Rio Tinto CEO Leigh Clifford has provided a stunning demonstration of the huge benefits available from labour market deregulation and more flexible work practices.
A demonstration that therefore makes even more depressing the knee-jerk -- needless to say, negative -- reaction to the Commonwealth Bank's announcement of further job cuts.
And on a broader front, also the dangerous and potentially extremely damaging "reforms" of the Financial Services Reform Act -- neatly, if again depressingly, dissected by myself.
The benefits shown by Clifford are captured in the two graphs. They relate what has happened at Rio's Hamersley iron ore business since it was finally able to move its staff to contracts in the early 1990s.
The improvements are just mind-boggling. Industrial disputes have vanished and productivity of the workforce has -- even this word seems inadequate -- leapt.
Output per employee is now double that of the early 1990s, and triple that of the mid-1980s, when Rio Tinto in its previous form as CRA started -- tried to start -- to get serious about reforming its industrial relations and work practices.
Under the old IR "system" that prevailed through the 1970s and 1980s, productivity improvements were hard-won. Rio/ CRA would have thought itself doing well, extracting marginal increases from year to year.
The sharp acceleration in the 1990s did not come at the expense of safety, with the accident rate also falling sharply, or employee wages. Profits and real wages have risen.
The cost has been in employee numbers. But that's exactly the -- good news -- point. Enter the CBA and further job cuts.
Obviously for the individuals it can be devastating.
But doing more with less workers is exactly the process which has taken us from the 10th century to the 21st.
Bank workers losing their jobs today are no different to farm workers that lost theirs to mechanisation in the 18th century. Except that the individual consequences today are far less unpleasant.
It's a process which has made everyone in every succeeding generation better off. And not just financially.
It's the fundamental part of the mosaic that gives us healthier, longer, more meaningful lives than our predecessors.
Would anyone, Bob Brown & Co aside, really want to go back to the world of the 18th century?
To 30-year life-spans (if you survived infancy), which you spent in literally back-breaking labour just to get barely enough food?
Or indeed for that matter, Phillip Adams & Co aside, even just back to the 1950s?
When life -- but only in the "white" world -- might not have been as nasty, but was arguably more brutish and certainly shorter.
"Reforms" such as those in the Financial Services Act, promise, depressingly, to start us back to exactly that sort of future.
On the surface, the new Act simply imposes disclosure obligations on financial institutions such as superannuation, life and managed funds.
And who -- and this writer in particular -- could say no to that?
Except that, as I point out in my backgrounder (The Financial Services Reform Act: A Costly Exercise in Regulating Corporate Morals), the disclosure obligation will force the financial institutions to cross-examine the corporate sector.
And not about matters relevant to its financial and investment performance, but a range of "feel-good" issues like environmental, social and ethical standards and practices.
The seemingly innocuous disclosure/ inquiry process will then work to pressure the underlying companies to adopt those feel-good non-rigorous "values".
Even then, who could say no to that? Surely, we want our companies to be "ethical", to "look after" the environment, to contribute to "society"?
But as the duo argue, this will work to the detriment of financial return.
Also though: "The values to be applied are vague and not of a kind that can or should be enforced by government in a liberal society", they add.
Indeed, "The Act will provide a means for intrusion by numerous political and anti-business groups into the already heavily regulated operations of Australian companies".
On paper, businesses -- and then on the next level, the financial institutions -- could state they did not take the "feel-good" matters into account -- and so avoid scrutiny and the paper chase that requires.
Apart from the fact, that in practice no institution could say that and get away with it; it would almost certainly be untrue. Every business takes at least some account of those matters.
The duo call for the bits imposing these reporting obligations to be repealed.
Unfortunately, in their dreams. The bird has flown; there is no way that's going to happen.
Business big and especially small, has been saddled with another huge burden of red tape. But even worse, red tape that will directly damage their ability to create business and jobs.
Indeed, the requirements are specifically intended to do exactly that. To deter investment in such "anti-social" etc. activities
Obviously, not intended by the Government which hadn't a clue what it was allowing into law. But most definitely by the special interest groups that pushed the "innocuous" "feel-good" obligations.
The Rio Tinto experience shows precisely how we can build a high-growth high-wealth future, precisely by doing more with less workers.
And in the process, crucially, creating more, better-paid, and safer jobs than would otherwise have been the case.
The financial services "reforms" equally show precisely one way of throwing all that away. And we won't even "feel good" in our less than genteel poverty.
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