Year: 2009

Bring On The Acid Bath

Australian public debate is usually sober and routine. Policies are proposed, criticised and eventually watered down. One person calls another person a “neo-liberal” and everybody goes home at a quarter past five.

So when novelist Peter Carey claims that a technical legislative change affecting the publishing industry will encourage the growth of “a new species that can swim in acid”, it is at least an entertaining break from the normal banalities.

The Productivity Commission is investigating the removal of the ban on parallel importing, which makes it illegal to import for sale any book that has already been published in Australia. It seems that any proposal to lift this ban is like kryptonite straight to the groin of Australia’s publishing fraternity.

If the ban is lifted, Carey imagines a very bleak future: “long-term devastation” and “cultural self-suicide”; Australian book editors will be “reduced to nothing, to become marketers and publicists for Paris Hilton”. And according to Carey, treacherous – and apparently acid-resistant – global retailers will take over. They plan to rob Aussie publishers “blind”.

Also chiming in, Tim Winton was slightly less surreal but more poetic, predicting a “great bitterness” would wash through the Australian literary community.

And Matthew Reilly, whose books have sold more than 4 million copies, compared the possible influx of popular books if the ban is lifted to the introduction of McDonald’s.

Our novelists are adopting a whole new strategy into debate over microeconomic reform: emotional blackmail. As a general rule, if a law needs a lot of exceptions to avoid being idiotic, it’s probably not a very good law. And there are a lot of exceptions to the ban on parallel importing.

To ensure Australian readers aren’t shut out of the worldwide book market altogether, if a new book hasn’t found an Australian publisher within 30 days, importers are free to bring it in. Other regulatory exceptions ensure that overseas travellers don’t get arrested for bringing in the Dan Brown novel they picked up at Heathrow, and that booksellers aren’t jailed for ordering books that are out of stock in Australia.

The hardest thing in retail is trying to figure out how much consumers are willing to pay for your product.

Australians might be willing to pay a relatively high price for books, but for the less affluent Indian market, authors and publishers might have to sell at a lower price. Clever capitalists try to segment their market as much as possible – rich people pay more, poor people pay less.

So if parallel importing is legalised, Winton, Carey and a lot of publishers are worried that bookshops will be able to import those cheaper copies.

Well, hey – cheaper books for everyone! And if authors really want to keep selling their books at different prices in different markets, they should be able to use private contracts to prevent their own retailers from undercutting them. Like all protectionist laws, the ban on parallel importing privileges producers over the consumers they are supposed to serve – novelists no more deserve to be insulated from competition and consumer demand than farmers, computer programmers or line workers.

In an era where everything is available on the internet, segmenting a market is getting harder and harder. Over time, the whole issue of parallel importing may become obsolete – call it the Amazon effect. The debate shows how much Australian cultural producers have made it appear that our culture is only possible with government protection.

But strong and vibrant culture doesn’t usually come from a bureaucratically orchestrated jumble of subsidies, regulations and writers’ workshops. Culture shouldn’t need a legislative umbrella to protect it.

Peter Carey may believe that parallel importing will silence Australian authors, but there’s something anachronistic and nationalist about the crusade to encourage specifically Australian voices, Australian stories and Australian images. It is peculiar that while we might believe that modern Australia is a cultural collage of backgrounds and value systems, culture warriors on both sides of politics are not able to admit that this makes the deliberate encouragement of a uniquely Australian culture a sham. Many Australian Muslims might find Islamic authors published overseas more personally enriching than Tim Winton’s descriptions of surf in Western Australia.

Unique voices will continue to find their way in a marketplace no matter how globalised that marketplace is – globalisation may spread McDonald’s outlets across the world, but it also makes far-away Peruvian cultural products easily accessible to punters in Narre Warren.

Yet Australia’s cultural legislation protects and subsidises authors with the aim of constructing some sort of universal story that can be shared by the 21 million people living within the territorial limits of Australia. Apart from being futile, this attitude imagines that Australia is a solitary island, rather than deeply integrated in cultures spanning the globe.

Culture evolves in the wild, battered and shaped by the elements, and by the pressure of competitors. It is more likely to stagnate or starve when protected in an artificial environment. The more Australian authors have to compete, the more rewarding our cultures will become.

Tinseltown Ideology Reflects Our Cultural Obsessions

It’s no surprise that when Hollywood decided to remake the 1951 sci-fi classic The Day the Earth Stood Still for modern audiences, the theme would change from nuclear war to the now much more popular fear of environmental collapse. There is a long tradition of movies with political messages.

But the strikingly different approach of each film speaks volumes about a shift in green philosophy of the last few years. It is apparently now unremarkable to believe that humanity should be sacrificed at the altar of Gaia.

The plot of both The Day the Earth Stood Still films is very simple – an alien named “Klaatu” visits Earth to teach humanity a lesson about its bad ways.

In the 1951 film, Klaatu is a sort of Christ-like figure, whose extraterrestrial intervention into human affairs brings about an age of peace. This original Klaatu is a charming alien who firmly but gently convinces mankind to abandon politics and warfare. Humanity obediently pulls back from the nuclear precipice. Peace and good times are then had by all.

In 2009, the filmmakers have changed Klaatu into a dictatorial environmentalist with a penchant for genocide. Keanu Reeves plays a Klaatu who fairly quickly decides that all humans need to be immediately eliminated for the sake of the earth. The new film is sort of like an episode of Doctor Who where the Daleks are the good guys.

Indeed, the alien civilisations of 2009 appear to be everything that the alien civilisations of 1951 were trying to stop. When the 1951 Klaatu steps out of his space ship, he immediately states that he has come to visit the earth “in peace and with good will”. By contrast, it seems that Keanu Reeves steps out of his space ship only to briefly survey the species he plans to destroy. This film has to be one of the most deeply anti-human movies in a long time.

So what does it say about our collective mental health that, when we try to imagine a “good” race of aliens, we also imagine that they would want to systematically slaughter us? If we’re lucky, the next bunch of extraterrestrial visitors will bring us the anti-depressants we so obviously need.

The extraordinary ideological change between the original The Day the Earth Stood Still and its remake shows how mainstream apocalyptic environmentalism has become. Obviously, the vast majority of those who care for the environment also think that the human race is probably worth keeping alive. But what was, just a few years ago, the harmless spluttering of Malthusian academics certain that the Earth needs to halve its population, is now being repackaged approvingly as infotainment.

Movies have always both reflected and distorted our cultural obsessions. Filmmakers aren’t stupid – they want movies to sell to as wide an audience as possible, so they try to mimic as best they can the attitudes and interests of the population at large.

But at the same time, the political views of most filmmakers hardly reflect the political views of that audience. You could shove the number of conservatives and libertarians in Hollywood into a small Prius, and still have enough room for their pets, or their guns – or whatever profit-loving, environment-hating, worker-oppressing things they like to carry around with them.

So every year, Hollywood produces a couple of films that are little more than vehicles for Tinseltown’s latest trendy ideology. Last year’s otherwise charming Wall-E depicted humanity as not just destructive, but also morbidly obese morons encased in hover-chairs. And the global warming disaster movie The Day After Tomorrow implied that the world was just one bonfire away from a climate implosion.

Presumably the next iteration of Godzilla will be born because of an aggregate global temperate change of 3 degrees spread over a century.

Of course, if you’re too quick to jump at the latest popular cause, it’s easy to make mistakes. Hollywood can get it spectacularly wrong. Remember the overpopulation crisis of the 1970s? A steady stream of films like Logan’s Run, Soylent Green, The Last Child, and Z.P.G. (which stood for the environmental movement’s aim of “zero population growth”) tried to popularise the bizarre idea that the amount of people the world had in 1978 was exactly the maximum population the world could hold.

But despite Hollywood’s best efforts at convincing us not to, we kept on breeding. At the time of writing, we have not yet had to resort to turning our dead into basic foodstuffs.

For decades, the film industry churned out films about the need for love, peace and just generally getting along. What made them stop? Bring back the original, kindly Klaatu, who wants to help humanity, not destroy it.

The Bail-Out Disease

If pop psychology has taught us anything, it has taught us that individuals go through five stages of grief – denial, anger, bargaining, depression and acceptance.

Governments do, too. Presented with the biggest economic crisis in 50 years, the Federal Government first tried to ignore it and then angrily blamed it on greedy capitalists. Now having reached the bargaining stage, Canberra has convinced itself that it can fix the crisis if it applies just the right sort of stimulus and bails out just the right sort of companies.

Already the number of industries being prepared for bail-outs is large. Car dealers have been bailed out. Commercial property investors look to be bailed out. Banks are being bailed out with the fluffy blanket of a government guarantee. Deputy Prime Minister Julia Gillard appears to have spent the past few months moonlighting as the liquidator for a chain of child-care centres. Now the dairy industry wants a bail-out, presumably because of the importance of marinated fetta to economic growth.

We could also add to that list the car industry, but I’m not sure that we can blame the global financial crisis for that – propping up this sector with piles of cash and legislative favours is sort of an Australian tradition. We were probably going to do it anyway.

All of these are dwarfed by the strong possibility that the Federal Government will have to eventually bail out the state of NSW. Collectively, the NSW Government is far worse than the most reckless, hard-partying, due-diligence-ignoring Wall Street CEO. When NSW inevitably goes into receivership, its citizen-shareholders will wish they could sue.

Seriously, who isn’t eligible for a bail-out? Your guess is as good as anybody’s. None of the traditional policy justifications for propping up failing companies – whether you agree with them or not – seem to apply to our great bail-out bonanza.

For example, child-care organisations are clearly not “too big to fail”. Car dealers are clearly not “too important to fail”. If there is a formula governing which industries are eligible for a government bail-out, it sure is an obscure one.

But the sad reality is that the decision about which companies deserve a bail-out – and which companies should join whale oil merchants and abacus makers in the cemetery of dead businesses – is entirely arbitrary, dependent only on the political winds in Canberra.

So there’s a certain hypocrisy about a Government that on the one hand is deeply concerned about the influence of lobbyists and donations on the political process, and on the other is making it more and more attractive for businesses to seek political favours. Own a company? You’d be stupid not to try for a guarantee, or a loan, or any other trick that transfers money from the Government to you. Bail-out lotto is a surprisingly easy game to win, and it offers big prizes.

Of course, bail-outs are extraordinarily unfair to those who aren’t on their pleasant receiving end. Shareholder capitalism should be pretty simple. People bet their money in the market on businesses that they think might be a good thing. They profit when they are correct and lose when they aren’t. The companies that make bad decisions, or make products that no one wants to buy, fail. And the good ones survive.

While government bail-outs are no doubt well-intentioned – nobody likes to see companies collapse and jobs disappear – they dramatically alter this basic formula. They undermine the certainty that is so important to economic confidence – investors have no idea how the Government will react to a business heading south. Bail-outs mean that people aren’t financially punished for their bad financial decisions. They keep companies afloat that probably should sink – if your business model isn’t working, do something else with your time.

And bail-outs are expensive. There’s no clearer example of corporate welfare than the Government taking money from taxpayers and adding it to the revenue spreadsheets of Australia’s biggest businesses. Bail-outs are paid for by everybody, but they’re not available to everybody.

Does anybody doubt that if the Government was presented with the imminent collapse of Ansett that it would have quickly ponied up the cash? At the time, the Howard government resisted the howls of Ansett executives and the unions and let Ansett die the death it deserved. Nearly a decade later, flights have never been cheaper and it is safe to assume that most of those who were laid off at the time have been able to find work in a more productive enterprise.

The political eagerness to bail out failing companies just reveals that they – like a lot of us – don’t quite understand what is going wrong with our economy.

It’s actually a bit misleading to describe our economic woes as a crisis.

If anything deserves that title, it was the asset bubble that was burst in the crash last year.

All the downsizing and unemployment that we face over the next year is not the crisis, it is the correction.

So when the Government tries to stimulate the economy with big spending and tries to resuscitate dying companies, it isn’t resisting the crisis, it’s resisting the correction. And preventing the economy from healing itself isn’t doing Australians any favours.

Things fail. Napoleon failed to conquer Russia. Baz Luhrmann’s Australia failed to be the nextTitanic. And companies fail. In fact, building a successful business is an extremely hard thing to do.

The sooner we get to the last stage of grief – acceptance – the quicker our economy is going to recover.

Leave The Poor Old Chaps Alone

The State Government’s proposed application of anti-discrimination legislation to men-only clubs is an odd priority for a government during a financial crisis. States across Australia are staring down the barrel of deficits, high unemployment and the implosion of our domestic manufacturing industry. But Victorian Attorney-General Rob Hulls has decided to intervene in a private dispute between what he describes as “progressive thinkers” and “crusty old fogeys and young fuddy-duddies” at the exclusive Athenaeum Club over whether to allow female members.

Seriously, does our Attorney-General have no better way to spend his time? After all, if you’re wealthy enough to afford the high membership fees demanded by Melbourne’s exclusive clubs, you’re hardly a victim of debilitating discrimination.

There are many organisations in Australia with membership rules that could be considered discriminatory. There are women-only gyms. There are gay-only nightclubs. There are same-sex schools. There are churches that will only hire you as a priest if you believe in God. And there are places that insist you take off your shoes before you enter, even if you really don’t want to.

Of course, there are pockets in Australian society where people do encounter discrimination on the basis of race, gender or religion. But exclusive clubs are hardly a social problem that demands immediate action from a crack team of legislators. These clubs are a lot more harmless than the government seems to believe. As The Age reported on Friday, less than one-fifth of the Melbourne Club’s membership is also listed in Who’s Who Australia – it’s hardly a centre of power, secret rituals and the manipulation of public opinion.

Put a bunch of men in a room with alcohol and snacks for long enough and it’s fairly predictable what will happen. The conversation will eventually degenerate from business and high politics to cricket, the best songs on Guitar Hero World Tour and the most effective way humanity could defeat a surprise invasion of Velociraptors. Who would win in a fight: Conan-era Schwarzenegger or Bruce Lee? Perhaps the conversation will eventually turn to some gentlemanly wagers – could it be possible for one man to traverse the world in 80 days? And given the demographics of Melbourne’s most exclusive clubs, a typical evening might end with the singing of some vaguely remembered songs from boarding school.

Gentlemen’s clubs date back to 17th-century England. Far from being stodgy, stiff and proper, these original clubs were little more than a place to get drunk away from the wife. Early caricatures of English gentlemen’s clubs consistently show club members red-faced and sozzled, grasping at bottles of wine. Some clubs even provided boarding rooms for the gentlemen to sleep it off.

In the present day, the most exclusive all-male club in the world, the Bohemian Grove club, is really just an excuse for powerful Americans to participate in stupid rituals that have much more camp value than deep meaning.

So it’s no wonder that the gender exclusivity of men’s clubs inspired powerful and wealthy women to set up their own exclusive clubs – in Melbourne, we have the Lyceum and The Alexandra – where the conversations are, no doubt, on average much more sensible. And on the other end of the spectrum, Melbourne’s least exclusive club, the RACV Club, is now best known for its buffet-style dining: the Sizzler of Melbourne’s club set.

Still, at least the RACV Club is doing well. The truth is that some of the longest-standing men’s clubs are in terminal decline, with or without female membership restrictions. There really aren’t that many of Rob Hulls’ “young fuddy-duddies” quixotically tilting against the demographic windmills. Instead, many clubs are struggling to demonstrate to apprentice power-brokers and the next generation of fatcats why joining would be worthwhile. Like a lot of voluntary organisations, they are failing to encourage the generational change needed to survive.

After all, in 2009, it’s far more exciting to get a reservation at Vue de Monde than be served a plate of mutton, mashed potatoes and steamed beans at a gentlemen’s club.

The government’s proposed changes to the legislation governing the Victorian Human Rights and Equal Opportunity Commission don’t just end at forcing private clubs to change their long-standing membership requirements. They also include the power to enter, search and seize documents. So we can look forward to burly anti-discrimination commissioners kicking down the door of the Melbourne Club and ordering scared retirees to slowly place their cognac and copies of The Spectator back on the antique mahogany side-tables.

The commission may also be empowered to act wherever they suspect discrimination is occurring, regardless of whether there have been any complaints.

In a society that values individual liberty, free association is a basic human right. And the right of free association also implies the right to exclude those with whom you do not wish to associate. So if you don’t like the exclusive membership policies of Melbourne’s clubs, start your own.

Go On, Mate, Get Out There And Make A Difference

When politicians suddenly quit halfway through their term, they’ve usually done something naughty, or stupid, or are so awful at their job that they’ve worked out the electorate can’t stand them any longer.

But if the only reason state Labor MP Evan Thornley has resigned his seat is so he can re-enter the private sector, then, well, that’s fantastic. In 2009, we’re going to want every business person on the ground working overtime to create jobs. The last thing we need is talented entrepreneurs spending their lives stuck in the world of petty rivalries and disproportionate egos that is Australian politics.

Anyway, we have a more than sufficient number of politicians trying to engineer political solutions to what is an economic crisis. Thornley founded a company that, at its height, was worth just shy of $1billion. His commercial acumen and skills could be far more useful building the economy than regulating it.

The position that Premier Brumby was reportedly going to offer Thornley – minister for industry, trade and industrial relations – is one that could easily have a few responsibilities shaved off it. A general consensus among economists is that the best trade policy is to have no trade policy at all. Industry policy has a long and venerable history of comprehensive failure. And Victoria has ceded the vast majority of its industrial relations responsibility to the Commonwealth.

It must be strange for someone who has spent his life adding value to the economy to be offered one of the ministries most dedicated to taking value out of it.

It is a widespread delusion that the best way for a person to serve others is to enter politics; that politics is a noble profession of public service. But there’s just something far nobler about working in private industry or in the not-for-profit sector – individuals who spend their whole careers trying to figure out just what sort of products or services consumers want, or trying to understand social problems and how to resolve them. If the idea of service to others has any validity, surely social and commercial entrepreneurs are worthier than the politicians who seek, above all else, the highest level of political power.

And while many people dismiss success in business as little more than the greedy pursuit of fortune, how does that compare to politics? The business of the politician is, essentially, the pursuit of power over others. The top politicians may be paid a lot less than the top CEOs but, while a CEO can at most control their corporation, many politicians seem to believe they can move everybody’s private resources around like chess pieces.

Far from being noble, politics is a profession that rewards expediency and even deception. Political decisions are guided mostly by polling data and a desire to hurt the other team. Legislation is the result of manic horse-trading that seeks not to find the best way to do something, but to mollify as many interest groups as possible and please the bizarre preferences of the independents that often hold the balance of power.

So it is no surprise that so many laws and government programs are ill-defined, have no clear goal, and provide no method of assessing whether they are actually working. But politicians find it’s a lot easier to start a government program than to close an old one. Bureaucracies, commissions, departments, boards, committees and taskforces pile up upon each other, each insisting on a slice of the annual budget. They say that laws are like sausages: it’s better not to see them being made. But do we really have to be forced to eat so many?

Many in the private sector are now being sadly reminded that jobs that are underutilised or unnecessary have a habit of being eliminated. This does not occur in Parliament. Inefficient or just plain disinterested backbenchers need little more than a lock on their preselection and a safe seat to feel relaxed and comfortable. Even if they underperform by every possible measure, they can remain employed for decades.

As the Austrian economist Joseph Schumpeter once wrote: “Politicians are like bad horsemen who are so preoccupied with keeping in the saddle that they can’t bother about where they go.” The private sector is much less forgiving of people who spend most of their working day preparing for the next round of job interviews.

Indeed, there’s a lot to be said for the private sector. No hairdresser or bank manager can cut your hair or take your money unless you specifically ask them to do so. Politicians have no such limit – laws that impact on everybody are enacted with only the barest of consent from what constitutes a democratic majority.

While Thornley’s political colleagues might be furious at his resignation, hopefully he is able to show them that only the private sector can create the jobs that Australia will need next year.

20 Years On: Western liberty and Soviet tyranny

2009 marks the 20th anniversary of the fall of the Berlin Wall – the moment which signalled the end of the short and brutal totalitarian 20th century.

The movement had actually begun much earlier. The disintegration of Communist rule in Hungary (which, during 1989, was bringing Hungarians freedom of the press and association, and by October, constitutional reform) meant that East and West Germans were reuniting for holidays in Hungary. Worse, from the perspective of East German officials however, low-level Hungarian border guards were letting many of those East Germans holiday makers slip in out of Hungary and into the West. Porous borders became Hungarian official policy when the liberal Communist regime in September explicitly annulled the migration restrictions formed as part of the East German-Hungarian treaty. Thousands of East Germans began pouring into Austria.

The events of November are well known. Czechoslovakia granted East Germans the same migration freedoms as Hungary had. And without the support traditionally expected from the leadership of the USSR, the East German government was forced to admit that its migration restrictions, which had supported its rule in the 28 years since the Berlin Wall had been erected, had effectively failed. On 9 November, an East German official mistakenly announced that travel to West German was permitted ‘immediately’, and confused, uninformed but thankfully restrained guards on the East allowed the massive stream of excited Germans into the West.

The story of November 1989 is a story of spontaneous and uncoordinated desire for liberty – depending on political confusion, the humanity of border guards in Hungary, Czechoslovakia and East Germany, and the bold excitement of a free future – but it would not have been possible without the world-historical leaders in Washington, Moscow and England. Mikhail Gorbachev declined to act to defend the solidarity of the Soviet Bloc at a very crucial moment. And the triumvirate of John Paul II, Margaret Thatcher and Ronald Reagan redefined the essential questions of the Cold War-the stark dichotomy between Western liberty and Soviet tyranny.

In this IPA Review, John Roskam looks at just what made Reagan tick-his attitude to the Soviet Union, Mikhail Gorbachev, and how that attitude played a central role in winning the Cold War and liberating those behind the Iron Curtain. As Roskam points out, Reagan meant every word of what he said. His description of the Soviet Union as an ‘evil empire’ may have been ridiculed in the left-wing press, but it resonated with those who had actually experienced the Communist system, and those who still were. If it wasn’t for the moral clarity Reagan, Thatcher and John Paul II brought to the Cold War stalemate, those migrants escaping across the Hungarian border, or those streams of East Germans flooding through Checkpoint Charlie would have had to stay at home.

In retrospect, it’s hard to imagine the Soviet Union lasting much into the 1990s. The liberating and democratising nature of the internet and the digital revolution might well have totally undermined the Soviet system if it had survived the events of 1989 – studies of Soviet computing show that the system was completely unable to handle the digital age, even before that era fully manifested itself with the internet.

We know now that the Soviet system was moribund and heading towards an inevitable collapse. But that it collapsed in 1989, not 1994, or 1998, is a testament to the leadership of these great figures.

Submission to the Preventative Health Taskforce’s Discussion Paper “Australia: the healthiest country by 2020”

Executive Summary: The National Preventative Health Taskforce’s Discussion Paper: a) downplays the positive role individual choices can play in the health sphere, b) pays little attention to the rights of individuals to consume legal products of their choosing, and for commercial vendors to provide consumers with those legal products, c) fails to interrogate the extent to which the management of individual risk should be appropriated by the state, d) neglects to properly assess the evidence base of its policy prescriptions, and e) presents policies that fail to live up to the framework of evidence-based public policy.

Available in PDF here.