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The devastating effect a natural resources boom can have on an economy are known as:

http://en.wikipedia.org/wiki/Dutch_disease

Almost identical to the financialization that's been going on with Wall Street.

Usually termed "rent-seeking". I'll have to think a bit on whether / how this is related to Dutch disease.

Off the top of my head, though, DD is exploiting a resource to create, but concentrate, wealth. RS is exploiting a market anomaly or manipulation to create a self-directed wealth stream, though often or usually decreasing overall societal wealth in the process.

DD is economically beneficial activity with an inequitable distribution of gains.

RS is economically harmful activity with an inequitable distribution of gains.

https://en.wikipedia.org/wiki/Rent_seeking

With some notable mitigations, particularly in the case of Norway, as noted in the Wikipedia article.

"Anyway, picking up one of these trades in Australia at least instead of going to university has been lucrative for many years and shows no signs of abating."

But it will abate of course, 'rushes' always do. The successful people get in, double or triple their working capital and then step away. A lot of people will keep trying to cash in way past the stage that its possible and lose everything.

I was reading an article in Smithsonian magazine about the Australian mining rush. You realize this is what will happen in Afghanistan right? They have a crap ton of iron and they share a land border with China. I am sure that somewhere someone is putting in motion the plans to get a rail line built to the border such that ore can be removed rapidly from the country. If the Afghanis are smart they will figure out how to get the smelting industries built in country so that they capture both the resource benefit and the steel making capacity they need to kick up to the next level. Unscrupulous folks will try to prevent that, so much easier to steal from someone when it looks like you're just carrying away rocks.

>Afghanistan right? They have a crap ton of iron and they share a land border with China.

I am going to guess that (because of the mountains in Eastern Afghanistan and Western China) the cheapest way to get iron ore or oil from Afghanistan to China (particularly since most of the demand is in the coastal parts of China) is to haul it to Karachi and put it on ships.

There's also of course a very large political risk for any investment in Afghanistan, and mining there would require major foreign investment.

(I do not disagree with your overall point that the other parts of the world will ramp up mining, but Afghanistan is probably not going to be the next Australia.)

ADDED. Google Maps does not show any roads that cross the border from Aghanistan to China although there is a road that crosses from Pakistan to China.

I think we're in agreement, Afghanistan is a looooong way from being another Australia. My observation was that the Chinese rail system extends out to Kashgar [1] in the far western provinces. And the Chinese have proven themselves adept at creating new rail at a pretty impressive rate. Further, there are decent Fe1/Fe2 ore reserves in the mountain range that connects with China [2]. The long finger of mountains that connect China with Afghanistan would need a rail line (probably along the valleys rather than along the top (the peaks reach as high as 18,000'!) Or an easier route which would be through Tajikistan(sp?)

Anyway, China is already in there trying to negotiate mineral leases and they have the money to invest. And they have the People's Army to insure against political instability :-)

[1] http://www.johomaps.com/as/china/chinarail.html

[2] http://pubs.usgs.gov/sim/3152/B/ - advise not to open in Acrobat on low memory machines :-)

I think at the moment China considers those mountain borders to be a feature.

The uk is not unregulated for trades, far from it, all significant trades are regulated (see corgi, Niceic and part p for example). It is illegal to do even the simplest electrical work without qualifications or inspection. I'm not sure why you feel australian tradesmen have a monopoly on quality work, but there are plenty of qualified and competent tradesmen from other countries working in the uk as well.

>> To put this in comparison, my nephew at 17, was a deckhand on a tugboat in a mining port making $120K+. Now that he has a license to captain a vessel up to 25 metres I believe he's rapidly approaching if not exceeding $200K.

I think the major problem is salary. Who the hell pays a captain $200K a year? Managers at high end companies don't even make that much, especially mine. Its not just that, celebrities, sports coaches, and the entertainment industry in general are over paid. Its only a lucrative business because most people don't care about being smart or learning things, they care about their next fix of football or basketball or any other stupid game or TV show that does absolutely nothing for society.

The pay structure isn't aligned with education and experience and that's what promotes high standards of living and a lot of the problems with jobs. People that aren't well educated and have limited experience (like in a trade), probably don't spend their money wisely. Not only that, the cost of training for a tradesmen vs. a college grad is next to nothing because a college grad, like a computer science grad, doesn't need to be taught how to program, design, or use software development tools because there is already a general foundation of understanding. As a tradesmen, there is hardly any foundation. For example, this girl has be taught how to read blueprints and run machines on the job where I don't have to be taught any of that (outside of internal company knowledge) because of my engineering education.

> Its not just that, celebrities, sports coaches, and the entertainment industry in general are over paid.

These people deliver value to someone.

I'm not a fan of sports, but I trust a few million people who enjoy watching sports as to what the proper allocation of that money is than I trust you.

> The pay structure isn't aligned with education and experience

Who cares?

The pay structure is aligned with value delivered and the rarity of the skills in question.

Your opinion that education is what should get compensated is deeply uninteresting.

> People that aren't well educated and have limited experience (like in a trade), probably don't spend their money wisely.

Baseless assertion.

A plumber making $90k/yr may not have the exact same IQ you have, but he's likely smart enough to buy a house, save for retirement, etc...and a lot less likely to gamble his entire future on one "hot" startup.

I've known a lot more tradesmen with second and third houses (for the rental income) than I've know engineers.

> As a tradesmen, there is hardly any foundation.

Have you met many tradesmen?

Any?

>I trust a few million people who enjoy watching sports as to what the proper allocation of that money is than I trust you.

What value do they deliver that requires them to add several more zeros to their income? Do you really trust people that waste their time paying hand over fist, listening to the next person sing when there are real problems in the world worth solving?

Actors aren't rare. Singers aren't rare. I can do tradesmen work with less training that's needed to start someone from square one like this article suggests. If companies are in real need of tradesmen, why not just convert engineers over?

> The pay structure is aligned with value delivered and the rarity of the skills in question. Your opinion that education is what should get compensated is deeply uninteresting.

I never said people should be compensated based solely on education. Nice strawman. But the fact that you find the value of education "deeply uninteresting" just tells me that you're lazy and really shouldn't even be making claims about tradesmen who require at least some form of education. Its just there education is extremely compartmentalized. Their job isn't meant for design, innovation, and flexibility.

> Baseless assertion.

A plumber making $90k/yr may not have the exact same IQ you have, but he's likely smart enough to buy a house, save for retirement, etc...and a lot less likely to gamble his entire future on one "hot" startup.

I've known a lot more tradesmen with second and third houses (for the rental income) than I've know engineers.

Notice I said probably, as in I'm not really sure, but since you trust a few million people that spend tons of money on sports than myself, it makes your position debatable. So it leads to the question, does a plumber need to make $90k/yr to buy a house, save for retirement, etc? And by the way, just because you know more tradesmen with retirement homes than engineers, doesn't make it true unless you perform a study with appropriate sample size and statistical rigor to suggest a correlation. Something usually done by college grads.

> Have you met many tradesmen? Any?

Yes I have. In fact I came from Flint, MI. You know that city that use to have a bunch of trades and union workers making cars? You know that city is pretty much dead and infested with crime. You know why? Because such workers walked out of high school, demanded high wages for menial work, and coupled with GM's miss management, caused the plants there to be wiped off the map. And, unfortunately, because the people who worked at those plants decided to forgo the "deeply uninteresting" education and just walk into the plant to get a job, they've screwed themselves.

1) Are you from Australia?

I'm not, so those numbers looked high to me, until I remembered that Aussie dollars are worth about half of American dollars.

2) People, in general, don't spend their money wisely.

3) Unlike a college grad, tradesmen work during their training, so they are productive for the company from day one. It is a win-win situation that should be a model for jobs everywhere, not just technician jobs.

Since when did people going to college not "work"? Have you even been to college?

My point is that apprentice technicians and tradesmen offset the cost of their training by working for the company that trains them. Maybe not entirely, but if not, they make it up by being more productive after training than someone who was trained elsewhere. Ultimately, these companies wouldn't invest in training if there wasn't a return on that investment.

> Ultimately, these companies wouldn't invest in training if there wasn't a return on that investment.

Possibly, but its hard to see a ROI in this situation considering they are paying for training and giving the kids a full-time job, possibly with benefits. That's a couple thousand a person in training + 44,000 salary + a couple thousand in benefits and possibly a union membership. I don't see how there is cost offset over converting engineers who have a base knowledge. Not only that, where are they going to go if they lose their job?

We're also talking about high school students here. They've had stuff taken care of for them all their life (baring extenuating circumstances). Not exactly the most responsible bunch I would guess.

Dude, they aren't "giving" away jobs. This isn't a charity. You don't hire people unless you need them to make money, and then you do whatever it takes to help them make you money. If it wasn't in the best financial interests of the employer, they wouldn't do it.

Why would you prefer engineers take a pay cut to do technician work rather than the engineering they are trained for and experienced in? If an engineer can do it, I bet it would be even easier to transfer VPs and executives to these lucrative technician jobs, right?

Because, if you look at it from a business standpoint, why would you hire more employers if you have employers that can convert. Unlike some people, I don't need $90k to make a living. But then again, when has ethics ever been a problem right? Its all about wanting more and more. Not to mention, some engineers are really crappy and since getting a new job isn't particularly easy, especially with a family, pay cuts are an option.

I've seen a lot of things done at the company I work for that wasn't exactly in the companies "financial interest". Its amazing how much money is used for things that aren't needed because a manager felt they couldn't wait an extra month, or something wasn't "moving" fast enough, or other poor excuses that justify spending 50k on a system of which they probably don't even use the majority of the features.

Depends where you go to school. At many private schools, parents simply pay all the kids' living expenses. Sure, some people work, but I would say more than half simply have money deposited in their checking account by family. I know many people from my years at college who had never worked a job until their first job after graduation.

That isn't the work I'm talking about. I'm talking about assignments and exercises. The things you're suppose to be doing in college.

The AUD is worth more than the USD: http://www.google.com/finance?q=CURRENCY%3AAUD

I should mention that I looked it up, and Australian dollars are almost 1:1 with US dollars. So, yeah, those numbers are high. Good for your nephew.

The stupidity hurts.

$1000 per WEEK!? for a "crappy" house? That's insane!

I know of plenty of Software Engineers in New Zealand making the equivalent of the US minimum wage.