are not even in the same country.

What else does South Australia have that might be turned into new export industries and jobs growth? One thinks of the state’s huge and diverse renewable energy potential. Adelaide’s bourgeoisie, however, lacks the flair of its Danish counterpart that won a leading global position in wind technology despite having few obvious resources apart from imagination.

That does not mean, however, that the solution lies in developing better capitalists.

The source of South Australia’s dilemma is the fact that the state has been sidelined by forces at the heart of modern capitalism itself. Only a fundamental break with the system and the instituting of a rational, planned economy, can provide real answers.

It was, perhaps, a dim recognition of this truth that drove Weatherill to the wild throw of the political dice represented by his nuclear dump scheme. https://www.greenleft.org.au/content/behind-south-australia%E2%80%99s-nuclear-waste-dump-scheme-dilemmas-provincial-capitalism