Ilf and Petrov’s excellent adventure

A review of Ilf and Petrov’s American Road Trip.

In 1931, some 10,000 American tourists travelled to the Soviet Union in order to see what the great Soviet Experiment could offer their depression ravaged country.

But the tourist traffic heading the other direction was much lighter. Ilf and Petrov’s American Road Trip is the travelogue of two Soviet satirists, Ilya Ilf and Evgeny Petrov, as they crossed the United States, scribbling reports for Pravda readers back home. Like the American fellow-travellers who were merrily shuttled from Potemkin village to Potemkin village, the report of their journey reveals more about their home country and culture than the country they ostensibly went to investigate.

The resulting photoessay, which was originally published in the Russian magazine Ogonek, (roughly equivalent to Life) reproduced the snapshots taken by Ilya Ilf on their journey with their satirical impressions of their trip. American Road Trip is a delightfully naïve interpretation of American society in the depression era.

In this book edited by Erika Wolf, a historian of Soviet art, Ilf’s photographs are affectionately reproduced for the first time in an English language publication. Ilf’s photographs are more happy-snaps than Ansell Adams. Many photos appear to have been taken by sticking the camera out of the windows of their car. The book is full of slightly askew pictures of things the two Russians found interesting, or at least notable – some ‘handsome and unusually elaborate’ species of cactus, the childhood home of Mark Twain, an advertisement for whiskey that incorporated a statue of a horse, and a sign that notified visitors they were entering the little town of Moscow, Ohio.

There are some photographs of more political importance. A swaying sign in the street with the lettering ‘REVOLUTION IS A FORM OF GOVERNMENT ABROAD’ is, to Ilf and Petrov, bourgeois intimidation of the working class. (As Erika Wolf notes, the joke was on the Russians-the sign was instead an advertisement for a popular humour anthology illustrated by Dr Seuss. Ilf and Petrov were the foremost satirists of the Soviet Union, but they were unable to recognise the work of their American colleagues.)

For the most part, Ilf’s camera is non-political. Indeed, American Road Trip generally avoids direct political criticism. Ilf and Petrov are obviously fond of the country they are studying. They are fascinated by the advertising they see plastered across their trip, and direct much of their satirical energy towards Coca-Cola and cigarette advertising:

The fiery writing burns all night long above America and all day long the garish billboards hurt your eyes: ‘The Best in the World! Toasted Cigarettes! They Bring You Success! The Best in the Solar System!’

When we read how foreign the most basic and innocuous advertising seems to the two Russians-they are surprised that that towns advertise themselves on billboards beside the highway-we don’t gain a better picture of the United States in the 1930s, but of the Soviet Union. They are highly sympathetic to the Native Americans living on reservations, predictably seeing them as remnants of a social structure in opposition to the dynamic capitalism of the east and west coasts. (Although as Erika Wolf notes, Ilf and Petrov are once again tricked, as a Native American who pretends to be unaware of civilisation was actually a famous photographer and clown dancer on tour.) Similarly, a trip through North Carolina confirms their Soviet views about American race relations – deep in the Jim Crow era, it is fair to say they had a point.

What does surprise the modern reader is the unfocused rage they direct towards American filmmaking. ‘We watched at least a hundred picture shows and were simply depressed by the amount of vulgarity, stupidity and lies’. Certainly, it would be hard to defend the vast piles of films which were produced to fulfil contractual obligations in the studio system during Hollywood’s Golden Age, but cheaply written and produced movies are hardly a unique feature of American cinema. The cookie-cutter productions of Soviet cinema during the ideologically rigid Stalin era are, on average, of a far lower quality than comparable American films, and have certainly held up worse over time. Ilf and Petrov may have been outraged more by the ideological content of Hollywood films than their quality.

American Road Trip is certainly at the margins of Soviet culture in the 1930s, but it is more than a historical curiosity. Satire was a major part of Russian culture before and after the October Revolution. The lives of Illya Ilf and Evgeny Petrov illustrate how mixed the bureaucratic approach to political satire could be. Their 1928 novel The Twelve Chairs flirts with political criticism, but they remained in favour-other well-known satirists, such as those in OBERIU literary collective, were killed in Stalin’s purges for sedition.

Ilf and Petrov do little more than reflect dominant Soviet thinking about their ideological opponent, but they are never heavy handed or propagandistic. American Road Trip purports to be a study of the United States, but instead fascinatingly reveals the strength of Soviet ideology and the Russian mindset.

20 years reveals gigantic strides in international trade

The politics of trade policy often obscures what should be an unambiguously positive story about the globalisation of the world economy. Goods which were previously produced on a single site are now produced in a virtual international factory-each element assembled in different countries, even continents, and linked by the international shipping network.

In his 2006 history of the shipping container The Box, Marc Levinson illustrated this by detailing the convoluted production process of a Barbie doll – Chinese workers produce the figure using moulds from the United States, machinery from Japan and Europe, and plastic from Taiwan; her hair is produced in Japan, the pigments from the United States, and the clothing from China.

Just how rapidly the world’s economies are becoming interdependent is clear when we look at the shipping container. The US-based Progressive Policy Institute has recently noted that the container capacity of an average container ship has massively increased over the last two decades. The average ship can now carry the 2,348 twenty-foot equivalent units (the size of a standard shipping container). The international container ship fleet has itself grown four-fold since 1987.

And this is only set to increase. The world’s longest container ship, the Danish-owned Emma Maersk can carry 11,000 units.

This rapid and dramatic increase in international economic integration has been just as significant for our economic well-being as have any changes in public policy. The entrepreneur who popularised the shipping container – Malcolm McLean – should be just as well remembered as the politicians who cut tariffs. And when we look at the low cost and high variety of goods available in our stores, we should remember that it was entrepreneurs who brought them there, not well-crafted public policy.

What next? Liberalism after the Howard government

‘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.

As Tim Wilson writes in this special section on liberalism after the Howard government, part of the problem that the Coalition faced in its final years was the unwillingness of the government to grapple with key demographic and social changes. Similarily, as Ken Phillip notes, in industrial relations the rise of independent contracting has been meteoric—to the extent that there are now far more self-employed people than there are 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’s 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 that 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. As Des Moore shows in his piece on the Howard government’s spending and taxing record, 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.

This mixed record — the Howard government was extremely successful at managing the economy, but disappointing at reforming it—is reflected in this IPA Review issue by the conflicting, but not irreconcilable, accounts by Tom Switzer and Christian Kerr.

Liberalism’s dilemma

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, as Richard Allsop points out, 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.

Part of this gulf between the policy preferences of voters and liberal policy preferences has been explained well by Bryan Caplan in his 2007 book, The Myth of the Rational Voter: Why Democracies Choose Bad Policies. In it, Caplan nominates four biases held by the average voter that are not empirically justifiable. The ‘make-work bias’ is a tendency to equate economic growth with jobs, rather than productivity; the ‘anti-foreign’ bias ignores the importance of foreign trade; the ‘pessimistic bias’ overplays contemporary economic problems; and the ‘anti-market’ bias underestimates the benefits of market exchange.

Caplan’s four biases go most of the way to explaining the distance between liberal philosophy and Liberal Party policy. As a consequence, the Coalition’s loss of government illuminates sharply a debilitating problem that liberalism faces in 2007.

What role can liberal philosophy have if it can’t be successfully marketed to voters? Certainly, ideology cannot be the sole guide to policy. This is the classic dilemma for libertarians seeking public office. As one American libertarian noted, ‘There is no mass constituency for seven-year-old heroin dealers to be able to buy tanks with their profits from prostitution.’

Liberal political parties are unlikely to win future government on a platform of radical change, except in times of crisis. The four 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 programme of social liberalism and economic liberalism.

In her piece, Louise Staley starts to examine what an array of liberal social policies might look like. Importantly, she argues that ‘liberal’ in this context is not merely a synonym of ‘left’, but neither is it ‘conservative’. Instead, liberalism needs to develop its own approach if it is to break through the social policy impasse. But this is an area where modern liberal thought is conspicuously lacking, and filling that hole will need to be a part of any liberal revival.

There is the possibility, too, to develop an economically liberal message that may resonate with voters. 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 that such a campaign would be a direct repudiation of the Howard record.

Ronald Reagan campaigned along these lines, although it should be noted that Australia lacks the anti-statist political culture of the United States. But if the Rudd Labor government turns out to be anything like the governments of Tony Blair and Gordon Brown, this regulation is likely to increase exponentially — presenting possible policy targets such as privacy and bureaucratisation.

Nevertheless, again we reach a strategic bottleneck — campaigns against the Nanny State may swing voters towards liberal parties at the margins, but probably not deliver two dozen seats. Arguing that a consistently liberal message could win an election would be convenient, but doesn’t seem to be true.

In this IPA Review, we have assembled a range of approaches to this challenge. What is not under question however 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.

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.

A disgusting history of England

A review of Hubbub: Filth, Noise & Stench in England by Emily Cockayne (Yale University Press, 2007, 335 pages)

For Europe, the seventeenth and eighteenth centuries saw the rise of the nation state and the consolidation of sovereign power. It was a period in which the Baroque and Rococo movements celebrated the aesthetic potential of art, and in which we can first glimpse modernity in the fields of political theory, the media, commercial endeavours and industry.

But it was also very disgusting.

Two recent films graphically depict the repulsive squalor of urban Europe on the cusp of the Industrial Revolution. Perfume: The Story of a Murderer, based on Patrick Suskind’s novel of the same name, describes the ghastly scent of eighteenth-century Paris — from its gruesome montages of fishmongers, rotting meat, manure, to the heat and stench of the tannery to which the protagonist is apprenticed. The perfume of the title is the ultimate contrast to the film’s visceral portrayal of urban life.

In The Libertine, the 2nd Earl of Rochester — played by Johnny Depp — pursues his rakish lifestyle amongst the squalor of Restoration London. While wealth largely protects Rochester from the filth experienced directly by the protagonist in Perfume, his end is nevertheless gruesomely unglamorous. It is not revealing too much about the plot to write that Rochester’s debauchery leads to the macabre but inevitable contraction of syphilis.

Emily Cockayne’s Hubbub: Filth, Noise & Stench in England keeps the attention firmly on all this unpleasantness. Influential and great individuals figure in her survey of everything that was repulsive about life in the period, but only incidentally.

Samuel Pepys is awoken in 1660 to discover that ‘a great deale of foule water’ had seeped into his parlour from his neighbour’s house. Alexander Pope is disgusted by the ‘large tribute of dead dogs’ floating down the Thames. Jonathan Swift, frustrated by the roar of a vegetable merchant hawking his wares to passers-by, complained that

Here is a restless dog crying cabbages and Savoys, plagues me mightily every morning about this time. He is at it now. I wish his largest cabbage was sticking in his throat.

Thomas Hobbes also pops up in a section on the ugliness of growing old: 60 years old, but dressed in a manner inappropriate for his age, and a little bit ‘French’.

As Cockayne writes in the first chapter, Hubbub is designed to provide an alternative to the customary histories of the period — which tend to focus on the pleasures of the times — by looking at all that is noisome and disgusting. Drawing from diaries, paintings and illustrations, court records, government archives, and even maps and architectural drawings, Cockayne lovingly combs the margins of the period to document all the possible grievances that an individual could have with everyday life. No nuisance is left unacknowledged. She neatly divides the book into separate categories of complaints: ‘ugly’, ‘itchy’, ‘mouldy’, ‘noisy’, ‘grotty’, busy’, ‘dirty’ and ‘gloomy’.

Some of these grievances seem, at least upon their first citation, relatively petty. Hobbes may invite ridicule for having dressed too young and French for his age, but vanity certainly did not disappear with France’s ancien régime. Ugly people were ridiculed, but being ugly did not seem to harm career prospects, at least for men; women were at a much greater disadvantage, and those with physical deformities even more so.

As Cockayne’s sources are by necessity biased towards the literate upper class, it is not surprising that the din of everyday commercial traders and street sellers receives a great deal of attention. The poet Nicholas Breton summed up the situation well by noting that ‘the cry of the poore is unpleasing to the rich’.

And some of the poor must be forgiven for perhaps thinking that this essentially aesthetic complaint had the backing of the force of law. Two individuals were convicted of vagrancy in 1685, despite their protestations that they were shilling for work: one yelling ‘have you got any knives to grind?,’ the other ‘have you got any worke for a tinker?’.

Similarly, satirists singled out ugly, scruffy and apparently atonal buskers for ridicule.

Cockayne notes that the wealth of the new merchant class combined with increased literacy had architectural consequences. In the early sixteenth and seventeenth centuries, a study tended to be located on the outside of an urban dwelling to maximise light. The heightened sensitivity to noise felt by a literate occupant meant that, by the eighteenth century, studies were mostly located in the centre of buildings to minimise street noise.

Some of the complaints were mere nuisances. Others were certainly not. ‘Itchy’ and ‘mouldy’ make for very uncomfortable reading.

Sometimes the source of an itch was the ubiquitous wigs of the period. Wearers would shave their heads for fitting, but the rough underside of the hairpiece would have caused much discomfort. Wigs could accumulate dirt and become greasy and disgusting.

Poor quality clothing was not helped by almost non-existent hygiene. It is difficult to discern how often or how thoroughly people washed in this period, but what little evidence we have does not flatter — rare was the ‘wet wash’. (It is alleged that Louis XVI took just one bath in his life.) While the diarists of the period rarely mention bathing, Pepys manages to slip in a note that he ‘rubbed myself clean’. Soaps were either greasy irritants or extremely expensive.

Worse still was the food. It is no surprise that one of the most popular cookbooks of the era, Hannah Glasse’s 1747 The Art of Cookery, had a section to teach aspiring cooks how to clear a room of bugs. Cockayne’s descriptions of the deteriorating food quality of this period are as close to gut-wrenching as a history book can get. Her description of everything that could go wrong with pork is indicative of the culinary challenges of the time:

While rootling in the back alleys and dunghills, pigs picked up contamination from city industries and noisome ditches filled with night soil and street sweepings. Mingling with dogs increased the circulation of disease and intestinal worms. Pork from city pigs needed to be cooked thoroughly to ensure it did not cause illness or worm infestation … Pork with flabby fat and a hard ring, or with any part that felt ‘clammy’, should stay on the block.

Butcher shops open to the elements were susceptible to mud splashes and insect contamination. Fruit was prone to disease: apples were dismissed by one contemporary author as ‘unwholesome’.

But not all of the risk for food shoppers was unintentional. Shoddy merchants often knowingly disguised rotting meat or stuffed bread with filler — grit, wood, sand, and even stones were used to make up weight.

The list of unpleasantness is nearly endless. Choking smog so blanketed London that people detected house fires not by the smell of smoke, but by the crackle of flames devouring wood. The pavement was so uneven as to be dangerous. The wheels of carts bumping along poorly laid streets would shed their lubricating fat, which would combine with animal dung, soot and other filth.

The Thames was so ‘impregnated with the filth of London,’ said a character in Tobias Smollett’s The Expedition of Humphry Clinker, that ‘human excrement is the least offensive part’.

Cockayne’s catalogue of the filth of urban England is hardly balanced. There are scores of histories extolling the virtue of the polished and refined city lifestyle (albeit upper class city lifestyle), and to match each description of filth with a counter example of the luxuries of elaborate sixteenth century English gardens would be fatuous.

But she does address the overwhelming question that Hubbub raises — if the city was so bad, why did it continue to grow? City life was certainly filled with unpleasantness, but individuals were aware of the need to accept trade-offs in order to prosper. As Cockayne writes,

There were consolation prizes for those citizens prepared to put up with congested roads and grimy houses. The prospect of finding secure employment, with the opportunity to specialise and diversify, attracted migrants to the cities and induced them to settle, despite the risks and squalor.

‘Muck and money go together’ said a contemporary proverb. So too did the social interactions, arts and cultural life offered by urban density. And while the primary source for Hubbub is a seemingly endless list of contemporary complaints, individuals were able to acclimatise and cope with the vast majority of daily nuisances.

Furthermore, Cockayne rarely leaves the city limits. Rural life had its own share of complaints — urban unpleasantness was so visible to contemporaries because it was relatively new. Living and working in the English countryside was scarcely the idyllic life portrayed in Marxist anti-Industrial Revolution tracts, or even by John Stuart Mill or William Cobbett.

Even so, at the end of the period of Cockayne’s survey, London was progressing towards a cleaner, healthier place, despite the conspicuous acceleration of the Industrial Revolution in the last few decades of the eighteenth century. Indeed, this period has modern political significance. Modern environmentalists point the finger at the Industrial Revolution as the originating point of today’s environmental problems — Leonardo DiCaprio’s upcoming The 11th Hour will reportedly do just that.

But as Hubbub reveals, long before even the most revisionist historian dates the beginning of the Industrial Revolution, Londoners were complaining of ‘duskie cloudes’ over the city. Traditional biofuels such as wood, coal and charcoal were big sources of lung damage. The shift towards electrification that came in the early twentieth century may have spurred a great increase in the use of natural resources for energy generation, but it also shifted noxious smoke out of the kitchen and the living room.

The improvements in sanitation, public works, masonry — Cockayne details how poor craftsmanship meant that buildings in this period tended to fall down without warning — medicine and food technologies achieved during the Industrial Revolution have increased living standards far beyond the imagination of seventeenth-century diarists. Whatever environmental challenges we face, we are not served well by naïvely utopian paeans to pre-industrial Europe or by appeals to wind back development.

Annoyances such as toothaches, itchy clothing, excessive noise and drunken neighbours are all recognisable to twenty-first-century Australians, but to be so immersed in it is not.

IPA Review Editorial, October 2007

In the security scare that followed September 11, it became something of a sport for American news organisations to sneak prohibited items through airport screening security.

So when The Chaser — the Australian political satire group — loosely disguised themselves as the Canadian delegation convoy, and easily passed the security at APEC, it wasn’t surprising. The media pounced on the incident — after all, not much else was happening of interest at APEC. The Chaser’s War on Everything, when it aired the next week, achieved its highest ratings ever.

The Chaser is part of a genre of satirical news programs, which include the US’s The Daily Show and its spin-off, The Colbert Report that are gathering loyalty from the apparently ‘disengaged’ youth demographic.

(It is conspicuous that the commentators who bemoan the Australia’s ‘disengaged’ youth always assume that once they become engaged they will immediately become Left activists. But what if all those yoof got off their bed, put down their headphones, and en masse joined the Young Liberals?)

The popularity of satirical news programs with youth audiences has led some on the Left to view these programs as the saviour of democratic engagement. But satire is a double edged sword. It doesn’t always do what you think does.

Some on the Left have cottoned on to the uncertain potential of satirical news. One piece last year in the Boston Globewas titled ‘Why Jon Stewart Isn’t Funny’, and it argued that the host of The Daily Show, through his relentless satire of Washington buffoonery, encouraged political complacency.

The article claimed that The Daily Show leads audiences to adopt a ‘holier than art thou attitude toward… national leaders’ and undermined ‘any remaining earnestness that liberals in America might still possess’. Given the dreary sanctimony of so many of those in the American Left, if this is true then Jon Stewart does a fantastically important public service. But the Boston Globe writer is spot on. Satirical news programs display an extremely cynical attitude towards the political class.

After all, making fun of politicians is really easy, and fantastically rewarding. The Colbert Report and The Chaser’s War on Everything are able to take advantage of the self-seriousness and cautious approach to the media that politicians harbour. Stephen Colbert, in his ‘Better Know a District’ interviews, successfully tricks junior politicians into making outlandish statements. (‘It was wrong to break the law to get people out of slavery — that’s what you just said’) And The Chaser is never funnier than when they are harassing humourless politicians at their press conferences.

But Left politics relies on the heroic politician, blessed with intellect and political cunning, to enact policies in the ‘national internet’ for the betterment of ‘society’. Cynicism about the type of people who choose to go in to politics and the capabilities of government action does clash with the ongoing hunt in the left for the political saviour.

For this reason, The Chaser’s jokes may seem fairly leftwing, but by undermining the sacred authority of the political class, satirical news tends to be more libertarian than socialist. A generation raised on cynicism and sarcasm are far less likely to jump on the bandwagon of a charismatic leader-type.

The IPA Review has been sceptical of governments, politicians, regulators and other self-appointed ‘leaders’ for sixty years, and this edition is no different. Sinclair Davidson and Ken Phillips criticise the ideological baggage of the union movement, in teaching and construction respectively. Tim Wilson treats yet another call for a government petrol price inquiry with the contempt it deserves. Jennifer Marohasy and Alan Ashbarry decry the cultural divide of forest politics. And in our cover story, Nicholas Eberstadt stares directly into the eyes of the anti-natalists, and asks what they have against children.

Wolfgang Kasper reminds us that federalism is more than just anachronistic ‘State’s rights’, as the Prime Minister seems to consider it. Instead, the principles of federalism are at the heart of liberal government. And Richard Allsop completes the thankless task of reading recent Prime Ministerial biographies, to try to discover more important things than the hometown of John Howard’s grandfather.

There is, of course, the standard array of book reviews, complaints about regulation, personal digs at high-profile environmentalists, and references to Adam Smith that have made the IPA Review Australia’s leading free market review of politics and public policy

Regretting Privatisation: Broadband and the 2007 election

Telstra was sold barely a year ago, but both major parties want to bring the government back into the telecommunications infrastructure game.

The Federal Government has responded to its own failure to reform the decade-old regulatory framework for telecommunications with an array of subsidies and initiatives to introduce high-speed broadband networks. In response, the Labor Party dangles in front of voters a $4.7 billion high speed fibre-optic network.

Both parties are trying to make political capital out of the regulatory quagmire which government action has created for the telecommunications industry. But their proposals offer far less than substantive regulatory change could, and they offer it at a much greater cost to taxpayers.

How broadband became an election issue

A decade is a long time in the communications industry.

In 1997, the ABS reported that barely 300,000 Australians subscribed to Internet connections. In 2007, that figure is now six-and-a-half million. (The number of actual users is far higher. With modern networking hardware not widely available a decade ago, many people share Internet access in the household or workplace.)

With the limited speeds offered by dialup technologies, accessing video and audio was then idle futurism. Today, some estimates place video and audio downloads at 90 per cent of traffic.

Nevertheless, the regulatory framework which was developed in 1997 to govern the industry remains the same regulatory framework governing the industry in 2007. While technology and consumption patterns are almost unrecognisable a decade later, the regulation hasn’t budged.

This regulatory framework was designed to encourage the competitive provision of telecommunications using the legacy infrastructure owned by Telstra. By purchasing capacity from the infrastructure owner, competitors could share the network, introducing competition where previously there was none, and without the need for competitors to build their own network from scratch. The approach favoured by regulators under such a framework is to encourage competitors first to resell Telstra’s products, and then progressively to install hardware into the network to compete with the dominant telco.

With carefully regulated access prices, this ‘ladder of investment’ is designed to encourage both competitors and incumbents to invest in infrastructure—the former in order to siphon off some of the market share of the incumbent; the latter to invest to stave off hungry competitors.

The high level of competition for basic internet and telephony service attests to the success — at least on one metric — of this regulatory model. Indeed, at one time, there were more than 600 internet service providers (ISPs) in Australia.

But a mere two dozen of those have had more than 10,000 customers, and competition is not merely a synonym for ‘lots of companies’. Most Australian ISPs are small shoestring operations — reliant on regulated access prices for reselling Telstra services, and highly prone to failure. This segment of the industry looks like a caricature of the economic models of ‘perfect competition’ — hundreds of companies, prices down to marginal cost, and homogenous products.

Nevertheless, the structure of the market is not the most significant flaw in the existing regulatory framework. Critically, the ‘ladder of investment’ theory is unable to deal with major shifts in technology. When it becomes time to move beyond the legacy copper-wire network — the need for a fibre-optic network in Australia is manifestly clear — access regulations are unable to encour-age the creatively destructive investments required.

After all, regulators have encouraged firms to invest further and further into the existing Telstra infrastructure. These firms rely on a specific regulatory framework to provide them with a business model. Furthermore, the prospect of entirely new networks threatens their existing hardware investments — a fibre-optic network may strand a firm’s assets, or at the very least provide unwelcome competitive pressures. Understandably, these firms resist any proposed change to the telecommunications access regime.

The ‘ladder of investment’ may encourage investment up the ladder, but it discourages investment in alternative ladders. There have been indications that this framework was distorting investment for some time. Optus had been migrating customers off its own cable network and on to the Telstra network when the regulated access price turned in its favour. Fearful of having its service declared by regulators as open access, Telstra is only turning on its recently upgraded high-speed ADSL2+ equipment in areas where there is investment from competitors — in Tasmania, for example, the telco has installed ADSL2+ in more than 100 telephone exchanges, but has switched it on in only three.

But the big evidence came in a flurry of controversy last year. The impasse between the Australian Competition and Consumer Commission (ACCC) and Telstra late last year over the access price for their proposed fibre-to-the-node network pivoted around the application of the regulatory framework to new infrastructure investments.

The fact that the two organisations could not come to an agreement (Telstra very publicly announced that it was scrapping its plans to build a new network) should have provided federal policymakers with a very clear indication that the decade-old regulations had finally collapsed.Unfortunately for taxpayers, this was not to be the case. Instead of reform, the political reaction to this regulatory failure has been to propose subsidies, grants, programmes, initiatives and plans. Worse — all of the proposals on the table would increase government involvement in communications investment, not decrease it.

With the ink barely dry on the full sale of Telstra, das broadband problem has politicians wanting to try their hand again at managing the telecommunications industry.

Picking winners, 2007 style

When Communications Minister Helen Coonan announced a one billion dollar award to an Optus–Elders consortium (dubbed ‘Opel’) to deploy a WiMAX wireless network for regional and rural broadband, she had to defend the technology against its legion of critics.

WiMAX is a successor technology to the WiFi standard that is common in home internet networks. In optimal conditions — that is, with access to the right licensed spectrum band, and in the best geographic and environmental circumstances—the technology can deliver broadband speeds at distances of up to ten or fifteen kilometres, wirelessly from the base station.

However, WiMAX’s reputation has suffered from over-hype. Early enthusiasts proclaimed a range of seventy kilometres, and when the technology failed to deliver even half of that, cynicism about its capabilities crept in.

The Communications Minister has not avoided this trap. Releasing maps of the coverage of the Opel network, the Government has assumed a range of 20 kilometres, with a ‘possible’ further 5 kilometres, a much further distance than the broadband is likely to be available.

Two other factors work against the network’s favour. First, the Opel network will deploy a ‘fixed’ WiMAX network, which is being superseded by the superior ‘mobile’ WiMAX technology. Second, such range is only possible on licensed spectrum, to which the Opel network does not currently have access. WiMAX operating on unlicensed spectrum has to compete with a range of consumer technologies such as home wireless phones, private radio transmitters, garage door openers, and so on.

Given these problems, a more likely range for the WiMAX deployments would be in the region of five to ten kilometres. To be uncharitable, when considering environmental and topographical factors, a maximum range of as little as one or two kilometres is entirely possible.

When the maps of WiMAX coverage that were paraded around by the Communications Minister after the Opel announcement are redrawn with a more realistic range, the difference is stark.

Figures 1 to 4 illustrate this difference in two marginal electorates — Gippsland in rural Victoria, and Wakefield in northern Adelaide. (In an election year, electorates are always the most appropriate unit of measurement.) Figures 1 and 2 are the maps produced by the Department of Communications, which assume a twenty kilometre range with a possible added 5 kilometres for the WiMAX network. Figures 3 and 4 depict what the coverage would be like when we assume a more realistic, but still charitable, range of ten kilometres. In both cases, what appeared to be blanket coverage is now revealed as relatively spartan.

A range of ten kilometres may still be too optimistic. Many WiMAX experts predict even less—down to five, or even one or two kilometres. Experience with a similar technology used by the wireless ISP Unwired in Sydney gives little hope. That the likely range of a wireless network could be overestimated is certainly not unique. A firm competing in an open market that found its network was under performing would merely deploy more towers or upgrade to a better technology. But when the source of funding is public dollars, it should be of some concern.

As these maps make clear, it is highly unlikely that the one billion dollar grant for rural broadband will produce the services advertised.

There is one further core problem with the Federal Government’s rural broadband proposal. While the choice of WiMAX has been the major public focus, the Opel plan also relies on widespread ADSL2+ installations. (For instance, Omeo in Gippsland will be serviced by ADSL2+, rather than WiMAX.) However, as we have seen above, Telstra has deployed ADSL2+ in hundreds of exchanges, but because of the risk of regulatory appropriation, has not switched it on until there has been competing investment.

It is yet another striking demon-stration of the perversity of the regulatory framework that governs the sector: once Opel has installed its equipment in exchanges around the country, and as a result Telstra feels free to switch its equipment on, taxpayers will have paid to build duplicated infrastructure.

Broadband to urban areas is to be dealt with separately, and a taskforce set up by the Government has released guidelines for firms applying to build a network. Applicants have until April to apply, and can specify any necessary regulatory changes required. The minister has gone so far as to suggest that one possible regulatory change would be to grant an infrastructure monopoly to the successful firm to protect it from competition, something which would resemble the legislative monopolies that have characterised Australia’s economic history for most of the twentieth century. Nevertheless, one of the core guidelines recommended by the taskforce is the maintenance of an ‘open access’ regime.

It is clear that few lessons have been drawn from the failures of access regulation in the telecommunications sector.

‘Well, we could just pay for the damn thing ourselves’

While the federal government has provided the most detailed plans, they were beaten to the punch by the ALP. In March, the Federal Labor Party announced its solution to the broadband problem — a $4.7 billion grant to build a national fibre-optic broadband network. Specifically, the ALP proposes a fibre-to-the-node network, which is the same sort of network that Telstra proposed and then abandoned six months earlier.

There is a degree of irony when con-sidering the source of the $4.7 billion. $2.7 billion will come out of existing communications funds—a legacy of the more than a dozen broadband infrastructure programmes of the Howard Government’s last five years. But the remaining two billion dollars will be drawn from the Future Fund, itself a result of the sale of Telstra. Telstra is, as the country’s biggest telecommunications infrastructure providers, likely to be a big contender for the grant. The ALP proposal may return to Telstra the proceeds of its own sale.

But less facetiously, it is hard to justify the use of taxpayer money to build a network that the private sector — in this case, Telstra — was desperate to build itself. And instead of regulatory reform, both the ALP proposal and the Federal Government’s proposal lock the telecommunications sector back into a cycle of government investment and regulated access.

To appropriate the graceless expression made famous by the Communications Minister, neither proposal adequately ‘future-proofs’ the communications sector. When the next inevitable infrastructure upgrade is faced — fibre-to-the-node is hardly the last communications network that will be built in Australia — the same regulatory challenges will arise, unless a more comprehensive and ‘future’ orientated reform is pursued.

As Alan Moran and Warren Pengilley have demonstrated in their recent Institute of Public Affairs monograph, Regulation of Infrastructure: Its Development and Consequences, telecommunications is hardly alone in suffering from inappropriate access regulation. Ports, gas, airports, electricity and railroads have all been negatively affected by infrastructure regulation which grants competitors access to their networks at a regulated price.

In telecommunications, a regulatory framework that includes a disincentive to invest is particularly damaging — technological change requires continuous investment. Broadband in Australia is less than it could be, not because the federal government has failed to assume responsibility for its infrastructure, but because it refuses to reform obsolete regulations that hold private investment back. Bringing the government back into the telecommunications market is no solution.

Big Brother vs. Big Brother: How politicians failed to understand reality television and in their confusion instead decided to regulate the internet

With Hugh Tobin

If the people who watch Big Brother are so stupid, why do we allow them to vote? After all, the cultural criticism of reality television is, implicitly, a criticism of its audience.

The political condemnation which has greeted a series of reality television controversies could easily backfire. The series is simple entertainment, but it is entertainment designed to reflect the social lives and concerns of its audience. There is more to Big Brother than voyeurism.

Nevertheless, in June this year, the cultural pessimists who have made sport of condemning the reality television genre were provided with yet another target for their concentrated hysteria. A new Dutch reality television programme, The Big Donor Show, starred a terminally ill woman with a kidney to donate. Three potential donor recipients were to compete for the life-saving organ. (The programme’s logo tastefully featured a drawing of a kidney in place of the final ‘o’ of ‘donor’.)

Of course, it was a stunt, designed to highlight the shortage of organ donors in the Netherlands and, indeed, around the world. The conservative politicians who had been quick to condemn the programme and call for its censorship awkwardly tried to back away.

The show may have been designed to attract attention to the shortage of organ donors, but the politicians who instinctively shot from the hip illustrated just how highly politicised reality television has become. Reality television attracts vehement criticism—criticism about its supposed emphasis on sex, its voyeurism, its artlessness, and its seeming appeal to the lowest common denominator.

On the surface, many of these objections seem unfounded. Artless voyeurism and sexual innuendo have not merely been a prominent feature of the history of television, but probably a big source of the medium’s popularity. Reality television, then, is simply another genre of entertainment, and should be judged by the same standards as ‘traditional’ genres such as sport or drama. Putting aside the intellectual snobbery adopted by culturally conservative politicians, there’s nothing harmful about a bit of trash TV.

The success of the Dutch kidney donor stunt was only made possible by exploiting the instant notoriety with which reality television has become synonymous. And just as in the Netherlands, over-zealous Australian politicians have rushed to condemn the tone and content of the genre. But the political response in Australia has gone much further than simple statements to the press. The knee-jerk reaction to a series of reality television scandals has led to a major regulatory expansion for online content and delivery.

The controversy surrounding Big Brother in mid-2006 has inspired the federal government to increase the powers of the Australian Communications and Media Authority (ACMA) to police mobile phone and online content. A hastily written piece of legislation now urges the regulator to develop industry standards for the entire Australian internet community, as well as enforce the removal of ‘objectionable’ material here and overseas.

Vague borders

It’s no surprise that Big Donor would originate in the Netherlands. Endemol, the production company which produced the stunt, was one of the major companies responsible for the modern wave of reality television. It produced the first series of Big Brother which aired in 1999 on Dutch commercial television.

The first of the Survivor franchise was aired in Sweden in 1997 as Expedition: Robinson, and 19 Entertainment’s Idol format began in 2001 with its UK series, Pop Idol. These have all been franchised internationally: there are now 95 different winners of the Idol series around the world, and more than 160 winners of Big Brother.

But reality television, a loose genre which presents largely unscripted non-actors in various contrived situations, has a long history. 1948 — the same year in which George Orwell wrote Nineteen Eighty-Four — also saw the first television broadcast of Candid Camera, the long-running and influential concealed camera show which pioneered the genre.

The borders of reality television are unclear. The genre borders upon documentary filmmaking — programmes such as the US’s COPS and Australia’s Border Security, or ‘celebreality’ shows, such as The Osbournes and Newlyweds: Nick and Jessica, document the daily lives of non-actors. The Seven Up! Series — the latest episode of which was reviewed in the December 2006 edition of the IPA Review — also shares some similarities with this strand of the genre.

What constitutes ‘reality’ television is often a matter of degree — many of the staples of the genre have close affinities with more traditional programme formats. Like a game show, the participants in Big Brother compete against each other for a prize, as do contestants in the Idol and Survivor formats. Talk shows such as the Jerry Springer Show have also sometimes been classified as part of the genre when they actively try to foment on-air drama between participants.

Much reality television blurs into fiction. The question of just how ‘real’ reality television is is made particularly problematic by shows such as Laguna Beach, which purports to follow a group of wealthy teenagers living in Orange County, California. Laguna Beach features a not-insignificant amount of scripting and ‘production manipulation’.

Scandal and controversy have accompanied reality television since its early days — reality television has been a more powerful conduit for debate about social and cultural issues than any number of high-minded, preachy Hollywood films. In the 1973 US series An American Family, which centred around a family experiencing a divorce, the eldest child’s homosexuality was the lightning rod for controversy.

In 1992’s Sylvania Waters, a series which filmed an Australian family, the perceived and real alcoholism, racism, and materialism of the Laurie Donaher/Noeline Baker de facto family drew much criticism. The Sun headlined its story on the series when it debuted in the UK: ‘Meet Noeline. By Tonight You’ll Hate Her Too’.

The most controversial programmes, however, have been those which have placed participants in special living environments. MTV’s The Real World has, since 1992, placed participants together in an urban house and given them jobs and group activities. Tensions and arguments over race and sexual orientations have been a recurring theme throughout the series.

Politics and Big Brother

Unsurprisingly, the Big Brother franchise has a tradition of controversy. Last year’s accusations of racism in the UK Celebrity Big Brother gained the British series world-wide attention. Politicians who have been so eager for the limelight that they have volunteered as participants have come under heavy public fire. The Scottish MP George Galloway thought that the best way to capitalise on his notoriety after being accused of Iraqi Oil-for-Food corruption was to appear on the 2006 edition of Celebrity Big Brother. The minority whip of the Mexican Green Party also participated in a 2004 Mexican Big Brother, to much political criticism.

The Australian Big Brother may not have featured any politicians as housemates yet, but the franchise has been readily embraced as a political totem. Beginning in 2001, early Australian seasons of Big Brother were aired with relatively little controversy. 2003 saw a small incident as one housemate identified a minor in an ongoing court trial — the producers frantically shut down the live Internet feeds and official Website discussion boards. A 2004 contestant staged a silent protest upon his eviction from the house, taping his mouth shut and holding up a banner reading ‘Free th refugees’ (sic), to the consternation of producers who had planned the usual extensive post-eviction interview.

The Dutch production company which developed the Big Brother format originally conceived as few as six contestants locked up in a house for a year. The format was partly inspired by the early Webcam movement, a late 1990s’ trend where exhibitionists document a usually unedited video stream of their lives onto the Internet, including sexual encounters.

And it is this lineage of total surveillance and exhibitionism that has provided the source of the major controversy. The 2005 series’ emphasis on the sex appeal of the housemates, in particular the weekly 9.40pm ‘Uncut’ programme which presented material not appropriate for the 7pm ‘Daily Show’, was a focal point of political condemnation. ‘Uncut’ featured, for the most part, conversations about the sex lives of the housemates, shower scene footage, and general playing around.

Following complaints from the Australian Family Association, Liberal MP Trish Draper condemned the programme as pornographic, arguing that the housemates have ‘an aspiration to be porn stars’. Big Brother participants are certainly exhibitionists, but it would undoubtedly be easier to get work on a porn film than become a housemate.

In 2005, ‘Uncut’ was the problem. Once the programme had attracted the attention of the Communications Minister, Helen Coonan, media regulators determined that the material chosen for broadcast was in breach of the free-to-air code of conduct. For the next year’s season the programme was retitled ‘Adults Only’ and the sexual content watered down. (Nevertheless, by June 2006, Channel Ten had succumbed to political pressure from government backbenchers and pulled the show; even though it was, as everybody acknowledged, firmly within the bounds of broadcasting regulations and the television industry’s code of conduct.)

But for Big Brother 2006, the biggest controversy wasn’t what was broadcast on free-to-air television. It was the Internet-only, subscription-only live feed which recorded the alleged sexual harassment by two contestants of a third female participant.

Steve Fielding of Family First led the critical charge of criticism at the show: ‘This show legitimises behaviour that is not acceptable anywhere in our community and this latest incident is disgusting and degrading and, quite frankly, this is not a community standard that’s acceptable … Family First is calling for Big Brother to be pulled’.

The Prime Minister also called Big Brother a ‘stupid program’, and the Communications Minister said that it was ‘disturbing and offensive’. Predictably, the ACMA was once again pulled back into the fray.

Whether the ACMA had jurisdiction over the online material was, however, uncertain. The incident was not broadcast on television. As the ACMA noted in its report, the footage wasn’t even stored on the Big Brother website — the site did not provide an archive of the feed. But enterprising subscribers had recorded it themselves, and the incident was soon viewable on video-sharing sites such as YouTube.

The ACMA’s report concluded that there was little the regulator could do about what was provided online. For the government this was an insufficiently dramatic political response to the August 2006 incident.

So now, in 2007, we have legislation which gives the ACMA that authority. The Communications Legislation Amendment (Content Services) Bill, which passed through parliament in late June, gives the regulator authority over ‘ephemeral’ content services such as Internet live feeds, as well as the power to regulate ‘convergent’ devices, such as mobile phones offering video or other content. But the importance of the new legislation is not limited to an expansion of the ACMA’s jurisdiction. The law places the regulator firmly at the centre of ascertaining the responsibility for content created and delivered on the internet.

The creation of content by Internet users, rather than professional content producers, has been one of the primary innovations in entertainment technology over the last decade. Sites such as YouTube provide a neutral distribution system for users to upload and broadcast that content. But the introduction of this legislation requires the site to police the material it hosts, rather than placing the responsibility with the producer of the material. As Microsoft has noted, this surpasses the high regulatory bar set by the European Union—an unfavourable comparison.

The high pace of innovation has blurred the distinction between forms of content and delivery—indeed, this is a good working definition of ‘convergence’. In an effort to translate the complex technological and cultural changes of the content industry, the legislation confuses and over-regulates.

For example, there are 22 exemptions to what is considered, for the purposes of the legislation, as a ‘content service’. Entrepreneurs eager to found their own YouTube killer in Australia will struggle to navigate the convoluted legal framework and liability issues. They will be doubly frustrated if they had originally been seduced by the federal government’s public desire to encourage a local content industry.

Between the audience and the activists

As has regularly been pointed out both by critics and contestants, ‘The Daily Show’ and ‘Uncut’/‘Adults Only’ programmes of Big Brother are not strictly ‘real’. Programme producers can cut and edit what is finally broadcast to direct or create narratives, play up potentially dramatic situations and even manipulate audience perceptions of individual housemates. But they have very little capacity to manipulate the live Internet feed.

What is shown live from the house is as close to ‘reality’ as audiences are likely to get from the artificial environment of Big Brother. If the programme’s original conceit was to broadcast the mundane lives of a group of people in an isolated house, then live streaming is the ultimate manifestation of that idea.

When politicians criticise or disparage the contestants on Big Brother, they implicitly criticise the (voting) audience.

In the UK, the programme’s audience is 58 per cent female, and 49 per cent are aged between 16 and 34. The Australian audience has a similar composition. The participants on most of the standard Big Brother series are deliberately chosen to replicate the likely audience.

This same demographic now spends more time online (38 per cent) than with any other entertainment medium. Again, the activity online provides an interesting parallel with the Big Brother format. This is the same generation that is likely to have a public profile on MySpace or Facebook, to record their daily activities publicly on services such as Twitter, to run a blog, to produce YouTube commentaries, or in some other way to participate in online discussions and forums.

Big Brother may be exhibitionism on the scale of free-to-air television, but the audience also practices their own smaller-scale exhibitionism online.

Politicians eager to court this key demographic should be wary of such instant point-scoring. The reactionary attitude of the political class to the genre is, particularly for young viewers, indicative of a failure to understand youth culture.

One recent paper in the International Journal of Cultural Studies has found that UK Big Brother viewers were, when assessing a politician, most likely to give their support to someone who they saw as an ‘ordinary’ person. The programme, this finding implies, is popular because the audience can relate to the housemates; and politics is unpopular because the participants are harder to relate to.

How individuals acted in the artificial environment of the Big Brother house was seen as a reliable guide to their personality and ability—a view that contrasts poorly with finely stage-managed political personas. The ‘Uncut’/‘Adults Only’ programme was both unfiltered titillation and a candid display of key aspects of the housemate’s personalities.

Endemol has itself encouraged the comparison between the programme and politics. The company’s UK division sponsored a 2003 study which contrasted what it saw as the typical Big Brother viewer — typically female, under 40, and largely uninterested in politics — with ‘Political Junkies’—male, 50-plus, professionals, who regularly discussed politics in social settings. Endemol’s UK chairman wrote in the study that the British government needed to replicate the most appealing aspects of Big Brother and ‘broaden its accountability, allowing the electorate more control via interactivity and thus earning more respect from the new generation of voters’.

Politicians should probably not apply to be housemates. George Galloway was, after all, voted out of the house early into the season. But the remarkably confused interpretation of the implications and importance of reality television and the internet has led Australian politicians to demonstrate just how little they understand this key demographic.

When the frills of Big Brother — the prize money, the weekly voting, the Friday-night games — are stripped away, the programme does nothing more than stick 14 young people in a house and watches what they do. They may be more attractive and extroverted than the norm, but they represent a cross-section of the social, political and economic make-up of their generation.

Politicians would do better to watch the show than to breathlessly condemn it.

Libertarian ascendancy

Review of Radicals for Capitalism: A Freewheeling History of the Modern American Libertarian Movement, by Brian Doherty (PublicAffairs, 2007, 768 pages)

If one relationship illustrates the uncomfortable and slightly paradoxical relationship between modern, big-tent conservatism and the radical libertarian movement, it is the one between Barry Goldwater and Karl Hess.

Hess was first and foremost an activist, standing in contrast to the more numerous academic types who constituted the American libertarian movement in the 1960s and 1970s. He was firmly counterculture. He sported a Castro beard, and dressed in that same South American revolutionary style. While Hess’s right-of-centre credentials were firmly entrenched — as a journalist for Newsweek he had expressed what was seen as an unbecoming enthusiasm for McCarthy-era anti-communism, and his own writing was strongly libertarian, as well as staunchly anti-war — he conspicuously allied himself with the New Left in the latter half of the 1960s.

Barry Goldwater, whose ideological footprint was stamped with his ghost-written Conscience of a Conservative, was the 1964 Republican nominee for President. Goldwater’s foils were the Soviets and liberals, in equal weight. And Karl Hess, the future counterculture icon, was his unlikely speechwriter.

By the early 1970s, Hess’s position as a libertarian anti-war protester had been the subject of numerous profiles in the mainstream press. His relationship with Goldwater was, however, just as strong. Hess maintained that Goldwater, despite his position as the proto-typical American conservative, was still a perfect fit for his libertarian anti-war coalition, telling the Washington Post that ‘I don’t know anybody who would make a better Weatherman’ — the anti-war terror cell of the radical left. In an almost beautiful vignette of improbable friendship, Goldwater, bumping into Hess on opposite sides of a rally outside the capital in 1969, pulled him aside to asked him to ‘give me a call as soon as you’re free’.

Libertarianism, as Bryan Doherty’s Radicals for Capitalism: A Freewheeling History of the Modern American Libertarian Movement reveals starkly, has always existed uncomfortably alongside its fairweather partner, conservatism. Libertarians, as Doherty points out, often have close personal and institutional connections with the traditional right — they share the same think-tanks, libertarians are often members of the dominant right party, and the two make common cause on many issues, particularly free market economics.

But in the areas of sex, drugs, some science issues such as cloning and stem-cell research, and (often) war, libertarians deviate sharply from the conservative movement. Ayn Rand, in her typically venomous, Randian manner, held conservatives ranging from National Review’s William F. Buckley to Ronald Reagan in utter contempt, dismissing them as wallowing in the ‘God-family-country swamp’.

And that swamp is repelled by libertarians’ radical views on emotionally charged issues, some of which can border almost on satire. Libertarianism often rejoices in how off-putting its beliefs are, relishing its outsider status. Doherty quotes a founder of the New York State Libertarian Party who says that ‘hard-core libertarianism has no mass constituency … there is no mass constituency for seven-year-old heroin dealers to be able to buy tanks with their profits from prostitution’.

Doherty structures Radicals for Capitalism around five major figures: four economists, Ludwig von Mises, Friedrich Hayek, Murray Rothbard & Milton Friedman, and a novelist, Ayn Rand. The title of Doherty’s book itself is in part a compromise for Rand, who hated the term ‘libertarian’ in the same manner that she hated everything else.

But around these well-knowns, Doherty brings in their intellectual ancestors and heirs, and many other peripheral figures largely ignored by modern libertarians. For instance, Doherty profiles the group Spiritual Mobilization, Christian libertarian pamphleteers who splintered out of Leonard Read’s Foundation for Economic Education (FEE). (Libertarian mythology, for some reason, tends to downplay the importance of explicitly Christian free marketeers — the Spiritual Mobilization group have suffered from the same selective memory-loss that the Free Bible Movement has suffered from in the popular mythology of the free trade Anti-Corn Law movement.)

Modern libertarian thought has coalesced around the United States and, as Doherty points out, rightly so. Read your Constitution; there has scarcely been a stronger declaration of the rights of the individual. But the history of nineteenth-century America depicts the demise of anti-statism as the dominant American ideology.

Radicals for Capitalism — after briefly surveying proto-libertarians such as Supreme Court Justice Stephen Field, Yale political scientist William Graham Sumner and political philosopher Herbert Spencer — begins the twentieth century with what were, by then, termed the ‘Old Right’ — a small, disconnected cadre of anti-statist intellectuals repulsed by Franklin D. Roosevelt’s fascistic New Deal.

The intellectual isolation of the Old Right in the country that should be most receptive to its ideas sets the trajectory of the Libertarian movement until at least the 1970s. Movements cannot thrive without an institutional base. Anti-staters before the Second World War were first and foremost intellectuals, and produced a large amount of material. But they failed to reassert themselves in the intellectual landscape of the time, let alone dominate it.

They were not helped by their theoretically incomplete political and economic programme — Ludwig von Mises and Friedrich Hayek were still formulating their comprehensive treatises before the war. The Old Right was an informal coalition built around a hatred of Roosevelt.

Libertarians emerged from the war even further from the intellectual zeitgeist. No post-war libertarian set the tone and structure of the movement more than Leonard E. Read. Read was a refugee from a pro-business lobby group which was usually free-market, but had the frustrating habit of providing an outlet for ‘both sides’ of any given debate. The anti-market side, Read thought, already dominated public debate — why build them another platform from which to attack American capitalism?

Read left the lobby group in 1946 and founded The Foundation for Economic Education (FEE) — the prototypical free-market think-tank. Read’s and the FEE’s approach was, as the name suggests, a purely intellectual and educative endeavour. FEE’s mission was to provide the intellectual stimulant for the remnants of American anti-state thought, and hopefully to convince others, through argument alone, of its merits.

The FEE defined the structure of Libertarianism. Until the Vietnam War era, libertarians almost uniformly focused their activities on education and intellectual outreach. ‘Full-service’ think-tanks, specialist schools such as the charismatic Robert LeFevre’s Freedom School, and outreach organisations focused around varieties of libertarian thought such as Ayn Rand’s objectivism — the movement spent the post-war decades building up the institutional base which it had lacked for most of the country’s history. Having been largely expelled from the government-supported educational establishment and its lucrative tenure tracks, libertarian intellectuals have had to be both scholars and entrepreneurs to stay afloat.

It wasn’t until the late 1960s and 1970s that these efforts really started to pay off. A new generation of libertarians mixed activism over academia, aping the activities of the left. The Libertarian Party held its first convention in Denver in 1972.

Karl Hess — as far from a Read-style educator as can possibly be imagined — with other young libertarians strategically aligned himself with the New Left. It was not a particularly comfortable fit. The movement was still dominated by intellectual types—as it is today. But as these intellectuals gained confidence, their proselytising took a more public dimension. Doherty relates a particular prank of the Circle Bastiat Boys, a group comprising Murray Rothbard, Leonard Liggio, Ralph Raico and others:

One of their favourite stunts involved filling the studio of a televised talk by the governor of New Jersey, hitting him with questions as if their ideological universal was the norm and his some sort of aberration. ‘What, governor? You are for public schools? Where did you get such strange ideas? Can you recommend any books on the subject?

The libertarian movement in the 1970s was a dramatically different one from the isolated remnants faced by Leonard Read, and its expansion was in no small part his achievement. Resembling the state of the movement in 2007, libertarian ideas formed the basis of a magnificent variety of sub-culture groups. And not just famous groups such as Randian Objectivists or Young Americans for Freedom. They also formed a quite sizable part of the hippy and drug movements, science fiction writers, and fans, even early computer enthusiasts.

A proliferation of small independent zines were produced across the country, amongst them Efficacy, Rights by Right, Bull$heet, Living Free and Invitu$. The now-widely circulated Reason Magazine, of which Doherty is a senior editor, was founded in 1968 as a movement zine, dedicated to libertarian gossip and libel.

Libertarianism is a large enough movement to spread out well across the academic/activist divide. However, by the 1990s, it is possible to speak of ‘establishment libertarianism’. Libertarian arguments are, certainly, a constituent part of liberal economic theory. How much the ‘radicals’ of Doherty’s book propelled the general policy drift towards free markets around the end of the century is an open question. We know that Milton Friedman and Friedrich Hayek had a significant impact by the concrete policies and politicians directly inspired by the two academics. But individualists such as Andrew Joseph Galambos, who argued that his ideas were so firmly his private property that you had no right even to describe them to others, perhaps not so much.

The Adam Smith Tie establishment — a network of libertarian-leaning academics and policy-wonks centred around free-market focused think-tanks such as the Cato Institute — has arguably been the movement’s greatest political asset. The employment stability, institutional base and open forum that think-tanks have given to free market writers, thinkers and activists contrasts with the unfortunate isolation faced by Mises, Hayek, and even Rothbard (although, one suspects, Rothbard’s instability was partly of his own making).

These institutions have also provided public credibility for libertarian ideas, even if they by necessity have had to couch their message in practical, rather than moral terms. One political philosopher, writing for Cato recently, titled his essay on broadcasting the libertarian message ‘I’m not a utilitarian, but I play one on TV’. The individuals who work at think-tanks typically have a wide span of philosophical views, but the messages they broadcast are more Friedmanite practicality than Randian moral elitism.

Although Doherty’s book is not an intellectual history, he handles the intellectual issues clearly and honestly. His discussion of Albert Jay Nock’s Our Enemy the State, a foundation text of the Old Right, reveals its uncomfortable ideological fit — its place amongst college-age libertarians is earned almost entirely by the quality of its title.

For an Australian reader, Radicals for Capitalism suffers a little from its scope. Little sense — at least once the Austrians Hayek and Mises move to America — is given of the international environment of the American libertarians. Doherty notes the role of Antony Fisher, a founder of the UK’s Institute of Economic Affairs, at franchising his think-tank model across the United States, but, with those few exceptions, American libertarianism is a closed shop. This is perhaps an unfair criticism — Doherty’s book is unambiguously a history of the modern American libertarian movement — so a synthesis of world-wide radical pro-capitalists remains to be written.

Despite its dramatic gains over the past 50 years, libertarianism still remains as marginalia in American politics. The New York Times’ review of Radicals for Capitalism demonstrates this neatly. The reviewer, an economics writer named David Leonhardt, after quickly dismissing libertarian ideas as a rhetorical aberration, dug through Doherty’s book to cherry-pick as many bad things as they could find — Milton Friedman in Pinochet’s Chile, Rothbard’s youthful flirtation with the segregationist Presidential candidate Sturm Thormond, and the anti-Semitic Merwin Hart (whose name is mentioned exactly once, and in an obviously negative context).

Leonhardt complains that ‘the book fails to ask why people who claim to love freedom have so often had a soft spot for those who would deny it to others’. It would be hard to make the case that Doherty’s book describes a libertarian movement that didn’t care about human, political and economic rights, but in the hands of the establishment left, that is its inevitable conclusion. He ends his review, appropriately, with a discussion of global warming — whatever you think about the left, they sure are focused. Leonhardt’s ignorance of libertarian beliefs and principles is, to be charitable, a reflection of the publishing and writing industry’s reluctance to produce books about the ideological foundations of the free market or the conservative sides of politics.

Sprawling and comprehensive, Radicals for Capitalism replaces Jerome Tuccille’s now 30-years-old It Usually Begins with Ayn Rand as the ‘official’ movement history. Doherty contextualises libertarian figures like Friedman and Rand amongst their peers in the wider movement and produces, as a result, a broad picture of an ideology in its ascendancy.

The Regulatory State’s democracy problem

Let’s briefly grant critics of ‘neo-liberalism’ their preferred terminology. Are Australia’s governments entranced by dreams of a neoliberal utopia?

‘Neo-liberalism’ has become commentariat dogma on both the left and the right. As any number of opinion pieces describe, Margaret Thatcher and Ronald Reagan engaged in privatisation and deregulation on a massive scale, fuelled by ideological zealotry. In Australia, Prime Ministers Hawke and Keating did the same, but in contrast to their Atlantic allies, they exhibited the measured and reasonable approach that could only be grounded in Treasury advice.

By the late 1990s, after a decade of continuous economic reform across the country, Australian governments had, sometimes reluctantly, handed their role in the provision of services to the private sector. Neo-liberalism, we read, rules the day.

But this reading of the form and function of Australia’s system of government is deeply incomplete. Instead, in 2007, the best characterisation of Australia’s political system is not a neo-liberal, ‘nightwatchman’ state, nor is it the social-democratic welfare state which dominated the twentieth century. Rather, it is a ‘Regulatory State’.

The Regulatory State shares elements of these traditional political models. Like the former, it has an economy relatively open to foreign capital and products. It has privatised most of its publicly-owned monopolies. And like the latter, Australia has a large welfare state, as well as extensive government provision of health and education services.

Australia is not, however, merely at a mid-point between liberalism and socialism. The phrase ‘Regulatory State’ indicates a separate alternative — the regulation of our economic and social life has come to be the primary activity of government, and the primary means by which government interacts with the economy and the individuals who comprise it.

In a Regulatory State, not only is regulating the first priority of the state, but regulation defines the state. It is a revealing way of analyzing Australian democracy.

Regulation governs our commercial interactions. It governs the work environment, the social environment — reflect for a moment on how many regulations there are by which you are suddenly administered the moment you walk into a bar — and the home environment.

From a historical perspective, regulation acts as a substitute for public ownership. The privatisations which critics of neoliberalism have fixed upon as indicative of a laissez-faire economy have been matched with a correspondingly dramatic increase in legislation and subordinate legislation to control these newly private entities. The Regulatory State has found that its social, environmental and economic purposes can still be achieved by the use of regulation, while avoiding the burden of actually owning, and being responsible for, the public utilities themselves.

The modern left’s primary criticism of privatisation is that private ownership will not deliver the social benefits that public ownership had (or could have). And yet no state business has been privatised without being saddled with an extensive regulatory programme aimed at trying to keep those benefits?

One exception to this is the padded workforces of the former state government trading entities. Privatisation — and its diluted form, corporatisation — has been fundamentally about forcing efficiencies by shedding labour. This willingness to jettison excessive, unionised jobs itself says much about the ideological progress of social-democratic parties. But job shedding in these former state entreprises has been accompanied by the creation of jobs in production management, as well as regulatory and governance jobs.

Almost all of the growth in regulation under the modern Regulatory State is social, rather than economic.

Environmental regulation has a long history, but its marked rise in the last quarter of a century was inaugurated by the 1972 Stockholm Conference on the Human Environment and the subsequent establishment in many nations, including Australia, of national environmental agencies. Consumer product safety, particularly in the transport sector, and Occupational Health and Safety regulations have also increased rapidly. Corporate and financial regulation has also displayed particular growth, often mandated by parallel international trends, but also propelled by what former British Prime Minister Tony Blair has described as an increasingly risk-averse population.

Charts 1 and 2 show just how dramatic this increase in regulatory and legislative activity has been. The impact of these regulations is cumulative — firms and individuals have to comply with the total body of law, not merely the law that has been passed in the most recent session of parliament. Certainly, much law is passed to override or amend existing legislation, but that in itself constitutes a further cost.

Furthermore, these charts do not include the web of quasi-regulations, codes of conduct, guidelines and other ‘voluntary’ self-regulations, which are often policed by regulators, or developed by the government, or instituted to ward off potential legislation. It would be a mistake to ignore these much-harder-to-quantify interventions when trying to ascertain just how significant regulation is in Australia.

Using the direct tools of legislation, or the indirect tools of subordinate legislation and quasi-regulation, government intervention in the economy is expanding, rather than, as left-wing critics would describe it, receding. Furthermore, regulation has assumed a sort of entrepreneurial role for government intervention—a mechanism to search out new areas of the economy just begging to be regulated.

This casts Australian governments’ enthusiastic regulatory activity in a new light. The development of regulation is unambiguously a political activity whose direction is determined by political imperatives, and which has just as many political consequences as it has economic and social consequences.

Independent Regulatory Agencies

The direction of regulation may be determined by elected legislators, but its administration is delegated to the central institution of the Regulatory State — the independent regulatory agency.

These institutions are deemed ‘independent’ because they exist outside the normal bureaucratic chain of accountability — ministers and other elected representatives are not directly responsible for the agencies’ actions.

Independent regulators are accountable through such indirect means as procedural norms, requirements to be ‘transparent’, jurisdictional limitations and, as a last resort, the right of aggrieved firms and individuals to judicial review of the regulators’ decision-making processes. Nevertheless, within the confines of these mechanisms of accountability, regulators have significant discretionary power.

While the United Kingdom had inspectors policing factories for violations of the Factory Act from 1833, the independent regulatory agency is largely an American invention. The socialist fetish for public ownership never took strong hold in the United States, but, pioneering the now familiar pattern, regulation administered by independent regulatory agencies provided a substitute. In 1887, the Interstate Commerce Commission was formed, followed quickly by the Food and Drug Administration (1906) and the Fair Trade Commission (1913).

Then, as now, independence was intended to protect objectivity — the regulators would be friendly to business, but neutral in their application of the law.

But this balanced objectivity has also been under-mined historically by the bureaucratic impulses of the independent regulator to expand its jurisdiction, its powers and its discretionary budget. Regulators lobby governments for increased regulations, increased powers to administer them and, of course, increased budgets and staff. Regulators involve themselves more deeply in the activities of the firms they regulate, trying to discern the levels of compliance while, at the same time, trying to expand their jurisdiction into other industries and sectors.

For instance, having decided that the free-for-all internet is littered with bottlenecks to genuine competition, the ACCC is using the migration of media content online to explore new opportunities for regulation — a textbook example of regulatory creep.

In Australia, there are approximately 60 federal regulatory agencies, and 40 federal ministerial councils. We know that there are approximately 70 agencies in Victoria (the only state which publishes this data publicly), but extrapolating that figure, the Productivity Commission estimates that there are up to 600 regulators across the country.

Doing a similar extrapolation for the budgets of those agencies, and taking into account government departments with regulatory functions, inter-governmental bodies, and the range of quasi-official agencies and boards, it is easy to imagine that at least $10 billion is spent on regulating our activities.

Reigning over this web of institutions that is the Regulatory State are three ‘mega-regulators’ — the Australian Prudential Regulation Authority (APRA), the Australian Competition and Consumer Commission (ACCC) and the Australian Securities and Investment Commission (ASIC) — the results of a concerted effort over the last decade-and-a-half to consolidate federal and state regulatory agencies into single, one-stop-shop regulators.

Rather than having their jurisdictions delineated by the industries they regulate, instead they are delineated by the regulator’s ‘function’. ASIC is responsible for consumer and investment protection in cases of market manipulations such as insider trading. APRA is responsible for the regulation of information asymmetries in financial services, and the ACCC is responsible for anti-competitive conduct and consumer protection economy-wide. Old industry-based regulators, such as the Insurance and Superannuation Commission, had their functions divvyed up into the new functional bodies.

Just as the volume of regulation is growing, so are the three ‘mega-regulators’. We can see, since the turn of the twenty-first century, a significant increase in government spending and staff. We see increased media profiles and public relations activities. (The ACCC’s activism in the media was the subject of much criticism during the 2003 Dawson Inquiry into the Trade Practices Act — chastened, it decreased those activities immediately following the Dawson report, but has been steadily returning to its former levels.)

These agencies preside over the most intense period of regulatory and legislative activity in Australian history. This gives them enormous political power and influence — for which they are largely seperate from the traditional chains of democratic accountability.

Distracted by ‘red tape’

Regulation, admittedly, doesn’t get much good press. But the criticisms that regulations do receive are revealingly narrow.

Overbearing business regulation stifles incentives to take risks and to innovate’, wrote Labor’s Small Business spokesman Craig Emerson in The Australian earlier this year, ‘crucial to the efficient functioning of a market economy and productivity growth’. Undeniably true.

But the content of ALP policy focuses on reducing ‘red tape’ — only a small part of the total regulatory burden. Eliminating ‘duplication’ or regulatory confusion, which constitutes the bulk of ‘deregulatory’ proposals by both the ALP and the Coalition Government, does not address the real issue — regulations which discourage investment and entrepreneurial activity, and divert firms away from profit-making opportunities.

For example, Telstra estimates that it has to provide the government with 486 compliance reports annually — a significant red tape, or ‘paperburden’ cost. But the real cost of regulation of the telecommunications sector, however, is much higher, constituting the forsaken investment in infrastructure, the cost of universal service obligations, and the cost of delayed innovation across the economy. Similarly, the tomes of compliance reports required by ASIC dwarf the less tangible costs of diminished entrepreneurship and reduced corporate flexibility.

Focusing only on the paperburden cost of regulations is like focusing on the time spent filling out a tax return rather than the amount of tax paid.

In fact, the anti-red tape movement is reminiscent of regular movements throughout the twentieth century for more ‘efficient’ government. An efficient government is not a virtue if it is just as large as an inefficient one — indeed, efficiency can help it dominate the economy even more.

The bipartisan red tape proposals do nothing to reduce the size of government and its impact on the economy. Promises to reduce the red-tape burden offer little if they are not a constituent part of a promise to decrease the scope or extent of regulatory interventions.

A reduction in the volume of regu-lations and the extent of regulatory intervention in the economy will not only have economic benefits, it will have democratic benefits as well.

The dominance of the indepen-dent regulatory agencies in political and economic life is dependent upon this enormous pool of legislation and regulation — the problems of accountability and discretionary power will be resolved only when that pool is drained.

Regulation is the defining feature of the modern Australian state, and the regulatory problem requires a political solution.