Plugging into Argentina

Thursday, 20 November 2014

John M Green photo
John M Green

    John M Green discusses some issues of overseas board travel and draws comparisons between Australia and the South American nation.

    Overseas travel for Australian boards is easier today with “papers” increasingly loaded up on our tablet computers. We are no longer lugging around large, heavy folders, but we still have to stuff a panoply of power point adaptors into our bags, unless you are headed to Argentina, that is, where I was recently. Here, surprisingly, Australia’s unusual slanted three-pin power plug fits right into the local sockets.

    People have been noting the similarities of our two countries for a century — highly literate populations, lots of beef, grain and natural resources — and more recently, rugby, fine wine, G20 memberships and non-permanent seats on the UN Security Council.

    A hundred years ago, Argentina and Australia were the vibrant southern hemisphere twins in the global Top 10.

    But more recently the economies have sharply diverged, according to the World Bank, with Australia still up there at sixth place (in terms of GDP per capita) while our ex-twin is only just hanging onto the 47th spot, hampered by an unofficial inflation rate of 38 per cent, a pressing technical bond default workout and a currency under pressure.

    Australians are grumbling over soaring property prices, but in Argentina, even with falling house prices, real estate remains far out of most people’s reach, due mostly to soaring inflation and, imagine this, virtually no mortgage market. People wanting to buy their first home have to cobble together 100 per cent in cash.

    So in Buenos Aires, water cooler conversation is not about property, it is about currency. No wonder, with the official peso/US dollar rate (at the time of writing) at around 8.5 versus the unofficial “blue” rate at a pernicious 15-plus pesos to the dollar, a sign some commentators say foreshadows another devaluation, the last being in January.

    Argentinians tend to be optimistic and see a bright future for their country. They are just unsure when it will be. They covet an economy like Australia’s, even though many here think it is suboptimal. Our power points — and other attributes — might be similar to Argentina’s, but Australia’s economy and our politics, as challenging as we view them, have adapted to the 2010s with far fewer shocks.

    Returning to those power points, the Aussies sitting around our Buenos Aires board table were scratching their heads. Why did Argentina, of all places, accept the Australian power plug? Especially given the fact that hardly anywhere else does.

    The short answer is that both countries “copied” an American plug common in the roaring 1920s, but which has since become obsolete. The longer answer reveals a murky history of protectionism and collusion.

    Back then, households owned few electrical appliances. Not just because of the financial strain of the Great Depression, but because there were just not that many labour-saving devices to be had.

    If your family did have a couple of appliances, they either directly hard-wired them into the household electricity circuit, which was very expensive and hardly portable, or they plugged them into double-adapted light sockets, which was fairly dangerous with a cord dangling from the ceiling near a hot light bulb, with weak power and no earth.

    American inventor Howard Hubbell, having foreseen problems like these, pioneered the “separable attachment plug” in 1915. After that, both invention and protectionism spawned a proliferation of plugs around the globe.

    Many countries chose their own, to protect their citizens from foreign products made to inferior safety standards. This also helped slow an attack on domestic industries by foreign competitors.

    Philosopher Adam Smith wrote back in the 1770s: “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.”

    So it is no surprise that four decades before the Trade Practices Act 1974, Australia’s plug of choice came about via a handshake deal which, if done after the Act, might have seen the three smiling executives either fined or behind bars.

    In 1930, three Australian industry leaders — Fred Cook of Ring-Grip, Geoffrey Gerard of Clipsal and Brian Harper Miller of the State Electricity Commission of Victoria — collaborated to produce an American-style plug as stamping the pins out of thin sheet metal would be cheap and easy. Ever mindful of safety, they improved the US model by slightly shortening the pin length. After that, imported appliances had to be refitted with their new plugs or they would not fit into the power points they were also mass-producing for the Australian market.

    While their chat and cheers might be illegal today, some of us might salute them as heroes for accelerating a nationwide standard before we had a standards body, even though what they chose is today pretty inconvenient when travelling overseas. Argentina may also have had some “plug protectionism”.

    While their plugs look like ours, the pins are slightly longer, are uninsulated and the polarity is reversed, which I only discovered after I left the country.

    Those differences did not seem to zap my devices, or me, but maybe that was due to dumb Aussie luck, which is something Argentina could use a lot more of right now.

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