Free – but not so easy: Print 21 magazine article

Derek Fretwell has been thinking about freedom: what it is, why some have more of it than others, and what it all means for the poor old printer. Free trade, the free market, free lunches – there are lots of free things in the world and it turns out that many of them are not what they claim to be.

I have heard many arguments over the origins of the Pavlova. I have even seen grown adult men come to actual blows about whether Australia or New Zealand could claim development rights over this sticky sweet contribution to age onset diabetes. Put your mind at rest, the debate will not be re-opened; nowadays everybody knows it was us Kiwis.

It's similar with printing. Ask someone where printing was invented and the answer is likely to be "in Germany about 1450" or perhaps "in England about 1470". In fact Bill was copying Johannes in the above definitions and, in any case, both are wrong. I have it on extremely good authority that our industry first created history in China about 500CE, the first ever printed book being produced there sometime in 868CE from hand-cut wooden blocks. So the land of fake everything, from handbags to Olympic ceremonies, has a lot to answer for. I wonder what the inventors would think of the current restrictions on printing anything critical of the government in China now.

Free is another word subject to debate. To the Athenian Greek inventors of democracy, being free simply meant you were not a slave, or a woman for that matter. So accustomed are we to freedom in Godzone (or Oz) that the word 'free' is usually reserved to describe something that does not have a cost or charge attached, like 'free' entry or the mythical 'free' lunch.

Sometime in the 1980s, the New Zealand economy was 'freed' up by a chap called Roger Douglas. Rog decided we would all be better off without the government taking any interest at all in business so he tore up the regulatory framework and we became free. Since then the New Zealand economy has been about the most open in the world; we might be broke but at least we are free to be broke. This differs from Australia. Australia has the most expensively regulated business environment I have ever come across, but the Aussies think it is free, act as if it is and take offence when told that it isn't.

So 'free' means different things to different folks. Even folks as close as us Aussies and Kiwis have a slightly different take on what free actually means.

Trade cuts both ways
I am not sure what 'free' means in the workers' heaven, China, but we are about to find out. Because, for some reason I cannot quite figure out, we, with the small, isolated, agriculturally-dependent economy down by the South Pole, have just signed up for 'free' trade with the oldest printing industry on the planet and the world's most aggressively expanding economy.

Now 'free' when it is applied to trade is also a subject of debate. To us 'free trade' means nought to do with the government, right? Well I've wandered through the New Zealand China Free Trade agreement and it seems to me there is nothing free about it. It is, in fact, a description of things that are not free, a bureaucrat's dream of the world to be. It is a list of rules for trade and if there are rules then by definition it is not free. A more fitting description would be 'Lists of what New Zealand cannot sell to China'. They can sell what they like here because our economy is 'free'.

I also cannot figure out how you can have free trade with the commies, with a regime dedicated to world domination and to whom the word 'free' is something to be feared. Like Free Press, Free Association, Free Speech, Free Elections, Free Tibet are all bad, but Free Trade, suddenly, is good. Nor can I understand how free trade is possible with a Government that maintains an artificial exchange rate for instance. How can we trade freely with a country that pays its printers third world rates and then sells the product, here, at first world prices?

Now before all the printers of ANZ start cheering for protectionism just remember the cheap Chinese manufactured plates from Kodak, Agfa or Fuji. If not the cheap presses then at a minimum the cheap processors, cheap stock, cheap shoes, cheap phones and so on. It cuts both ways and one man's protectionism is another man's higher prices. I am not an advocate of protectionism, I believe in free trade but for trade to be really free it must also be fair. There is nothing fair, currently, about trading with China.

The cost of being free
It was interesting though that soon after the signing of the New Zealand China Free Trade Agreement we received high level visitations from the Land of the Free. Condoleezza Rice was almost exuberant in her avoidance of the room-filling animal that is our nuclear-free legislation. We were again, if not Allies, at least allies. We could even enjoy free trade with the US if we behaved.

The US pays agricultural subsidies to inefficient industries, not much free about that unless you're a US farmer. They also encourage free limits on the amount of beef, for instance, that New Zealand or Australia can sell into their free market. These are not trade restrictions mind you because the US does not impose them, we freely do it ourselves. Meantime they demand free trade for other products and systems in which they enjoy a superiority of technology or dimension. So we have the free movement of capital and investment and large chunks of both our economies are owned and controlled by the defenders of the free world. The word neo-colonialism comes to mind, perfectly freely.

The masters of financial instruments this side of the ditch have been free about dishing out the savings of mum and dad to allow 16-year olds to purchase hot rods, houses and colour TVs. Something like 18 finance and mortgage investment companies over here have found freedom a little daunting. They have closed their doors or suspended repayments of other people's dosh while they wait for the free market to adjust to their mismanagement. Just how much free trade can we afford I wonder? My slide rule says something like $5 billion of New Zealand's free funds are currently locked away waiting for a miracle to be freed up again.

The largest free economy in the world has similar issues and, in a perfect reversal of all they profess to believe, have announced the biggest bail-out in history. In this the US taxpayer will pay for the mistakes of the business leaders of the current generation. This sounds to me suspiciously like the socialisation of losses once freely predicted by Karl Marx. I myself found freedom a little expensive when our own bunch of socialists freely allowed me to help save Air New Zealand, New Zealand rail, et al. Interesting word that 'free'.

Meanwhile, back in China and Arabia, the non-free sovereign banking funds are eyeing up the bargains freely on offer.

There is a fundamental power shift in capital markets underway and the world is going to change. New powers will emerge to bounce both of our relatively small economies around a bit and we in the printing industry are going to feel it. At the same time as we face a change in the method of information dissemination and communication, we must deal with mistakes made by this generation of business leaders. Some of our printing companies are still owner-operated and many are relatively debt-free; they could be the lucky survivors if I am free to make that observation.

News is all bad
The recent Fairfax layoffs on both side of the ditch are the beginning of a change in the newspaper publishing business. Information out of the US has total newspaper circulation down from 22 billion to less than 19 billion in one year. Concurrent with this is a 25 percent drop in classad revenue, a drop in daily readers from 64 million to 50 million and a massive drop in titles from 1,774 to 1,437 just in 2008. These declines will likely accelerate in the next year and will produce a shift in the supplier landscape and a hardening of consumable pricing for printers worldwide. For suppliers of printing consumables from ink to press wipes, newspapers pay the bills and printers supply the profits.

The credit tightening will affect the print spend of all of our institutional purchasers as banks, insurance companies (those that are left) and even governments look to adjust costs and seek savings from technology. Print spend stands out like low-hanging fruit in the internet era.

The current generation of managers and executives have never experienced a real decline in demand and may be expected to come under intense pressure from investors in our industry. Those investors themselves are similarly inexperienced in managing business through a tougher time. It's easy, you see, to be clever and successful in a period of growth. Make a bad decision and in a year or two it is corrected or at least buried by business growth. Not so for the next few years and many will fail the challenge.

Agreements on trade are just that. Free trade does not require an agreement and the word free should be banned from the agreement vernacular. New Zealand has a trade agreement with China; Australia has a trade agreement with the US. We both trade extensively with each other and for the next few years that may be the freest thing to do.