Author: Chris Berg

Plain Packs Pointless When Smoke Gets In Our Eyes

When the Rudd government’s National Preventative Health Taskforce released a position paper on anti-tobacco measures, they titled it “Making Smoking History”.

If that was the goal you’d think the government could just ban cigarettes – a clear, bold, unequivocal stance on what it has condemned as a very dangerous and addictive product.

But the title does help us understand the reasoning behind plain packaging of tobacco, a policy which federal Health Minister Nicola Roxon announced a few weeks ago. It’s punitive.

The nanny state is no longer trying to inform us of the best choices and the risks of unhealthy behaviour. Now it’s just resorted to bullying – haranguing and punishing people who still make those unapproved choices contrary to nanny’s wisdom and despite nanny’s best efforts.

Where will this end? Surely, after decades of anti-smoking education, the presumption eventually has to fall back onto individual responsibility.

You can hate tobacco companies. You can hate what cigarettes do. But the government is planning to make Australia the first country in the world to impose plain packaging on cigarettes. It seems reasonable to ask whether it will work.

Here’s what we know: smokers are influenced by packaging, to a degree. Lighter colours seem to imply less risk. One leaked Phillip Morris document admitted as much. “Smooth” and “silver” also suggest safer cigarettes.

Hence the government’s proposed new packet design – an unappealing olive green, with unadorned text for the label. But the literature suggests package marketing only influences the choices of existing smokers.

The government’s goal for packaging is to stop people becoming smokers in the first place. Roxon argues “catchy colours” are designed to “suck in young people”. Her aim is to “make sure fewer people start on this dangerous habit”. And there’s no clear evidence packet design inspires non-smokers to start smoking.

The most that reviews of the scholarly evidence can find are surveys in which teenagers are asked to imagine whether their friends could be duped by shiny packages. You may not be surprised to learn teenagers assume their friends are idiots.

This lack of evidence isn’t surprising. People start smoking because they want to try the sensation of smoking, not try the sensation of holding a well-designed package. And what about existing smokers? Let’s just say if graphic photos of bleeding lungs haven’t inspired you to kick the habit, an olive box probably won’t either.

The tobacco companies are upset about plain packaging because it will make it harder to compete for the existing pool of customers. They focus on packaging design because there’s nothing left for them to do.

It’s not as if cigarette marketing isn’t highly regulated already. Smokers won’t even be able to see the olive-ness of the packets until after purchase. New Victorian laws mean cigarettes are closeted out of view behind the counter. Now retailers can only display a sign, provided by the state government, with the words “We Sell Tobacco Here” in black on a white background.

Existing laws will undermine the effectiveness of future anti-smoking policies the government might implement.

After all, it’s one thing to show that people in an experimental psychology lab think lighter colours mean lighter cigarettes. But it’s quite another to imagine that – after decades of anti-smoking advertising, warning labels and social disapproval – the colour of the packet will make a lick of difference to the decision to smoke.

The traditional justification for nanny state-style regulation is that people don’t understand the consequences of their choices.

Should people be allowed to manage their own risks: to conduct themselves in their own way, to abuse or protect their bodies as they see fit?

The answer to that question ultimately depends on your personal values. But the first health warning on cigarette packets was imposed 38 years ago.

Anyway, we’re a long way past the days of health bureaucrats gently nudging us to make better decisions, and moderate sin taxes to recoup the costs to taxpayers.

Budget after budget of tobacco excise increases mean tobacco taxes now far outweigh the burden of smokers on the publicly funded health system.

The government estimates smoking-related illness costs about $300 million a year. But it collects $5.8 billion each year in tobacco excise duty.

If the very existence of brands causes harm, as the government’s plain packaging strategy suggests, then plain packaging for alcohol will no doubt be next. Eighty per cent of Australians believe the nation has a drinking problem.

Brewers won’t be able to get away with fluorescent and sparkling alcopops forever. They’re obviously targeted at younger consumers. Nobody drinks Bacardi Breezers “responsibly”.

Prominent text warning labels will come first. Then graphics.

Seems unlikely? Well, 10 years ago the idea that the government would eliminate logos from cigarette packs would have seemed pretty unlikely too.

In a nanny state, what first sounds absurd can quickly become the law of the land.

Learning From Public Policy Mistakes Of The GFC

In the Financial Times at the end of March, the former Federal Reserve Chairman Alan Greenspan wrote “With notably rare exceptions (2008, for example), the global ‘invisible hand’ has created relatively stable exchange rates, interest rates, prices, and wage rates”.

That statement is mundanely true. But as it came from Greenspan, it was not well received.

Left-leaning blogs have had great fun: “With notably rare exceptions, the levees protecting New Orleans have held fast in the face of major hurricanes”.

The Nobel winning economist-turned-polemicist Paul Krugman wrote he “didn’t know quite how to respond”.

The Global Financial Crisis still looms large.

Our understanding of the crisis will shape debate about the role of government and the fragility or robustness of markets for decades.

So it’s important to get it right – to pinpoint exactly what went wrong in the US housing market and what caused it. The particulars are important.

Those particulars make it hard to shove the crisis into a morality play of deregulation and rampant greed.

We know a lot more about the crisis than we did in 2008 and 2009.

The US government’s Financial Crisis Inquiry Commission reported this January. While its majority report largely fails to interrogate the structural origin of the housing bubble, a dissenting report released as an appendix is much more interesting.

Written by Peter Wallison of the American Enterprise Institute, the dissent rigorously documents the deliberate erosion of lending standards by successive American administrations.

As Wallison writes, in the early 1990s lending standards were seen as a barrier to home ownership for low and middle-income families.

The solution was the Housing and Community Development Act of 1992, which intended to give those families better access to mortgage credit through the government-sponsored enterprises Fannie Mae and Freddie Mac.

Fannie and Freddie had been, until then, conservative and relatively benign, trading mortgages on the secondary market since the Great Depression. But with the 1992 Act they now had a new mandate, a social mission.

Over the next 15 years the Government ratcheted up the affordable housing goals.

The result of these goals was spectacular.

By 2008, “non-traditional” mortgages (loans made to those with blemished credit, or lacking documentation, or with negligible down-payment) made up a massive 58 per cent of the total US mortgage market.

And US government entities – primarily Fannie and Freddie – were either directly holding or guaranteeing 71 per cent of those non-traditional loans.

This was a successful program, under its own terms. It boosted homeownership rates substantially. But the housing bubble it created eventually burst.

The received wisdom on this boom in non-traditional mortgages has focused on fraud by lenders, the naivety of borrowers, and the greed of investment bankers who packaged them into complex and inscrutable investments.

This tale has been reinforced by bookstores full of hastily-written financial crisis porn, rich with anecdotes about fast-living financiers and lazy lenders.

Yet in a market engorged by government affordable-housing goals, these bankers no more epitomise the ‘invisible hand’ than the US Congress does.

So three years after the crisis, the policies which caused the housing bubble are starting to get their due recognition.

As are the mistakes made in 2008, while the bubble was collapsing.

If the erosion of lending standards was the long-term cause of the crisis, then the actions of the US government in 2008 was the short-term one – badly deepening the crash and impeding the recovery.

Since the 1980s, the US government had slowly built an expectation it would bailout big firms if they got into trouble. This expectation was never explicit. You wouldn’t want to bet the company on it. But it was there.

Still, the bailout of the investment bank Bear Sterns in March 2008 came as a surprise. Sure, Bear Sterns was deeply involved in non-traditional mortgages, but it was only a mid-sized firm. If Bear Sterns was “too big to fail”, so were dozens of others.

When the Federal Reserve stepped in to save Bear Sterns, it was massively expanding the government’s implied support net.

In retrospect, many participants have blamed the failure to bailout Lehman Brothers in September for the crash. And it is true that the market only truly sunk after it became clear Lehman would be left to fail, and investors realised government help was not guaranteed.

But Lehman’s actions in the week after the Bear Sterns bailout reveal the real problem in 2008.

Bear Stern’s near collapse in March should have inspired all participants to stop and reassess the quality of the mortgage-backed securities they were holding.

Instead, Lehman doubled-down, packaging all their riskiest assets into a special fund with one purpose – as collateral to borrow money from the Federal Reserve. In other words, instead of limiting their risk, they increased it.

For Lehman and other firms, maximising the chances for a bailout became the main game. Not cleaning balance sheets and taking a financial hit. As a former director of the Federal Reserve Bank, Vince Reinhart, has argued, the question becomes less “how do we get out of this mess?” and more “how much money will the government pony up first?”

Expectations changed again in September with Lehman’s collapse. The US economy froze. The global panic began. Governments initiated an unprecedented series of interventions and stimulus packages.

And the name of the Lehman Brothers fund specifically designed to take advantage of Federal Reserve largesse and the banking sector’s new claim on taxpayer dollars?

The “Freedom” fund.

Memory of the Great Depression shaped economic policy in the second half of the 20th century. The Great Recession will shape the next 50 years.

So let’s not let our understanding of its causes slip into a vague haze of myth and cliché. The crisis was caused not by greed, or deregulation, or neo-liberalism. It was caused by a web of public policy mistakes – if well-intentioned ones – and their unintended consequences.

Multiculturalism Is A Useless Word

Multiculturalism is one of the least useful words in Australian politics.
It owes all its power to ambiguity. It is divisive because it is vague.
Recall that multiculturalism refers not to the policy of letting in migrants and refugees, but to how we deal with them when they get here. Multiculturalism is the opposite of ‘assimilation’, not the opposite of discriminatory immigration settings.
If multiculturalism is a positive program, a deliberate, imposed set of policies and laws, then those policies are few and not easy to pin down.
Interpreters, multiple languages on government documents, and a few scattered cultural grants do not make a policy revolution. A female-only swimming session does not constitute a threat to the Commonwealth.
The political rhetoric about multiculturalism is vastly disproportionate to the number of policies which multiculturalism has apparently inspired.
But if, alternatively, multiculturalism is an ideology, it is an ill-defined and unclear one.
Sure, ideas have consequences. Yet it is hard to see how stating that “every person should be able to maintain his or her culture without prejudice or disadvantage” (in the influential formulation of the 1978 Galbally Report into migrant services) leads to migrant crime, one of the many claimed consequences of multiculturalism. Or how it causes new arrivals to prefer to settle in suburbs near other new arrivals – an entirely reasonable preference, as one person’s ethnic enclave is another’s comfort in numbers.
Attributing the misbehaviour of some young migrants to vague philosophical statements made in bureaucratic documents gives government too much credit. Politicians are just not that influential.
And it is too simple to blame law and order problems on migration levels or ethnicity, rather than under-policing and skewed police priorities.
The basic idea of a liberal democracy is that individuals can live their own lives according to their own preferences under a neutral legal and political framework.
Rights in a liberal democracy are held by individuals, not by groups. Nobody has more or different rights than another by virtue of their cultural origin.
No substantive policy imposed in Australia under the banner of multiculturalism has undermined these basic principles. Sure, there’s been a lot of academic waffle about cultural relativism and the superiority of non-Western thinking, but that waffle has not been translated into law.
Australia has done settlement policy pretty well.
Several European leaders have made recent statements damning multiculturalism, and Australian critics have claimed these statements are just as applicable to our circumstances. They are not.
For one, the European economy is vastly different.
It’s no coincidence that the biggest social problems with multiculturalism occur in European countries with sluggish jobs markets. Or in those countries with extremely generous welfare schemes.
Nothing impedes integration like unemployment.
Other specific policies can exacerbate the natural, well-known, but manageable challenges of mass immigration.
Germany’s Chancellor Angela Merkel said late last year that multiculturalism has failed. But this is in no small part due to the legacy of Germany’s post-war guest worker program, which was so poorly designed as to entrench a disaffected Turkish underclass.
In the 1960s and 1970s, Turkish guest workers were meant to be temporary. The government deliberately encouraged to them live outside German society – they were housed in dormitories near the factories where they worked.
But the two-year rotation for guest workers was extended for another two years, then for four decades. All the while the workers expected to be sent back. One Turkish migrant told Der Speigel last year that “Some of our friends kept their packed suitcases under the bed or on top of a closet for 10 or 15 years, so that they could leave at a moment’s notice.”
No wonder Germany has had integration problems.
We’ve avoided these sorts of policy mistakes. Australia has strict walls around welfare, and a comparatively dynamic labour market.
As has the United States. Last week in the conservative National Review, the law professor Eugene Volokh pointed out that the US was also a successfully “multicultural” nation. Volokh argued that the success of this policy relied on a few basic principles like economic liberty and freedom of speech.
None of this is to deny the tensions when migrants enter countries that value individual liberty and the right to free association.
But it does give us a guide to minimise those tensions. Social integration comes after economic integration. Secure employment helps migrants build roots and communities. Migrants engaged in peaceful commerce feel more connected to their adopted country than those on welfare or unable to find work.
During his exile in England in the early 18th century, Voltaire observed that in the centres of trade, “representatives of all the peoples gathered… There, the Jew, the Muslim, and the Christian deal with each other as if they shared the same religion and give the name “infidel” only to those who go bankrupt.”
Multiculturalism means vastly different things in different countries. Let’s stop obsessing over this useless word, and talk about specifics.

Deregulation Can Save The Taxi Industry From Itself

The regulation of Melbourne’s taxi industry was a mess from the beginning.

Taxis were new, smart and efficient when they were introduced in 1908, but they were a threat to the existing horse-drawn hackney cab lobby. As The Argus newspaper said, “once the Melbourne public has ridden in a taxi-cab it will ride on one always, in preference to the horse-drawn vehicle”.

The mechanical competition was an ominous challenge to the hackney cabs, so when the city council considered the new taxis, the hackney cabmen had demands. First they said the cars might scare the horses, and should not be let on Melbourne’s streets.

Then they said motorised cabs should share the ranks with the horses-drawn ones. That way customers wouldn’t have a choice as to whether to take the new cars or not. They could only take the next one in line.

The politicking between hackney drivers and the new taxi company meant it took the city council until October 1910 for the cars to get licences to ply their trade.

More than 100 years later, vested interests, and the outdated regulations those interests rely on, are still a serious impediment to taxi services in Melbourne.

If Ted Baillieu is searching for a serious reform to hang his hat on – and he should be – he’s found one with taxis.

The Premier has announced an apparently wide-ranging inquiry into Melbourne’s taxi system, headed by the former federal competition regulator Allan Fels.

Transport Department research suggests Victorians have more complaints about taxis than trains. And we hate trains.

But the real problem with Melbourne’s taxi fleet isn’t their lack of cleanliness. Or the poor language skills of drivers. Or their low salaries. Or that some drivers don’t know where they’re going – something which could, you would think, be resolved with a GPS unit.

The problem is there’s not much reason for taxi operators and owners to make them better.

State governments have artificially limited the number of taxi licences, virtually eliminating competition and with it the incentive to provide a better service.

The licensing system is one of the few remnants of our old, stale, highly regulated economy – a relic that should have been discarded when we discarded egg marketing boards and laws limiting how far you can transport bread.

But on it has trundled, until today, when the market price of a single taxi licence has blown out to $500,000.

That extraordinary figure should be all the evidence needed to suggest something is wrong with the system – half a million dollars for the privilege of driving drunks home at 4am.

Taxi journeys are expensive, yet driver salaries are low. Much of the difference between the two is the cost imposed by the limits on taxi licence numbers.

To compound all that, taxis have strictly regulated fares, which further reduces competition.

It’s not a system unique to Melbourne – taxi licences are limited and highly regulated in most places in Australia and around the world. And there’s an overwhelming consensus that this doesn’t work.

A few countries have bucked the trend. New Zealand has deregulated its taxi industry. So has Ireland, the Netherlands and Sweden. Darwin, too.

A comprehensive survey in 2006 by economists Adrian Moore and Ted Balaker concluded that taxi deregulation would be successful. And not just in theory – every case study Moore and Balaker canvassed found that deregulation worked.

Allan Fels said this week effective taxi licence reform could cut the cost of a ride by a third. The experience from overseas suggests this is not just possible, but likely.

Considering that the poor, the elderly and those with disabilities (in other words, people who cannot drive or afford a car) are disproportionately large users of taxis, reducing the price and improving the service would seem like an important task.

But taxi regulation has never been set by impartial governments seeking only the best thing for consumers.

Current licence owners have a lock on taxi policy. They will no doubt aggressively lobby against any attempt to eliminate licence limits. That’s understandable, because they bought licences in good faith, and paid a premium. Licences will have to be bought out or, at least, the limits phased out predictably over time.

That challenge should not be seen as an excuse to avoid reform.

Back in 1908, the frustrated manager of the new taxi organisation complained far and wide that “public convenience” was being “subordinated to the interests of hackney coach owners”.

The situation is not so different today.

No reform will be worthy of the name unless it tackles – for good – the archaic limited licence system which increases costs, reduces quality of service, and is rigged to favour just a few wealthy licence holders at the expense of drivers and consumers.

Climate Change Can’t Be Stopped, But We Will Adapt

Julia Gillard is half-right. The world is acting on climate change. But not acting to stop it – to adapt to it. In the 1920s, an average of 240 people out of every million died every year from extreme weather events: drought, flood, windstorm, landslide, earthquake, extreme temperatures and wildfire.

According to data from the International Disaster Database, last decade that figure dropped to just three per million.

Actually, the numbers are even better than they first look. The 20th century saw a 99.9 per cent reduction in the risk of death from drought. And the risk of death from floods came down almost as much: 89 per cent. Floods and drought – two of the most commonly mentioned consequences of climate change. We’re getting much better at managing and surviving them.

The causes of this remarkable decline in mortality are many. Better transport and communications help move food to where it’s needed, quicker. Globalised trade gives producers an incentive to do so. Hardy modern agriculture can survive not just long-term climatic shifts, but the more pressing problem of bad growing seasons.

Better flood control and prevention, weather forecasting and more responsive emergency services all help reduce the damage from floods. Never have we been better at protecting ourselves against nature.

If the past is any guide to the present, that’s how we’ll deal with further changes in climate (whether caused by human activity or not): through adaptation. Especially considering there’s next to no chance of serious international action to reduce carbon emissions. Sure, if Australia introduced a carbon price now, we would not be “leading the world”. Other countries have introduced their own. But there’s action on climate, and then there’s “action on climate”.

The only purpose of carbon pricing programs is to achieve deep emissions cuts. By that measure, they’ve been a dismal failure. Those jurisdictions that have introduced them have been slowly backing away from serious reductions. The coalition of 10 American states acting on climate that Gillard often cites will soon be nine: New Hampshire is planning to withdraw.

European climate policy is pushing bravely ahead. But if nuclear power is off the table after the Fukushima scare then cutting emissions there will be a dead end. As George Monbiot wrote in The Guardian last week, “the energy source to which most economies will revert if they shut down their nuclear plants is not wood, water, wind or sun, but fossil fuel”.

And China has been increasing its carbon dioxide emissions by an average of 12 per cent every year this century. By 2020, China will be emitting nearly 500 per cent above its 1990 levels, even after their highly publicised emissions reduction efforts.

The goal of public policy must always be to increase human welfare. One lead author of the Intergovernmental Panel on Climate Change, Richard Tol, has pointed out that many studies of the economic impact of climate change have excluded the possibility of adaptation entirely – as if potential sea level rises will be met by humanity with a stoic fatalism, rather than levies and insurance. (Tol, it’s worth pointing out, is no climate sceptic.)

Nor do enough studies consider the positive effects of temperature increases. In a warming world, marginal land can become productive for agriculture, just as often as productive land can become marginal.

Given how we’re getting better at coping with extreme weather events, there’s reason for optimism. Taking all peer-reviewed studies of the economic consequences of temperature rises into account, Tol estimates that climate change could cost just a few per cent of global GDP over the next 90 years. That’s about one year’s economic growth. The cost of climate change is the equivalent of a bad recession, spread over nearly a century.

With the economic cost of climate change so low, Tol suggests (at most) an optimal carbon price would be $2 per tonne – a lot less than the $26 to $40 per tonne suggested by the government and commentators. But at $2, the cost of collecting such a tax would seriously eat up its revenue; hardly worth doing at all, and a bit trivial to be ”major economic reform” on which Julia Gillard could build her legacy.

The most damaging consequences of IPCC-projected climate change will be in the Third World. But developing countries aren’t disproportionately vulnerable to climate change because they’re in more dangerous parts of the globe, but because they’re poor.

Wealth and sturdy institutions are critical for handling natural disasters and climatic changes – as we’ve seen in the difference between the 2010 Haitian earthquake and the 2011 Japanese earthquake. This makes the real climate change question a question about economic development. How can the world’s poor get rich quick?

If her government is serious about tackling the consequences of climate change, that should be the one question exercising Julia Gillard’s mind. Her carbon price is, at best, a distraction.

Media Watch: Everyone Loves It Until They Advocate Censorship

On last week’s Media Watch, host Jonathan Holmes called for the government to use a practically defunct regulation to restrict free speech because he disagreed with the content of that speech.

Two days later, GetUp – the useful idiots of Australian politics – responded to this call to action, launching proceedings with the government regulator, the Australian Communications and Media Authority.

That the speech in question was about climate change and the speakers were Alan Jones and Chris Smith is absolutely beside the point.

Media Watch conclusively demonstrated that, on the right to free speech, it’s one of the bad guys – asking for the legal system to intervene in a vigorous public debate.

The program opened with an extended discussion about the number of climate change sceptics hosting AM radio shows, their take on climate science, and the fact that they interview more sceptical scientists than non-sceptical ones.

Completely within Media Watch’s brief, sure, and completely banal. It’s hardly news some radio commentators prefer to interview certain guests more than others. “Opinion maker has biased view” would not stop even the smallest press.

Yet Holmes went one step further. He argued the shock-jocks are in breach of the Code of Practice governing commercial broadcasters which mandates “reasonable efforts are made… to present significant viewpoints when dealing with controversial issues of public importance”.

And the reason the regulator hasn’t enforced the code against Alan Jones and his fellow sceptics? ACMA “won’t or can’t enforce the Code unless someone complains it’s being flouted.”

Nudge nudge, wink wink.

Defending his stance on Twitter, Holmes said on Wednesday that “if you check you’ll see I said stations shouldn’t need to be told by [the] regulator”. The key word there is “need” – Holmes believes that broadcasters do, currently, need to have their speech regulated; their freedom of expression limited.

The host of Media Watch would not respond to further questions.

Don’t just read the transcript – watch the show. Smugness has always been part of the appeal of Media Watch. But when tackling subjects with more weightiness than the NT News or an ABC 24 production error, complacent insinuation and innuendo are increasingly a substitute, rather than a complement, for argument.

Nevertheless, if Holmes believes that GetUp or his audience have misinterpreted his meaning and intent – or simply if he thinks the government regulating public debate is a bad thing – then he could say so on air.

The right to freedom of speech is meaningless without the right to choose that speech. No-one should be forced to say something they do not believe as a condition of saying something they do.

In the United States between 1949 and 1987, the ‘Fairness Doctrine’ obliged broadcasters to do exactly that. The regulation compelled contrasting views to be presented whenever an issue was raised on the air.

And certainly, the doctrine resulted in balanced and civil broadcasting environment. But it did so by exclusion. It was easier to avoid controversial topics than risk a regulatory penalty for being perceived unfair.

Testifying in 1984, the broadcaster Dan Rather argued that “Once a newsperson has to stop and consider what a Government agency will think of something he or she wants to put on the air, an invaluable element of freedom has been lost.”

The Fairness Doctrine quickly became a political weapon. During the Kennedy Administration, the Democratic National Committee produced activist kits teaching party members “how to demand time under the Fairness Doctrine”.

The Nixon administration also used Fairness Doctrine to threaten the licenses of hostile broadcasters. Angered by The Washington Post’s Watergate coverage, Richard Nixon is on record saying that “the Post is going to have damnable, damnable problems… They have a television station… and they’re going to have to get it renewed.”

The Fairness Doctrine is now widely recognised as having had a ‘chilling effect’ on speech.

Compared to the Fairness Doctrine, the Commercial Broadcasters’ Code of Practice is a model of restraint. But, as Media Watch helpfully demonstrated, that is because it is largely defunct – it has been interpreted benignly, and wielded rarely.

Monday’s Media Watch advocated that this free speech status quo be overturned, and the Code of Practice be used as a political weapon.

After all, I doubt Holmes would argue that gay broadcasters should be compelled to air the views of homophobes, or Christian broadcasters to air the view of anti-theists. Instead he called for the Code to be used solely against those discussing Australia’s biggest, most controversial, political issue – the carbon price.

Some claim a Code of Practice is the price broadcasters pay for using public spectrum; that the rest of the media is free to do what it likes but there must be special rules for those using the airwaves. The history of the Fairness Doctrine, and the egregious actions of GetUp and Media Watch, show just how slippery a slope that view is. “Public interest” rationales easily become political interest rationales.

When not actively hostile to free speech, Media Watch is just missing in action.

Take, for instance, the most prominent and disturbing violation of free speech in recent years: the class action lawsuit against Andrew Bolt under the Racial Vilification Act is as clear cut an attempt to silence a critic of public policy as this country has seen in many years.

So, unsurprisingly, the lawsuit has not been mentioned once on what is supposed to be the ABC’s flagship program of media analysis.

Referring to George Bush’s 2003 declaration to the Australian parliament that he loved free speech, Holmes’ predecessor David Marr lamented to the Media Watch audience “If only more Australian commentators shared his view.”

Indeed. And if only Media Watch did as well.

West’s History Not Complete Without Reference To Christianity

Julia Gillard’s declaration over the weekend that she would like the Bible taught in schools seems odd, given she’s Australia’s most prominent atheist.

Mind you, it’s more odd when you consider that in the incoming national curriculum for history Christianity barely gets a guernsey at all. Gillard was the minister who oversaw the curriculum’s development.

As Tony Taylor, one of the architects of the curriculum, helpfully pointed out in Crikey in January, when the curriculum does mention Christianity, it only sticks to the bad things – like the Crusades, and the Spanish conquest of the Americas.

Still, she’s right. Julia Gillard may be an atheist (so am I, for what it’s worth) but understanding the Christian roots of modern liberal democracy is important, even in a secular world.

In her Sky interview Gillard focused on the Bible’s cultural legacy, saying “it’s impossible to understand Western literature without having that key of understanding the Bible stories and how Western literature builds on them and reflects them and deconstructs them and brings them back together”.

Familiarity with Christianity and the Bible is about more than understanding Shakespearean metaphors.

It is a historical truism that the development of liberal democracy, modern political philosophies, notions of human rights and equality, and our social institutions all owe much to Christian thought.

Almost all thinkers in the formative centuries of Western liberal democracy were convinced (or simply assumed) there was a God, and He was a Christian God. The non-theist exceptions were… exceptional.

Their religious faith couldn’t help but shape their worldview.

Explicitly secular arguments for our modern world only appear with the Enlightenment, and by that stage the philosophical frame in which we understand liberalism and democracy had already been set.

Take, for example, the religious assumptions which underpinned the development of liberal philosophy.

The very modern-seeming idea of human rights comes from the concept of “natural rights” – rights drawn from God.

No-one defined modern liberalism more than the 17th century philosopher John Locke. Locke’s vision of the three basic natural rights – life, liberty and property – set the political agenda for three centuries. As did his arguments that all people are fundamentally equal, kings are just men, and power derives from the consent of the majority.

Locke came to these conclusions from an explicitly Christian mindset.

For Locke, humans are equal – men, women, workers, shopkeepers, peasants, kings, smart people, stupid people, the physically strong and the physically weak – because they are all capable of knowing God.

You don’t need to agree with Locke’s arguments. Neither do you need to believe human rights or equality are inherently religious concepts.

But as the philosopher Jeremy Waldron writes in his 2002 book God, Locke, and Equality: Christian Foundations in Locke’s Political Thought, “Secular theorists often assume that they know what a religious argument is like: they present it as a crude prescription from God, backed up with threat of hellfire, derived from general or particular revelation… With this image in mind, they think it obvious that religious argument should be excluded from public life”.

Thus we get ‘Captain Catholic’, and the idea that teaching children some basic aspects of Christian thought is antithetical to secular democracy.

If the next generation are going to be taught history they should be taught good history. That means fully identifying the religious origins of modern society.

It means discussing how one short passage in the Bible (“give to Caesar what is Caesar’s, and to God what is God’s”) put medieval Europe’s church and state in opposition, and undermined the centralised authority characteristic of other civilisations.

It means recognising not just religious support for the Spanish conquest of the Americas, but the religious beliefs of those who also opposed it, like Francisco de Vitoria, Bartolomé de las Casas, and Antonio de Montesinos – three 16th century theologians who bitterly opposed the enslavement and abuse of Native Americans on Christian grounds.

And yes, it means teaching how devout people did great harm as well.

This secular defence of Christianity should not be taken too far.

While liberal democracy was conceived in a Christian framework, one obviously need not be Christian to be part of liberal democracy.

That’s the whole point. Liberalism as practised in the 21st century is wholly secular and wholly pluralistic – we don’t need to rely on theology to justify universal suffrage or individual freedom.

And, of course, understanding the importance of Christianity in the development of Western thought does not mean we are required to design policy according to conservative Christian values.

Religious arguments for policy should be taken with the same grain of salt as other policy arguments.

The Prime Minister clearly doesn’t want Australian kids to read the Bible out of some evangelical fervour. Teaching children about Christianity is not the same as teaching them to be Christians.

Just as the history of the Middle East can’t be understood without Islam, the history of Western Civilisation can’t be taught without reference to the West’s dominant religion.

Natural Disasters Give Economic Growth A Moral Dimension

Between 1990 and 2002, globally 815,077 people were killed by 4,300 natural disasters.

Since then, an earthquake in Bam, Iran in 2003 took 26,000 lives. The 2008 Sichuan earthquake killed 68,000, and the death toll from Haiti earthquake in 2010 could have reached up to 300,000.

Now Japan, where 10,000 are missing and likely dead.

These numbers are numbingly large.

But tragedy is not aggregate but individual – the personal toll of lost family members, lost livelihoods, lost homes, peaceful lives violated suddenly and destructively.

So what we know about reducing vulnerability to natural disasters is pressing.

And the academic literature is unambiguous: a richer country is a safer country.

Sure, some regions are more susceptible to natural disaster. Asia, for instance, suffers more than Africa. But rich countries are statistically as likely to be hit by nature as poor ones.

It’s just the rich countries cope much, much better.

Between 1985 and 1999, 65 per cent of deaths from natural disasters took place in nations whose per capita incomes were below $US760 – in other words, those nations in the absolute bottom ranks of economic development.

Wealth buys better technology, more money to spend protecting assets against risk, and the wider availability of medical care, supplies, and services.

One economist calculated if a nation with 100 million people as poor as, say, Laos became as less-poor as, say, Turkey, that nation would suffer around 800 fewer deaths from natural disasters a year.

Wealth is not the only factor. Governance matters too. Living in a democracy is safer than the alternatives.

Further, a study published in 2006 by two economists, Hideki Toya and Mark Skidmore, found education level, openness to technological transfer and foreign investment, a more developed and complex financial sector, and even a smaller government (in this case, a smaller public service) were closely correlated with reduced economic damage and reduced loss of life in natural disasters.

That final one – smaller government – is counter-intuitive.

Certainly, larger governments have more resources to deploy in an emergency. But size usually comes at the expense of efficiency. After the 1995 Kobe earthquake, the sluggish response of the prefectural government meant one of the first coordinated humanitarian relief efforts was conducted by the Yakuza.

(Indeed, private sector disaster relief is more important than commonly acknowledged. Hurricane Katrina also saw firms with resilient logistics and a large distribution network provide supplies and transport quicker than the grossly underperforming Federal Emergency Management Agency. The mayor of Kenner, a badly damaged New Orleans suburb, said Wal-Mart was the “only lifeline” for his town in the first few crucial days.)

Some have been quick to praise Japan’s building codes for the country’s relative resistance to earthquakes and their aftermath.

But the difference between the impact of the Haiti earthquake and the Friday’s disaster in Japan is not the strictness of the two nations’ construction regulations.

Societies can only buy stronger buildings if they can afford them.

A country with tough building codes but no money will either price everyone out of the real-estate market, or, more likely, see those codes ignored. The widespread collapse of Chinese schools during the 2008 Sichuan earthquake revealed schools in the region had been in violation of building codes for decades. Regulators were very likely complicit.

And construction firms don’t make buildings safe solely because it’s mandatory. As The New York Times pointed out on Friday, “apartment and office developments in Japan flaunt their seismic resistance as a marketing technique, a fact that has accelerated the use of the latest technologies.”

Strong building codes have a role. They may have a vital role. But to be at all effective, those codes require the wealth and strong institutions described above. Crediting tough regulation for disaster resistance gets the thread of causation exactly backwards.

As Alan Kohler pointed out in The Drum yesterday, Japan recovered from the Kobe Earthquake quickly.

Less than 15 months after devastation, Kobe’s manufacturing industry was producing at 98 per cent of its pre-earthquake capacity. All debris – all of it – had been cleared within two years. Fifteen years later the only thing which has prevented Kobe fully restoring its earlier economic achievements is the 100,000 residents who just up and left after the disaster.

Compare this to Haiti. More than a year since the earthquake and only 15 per cent of the required housing has been built. Debris is still abundant. The country is struggling through a cholera epidemic caused by inadequate water and health supplies. Much aid money remains unused.

Obviously, the developing world desperately needs to catch up to the developed world.

But the devastations of 2011 – Queensland, Christchurch, and Japan – must remind us rich countries are still extremely vulnerable.

With greater wealth we can increase our resilience to natural disasters – we can save more lives and livelihoods. After all, there’s no reason the buildings of 2111 can’t be much stronger than the buildings of 2011, if we can afford to buy them.

That gives our political focus on economic growth – casually and smugly dismissed by so many – a moral dimension which must not be ignored.

Hands Up If You’re In Favour Of Cheap Milk … Anyone?

One would be forgiven this week for assuming low prices are bad.

Coles’s January decision to sell house-brand milk for $1 a litre was followed by Woolworths deciding to do the same, which was, in turn, followed by cries from the dairy industry about monopoly and unsustainability. Leading, over the past few days, to a Senate committee sitting in judgment over $1 milk.

But the controversy is little more than the cries of producers seeking a political solution to competitive pressure.

In its submission to the committee, Bega Cheese expressed great concern. As did Clover Hill Dairies, Amalgamated Milk Vendors, the South Australian Dairyfarmers Association, and the Southern NSW Collective Bargaining Group.

All up, there were 116 submissions, from businesses, lobby groups, and politicians. Only three supported cheap milk.

Coles’s critics weave a terrifying story: that the supermarkets together want to drive out small dairy farmers from the industry.

Some farmers and industry groups have even seriously suggested that Coles wants to eliminate fresh milk from Australian supermarkets. Australians will then have to be satisfied with UHT, which is cheaper to store. The dairy industry will collapse. Rural towns will disappear. Then, once the milk plan has played out, on to eggs. Then meat.

But when has destroying your own product ever been a good business strategy?

Predicting the collapse of the Australian dairy industry is a long bow considering all that’s happened is a sale on milk.

Coles says it is covering the cost of reduced retail prices itself.

But if the chain were to demand savings from producers in the next round of supply contracts, it would be doing exactly what it should be doing: pressuring suppliers to reduce costs and to find ways to be more efficient.

There are buyers and sellers all down the retail chain – from farmers and processors, to supermarkets and us. Everyone should be trying to get the best deal. And if Coles thinks it can buy milk for less than the cost of production, nobody will sell it to the chain.

People will always want fresh milk, no matter what dastardly strategy is cooked up in a boardroom. Demand, meet supply.

And cheaper milk will lead to more milk sold, not less. The dairy industry is booming – in 2011 dairy cows are selling for 25 per cent more than two years ago.

There’s a lot backwards about the rhetoric over milk prices. For years we’ve been told supermarkets are a cosy duopoly; that Coles and Woolworths were less competitors than a cartel in a conspiracy against working families.

But the point of a cartel is to raise prices, not decrease them. If this is a cartel, it’s the most counterproductive in history.

Not only that, but cartel-mate Woolworths has joined the chorus saying Coles’s strategy is unsustainable. Woolworths is trying to turn public opinion on its rival.

More likely, it’s what it looks like on the surface – Coles being competitive, and Woolworths being forced to follow. Yet that’s enough to get the wheels of Parliament spinning wildly.

So who’s standing up for consumers? Unfortunately not the Australian Consumers Association, known as Choice.

Choice claims ”to ensure the consumer voice is heard loudly and clearly”. But its statement to the Senate says cheap milk ”is not a ‘win’ for consumers”.

Instead, it has taken this price cut to a household staple as a chance to push an ideological barrow – a grand national food policy with which the government can sustainably and benevolently guide agriculture, rather than leave production to the market.

No surprise, perhaps. Choice sees consumer interest as a side issue at best. The self-described association of consumers is more interested in fashionable environmental mantras such as food miles and ”green living”.

Each to their own. (Although the government thinks Choice represents all consumers. The non-profit was paid to run Kevin Rudd’s ill-fated GroceryChoice website.) With Choice off on a tangent, nobody is defending consumers against dairy producers who want protection from competitive pressure. It seems the only body truly acting in the interests of consumers is Coles.

In A Truly Globalised World, Immigration Must Be Free

Four Corners last week told the story of Landina, a three-month-old girl lifted from the ruins of a Haitian hospital and evacuated to the United Kingdom for lifesaving medical treatment.
 
The show focused on the search for Landina’s family and the ethical dilemmas faced by the British surgeon who saved her life. Decisions had to be made about whether to return the girl to Haiti or keep her in England for long-term care.
 
But, at its heart, the story of Landina is the story of borders and immigration restrictions.
 
The choice to take the baby to England was a medical one. Yet the sad reality is, if she stays permanently, her life will be on almost every measure better than had she gone home to Haiti.
 
Being separated from her mother will be, of course, hard. But her potential income, to take an obvious indicator of wellbeing, will be at least five to six times higher than it would have been in Haiti. No matter what level of education she obtains.
 
Landina has this opportunity because she was plucked from the rubble of an earthquake by a compassionate doctor.
 
Fifty per cent of Haitians say they would leave Haiti if they could.
 
Our world, we’re continuously told, is a globalised world. In 2011, trade is not completely free, but the barriers to trade are lower than they have been in centuries.
 
Capital, too, is allocated internationally – investors shift their money from country to country, from market to market, looking for the most profitable enterprises.
 
Goods move easily. Money moves easily. That’s all great.
 
But the situation for people is very different. People don’t move around the world easily at all.
 
With its quotas, plodding bureaucracy, and, more obviously, all the smuggling, immigration today looks strikingly like the restricted and protectionist global trade of yesterday.
 
Indeed, over the last century, migration has de-liberalised – the relatively open borders of the 19th century have become the closed and rigid borders of the 21st century.
 
All the same principles which make free trade a win-win apply to free movement of people – large scale immigration allows people to work where they can be most productive, further facilitating the economic specialisation that has boosted global prosperity.
 
The development economist Lant Pritchett describes our world as “everything-but-labour globalisation”.
 
In his 2006 book, Let Their People Come: Breaking the Policy Deadlock on International Labor Mobility, Pritchett cites a study which found the economic benefits of free movement of people would be spectacular.
 
Eliminating the planet’s remaining trade barriers would increase global GDP by around $US100 billion.
 
Eliminating immigration barriers, by comparison, would as much as double world income: that is, increase global GDP by $US60 trillion.
 
This added wealth would be shared, but the overwhelming beneficiaries would be people who now live in poor countries.
 
Sure, right now, poverty in the third world is caused and maintained by institutional failure: bad governance, bad laws, bad justice, bad bureaucracies, bad political systems, and bad economic policy. In recent decades, having seen the failure of too many foreign aid programs, the first world’s development focus has been on fixing those institutions.
 
Slowly improvements have been made.
 
Yet slow improvements are no consolation for those people living in poverty, being told they cannot travel to rich countries where there is abundant work and where their labour could be usefully employed.
 
So the question – repeatedly posed in discussions of economic development – of whether we should focus on foreign trade or foreign aid is badly incomplete. The biggest idea in development no-one has really tried (in the phrase of economist Michael Clemens) is allowing large scale immigration from the third world to the first.
 
The story of a Haitian baby being raised in Britain is just a small window into the possibilities of this shift in development thinking.
 
After all it is not Haiti, or, say, Nigeria, we want to be rich: it is Haitians and Nigerians.
 
None of the standard arguments against immigration hold up to careful scrutiny. Immigrants do not steal jobs. They do not erode living standards. Those who move for work contribute more tax than they take in public services. Migrants – for all the tedious polemic and hyperbole – have never managed to undermine the political and social cultures of host nations.
 
(We can debate the merits of multiculturalism later, but for now it will suffice to say nobody agrees what the word actually means.)
 
In the Four Corners documentary, the difference between Landina’s future life in the first world and her family’s life was strikingly clear. In Haiti, the filmmakers followed the surgeon to a tour of Landina’s family home – a single, unadorned room of concrete floors and walls and fire corner, deep in a Port au Prince slum.
 
When the camera turned to England, Landina was carried into a middle class British home, with long passages and yellow painted walls, full of furniture.
 
It was a graphic display of the difference in living standards between the first and the third world.
 
Development activists who have spent their careers obsessing over the difference between free and “fair” trade have missed the point entirely.
 
Any effective strategy to eliminate world poverty will have to focus on immigration.