The Growth Of Australia’s Regulatory State: Ideology, Accountability And The Mega-Regulators

Institute of Public Affairs, 2008

Regulation is a political activity. It sets the framework for the market economy by defining the boundaries between private action and government action. Yet those boundaries are not fixed. Australian governments are growing the body of regulation — and the resources dedicated to regulating — at an ever increasing pace.

As Chris Berg argues, this growth in regulation has more than just economic consequences. It has significant political implications, as regulatory agencies are increasing their power and influence. Furthermore, those agencies are animated by a new regulatory ideology which favours interventionism and ‘arm-twisting’, adding to the powers of regulatory agencies.

Available in PDF here.

IPA Review Editorial, January 2008

It’s not too often that we can look enviously at the political state of a country buried deep in the European Union. Brussels is not just the capital of Belgium, but it is also the de facto capital of the EU, hosting the European Commission, the Council of the European Union, the European Council and one of the seats of the European Parliament.

So it is either fitting or ironic (I can’t figure out which) that Belgium has now been, for more than six months, without a government to call its own. As we quietly recover from the shrill hangover of the 2007 federal election, it’s worth considering how Australia could have been if no government had been successfully elected in November.

Since the 10th of June, Belgian politicians have been — at least as this edition of the IPA Review goes to press — unable to form a government coalition. This failure is the result of the adversarial relationship between French and Dutch speaking political classes, in particular, from the demand by Flemish nationalists for more autonomy over taxation and welfare policy in Flanders (a region that has traditionally favoured centre right parties; the francophone region of Wallonia appropriately prefers their politics to have a more socialistic flavour.) The former government remains in power, but only in a caretaker capacity, and the semi-former prime minister is set to step down once a replacement government is available.

Sure, not having a government has its disadvantages. The great economic reforms which have propelled Australia up the ranks of economic performance would not be possible from a government that couldn’t get out of caretaker mode. Similarly, the important reforms Australia needs — workplace changes which deliver deregulation rather than centralisation, the sale of remaining government enterprises, reform of communications and occupational safety regulation, corporate and financial services deregulation, and so on — all require a rather active government.

But on the positive side of the ledger, having no government also means having a government that can’t mess things up. Governments cannot extend their reach into the economy without a capacity to legislate. Indeed, as Belgium is a central member of the EU, no government also means no government able to increase its international obligations. As the Flemish free-marketeer Paul Belian has written, the inability of the Belgian Parliament to approve European Commission directives means that ‘in its hour of ungovernability Belgium is now more sovereign than it has been in the past 50 years.’

This special edition of the IPA Review arrives in newsagencies and letterboxes at a significant moment for the cause of limited government and open society in Australia. At the dramatic end of a nominally liberal/conservative government, we have assembled the nation’s best liberal and conservative commentators to try to describe the legacy of the Howard government and the causes of its demise. But more importantly, this IPA Review engages with the question—what next for liberalism? Has the cause of liberty advanced or retreated over the last decade? What are the next steps?

This edition also contains the full complement of non-election related commentary. Sam Gregg engages with Christian leaders who would ignore or reject free market economics for a socialist Christianity, Paul Monk holds anti-nuclear campaigners up to the harsh light of logic, and Chris Murn tries to host a Christmas street party. Pieces by Alan Moran, as well as Sinclair Davidson, Alex Robson and Chris Textor, dig further behind the claims of price-fixing by Visy and Amcor and reveal that not every criminal has committed a crime.

Even without a functioning government, Belgian government services continue to be delivered. Rubbish is still collected, social security payments are provided—even, as Paul Belian points out, taxes continue to be collected. While the government is in caretaker mode, government activity cannot be reduced, but neither can it be extended. As a result, the promises of more pork and populist extensions of middle class welfare which characterise Australian federal election campaigns may, indeed, obscure the fact that when the federal government is in caretaker mode for the election, that could be the best six weeks that government ever has. Cynics should hope for stalemate and inertia.

Xmas Buying Is Full Of Spirit

Before the three wise men went to visit Jesus at his birth, they first had to visit the gold, frankincense and myrrh traders. Retailers have been cashing in on Christmas since, well, before Christmas. Nevertheless, a chorus of commentators each year decries its commercialisation. The retailers who market their holiday stock in October become the targets of droll cynicism about how the holiday season arrives earlier and earlier.

According to these critics, between the Santa-themed lingerie and the mechanised excess of the Myer windows, the true meaning of Christmas has been lost somewhere on the Bourke Street Mall. Certainly Jingle Bells piped over the cheap speakers in supermarkets might be irritating, but presumably some people like it. Businesses that go out of their way to annoy their customers don’t stay in business very long. And the excruciating kitchiness of so much holiday decoration just proves the old saying “there’s no accounting for taste” is never more insightful than at Christmas time.

But there is more to Christmas than just bad taste. The opponents of a commercial Christmas have always had a distinctly political message. George Bernard Shaw, a fervent anti-capitalist and apologist for Stalin, put his case against the holiday merchandising half a century ago: “Christmas is forced upon a reluctant and disgusted nation by the shopkeepers and the press; on its own merits, it would wither and shrivel in the fiery breath of universal hatred.” Shaw was a great playwright, but was probably not very good at small talk.

The anti-commercialism message ties neatly into the common belief that we, as a society, are over-consuming. Cheap political paperbacks and moralising opinion pieces drearily list the possible consequences of buying one too many trinkets – clinical depression, environmental catastrophe, spiralling levels of personal debt, the loss of social cohesion, child obesity, economic turmoil and big houses.

The critics of the consumer society have coined an evocative new word – “affluenza”. Capitalism, they imply, is some sort of psychotic mass hysteria. And the Christmas period is a massive annual epidemic; a deranged orgy of consumption and spending.

But what’s wrong with a commercial Christmas? It really does seem like a strange complaint, even for those ideologically opposed to excessive consumption. After all, Christmas is the one time of the year that we go shopping not for ourselves, but for others.

Exchanging gifts has always been a central part of building social relationships. When world leaders exchange gifts at diplomatic meetings, it isn’t because they were conned by shiny advertisements.

And as every parent who has received a handmade present from their child is well aware, gift-giving has more symbolic importance than practical importance.

Amusingly, some biblical scholars have suggested that the gold, frankincense and myrrh given to the infant Jesus were more like gifts of much-needed medicine for a new mother. This would make the three wise men the spiritual ancestors of that uncle who always buys you “useful” presents like socks and underwear, rather than things you actually want, like an Xbox.

Nevertheless, a good gift at Christmas is one that strengthens a relationship; a bad gift is one that reveals that relationship to be shallow. Giving presents to friends and family members, even if those presents are extravagant, hardly fits into the affluenza theory.

Most of the criticism of commercialism seems to stem from a dislike of commercial activity intruding upon the “non-commercial” parts of society. How dare businesses drag their filthy profit-making into our nice clean holiday? But these critics vastly overemphasise the distinction between activities we might class as commercial and those we might class as social. The difference isn’t so great.

Commercial society is much more warm and fuzzy than is depicted by anti-capitalists. Interaction in the marketplace is inherently co-operative. Certainly, businesses do compete against each other, and this competition sounds like it is very aggressive, impersonal and distasteful. But they only compete in order to co-operate – that is, trade with their customers.

And on a practical level, the celebration of Christmas benefits from the introduction of commercial values. Vigorous competition during the holiday season keeps the prices of gifts low, allowing us to give more gifts to more people who are important to us.

We continue to agonise over the “true meaning” of the holiday. But whether Christmas is religious or secular, there’s little reason to fear that its personal significance will drown in a sea of holiday jingles and advertising.

Strangled By Regulation

It is unfortunate that the first act of the new minister for deregulation was to enact the latest tranche of the federal anti-money laundering and counter-terrorism financing laws – a major regulatory increase for the financial sector.

To be fair, the legislation’s origins lie in the halcyon days of the Howard Government. But it illustrates just how big the job of finance and deregulation minister Lindsay Tanner is going to be. The Labor government inherits an Australian economy which is rife with Byzantine and often unnecessary regulations.

Federal and state governments have been legislating and regulating at an ever increasing pace. Where less than 30,000 pages of Commonwealth legislation were passed during the 1980s, we are on track to pass nearly 80,000 pages this decade.

Regulation has accelerated similarly – the Howard Government has the record for the most enthusiastic regulators and legislators in history.

It is hard to get a concrete grip on the consequences of such increasing regulation on the economy, but it is certainly having an effect. The Business Council of Australia recently identified one example of this increase: a total of 227 pages of documentation need to be given to a customer to open a simple cheque account with an overdraft limit and home loan, roughly five times the number of pages in 1985.

The Rudd government has rightly acknowledged high regulatory burdens as a major economic problem. However, the fixation that the Labor Party had during the 2007 campaign on reducing “red-tape” – that is, the paper-burden cost of regulation – may prove to be a distraction from the real effects that regulation has on the economy.

Certainly, the significance of the paper-burden cost varies by sector – in the food industry, most regulatory costs can be attributed to the paper-burden. But for much of the economy, that paper-burden cost is dwarfed by the restrictions on economic activity imposed by the regulations.

For instance, the “chilling effect” of mandatory third-party access regulation far outweighs the paper-burden cost of those regulations by holding back infrastructure investment. Focusing only on “red tape” in these cases is like focusing on the time spent filling out a tax return rather than the amount of tax paid.

If Tanner is to fulfil the promises of a minister for deregulation, it will be necessary not only to tackle excessive “red tape” but to seriously cut back the regulations which distort investment, divert entrepreneurial and innovative activity, and inhibit business flexibility. His recent reaffirmation of the election promise of adopting a “one-in, one-out” approach to regulation is a positive sign, but his uncritical support for the Australian Competition and Consumer Commission is less so.

Tanner will be continually pressured by his fellow lawmakers, regulators and bureaucrats, activist groups and the community, and too often businesses to increase regulation. Cropping back the regulations which restrain the Australian economy will require challenging nearly everyone with a political voice.

Review Of ‘The Shock Of The Old: Technology And Global History Since 1900’

Hyperbole is one of the byproducts of technology. Writers soaked in the spirit of futurism proclaim new technologies are ‘paradigm shifting,’ imagining that the value of their chosen technology is self-evident and that it will be universally adopted by an enthusiastic population. History is often dubiously divided into eras defined by their ‘dominant’ technology-the twentieth century has been neatly chopped into periods of electrification, motorisation, and computerisation.

David Edgerton’s The Shock of the Old: Technology and Global History since 1900 is a contrarian account of the relationship between technology and social and economic history. Dividing the book into what he sees as the common fallacies of popular accounts of technological history, Edgerton tackles the distinction between invention and innovation, the ‘technonationalism’ behind national science programs, the lag between the introduction of technology and its widespread adoption, a similar lag between adoption in the developed and developing world, and the underrated importance of production and maintenance technologies.

But Edgerton’s biggest target is accounts of history that overemphasise the historical importance of cutting-edge technologies. He argues that technologies have a remarkably long shelf life: seemingly obsolete technologies remain in common use long after they have been superseded. This is hard to argue with. Anyone who has worked in a large organisation will be familiar with the stubborn longevity of enterprise computer systems.

Few fields demonstrate the gap between highly publicised cutting- edge technologies and the greater importance of legacy technologies better than warfare. As popular history would have it, chemistry and engineering, represented by the twin menaces of gas and the airplane, defined World War I, and motorisation and nuclear physics defined World War II.

Yet, as Edgerton demonstrates, such a view is deeply misleading. Of the millions killed in World War I, 80% died from injuries inflicted by ballistic weaponry. Far more important than gas, airplanes, and tanks was artillery, particularly as it was combined with new logistics and coordination techniques. In World War II, small arms and artillery were even more important again, relative to the leading technologies being introduced at the time. Edgerton recounts the development of the rifle over the last one hundred years, focusing on the popularity of the Lee-Enfield rifle in the first half of the century and the Kalashnikov assault rifle in the second. Rather than the ‘zeppelin and the bombing aeroplane,’ which H. G. Wells believed had brought battles to the home front, Edgerton writes that it was the cheap rifle that civilianised warfare in the twentieth century.

The Shock of the Old also emphasises the primacy of production and maintenance technologies in technological history. Production has hardly been neglected by historians – the Industrial Revolution consisted of developments in production technologies, and few casual observers of the modern economy are not aware of the supply chain innovations made by firms like WalMart. But the primacy of maintenance in technology choice and diffusion is not as widely recognised. For instance, Edgerton cites a study estimating that the upfront cost of a personal computer represents just 10% of its total lifetime cost, once installation, repairs, upgrades, and training are factored in. Edgerton does not explore or provide a citation for this estimate–but most ‘total cost of ownership’ studies apply to computers used in business, not the home. Part of the explanation for this large cost is the complexity and longevity of the enterprise systems mentioned above.

Edgerton jumps haphazardly from the developed to the developing world, and from issues like technology transfer to the Soviet Union during the Cold War to animal husbandry and then to the Japanese bicycle industry. Such scope is necessary-part of his aim is to rebut the myopic focus that high-school-level histories have on the English Industrial Revolution-but by doing so, his arguments tend to lose their coherence. The Shock of the Old gives the unfortunate impression of being a thematic collection of trivia, rather than a revisionist account of technology and its social and economic role in history.

Similarly, some of his arguments come frustratingly close to the banal – the difference between the availability of consumer technologies in developing and developed countries is most obviously a consequence of wealth disparities.

Furthermore, while Furthermore, while reviews have praised the novelty of Edgerton’s arguments, The Shock of the Old does not represent an advance in the history of technology. The distinction between ‘invention’ and ‘innovation’ is a well-recognised one. Indeed, that distinction has become a pivotal point in modern debates about technological change in communications and software industries.

Similarly pivotal is the crucial distinction between the development and diffusion of technologies-or as Edgerton describes it, the difference between a history that focuses on when a technology was invented and one that focuses on when and where it was used. On this point,The Shock of the Old is clearly not novel. Technological diffusion is the central issue of the major texts of the genre. How and why the Industrial Revolution began in England is just as much a question of diffusion as it is of invention- European manufacturers in the late eighteenth century were as easily able to obtain English technology as the early English adoptees. Edgerton gives these questions a broader geographic context than Western Europe, but the issues he raises are much the same as those raised by the more seminal works of technological and economic history, and he does little to resolve them.

Diffusion is, for example, one of the core problems for our understanding of economic development in classical Rome. Roman innovators were able to make some important advances in agriculture, water management, and seafaring, but the limited adoption of their technologies remains striking. For instance, the Roman water mill was tantalisingly close to providing an epoch-shifting economic breakthrough, but it remained limited in use and scope. We can only speculate what such a breakthrough might have meant for civilisation.

Edgerton’s book is an engaging and accessible exploration of the core myths of technological history, but is, unfortunately, less groundbreaking than its title implies. The Shock of the Old is interesting, but not innovative.

Stars In The Net Sky

Is the internet making us stupid? That, at least, is the conclusion of Doris Lessing, this year’s winner of the Nobel prize for literature. In her acceptance speech, she argued that our newfound love of trivial inanities on the internet was replacing our previous appreciation of learning, education and literature.

It would be easy to dismiss Lessing’s arguments by claiming that she is unfamiliar with the possibilities of technology, and that she is merely defending her favourite medium, the book.

But Lessing is not alone in her view. She joins a large group of pessimists who are instinctively sceptical about technological progress and cultural change. This deeply conservative pessimism is an unfortunate attribute of modern political and social debate.

Another recent example of cultural pessimism is provided by internet entrepreneur Andrew Keen in his book The Cult of the Amateur. In it, Keen argues in a similarly unhappy tone that the internet has allowed non-professionals to drown out high-quality culture with rubbish.

Certainly, there are some remarkably stupid things on the internet. There are also some disgusting things, pointless things, and obscene things. Hours can be wasted on Facebook or YouTube or in the virtual reality world of Second Life. Wikipedia has lists of fictional detective teams, lists of historic fires, and lists of lists – all of which promise the dedicated procrastinator many opportunities for distraction.

But while the traditional book may now have to compete with the lavish offerings of the internet, Lessing’s glumness is hardly justified. For our intellectual life, the widespread adoption of the internet has been unambiguously positive.

It is hard to overestimate the educational advantages of super-abundant information, particularly when we compare it to the information scarcity that has characterised most of human history.

One famous academic paper showed that each edition of The New York Times contained more information than an individual in the 17th century was likely to come across in their lifetime.

And the variety of information now instantly available on our computer screen makes what was available to us even 20 years ago seem like a short blurb on the back of a book.

While Lessing may fear the effects of substituting reading books for online activities like blogging, a number of studies have shown that students are now far more comfortable writing than their predecessors.

Remember all those fatalistic cries that the practice of shortening and abbreviating words for text messages would irreparably damage young people’s writing skills? This was yet another misguided prediction of cultural doom. It appears that most students are easily able to tell what style of writing is appropriate for school work.

If young people do have problems reading and writing, it isn’t the internet or mobiles that are at fault, but the education system.

Even television, that passive, much-reviled entertainment, is getting richer and more complex. The undemanding plots and one-dimensional characters of a typical television sitcom 30 years ago contrast poorly with the multiple, interlinked storylines and highly developed characters of today’s programs. Compare for example the basic linear narratives of early Simpsons episodes with the intricate structures of the show’s more recent outings. Television is becoming more engaging and, indeed, more mentally challenging.

Nevertheless, cultural pessimists argue that our ancestors were better off. In the 18th and 19th centuries, Lessing argued, the literate classes were respectful of great literature. Similarly, T.S.Eliot surveyed Western culture 50 years ago and famously wrote that “our own period is one of decline; that the standards of culture are lower than they were 50 years ago; and that the evidences of this decline are visible in every department of human activity”. Even earlier, Plato criticised his fellow Greeks’ love of the emotions in theatre and poetry, believing that what he considered serious thought was dying out.

But when cultural pessimists reminisce about earlier times, they are too often highly selective. The 18th-century gentlemen who respected literature were a small minority of the total, mostly illiterate population. And cheap, poorly written paperbacks were just as large a portion of the market for books as they are today.

Doris Lessing and Andrew Keen compare the best of the past with the average of the present. With a formula like that, it’s no wonder today always loses.

People are resistant to change. During the industrial revolution, British textile and agricultural workers destroyed the new labour-saving machines, as they saw them as threatening their jobs and the world they were comfortable with.

Of course, their predictions of doom turned out to be inaccurate – the introduction of those machines was the beginning of a massive spurt of economic growth that raised the wealth and living standards of the working class.

When Lessing condemns the internet as full of mere inanities, she similarly ignores the exciting possibilities of culture now that the internet has freed it from scarcity.

But cultural pessimism is not just resistance to change. What is most striking about contemporary cultural pessimism is just how elitist it is. Not everybody can be a novelist, but anyone can write a blog.

We should be glad that cultural pessimists have found a new target in the internet – it means that our culture is becoming even more diverse, anarchic and, best of all, truly democratised.

Where The Liberals Went Wrong

When you change the government, argued John Howard in the last few days before the election, you do change the direction of the country. Paul Keating’s clarion call proved to be just as ineffectual the second time round. That could perhaps be because it obviously isn’t true. Despite the high level of state economic and social intervention in Australia, the nation isn’t steered by Captain Government.

Part of the problem that the Coalition faced in its final years was the unwillingness of government to grapple with key demographic and social changes. Similarly, in industrial relations, the rise of independent contracting has been meteoric to the extent there are now far more self-employed people than members of a union — but the cause of this change was economic, not legislative.

Between 1996 and 2007, a lot of things happened and very few of them were the consequence of Commonwealth legislation. The `change the country’ line was doubly inappropriate because of the status quo strategy of the Rudd Opposition. Federal Labor’s big-ticket items may have been climate change and broadband but fibre optic networks and carbon trading don’t win elections.

Rather, it was Labor’s mantra of economic conservatism that was specifically designed to repudiate Howard’s argument. To try to emphasise their credentials, Rudd and Gillard repeatedly affirmed the independence of the Reserve Bank – as if that was ever up for grabs. The message was simple: vote for the ALP and they won’t change the country. But if you vote for the Coalition, they will embark on another round of industrial relations reform, and the country certainly will change.

The Howard government became alienated from its own record of conservative governance. The 2007 election re-established the status quo brand in the minds of political strategists. It will likely go down as one of John Howard’s major legacies, and it is largely a positive legacy. With the government’s extraordinarily flattering economic record, it is no wonder voters prefer more of the same.

Unfortunately, brand status quo has applied to areas which advocates of liberal philosophy – that is, the ideological combination of limited government and the open society – would prefer it did not. Despite their professed sympathy with small government principles, the Coalition delivered no reduction in discretionary spending and its election promises foreshadowed no future reduction.

Along a wide range of public policy areas, the Howard government could have done more. Industrial relations reform was used as a federal power grab, rather than as a push towards common law contracts. Taxation reform drove yet another stake into the already terminal federal compact.

Other reforms were barely reforms at all – the 2006 changes to media law did little to free up a stifled commercial media sector. It is hard to avoid concluding that the government’s approach to reform was about quantity, not quality. Economic reform packages may have started out well-intentioned but when they emerged from the meat-grinder of parliament, they too often represented steps backward.

Nevertheless, elections are not won or lost on the size of government, weak media regulations, or eroding federalism. Elections are won on appeals to the status quo, issues such as immigration, or security fears. Federal seats are won on vacuous – and, for federalists, deeply concerning – issues such as graffiti, hoons and train lines. It isn’t just that voters are not interested in liberal policies. In many cases it has proven far easier to win votes with an illiberal platform.

What role can liberal philosophy have if it can’t be successfully marketed to voters? Liberal political parties are unlikely to win future government on a platform of radical change, except in times of crisis. The biases of the irrational voter mean that dramatic increases in immigration or a reduction in the minimum wage are hardly tickets to electoral success. In an era of status quo politics, it appears that ideology is, on net, an electoral negative rather than a positive.

But conversely, the final years of the Howard government demonstrated what can result when a political party has no philosophical base, lacks the fiscal restraint imposed by ideology, and simply purchases the votes it needs. Sooner or later, voters or in the case of the 2007 election, the Opposition, punish them for their directionless expedience.

Perhaps one reason why liberalism seems impossible to market to voters is because it hasn’t yet been tried. No major party has gone to an election from opposition or from government with a full program of social liberalism and economic liberalism. The Howard government suffered from its abstract message – economic growth is far less concrete than fibre-to-the-node and the Kyoto Protocol.

Voters may instead respond to campaigns targeting over-bureaucracy and regulation, particularly as they affect business and community life. The record levels of regulatory and legislative activity during the Howard government provide ample scope to do so. It is fair to say such a campaign would be a direct repudiation of the Howard record.

What is not under question is the need for liberalism in Australia, and the challenges which liberals face – limited government and the open society remain simple and obvious goals regardless of their electoral popularity.

Fame Game Filling Our Need For Celebrities

Australian soccer is salivating over the more than 80,000 people who turned up to Sydney’s Telstra Stadium on Wednesday night and watched David Beckham do at least one of the things he is famous for – take a free kick.

But unfortunately for soccer, it wasn’t sport that brought such high numbers through the gates. Most people who attended were only interested in checking out the man who goes home to Posh Spice. One host of a corporate box reported that he had to explain to his guests that the person running around the field wearing yellow was the umpire.

The question of why we have such a fascination with celebrities is a well-rehearsed one. Fame, after all, has no inherent properties. Being famous doesn’t immediately make someone more virtuous or remarkable.

Similarly, it does not, as Bono seems to believe, impart to you any great insight into development economics or the most appropriate structure for giving economic loans to African nations. If your favourite political cause has a celebrity attached, it’s probably wrong. A busy media schedule leaves little room for even the best-intentioned celebrity to study the most humane way of keeping insects off the backsides of sheep.

But those who attended the Sydney exhibition match weren’t just there because they were fascinated by David Beckham (pictured below). After all, any thirst to discover as much as possible about the soccer star would surely be quelled by his series of autobiographies, David Beckham: My WorldDavid Beckham: My Side and David Beckham: Both Feet on the Ground. It is a testament to the cynical ingenuity of English publishing houses that one person could successfully market three auto-biographies, two of which were released a year apart.

Instead, the spectators were driven by a very human, but also a very peculiar, desire to see the celebrity in the flesh. For many of the spectators at the Sydney match, part of the attraction in attending the game was simply to share Beckham’s space in the world.

Certainly, on a practical level, there are some things that you can only discover by seeing somebody in real life, rather than on television. Those who have met John Howard are able to speak authoritatively about his height – the just-departed prime minister is hardly the munchkin depicted in hostile editorial cartoons.

But our desire to see and meet celebrities is more than a desire to assess their physical attributes up close. We have an almost primordial need to confirm that celebrities are, actually, real. Genuine human communication – even if it is one-sided and yelled from stadium seating – is our attempt at breaking down the barrier between celebrity and reality.

Even better when the celebrity is alerted to those attempts at communication – nothing amuses a heckler more than attention from their target.

Watching how someone carries themself, without the distorting effect of television, somehow gives far more insight into that celebrity’s personality. Everybody thinks they are pretty good at judging character.

Celebrities, many of whom are intelligent, are acutely aware of this curiously asymmetrical relationship. And eager to convert intangible fame into tangible cash, they exploit it. Successful celebrities “up-sell” their time to wealthier fans. For sports stars, a sponsorship deal is not just a colourful logo on a shirt, it is a commitment to meet the sponsoring firm’s clients when needed.

The same is true in many fields. Many firms sponsor ballet productions so their guests can mingle with performers. Ballet companies recognise that audiences like to break down the barrier between stage and stalls.

Nevertheless, at least dancers and soccer players have a day job. Paris Hilton is the archetypal celebrity thought to be famous for having done nothing. She might not be talented, but she sure is entertaining. Her life is a train wreck; a complex human drama conveniently serialised in newspaper headlines.

And Hilton’s business model is the same as Beckham’s – when the socialite was shipped down to Australia for the Melbourne Cup a few years ago, part of her job was to entertain cup sponsors. Celebrities who are famous just for being famous are also the most cunning manipulators of this disconnection between fame and reality.

The market for celebrities seems to work fairly well – there aren’t many opportunities for profit that the famous do not exploit. Our psychological need to humanise celebrities is a demand that is efficiently supplied.

No Umpire Needed In Sport Media

The AFL, with its of salary caps and draft restrictions, is one of the most regulated sports in the world. Unfortunately, the Australian media is just as regulated, and the regulations punish clubs, consumers and players.

Protectionism may no longer dominate as an economic ideology, but it lives on in the Australian Government’s approach to the media.

Invariably, from the artificial limitation on the number of television licences, to the banning of advertising on the ABC, to the digital transition debacle, each and every media regulation and reform proposal seems designed to protect incumbent free to air (FTA) broadcasters and penalise their competitors.

Anti-siphoning laws, which give FTA broadcasters first rights over a huge range of premium sporting content, are some of the most egregious examples of this protectionist approach.

FTA broadcasters are granted the privilege by government of not having to compete for broadcast rights in a fair and open market.

Like all protectionist rhetoric, advocates of the current system couch their arguments in the “public interest” and “protecting the consumer” terms. But preventing pay television from bidding for broadcast rights is not without cost.

A modern sporting competition is an extremely expensive affair, and, like any other business, its producers strive to appeal to demanding consumers.

To do so, the sports have evolved, not only in the manner in which they are played, but also through technological innovations that alter the experience for consumers.

Coaches utilise better communications and analysis tools to manage their teams.

Players utilise more powerful – and more expensive – medical advances to prevent injury and enhance performance.

And consumers utilise a variety of print, electronic and broadcast media to access statistics and interactivity to enjoy their game more.

But all this requires money. By restricting pay television from the market for broadcast rights, sporting codes are deprived of a potentially lucrative source of funds.

Competition is intense between the FTA broadcasters, but by banning alternative broadcasters, the final price that broadcast rights are sold at is likely to be lowered.

Anyone that doubts that this is a problem should identify any sporting code or club that wouldn’t be able to use the extra money. Many sports on the anti-siphoning list, like netball and the IndyCar series, do not command the enormous audiences that the big football codes do. Restricting the market for the broadcast of these sports punishes fans – it doesn’t protect them.

With the larger sports, problems are just as evident. The demise of the Fox Footy Channel, a casualty of the lopsided negotiations between FTA, pay television and the AFL, has been a loss for consumers. Die-hard fans are denied the opportunity to enjoy a channel dedicated to the sport to which they are devoted.

If the AFL had been able to negotiate with Foxtel directly, this may have not occurred.

As Justice Ron Sackville, judging a Federal Court case over AFL rights this month, stated: “The poor old AFL is denied the opportunity of a fair and competitive process to get the best price for its product . . .” He continued: “Now, that seems odd.”

Exempt from anti-siphoning restrictions, Football Federation Australia has been able to sign a deal with Foxtel to show all Socceroos, A-League and Asian matches. These rights were sold on mutually agreeable terms, and should help the code establish itself in the mainstream.

The anti-siphoning laws punish consumers and sporting codes, but the larger objection is philosophical, and one shared by the codes themselves.

Those who make a product, own it. The sporting codes should be able to determine to whom and under what condition those rights are sold.

The anti-siphoning laws confiscate the property rights of the producers of sport.

A better approach would be to treat content broadcast on television or radio neutrally. Governments should not be making a determination of the relative importance or merit of certain forms of entertainment. Doing so punishes the very consumers that these laws profess to protect.

The Government’s media reform bills have not tackled with any rigour the Government’s regressive approach to the media. Unfortunately, its penchant for protectionism does not appear to be abating.

Sports are supposed to be competitive, why can’t broadcasting be the same?

No Street Cred For Council Party Poopers

When the State Government offered councils a $6000 grant to develop street party kits last year, it was no surprise that they jumped at the opportunity. Not only is writing complicated protocol documents a major highlight of working for local government, but the Byzantine regulations that the kits were to help navigate were imposed by the councils themselves.

One part of government bribing another part of government to do what they should be doing anyway has become a staple of Australian politics. Why should councils miss out on all the fun?

The resulting street party kits are a grand monument to the bureaucracy and red tape that is impeding social and community life in Australia. These elaborate bundles of forms, rules and recommendations demonstrate clearly how the steady accumulation of seemingly trivial regulations can quickly become a restraint on community activity. The regulations aren’t those that apply to major festivals on the scale of last weekend’s Johnston Street Fiesta – they apply to small neighbourhood barbecues.

Certainly, many of the issues covered within the kits are, on the face of it, sensible. Washing hands before handling food probably isn’t a bad idea – it would be poor form to poison your neighbours while you were trying to get to know them.

But, as the City of Whitehorse demands, having to provide party volunteers with comprehensive food handling information in the form of written instructions is taking this a bit too far. Nobody wants a reputation in the street as the guy who loves to produce paperwork.

And don’t bother trying to sell any food or drink. Children’s lemonade stands are only possible if those children are able to fill out Community Amenity Local Law No. 1, Schedule 3 (Parts A and B) and Schedule 7.

The City of Stonnington’s 25-page safety plan appears to require the party organiser to assume responsibility for the safety of all guests – planning evacuation and ambulance routes, assembly areas and marshalling points, memorising emergency announcements, and strategically placing fire-fighting equipment around the party location.

Some rules are completely ridiculous. Stonnington requires party organisers to keep an incident kit close by at all times. This should contain a fluoro jacket, gaffer tape, torch, area map and sunscreen. They also require party organisers to nominate a communications liaison to negotiate potential clashes with local event venues, and to retain an electrician on call, just in case.

Street gatherings are not known for being rowdy. Nevertheless, the Moreland City Council insists that sound levels do not exceed 65 decibels. This exhilarating volume is just louder than a humming refrigerator and a little below a hair dryer. It is also above a quiet conversation. As a result, laughter, which surely ranks high on the list of attributes of a good party, is essentially prohibited within the People’s Republic of Moreland.

Presumably, the 65-decibel limit is also why many street party kits, when recommending that CDs are played at a street party, specifically nominate acoustic music. If you anticipate your street party may exceed the 65-decibel limit, you may be required to hire an independent acoustic engineer for the duration of the party to monitor your guests’ volume.

Councils and the Victorian Government recommend that a street party be held on the street itself. To do so, six weeks before the party is to occur, an application for road closure must be submitted to the local government. Forms demonstrating that the road closure has the support of more than 75% of the street’s residents must be submitted. A traffic management plan to be jointly prepared with a council traffic engineer must also be submitted, along with all the necessary fees and charges required to navigate the bureaucracy. This kind of ridiculous red tape is a major roadblock to community life.

The State Government-funded street party kits also raise another question – whose job is it to actually sit down and write them? The kits contain pages and pages of tips on how to have a good party. For instance, Whitehorse recommends that guests introduce themselves and recall the funniest thing they ever saw on the street. Developing topics for small talk is hardly a core role of government, and yet state taxes are being funnelled to council bureaucrats to do just that.

And the condescending advice that neighbours should share power tools and wave to each other when they pass on the street should make everybody wonder how stupid councils think their residents actually are.

Local governments enjoy dramatically less media scrutiny and voter interest than their state and federal counterparts. As a consequence, they are free to impose far more absurd rules than other levels of government. Local governments are adamant that they are trying to encourage street parties, but if they keep putting up these obstacles, they may not get invited to them.