Everyone is positioning this as though Abbott was selling out Australia to advantage his Japanese buddies. In reality, the current administration is selling ou

Everyone is positioning this as though Abbott was selling out Australia to advantage his Japanese buddies. In reality, the current administration is selling out Australians as a whole, to advantage specific workers in South Australia. Those workers are building the submarines in a MUCH less productive fashion. Some estimates are that the submarines will cost %40 more than if built in Japan. And this is a huge contract, worth tens of Billions of dollars. It is not unfounded to say that this contract is the equivalent of a charity payment of $15B or more to specific (small) groups of Australian shipbuilders. Such a move only makes sense in two contexts: 1) a ruling party needs to win political support from a faction controlled by the benefitted labor group; or 2) the country decides as a policy that it makes sense to develop an indigenous industrial capability in the sector (or to prevent the loss of the capability if it exists). The first concern is lame. The second one is also not compelling when you think of the opportunity cost of those Billions. The same Billions could be used to develop a domestic drone capability, or any of a hundred other technology infrastructures. Or, if we just think about the money as a bribe, you could bribe far more citizens with other forms of direct payments, which would cut out the private contractors who are the ones who will benefit disproportionately now. This is not about France vs. Japan. It's about economic logic vs handout politics.