Economics In One Lesson Applied In Real World Issue: Live Cattle Export Ban

1535 words - 7 pages

Henry Hazlitt well-stipulated his message in Economics in One Lesson, which distinguishes good economists from bad economists. He states that many economists overlook the long-term consequences of a policy and mainly focused to benefit only a particular group as a result of a unique characteristic of the market – that is the driving self-interest of each member of the society (1952). In other words, many policies fail because they are created by only considering the immediate impact and its consequences to certain groups, neglecting the needs of other groups involved.
Although the market can work solely with its magic using Adam Smith’s invisible hand theory, it is still crucial to have ...view middle of the document...

It is also understood that the underlying reason of their call is for the better treatment of animals being exported to other countries, which is in fact a good thing. However, this paper is scrutinizing the way in which the policy is created mirroring the fallacies mentioned by Hazlitt.
Firstly, Hazlitt said that “the bad economist sees only what the effect of a given policy has been or will be on one particular group” (p. 4). As a result of the pressure from few particular groups such as the media, the community, and the animal welfare groups after the harsh footage was aired, the government imposed the ban to Indonesia – the biggest live cattle export market. The pressure must have been too intense that the government impulsively execute the ban overseeing the long-term effect it may have to the economy and its effect to other affected groups such as the graziers in Australia. According to the Department of Agriculture (2014), the live export industry in Australia contributes largely to the Australian economy especially to livestock industry that garnered $996.5 million earnings and opened 10,000 employment opportunities in 2009. Hence, the ‘live cattle export ban’ to Indonesia in 2011 severely impacted this industry. It has been reported by ABC News that the graziers in northern Australia still suffers even two years after enforcing the temporary ban of live cattle exports (Stephens et al., 2013). As a result of the ban, Indonesia decreased its consumption of Australian cattle, decreasing the price to as low as $20 per head, which is way lower than the costs (Stephens et al., 2013). The Mayor of Cloncurry (a town in north-west Queensland) and one of the graziers, Andrew Daniels, described the situation as the “biggest man-made disaster in northern Australia” blaming the Federal Government for imposing the temporary ban of live cattle export in June 2011 (Stephens et al., 2013). Consequently, the chain reaction was extended to its supporting industries such as the musterers, livestock transporters, and the rural communities who made losses in their businesses. In addition, the ban would cost 1,500 jobs in Indonesian meat industry according to the head of Indonesian Meat Industry Association, Joni Liano, while describing Australian Government as “pressured by only a handful of groups” (Allard & Willingham, 2011). Hence, it is evident that the impulse enforcement of the ban lead to the economic disaster for livestock and its related industries.
Secondly, Hazlitt (1952) stated that “the bad economist sees only what immediately strikes the eye” (p. 4). When the appalling images and videos of the slaughtering of cattle in Indonesia was aired, the ban was immediately imposed. Imagine if the truth behind horrifying slaughtering was not exposed by the media. Will the government impose the ban immediately? It is known that the Australian government explicitly condemns any act of cruelty to animals. It is for this reason that the Department of...

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