Author: Chris Berg

Memory is a funny thing. “In the days of the Accord,” Business Council head Tony Shepherd told an audience last week, “different sectors were able to agree on a common purpose and a plan to foster productivity, competitiveness and growth … there is no reason we cannot do this again.”

Shepherd is not alone. Hardly a week goes by without another CEO recalling the ambitions of past governments, and lamenting the timidity of current ones.

Their story has been repeated so often it’s become a banal cliché: in the days of Bob Hawke and Paul Keating, businesses, government and unions put down their swords, held hands, and made beautiful microeconomic reform together. We need to rediscover the politics of consensus and conciliation. It’s time for an end to partisanship and to get on with … anyway. It’s boring to write, let alone read. Imagine hearing it in a speech.

But let’s be clear about what that cooperation would be in practice: institutionalised collusion between big business and big government.

This is the unacknowledged truth behind the business lobby’s complaints that Australia has left its reform era behind, or that politics is too divided to make the big historical changes.

Getting business and government around a board table isn’t necessarily a good thing. In politics, cooperation can be dangerous.

Big businesses are no fans of the free market. They only like competition in the abstract. In the real world, competition is traumatic. So when they are given the opportunity to set the rules of the game, they always try to fix it in their favour.

That’s why we talk so much about lobbyists. That’s why we talk about crony capitalism. And that’s why we talk about regulatory capture – when a business promotes regulation to shut down its competition. The politics of consensus has a dark side.

One of Adam Smith’s most famous quotes comes from his Wealth of Nations: “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public.”

Most people citing Smith’s warning leave it there. You can see the appeal. Business cartels are bad, said the neoliberals’ favourite economist.

But he went on: “Though the law cannot hinder people of the same trade from sometimes assembling together, it ought to do nothing to facilitate such assemblies; much less to render them necessary.” That is, cartels are bad – so the government should be careful not to create them.

On Monday, Julia Gillard announced that she wanted to do just that. Writing to the Business Council and the Australian Council of Trade Unions, she proposed a National Economic Reform Panel. This new body would encourage Australia’s biggest businesses, largest unions, and most well-connected community groups to build a national consensus on reform.

Happily, it won’t go anywhere. Remember Kevin Rudd’s relationship with Sir Rod Eddington, announced in a flurry of publicity in the 2007 election? It’s not clear that Eddington gave any advice, or that Rudd took any. The post-election Business Advisory Group didn’t seem to go anywhere, either. Similarly, it is doubtful historians will mark Julia Gillard’s tax summit in June this year as a key moment in Australian economic history.

We are haunted by memory of the Accord. When Hawke and Keating convinced the ACTU to restrain wages in return for social reforms in 1983, they created one of the few hero moments in Australian history. In our national mythology, the Accord was a necessary first step for the liberalisations of the next decade.

But the Accord was explicitly corporatist. It was a way to buy off the unions and (although they did not formally sign the Accord) a fair chunk of the business sector. It may have brought these bodies inside the tent, but it also gave them new influence and power over government.

Yes, many special interests gained from the Accord. But it does not follow that the Accord was in the general interest.

For instance, given Keating’s later efforts liberalising the labour market, we forget that the Accord constituted one of the most significant increases in industrial relations control in Australian history. To their credit, some unions recognised this. Not all unions signed up.

By the end of 1980s, advocates of liberalisation were arguing that, by locking the biggest unions within the policy system, the Accord was actually holding back reform. Privatisation, tax changes and tariff reduction were made harder, not easier, by the government’s newfound special relationship with labour. As Des Moore wrote in 1988, the Accord had granted unions a “privileged position … to defend their own narrow, short-term interest at the expense of the Australian community and of their own members”.

The politics of consensus is really the politics of privilege. It’s easy to understand why special interests want control over the levers of power, but it’s hard to see why we would give it to them.

Getting political journalism to focus on fact checking is appealing in principle. It is disappointing – even futile – in practice.

You can understand why people find fact checking seductive. Our politicians pander to prejudices, fudge policy details, vilify their opponents, and exaggerate their own virtues for votes.

But as good democrats we put the winners of this squalid electoral contest in charge of the levers of government. So it would be nice to know which politician lies least.

And there’s clearly frustration with journalism as it is practiced today: why not make its new duty to judge political untruths?

Fact checking was a feature of the 2012 Presidential campaign. One frustrated Mitt Romney advisor said he wouldn’t “let our campaign be dictated by fact-checkers”.

But, in a column over the weekend, Australia’s Laurie Oakes unintentionally demonstrated how faddish and illusory the fact checking idea really is.

Writing that he expected fact checking to become a central part of Australian journalism, Oakes identified two recent falsehoods: Julia Gillard’s “there will be no carbon tax under a government I lead”, and Tony Abbott’s claims about the future economic cost of that tax.

If only it were so clear.

Did Julia Gillard lie about the carbon tax on 16 August 2010? Well, yes. And no.

She probably thought she wouldn’t introduce a “carbon tax” in the next term of government. But that didn’t mean she wouldn’t introduce an emissions trading scheme. And what we call a carbon tax in 2012 is actually the latter with an initial fixed price.

Yet free market economists have long insisted that, contrary to popular wisdom, there’s not a big conceptual difference between a tax and a trading scheme. They both price carbon. A tax could be described as a “market mechanism” too.

The point is these are terms of art, not science.

The idea that a journalist – or scientist, or economist, or philosopher – would be able to provide anything near a definitive statement of whether Julia Gillard was being factually accurate is nonsense.

Anyway, how on earth could the press gallery fact check a prediction? Tony Abbott’s claims about the carbon tax’s economic impact are almost entirely rhetorical. Yes, he understates how much of recent electricity price rises have been due to the changes in the energy industry – an understatement which is regularly pointed out in parliament and the press. But as to the carbon tax’s real cost?

Models of future economic costs merely reflect the assumptions they’re built upon. We don’t know how much a policy hurts until long afterwards. Even then it’s still quite hard to tell. Fact checking of such predictions is just arguing the toss.

This problem is clearly illustrated in the latest piece on The Washington Post’s Fact Checkerblog. Run by a veteran correspondent, Glenn Kessler, Fact Checker is apparently the gold standard in the field.

The story goes like this. Republicans have been citing an Ernst & Young study saying tax increases on the rich would “destroy nearly 700,000 jobs”.

Kessler notes that a) the jobs are lost over a decade or more, b) 700,000 jobs is only a tiny fraction of total employment, c) the study ignores the benefits of reducing the deficit, and d) there’s a different study that says otherwise.

For their “misleading” analysis, he awarded the Republicans three out of four Pinocchios.

But who is being misleading here? The Republicans aren’t wrong. At best they are guilty of an ungenerous presentation of the evidence. The Ernst & Young study says 700,000 jobs will be lost – just not immediately. You can’t refute rhetorical excess.

What Kessler isn’t doing isn’t fact checking, really. It’s just more argument. Which is fine, but let’s not pretend that more argument is a journalism revolution. And it’s definitely not new.
Even apparently clear falsehoods – for instance, Mitt Romney’s ad saying Barack Obama “sold Chrysler to Italians who are going to build Jeeps in China” – are more subtle than they’ve been presented. In a confusingly worded Bloomberg article, Chrysler was reported to be considering exactly that.

Kessler gave Romney four Pinnochios for his Chrysler ad, but his actual conclusion was more modest.

The ad was “a series of statements that individually might be factually defensible, but the overall impression is misleading”.

In the hands of partisans this has become a classic Romney ‘lie’.

Certainly, Romney had confused the Chrysler issue in an earlier speech in Ohio. But senior politicians are usually very clever with their words. They don’t lie. They dissemble.
Kessler to his credit is relatively even-handed. He goes after both left and right.

Such non-discrimination is unusual. Fact checking is more common as a political attack than journalistic technique. Hacks of all sides push their own fact checkers. It’s just another weapon in the partisan’s armoury. Smugly purporting to be on the side of ‘reality’ is a fashionable way to hit your opponent.

There’s a more critical problem with the fact checking fad. Political journalism is a business of generalists not experts. The best reporters know a little about a lot, not a lot about a little.

That, indeed, is why the ‘he-said, she-said’ model of journalism was developed. He-said, she-said has a bad reputation these days – it is often used unthinkingly – but it exists for a reason. It reflects a modesty that generalists cannot rule definitively on all issues. Sometimes you need to call a specialist. If something is controversial, you may need to call two.

Political rhetoric is rarely true or false. When an issue is simple, politicians will fudge it. When an issue is complicated, it requires experts to unpack.

Either way, self-conscious and self-satisfied ‘fact checking’ is no magic bullet.

The Government’s Asian century white paper finally reveals the conceptual poverty of the Asian Century idea.

Certainly, Asia will continue to grow prosperous and come to dominate the global economy.

But Ken Henry’s white paper demonstrates that the concept of an “Asian century” offers almost nothing to guide Australian public policy in 2012.

Don’t believe the hype. The Asian century is not the stuff of wonky earnestness. It is a political story.

A simple reorganisation greatly diminishes the whole project. We can group the proposals – sorry, “pathways”, a horrible word that the Government uses to conflate policies with goals – of the white paper into two categories.

The first category is things that are true no matter which continent dominates the next 100 years. The white paper wants Australia to be one of the top ten richest countries by 2025. Fair enough. But this holds regardless of whether there will be an Asian century, or an American century, or a New Zealand century. Most of the white paper is like this.

One sentence reads: “A world-class school system is essential to Australia’s success in the Asian century.” What do the last four words contribute? The government will create “a long-term national infrastructure strategy”. It will establish a Tax Studies Institute. There will be a National Plan for School Improvement. We ought to expand our trade with the rest of the world. The Asian century conceit adds nothing to these ideas.

The white paper even plugs Closing the Gap. Ending Indigenous disadvantage is extremely important, but what on earth does it have to do with Asia?

In the second category are proposals specifically designed to deal with rising Asian economies. There aren’t many in this category. And they’re all pretty minor – even token.

Of these, increased Asian language teaching is the most significant. I’ve criticised this idea in the past, and Benjamin Herscovitch from the Centre of Independent Studies has done so recently at length. Yet even if more Asian language teaching was necessary, it’s an oddly trivial hook for this ambitious white paper. Is offering Chinese at more schools really the pivot on which our nation will turn?

The quality of proposals declines sharply from there. The white paper says that one-third of board members of Australia’s top companies should have deep knowledge of Asia. This is a pretty gimmicky idea. Anyway, why is intellectual composition of the boards of private firms any business of the Commonwealth government?

One welcome proposal is to boost the numbers of tourism and working visas from Asia (you could ask: why not boost visas from everywhere?). Yet in the mid-year budget just last week the government significantly raised the cost of visas for foreign workers.

Asian century boosters have always struggled to link their statement of the obvious (Asia is growing) to concrete proposals. This white paper is most ambitious attempt yet. If Ken Henry can’t make it work, nobody can. But it fails.

Apart from continuing to strive to be productive and educated and rich – good things whether our neighbours are rising or declining – it’s not obvious that Australia needs to do anything special about the rise of Asia.

Indeed, that may be the point.

The white paper mostly just reiterates existing Gillard government policies. Far from jolting us out of our complacency, the paper encourages it … well, as long as we stick with Labor and its NBN and its schools plan and its carbon tax.

The Asian century paper is a political document. It’s a theme for the Government now that most of the Rudd-era ambitions have been squared away; a fresh “Labor vision” for the party of Keating and Whitlam. It doesn’t have to be particularly coherent or convincing. It just has to be plausible.

And, to be fair, it is. The white paper exudes seriousness. It is ridiculously Big Picture. The Asian century is intellectually flattering: everybody feels smarter when they talk about it. In the last 48 hours almost every special interest in the country has claimed their pet issues are the key to surviving the new Eastern paradigm.

Given that the Asian century is above all a political idea, it seems significant that the Opposition has been caught off-foot. First the Coalition welcomed it, said it lacked detail, then said it lacked funding. By Monday Tony Abbott had described it as “laughable, frankly”. Then he moved on to Peter Slipper.

This is probably not wise.

The Asian century looks like Julia Gillard’s election strategy. It’s a lot better than Moving Forward. But like so many political visions, it’s seems more profound than it is. We should not confuse narrative for substance.