Beyond Brigden: Australia's Inter-War Manufacturing Tariffs, Real Wages and Economic Size

Abstract

Pre-depression Australia maintained a protectionist regime directed at expanding the economy and accommodating immigration. The 1929 Brigden Report recognised that industrial protection would benefit workers and that it might also foster expansion. Although Brigden's wage thesis mirrors the subsequent Heckscher-Ohlin-Samuelson and specific factors models, it has more advanced elements than either. We demonstrate the comparative failings of the latter models and show that the Brigden thesis requires a model with mobile capital, differentiated products, a non-traded sector and a specific factor. This model suggests that protection might indeed have promoted immigration, capital inflow and overall economic expansion in Australia.