Articles – Page 41

New Technology And The Call For Censorship

The first recorded call for press censorship wasn’t for reasons of politics, or heresy, or public morality. It was to police “quality”. The gatekeeper mentality is a very old one indeed.

Printing spread rapidly after Gutenberg’s first Bible went on sale in 1454. Following the Bible and legal documents, one market priority for early printers was ancient texts. The first edition of Pliny the Elder’s Natural History produced in Italy was printed in 1469. It was riddled with errors and was in some parts incomprehensible. A second edition was printed the next year, by a printer in Rome, whose editor was a Bishop by the name of Giovanni Andrea Bussi.

Bussi’s edition also had problems. Lots of them. Demand for books at their now much lower prices was enormous, and Pliny was not the only book the editor was working on at the time. (Bussi blamed “technical reasons” for errors in his work – an excuse no more convincing then than it is today.)

The print industry was already highly competitive, and Bussi’s rivals played dirty. One of those rivals was Niccolò Perotti, an archbishop and author of one of the earliest guides to Latin grammar.

Perotti wrote a letter to Pope Paul II. Bussi’s corrupt version of Pliny, Perotti complained, was one of many corrupt versions of Roman and Greek books being pushed around Italy. Editors who “set themselves up as correctors and masters of antique books… pervert what is correctly written”. They do not understand what they are editing. They interfere and impose their own views on the classical masters.

Perotti’s solution was two-fold. First, there should be a common standard for editors – a code of practice, we would say. But no doubt some editors would violate the standard. So Perotti asked the Pope to set up a bureau to regulate the quality of books. This bureau would “prescribe to the printers regulations governing the printing of books” and “examine and emend” each book. “Reckless advertisement” of the editor’s views would be limited. The performance of this task “calls for intelligence, singular erudition, incredible zeal, and the highest vigilance”.

The Pope did not take up Perotti’s proposal. Censorship in the decades to come focused on banning heretical and Protestant books, and regulating obscenity.

But this early peculiarity in the history of censorship looks conspicuously like a debate we are having five and a half centuries later.

It took a few decades for Church and secular authorities to understand the revolutionary potential of mass printing. But they got there. The institutions to censor and restrict bad books were being developed half a century before Martin Luther posted his 95 Theses against Rome. The medium necessitated censorship more than the message.

Perotti’s argument is almost an exact parallel of one made today. Online media is out of control. In the print media, editorialising is crowding out description. The pressure of competition is undermining quality everywhere. New technology is bringing out the worst in the journalist and reader alike.

Niccolò Perotti welcomed the printing press yet said it was being abused and needed to be regulated. The head of the Press Council Julian Disney told the Independent Media Inquiry last month that the internet is “a cacophony” and that “serious bloggers and serious websites” should submit to Press Council regulations. The council has written that bloggers exist in a “regulatory void” and “print or post material before facts have been adequately checked”.

One academic submission to the Media Inquiry decried “blog troll chatter”. Another group of academics suggested that the Media Entertainment and Arts Alliance’s union code of ethics was vital for blogs (even though they are not bound by it) because the codes’ “standard is one against which their actions can be judged”. Ken McKinnon, a former Press Council chair, argued “news-type” blogs should be dragged into the council’s jurisdiction.

The internet is to these advocates what the printing press was to Perotti – something that, unless judiciously tamed, will lead to the coarsening of public debate. According to this mindset, new technology has to be bought under old frameworks. It is too anarchic to be left by itself. Online debate is wild and uncontrolled.

“Cacophony” is an evocative word. It doesn’t mean simply too many loud voices. It means too many loud, discordant, clashing, harsh voices. Online debate is not being coordinated by a body like the Press Council. It is meaningless until it is tamed by regulators. Julian Disney’s complaint seems like an aesthetic one on the surface, but it masks a deeper objection to the nature of democracy. When everybody can have a say, everybody will have a say.

You would think this is a good thing.

But just as Perotti’s vehement attack on Bussi was driven by rivalry, so too is the backlash against online media being driven by those who see it as a threat to the established order.

Perotti eventually took Bussi’s job. He produced his own version of Pliny’s Natural History in 1473 – which was promptly denounced by another scholar for being even more error ridden.

And his proposal was ridiculous – Perotti obviously did not foresee the explosion of book production in the subsequent decades, let alone centuries. Obviously the Church had no moral issue with censorship. But even if the papacy had wanted to enforce quality in the press, how could it do so?

We will remember complaints about the “cacophony” of the internet as just as foolish.

Every new media technology is met with earnest concern that it undermines standards or is out of control.

The ‘Right’ Morally Culpable For Breivik’s Actions, Really?

Serial killers and terrorists often claim to be making political statements through violence. But we don’t immediately have to take their word for it.

Last week Norwegian psychiatrists declared that Anders Behring Breivik, who killed 77 people in Oslo and the island of Utøya in July, is insane.

Breivik disagrees. Through lawyers he told a Norwegian newspaper that the psychiatrists “do not have enough knowledge of political ideologies”.

The psychiatrist’s 243 page report will be reviewed by the Norwegian Board of Forensic Medicine – the assessment may then be changed – and then presented to the court – which may not accept it anyway.

Perhaps Breivik is clinically insane, perhaps he is not.

But a surprising amount seems to rest on the diagnosis.

On Utøya: Anders Breivik, Right Terror, Racism And Europe was launched by Lee Rhiannon in October. Edited by Elizabeth Humphrys, Guy Rundle and Tad Tietze, the book is an unapologetic attempt to make “the Right” morally culpable for Anders Breivik’s actions.

They argue “the significance of Utøya has been demoted, obscured and ignored” by “hard right commentators”. Calling Breivik insane is a furphy used to downplay his political significance (Tietze also argued this on The Drum last week). Breivik executed terror “in the name of the West, against those too ‘tolerant’ of Islam”. The Utøya massacre was “an unambiguous attack on the Left” and now “[t]he task for the Left is … to ruthlessly expose the true nature of the Right and its authoritarian project”.

If the shape of this argument seems familiar, no wonder: it is an almost exact inversion of that made by some conservatives in response to terror attacks carried out by Muslims.

The conservative thesis is that terror conducted by Muslims reflects something intrinsically violent in Islam itself. The thesis of Humphrys, Rundle, Tietze, and their contributors is terror conducted by someone who cites John Howard and claims to be of “the Right” reflects the dark heart of mainstream conservatism.

It is no more convincing when the protagonists have been reversed.

Mainstream Muslims exist in the same “general ideological framework” as Osama bin Laden, insofar as they share a religion. Yet Muslims who condemn violence are in no way responsible for violence perpetrated by others. It is obscene to suggest otherwise. So surely neither are conservatives, who loudly condemned Breivik in any way, responsible for his actions.

One could draw other parallels which would be equally damning and equally hollow. All supporters of the carbon price have some moral relationship to eco-terrorism. Stalin’s Great Terror means mainstream social democrats need to have a good hard think about themselves. Scientists are at all times one step away from fascist eugenicists. This makes good polemic, and it’s idiotic.

There is an enormous moral leap between believing multiculturalism is a bad policy and systematically slaughtering 77 members of the Norwegian Labour Party, some as young as 14 years old. To suggest they are on the same continuum is to obscure how anybody could make that leap.

And to suggest so in order to make a domestic political point (Andrew Bolt is not mentioned once in Breivik’s manifesto, but is mentioned 21 times in On Utøya) is opportunistic and petty.

The authors argue Anders Breivik is a leading indicator of the rise of a violent far right in Europe: the massacre “marked the transition of a section of the current European far Right to lethal violence against political enemies, characteristic of the fascist era.”

If that’s true, so then Breivik’s actions would take on a greater significance, putting aside On Utøya’s cheap political digs.

But the data on politically motivated violence does not bear this claim out.

The latest report of the European Police Office on domestic terror within EU member states documents 249 separate terror attacks in 2010. Of those, 3 attacks were conducted by Islamist organisations. The vast bulk were separatist (160 attacks). There were no “right-wing” terrorist attacks. But there were 45 “left-wing and anarchist” attacks. The Europol report cites the “increased violence”, and “increased transnational coordination between terrorist and extremist left-wing and anarchist groups”.

If we are simply looking for trends, the data suggests we should watch our left, not our right.

In fact, Europol concluded right-wing terrorism was “on the wane”.

Obviously, that assessment was tragically inaccurate. Europol’s analysis may well be very different next year – that is, if they determine the Norway massacre was not an isolated incident.

But, while we wait, the authors of On Utøya do not offer much evidence Breivik is part of a newly violent movement, rather than a shocking outlier. Right-wing terrorism deserves study, certainly. Guy Rundle’s contribution on the history of right-wing terror confidentially reaches back to Julius Caesar’s Gallic campaigns, but stops in Italy in 1980.

Commentators are sickly eager to pin extremist violence on their ideological opponents.

The attempts to characterise Jared Loughner (the definitely mad person who tried to kill a Democratic congresswoman earlier this year) as a child of the Tea Party is just the most farcical illustration. There was, and still is, no reason to believe Loughner had strong political views.

But the problem with On Utøya is deeper than that.

One of the fundamental mistakes in American strategy in the War on Terror has been feeding the egos of the terrorists. Trials by military commission of terrorists confirm their self-image as soldiers of God, where trials in civilian courts would classify them more accurately and mundanely as criminals.

On Utøya does something similar, but does it deliberately. Breivik fantasised his actions and spoke on behalf of critics of multiculturalism. Those critics have uniformly rejected him. Yet On Utøya seeks, bizarrely, to legitimise Breivik – and to claim violence is a logical extension of political debate (There is a striking parallel with Marxist philosopher Slavoj ?i?ek’s argument that terror is a justifiable weapon to fight liberal democracy).

The contributors to On Utøya say Anders Breivik’s actions have been depoliticised. They seek to “repoliticise” them.

But by opportunistically trying to get conservatives to own the Norwegian massacre, they break down the moral barriers between democratic debate and evil.

Phoney Food Fears Ignore Nimble Market Solutions

Nothing brings out the hyperbole like ”food security”. Paul R. Ehrlich – of The Population Bomb fame – appeared on ABC radio in October to declare that ”civilisation is going to collapse” because we are farming land our ancestors were unable to, and we are no longer drinking our water ”right out of the rivers”.

The fear of the moment is that population growth might outstrip food supply. The United Nations says the planet met its 7 billionth inhabitant in November. And the past few years have seen a surprising uptick in food prices. The 20th century saw a decline in the price of food basics, but we’ve had price spikes in 2008 and 2011.

This new food crisis has something for everyone. Tim Flannery’s Climate Change Commission blames climate change. Population panickers blame too many people. Oxfam’s latest campaign attributes higher food prices to ”speculation”, following the ”when in doubt, blame Gordon Gekko” rule.

Two hundred years ago, Thomas Malthus argued population grows at a faster rate than food production. Malthus was wrong then. And his followers are wrong now.

Certainly, high food prices are bad, particularly for those on subsistence income. But our data here is extremely patchy.

Those headline figures trotted out by activists about the millions of people going to bed hungry are so ad hoc as to be quite meaningless.

There is no reason to believe we’re about to enter an era of global hunger. Markets balance themselves. High prices attract new producers into the market, seeking the profits on offer. Those prices also make marginal land more viable. The result? Production goes up, prices go down.

In between their June and November food market report this year, the UN Food and Agricultural Organisation revised its production forecasts significantly up. Wheat prices have plummeted. Analysts now talk of a wheat glut. We can thank Oxfam’s hated ”speculators” for that. Of course, in 2004, before the price spikes, the UN was fretting food prices were too low and farmers weren’t making money.

On climate change, too, the future is far more complex than the doomsayers would have us believe. The Intergovernmental Panel on Climate Change itself says increasing carbon dioxide levels can have a positive effect on agricultural productivity. The 2007 report concluded up to 3 degrees of warming will increase crop yields.

Certainly, higher than 3 degrees and yields could decline. But if we factor in inevitable but unpredictable advances in agricultural technologies, then the outlook for food from climate change is good.

If temperatures and carbon dioxide have been rising throughout the 20th century, as the IPCC’s report emphatically stated, then so too have agricultural efficiency and crop yields. And quietly, away from the terrible prophecies we read in the press, agricultural innovation is happening.

The Borlaug Global Rust Initiative announced in June that scientists were close to developing ”super varieties” of wheat which would boost crop yields by 15 per cent.

A landmark study by the American National Research Council found last year farmers who adopted genetically modified crops increased their productivity. We’ve been manipulating plants since the dawn of agriculture. Genetic modification is just the most recent.

The real threat to the future of food isn’t population or climate change or stock traders. It’s ideology. Greenpeace claims to be worried about food production. But they are unrelentingly hostile to GM crops. Greenpeace activists destroyed a CSIRO crop of experimental GM wheat this year.

No wonder Greenpeace thinks food is going to be a problem in the future. They’re trying to stop the technological solutions designed to fix it. We’ll need scientific progress to feed 7 billion people.

Resistance to that progress is the biggest menace to future food security. And what about once-fashionable green policies about things such as biofuels, which convert food such as corn or sugar cane into fuel to replace petrol? Al Gore admits biofuels are a catastrophe. Americans are now burning one-sixth of the world’s food in their cars.

Yet short-term price instability and spikes are only a problem if you are poor. In the Third World, food insecurity is a symptom of economic underdevelopment. In the First World, the food problem is not scarcity but abundance.

It’s perhaps understandable ideologues are using the recent food price spikes to push their agendas – against globalisation, against population growth, against consumer capitalism. Yet it’s truly amazing that 177 years after Malthus died, we’re still falling for the old food scarcity myth.

The assault on freedom of speech

In the first editorial of the earliest independent newspaper The Australian (no relation to the current iteration), barrister turned media proprietor Robert Wardell wrote that:

A free press is the most legitimate, and, at the same time, the most powerful weapon that can be employed to annihilate such [individual] influence, frustrate the designs of tyranny, and restrain the arm of oppression.

Contrast this with what Justice Mordecai Bromberg wrote in his September decision in the case of Pat Eatock v Andrew Bolt and the Herald and Weekly Times: ‘the public deserve to be protected against irresponsible journalism’.

Protected by whom? And who decides what constitutes ‘irresponsible’? The decision in the Bolt case, both the way it was made and the way it was received by those hostile to freedom of expression, is deeply concerning.

The case is doubly concerning because it is just one of many new challenges to freedom of speech. The last six months of Australian politics have underlined that freedom of speech is under threat. Greens Leader Bob Brown has called for licensing of newspapers, or, failing that, for journalists to be licensed individually. Following the Greens’ lead, the Gillard government has initiated a media inquiry with specific remit to increase regulatory oversight over newspaper ‘ethics’ – and largely because it is annoyed by the coverage it receives in News Limited papers. Various commentators now openly talk about the government forcing ‘balance’ on controversial political views like climate change.

For many on the left, it seems finding exceptions to freedom of speech is more important than defending the principle.

Freedom of speech is one of our great bulwarks against excessive state power. It is one of the basic individual liberties. Free expression is an essential human right. Considering how close to the heart freedom of speech is to liberty and liberalism, it is absolutely vital that threats against it are countered.

In September, Justice Mordecai Bromberg found that the columnist Andrew Bolt (who was profiled in the January edition of the IPA Review) had violated Section 18C of the Federal Racial Discrimination Act, which makes it unlawful to, ‘offend, insult, humiliate or intimidate’ on the basis of race, skin colour, or national or ethnic origin. The offending columns in question were published in 2009, and discussed the light-skinned individuals with part Aboriginal backgrounds who, Bolt claimed, had chosen to identify as indigenous out of a range of possible racial identities.

Justice Bromberg recognized that Aboriginality, and race more generally, is a social construct. Australian universities offer entire subjects in Aboriginal identity. Nevertheless, Bromberg found that it was, ‘reasonably likely that the ordinary person within this group would have been offended and insulted by her perception that [Bolt’s columns] were challenging the legitimacy of her identity and that of others like her.’

Certainly, Bolt made some errors, inaccurately tracing the lineage of some of the individuals in question. But they did not sue Bolt for defamation – an ancient common law right and limit to freedom of speech intended to redress reputation damage. They sued under an Act that both had different standards by which to judge the harm and, which uniquely related to offences held by a group.

Justice Bromberg used the existence of Bolt’s errors and a (necessarily subjective) assessment of the ‘inflammatory language’ in some of those columns to bypass Section 18D of the Act – which offers some limited exceptions to 18C, including whether the comment is made in the public interest and in good faith. That legal judgment was his to make. But the Bromberg decision goes much further, explicitly endorsing not only the language and shape of the Act, but its intent:

In seeking to promote tolerance and protect against intolerance in a multicultural society, the [Racial Discrimination Act] must be taken to include in its objective tolerance for and acceptance of racial and ethnic diversity. At the core of multiculturalism is the idea that people may identify with and express their racial or ethnic heritage free of pressure not to do so.

And a few dozen paragraphs later, he argued that, ‘In my view, even outside of political discourse, freedom of expression is not merely a freedom to speak inoffensively … But there are areas of discourse where incivility is less acceptable, including because it is more damaging to social harmony.’

The problems with the Racial Discrimination Act have been known for a long time. As far back as 1992, the IPA Review published Terry Lane’s critique of the racial discrimination restraints on speech, arguing that ‘It is impossible to see how racial harmony would be encouraged, improved or guaranteed by the imposition of penalties on those who express outrageous views.’ But Justice Bromberg’s decision makes it clear that the Act is explicitly designed to restrain specific viewpoints from being expressed, in pursuit of a specific – and, it might as well be said, controversial – goal. There is nothing legally new in the Bolt case. While Justice Bromberg was happy to endorse the social purposes of the Act, he seems to have kept within it. But it is a stark illustration of the still yet unbounded scope of the Racial Discrimination Act.

The Bolt case would be less concerning for freedom of expression if it wasn’t concurrent with an escalating political battle against press freedom. The relationship between News Limited papers (in particular The Australian) and the federal government has been openly hostile since the global financial crisis broke in 2009. The government’s Keynesian stimulus package has been dogged by waste and policy failure – facts which the press has been more than willing to focus on.

In response, the government and its supporters have, over the last two years, spent an increasing amount of time complaining about an overly-critical media and perceived flaws in political and policy coverage.

Politicians complaining about press coverage is one thing. Quite another if they do something about it. The British News of the World phone hacking scandal provided a pretext. When the scandal was reignited in July this year after it emerged that News of the World – owned by Rupert Murdoch – had hacked the phone of a murdered schoolgirl, the resulting media and political frenzy was global.

Despite no suggestion and no evidence to support the claim that such phone hacking had gone on in Australia, Julia Gillard nonetheless claimed that News Limited, the Australian arm, had ‘hard questions to answer’. Exactly what those hard questions were is not clear. The most obvious explanation is likely the real one: there were no hard questions. Instead, the Prime Minister saw the British hacking scandal as an opportunity to sully her critics in the media.

Gillard was, at least initially, circumspect about the policy consequences of her hostility to the press.

But if the relationship between News Limited and the government is fraught, it is nothing compared to the relationship between News Limited and the Greens. Bob Brown has described his press opposition as the ‘hate media’ because he believes they are unfair to his party. Since the News of the World scandal he has first hypothesized about imposing a government license for newspapers – a policy which has been absent in the Anglosphere since it was found to be tyrannical four centuries ago – and then having the government license individual journalists – presumably to weed out ‘irresponsible’ ones.

Wielding their power over Julia Gillard’s office, the Greens pressured the government to instigate a media inquiry. The purpose of the independent media inquiry, which was announced in September, is clear: to impose more government oversight of the press. Lobbying for the inquiry on the ABC’s Q&A, Greens Senator Christine Milne said that, ‘it’s time we had a good inquiry and certainly bias is going to be one of the things that certainly will be looked at.’ The independent Rob Oakeshott supported the push for the inquiry because of the ‘absolute rubbish’ that was being written about him.

There is already a series of serious policy reviews being conducted about media reform. No one denies that the challenge of the internet necessitates a rethink of the regulatory settings governing media and telecommunications. The Institute of Public Affairs has long argued that regulations like sport anti-siphoning (which give free to air television first broadcast rights to ‘premium’ sporting events), local content requirements (which impose mandatory minimums on Australian television and broadcast content), ownership restrictions, and much telecommunication regulation make little sense in a digital age where the boundaries between broadcast and media services are being blurred. Nevertheless, the government is already looking into that with a largely unheralded but hugely important Convergence Review, conducted by the Commonwealth Department of Broadband, Communications and the Digital Economy.

But it is clear that the purpose of the independent media inquiry is to regulate the content of newspapers, not conduct a needed policy reform inquiry. The terms of reference for the inquiry appear benign, but they are not. The inquiry was instructed to facilitate two distinct investigations. First, it was to look at the sustainability of media business models in the digital age. Considering the growing calls from many on the left for direct subsidies of ‘serious’ journalism, this is worrying in and of itself. But the second investigation was much more disturbing. The inquiry was tasked to study the ‘effectiveness of the current media codes of practice in Australia’ and ‘ways of substantially strengthening the independence and effectiveness of the Australian Press Council’.

The implication is obvious – the inquiry will look at ways to make the voluntary codes which govern media ethics into mandatory regulations.

It is good that media organisations develop their own ethical codes of practice. But it is very bad that the government believes it should do that for them. Governments are necessarily antagonistic to the press; our current federal government, perhaps more so than usual, but not more than, say, the Whitlam government. We should be very uncomfortable with the prospect of government regulators – perhaps a newly enlarged and empowered Press Council-monitoring, scrutinising, and legally punishing journalists and newspapers for perceived ethical breaches.

In a functioning democracy, the media is one of the primary ways by which governments are scrutinised. So governments should not be putting themselves in the position of defining what constitutes approved and disapproved commentary or journalism. This is a breach of freedom of the press. And it is fundamentally hostile to liberal democracy.

We can see how serious these proposals are by the way interest groups have reacted to the news of the independent inquiry. The chair of the Australian Press Council, Professor Julian Disney – which is, currently, paid for by voluntary contributions from the newspapers, and has no coercive power-welcomed both government financial support and the prospect of regulatory ‘teeth’. He told the marketing website Mumbrella that he wanted the Council to regulate website comments and ‘serious’ bloggers.

Disney told the inquiry itself he was concerned about the ‘cacophony’ of voices on internet comment threads: ‘You can’t have free speech if you can’t hear what’s being said.’ This appears to be more a complaint about vibrant democracy than unethical journalism. Groping around for a purpose that wasn’t simply an attack on the government’s critics, it heard some extraordinarily illiberal and anti-democratic views, by apparently mainstream people.

These are not the only threats to freedom of speech in Australia today. In the June edition of the IPA Review, I outlined the extraordinary call by the host of the ABC’s Media Watch, Jonathan Holmes, to have the government’s regulator enforce ‘balance’ on a number of climate sceptic radio hosts. In a Media Watch segment in March titled ‘Balancing a hot debate’, Holmes pointed out that hosts like 2GB’s Alan Jones, 4BC’s Gary Hardgrave and MTR’s Chris Smith tended to interview climate scientists they agreed with.

Fair enough – but you’d think, in a society which values freedom of expression, that was their prerogative. Nevertheless, Holmes suggested that this contravened the Commercial Radio Australia Code of Practice which insists that broadcasters must ‘present significant viewpoints when dealing with controversial issues of public importance.’ This regulation may be on the books, yet it is practically defunct. The left-wing activists GetUp filed a complaint-necessary for the Australian Communications and Media Authority to act-the next day.

It seems amazing to have to do so, but in 2011 we need to remind ourselves why freedom of speech matters.

The first issues paper of the media inquiry even asks what the purpose of a free press actually is – as if its existence is up for debate. The paper first asked whether the ‘marketplace of ideas’ theory assumes that the market is open and readily accessible?

The marketplace of ideas theory suggests that freedom of speech is desirable because the only way to come to the truth about a topic is to freely debate it – the ‘market’ for speech will ensure that the best and most true ideas float to the top, and wrong ideas fade and die. Then: ‘Are there alternative or preferable justifications for freedom of the media?’ There certainly are. Freedom of speech is a subset of a larger right – that of liberty of conscience. People should be at liberty to express what they privately believe (subject to small limits on defamatory speech and overt threats).

The ‘marketplace of ideas’ theory is high-minded and idealistic – imagining a world where the only public debate is academic, rational, and focused on coming to the ‘truth’ of any given proposition. And it implicitly limits freedom of speech. If speech is necessary to the functioning of a democracy or to truth-seeking, the marketplace of ideas theory provides a defence. If the speech is not necessary, then the theory offers no support. It provides absolutely no guidance about what to do with, for example, the anonymous blog comments which the Press Council and government would like to regulate.

It provides no guide to how policy makers should treat wrong ideas, orideas on which a consensus (dubious or otherwise) has formed. It gives an opening – which Media Watch and GetUp have taken advantage of – to restrain public debate by insisting on ‘balanced’ presentation of political issues. And it provides an opportunity for governments to restrain debate on issues when they feel they have more pressing social goals – as Justice Bromberg suggested in the Bolt decision.

The marketplace of ideas justification for freedom of speech is woefully inadequate. That the media inquiry can think of this as its only justification is deeply concerning. And it emphasises the challenge – not merely to resist illiberal violations of freedom of speech, but to demonstrate that freedom of speech is a value worth defending at all. While the threats may seem disparate – the media inquiry and the Racial Discrimination Act have their own origins and their own political supporters – the reaction to the threats in the last few months has revealed that freedom of speech is not at all safe in Australia in 2011.

The World Will Be No Safer Under Basel III

The Basel Committee on Banking Supervision is about to introduce its Basel III accords, global regulatory standards which govern how much capital banks are required to hold.

But it’s not typically a great idea to introduce huge regulatory increases when the world is on the brink of economic collapse.

And the Institute of International Finance (IIF) suggests Basel III implementation could slice 3.2 per cent of GDP in Europe, North America, Japan and the United Kingdom in the next five years alone, and leave the global economy with 7.5 million fewer jobs.

Sure, the IIF represents more than 400 banks, so they would say that. Governments admit it will slow the economy, but by much less. (They would say that too.)

Basel III was developed in haste after the financial crisis. Like its predecessor, Basel II, its purpose is to ensure banks have an adequate buffer of capital if there is a bank run.

Regulators say capital requirements are necessary because governments insure bank deposits. The idea of deposit insurance is to guarantee depositors won’t lose their money if the bank goes under. But the insurance also means banks and their customers don’t wear the cost of wild speculation and risky banking practices. So regulators believe banks need to be compelled to be prudent.

In other words, a new regulation introduced to patch up the unintended consequences of older regulations.

The existence of Basel II in the lead-up to the financial crisis has always been a gaping hole in the theory that we should blame a lack of regulation.

But it’s worse. The Basel II Accords – designed to keep the banks secure, designed to protect the depositors against excessive risk-taking, designed by some of the world’s most intelligent people – were the primary cause of the crisis in the first place.

That is the conclusion of Engineering the Financial Crisis: Systemic Risk and the Failure of Regulation by the political scientist Jeffrey Friedman and the economist Wladimir Kraus. The book was released in October.

Friedman and Kraus’s argument complicates both left and right crisis narratives. The causes of the housing bubble are well known: policies to boost home ownership, low interest rates, and Freddie Mac and Fannie Mae’s 71 per cent stake of the non-traditional mortgage market.

But explaining the housing bubble is just the half of it. You have to explain how that bubble turned into a banking crisis.

Basel II actively encouraged banks to hoard mortgages. Its capital buffer rules weighted mortgages far higher than business or consumer loans. When the bubble burst, the banks were holding a disproportionate number of dodgy mortgages because they’d been urged to do so.

This is not a completely new story. Friedman and Kraus give it empirical support. They show that American bankers weren’t actually that reckless. They favoured what they imagined to be safer, more expensive assets over cheaper, riskier ones. And the banks were nowhere near as leveraged as they had a legal right to be under Basel II.

Furthermore, it wasn’t “irrationality” that caused the crisis. That widespread theory assumes bankers and regulators had enough information to know what they were doing was bad, but they all went crazy and did it regardless. The irrationality thesis has no explanatory power.

It was just that everybody – regulators, bankers, politicians, investors – thought highly-rated mortgages were a lot safer than they were.

So how did the banking crisis become an economic crisis? Basel II, after all, was supposed to halt a contagion at Wall Street’s edge.

Friedman and Kraus argue that Basel rules are inherently contradictory. The capital buffers which Basel requires aren’t buffers at all. The idea behind capital buffers is, again, that if there is a run on a bank, the bank will be able to dip into reserves to survive. But if it uses those reserves, even in a crisis, it will suddenly be under Basel’s required capital threshold, and will be legally penalised.

As one economist pointed out, there has been little “consideration of the paradox that the buffer function of regulatory capital is limited because this capital is needed to satisfy the regulator”. When the banks hit Basel’s capital minimums in the last months of 2008, credit froze, and the “real” economy started to hurt.

So it is sickly perverse that Basel III’s main purpose is to raise capital minimums even higher. And analysts from the Cato Institute have argued that it “retains many of the weaknesses of its predecessors” – particularly “a highly gameable weighting system” that led to the hoarding of mortgages in the first place.

Basel III shows that governments are trying to fix the finance sector’s problem before they’ve figured out what the problem actually is. The first and most important question has to be why the crisis occurred. Answering that takes reflection.

But legislators work faster than academic economists. Already by 2009 politicians were running down new regulatory paths. In February that year Kevin Rudd had concluded that Basel II was “inadequate” and that it needed a successor. This is meaningless. All regulations were inadequate at stopping the crisis.

Anybody who says they’ve got a handle on the causes of a crisis that big and that complicated in its immediate aftermath is wrong. And they’re being deceitful if they say they know how to fix it.

The United States Congress passed the Dodd-Frank financial reform act six months before its own Financial Crisis Inquiry Commission released its report into the causes of the crisis.

Such is the false confidence of regulators and politicians.

Basel III standards are about to be disseminated around the world. There is no reason to believe that the economic system will be any safer or more stable. And it could be a lot poorer.

Yes We Can… With Exceptions, Qualifications And Requirements

Barack Obama told the Australian Parliament last Thursday that our country and his are “among the most open economies on Earth”.

This is true, as far as it goes. The United States is 10th out of 141 countries on the Economic Freedom of the World Index. Australia is fifth.

But that observation sits uncomfortably with almost everything else Obama said in his speech to the Parliament.

The 44th president mouths his support for free trade but carves out so many exceptions, qualifications and requirements that, if those caveats were put into action, the United States would plummet down the economic freedom rankings faster than you could say “level playing field”.

After all, how to reconcile “History teaches us the greatest force the world has ever known for creating wealth and opportunity is free markets” with “We seek trade that is free and fair”? Perhaps it is asking too much of the White House speechwriting B-team to be internally consistent. Yet it is not clear what the qualifier “and fair” is supposed to do apart from repudiate “trade that is free”.

Free trade is the universally recognised principle that national borders should be open to goods no matter where they come from. Fair trade is the opposite. First literally: the phrase originated as a synonym for protectionism in the 19th century. And second practically: its modern popular use describes a trading system that discriminates between different third world producers according to first world standards. Those who conflate the two are saying they support free trade and oppose free trade at the same time. That’s incoherent even for politics.

Obama then ticked off a series of standard refrains. Countries need to play by the rules (as if the benefits of trade are only possible if that trade is approved by World Trade Organisation lawyers in Geneva). Currencies need to be market driven (a clear swipe at China, which is desperately, if nervously, trying to fix its currency issues). “Workers’ rights” need to be respected (wholly admirable, but this vague demand has been long used by unions to protect themselves from foreign competition).

It’s obvious from his speech alone that Barack Obama is no friend of free trade. It’s less obvious why so many Australian conservatives and liberals were full of praise for the president when he was here.

Obama’s domestic record on trade openness is not good at all.

Most notoriously, his stimulus package had a crucial “buy American” provision. The provision mandated that steel, iron or manufactured goods purchased with stimulus money had to be produced in the United States.

Actually, it was worse than that. Steel, iron or manufactured goods purchased for a project which received any stimulus money at all had to be domestically sourced. In other words, if a project received just one dollar of federal stimulus, everything bought with non-stimulus money on that project had to be American as well.

The Government Accountability Office found that Buy American red tape badly delayed many stimulus funded projects. And, of course, substantially reduced their value for money.

The administration’s jobs act, which is spluttering its way through Congress at the moment, has the very same Buy American provision. This is naked, unabashed protectionism imposed as a gesture to Obama’s trade union supporters.

Yes, the administration talked a big game on the benefits of free trade agreements between the United States and Korea, Columbia and Panama. These agreements were negotiated in the twilight of the Bush era. But Obama deliberately delayed passing those agreements for four years. His friends in Congress were responsible for part of this delay, sure. But the White House squibbed many opportunities to shepherd the agreements through. Then the administration saddled the agreements with expensive trade adjustment payments which ensured further delays: the US federal deficit would make anyone question whether now is a good time to expand the welfare state.

The Obama administration also had a chance late last year to resuscitate the Doha round of international trade talks, as the trade analysts Philip I Levy and Scott Lincicome pointed out at the time. They completely failed to do so.

As a candidate, Obama played the same game as he did in Australia last week. He would say he was a supporter of free trade, but then rail against “unfairly traded” products which “flood” American markets.

In his State of the Union address this year he said his goal for the country was to “win the future”, a bizarre and hackneyed phrase which implies that prosperity is an international competition with winners and losers. This is the exact opposite of what we know about trade – countries which exchange do so because it is mutually beneficial. Trade is not a contest some countries “lose”.

As a small country plugged into the global economy, Australia depends on free trade for our prosperity more than most. The US president came to our parliament and disingenuously championed protectionism. It should be embarrassing there was no outcry.

The Less Parliament Sits, The Better Off We All Will Be

‘We’re getting on with the job.” This has long been the standard response of Julia Gillard and her leadership team to questions about low poll numbers, the Foreign Minister’s latest tweet, or anything else they don’t want to talk about.

The hung Parliament isn’t gridlocked. Far from it. More than 140 pieces of legislation have passed through both houses. And despite the gauntlet of Bob Katter, Adam Bandt and a motley crew of independents, more than 180 pieces of legislation have gone successfully through the House of Representatives.

A few months ago Treasurer Wayne Swan was bragging this was ”in pretty stark contrast” to the US and Europe, where parliaments have passed fewer laws.

But hold on: why is all this law-making a good thing? (Great! More rules!) The government’s delight at its hectic law-writing schedule must be surprising to those who actually have to deal with the consequences: judges.

Chief Justice of the Federal Court Patrick Keane said earlier this year the ”volume and complexity of federal laws” meant that ”opening the Tax Act [which has blown out to 6000 pages long] is like entering a parallel universe”.

So it’s weird the government thinks placing even more Byzantine restrictions on society and the economy is worth boasting about. Certainly, not every piece of legislation passed has made a new law. Some bills change laws already on the books, others eliminate existing laws. Yet every change has consequences.

Business surveys report a huge increase in the amount of time it takes to monitor regulatory and legislative change. Corporate boards spend more time than ever focusing on legal compliance, instead of on service delivery or innovation.

That’s not just the fault of Gillard’s government. It’s the fault of successive governments, Labor and Coalition, which have steadily increased parliamentary productivity. Now there is an orgy of fresh legislation every year.

And those governments have been egged on by a political culture that favours action – any action – over steady-as-she-goes.

Commentators have recently complained that governments no longer have an appetite for big reform. At least, not like Bob Hawke, Paul Keating and John Howard did. Let’s put aside the questionable evidence for this claim. Isn’t it remarkable how so much of this commentary avoids judging the virtues or otherwise of that ”reform”? The criticism seems to be that legislators aren’t pushing through massive change at a sufficient clip. Anything will do. Huge new taxes, or huge new tax cuts. Doesn’t matter. Just as long as they’re huge.

The Parliament and the press gallery are predisposed to like active governments. A great politician is one who changes the country. A great parliament is one that maximises its opportunity to write and pass new laws. Australian political history is one long game of one-upmanship.

Poor old Kevin Rudd took this bias to its logical conclusion. He spun so many government wheels in motion that his successor is only now starting to control its oversized chassis.

The bias towards legislative frenzy is not helped by oppositions that accuse the party in power of being all talk and no action. This was true while Brendan Nelson held the Liberal leadership. But it’s an odd criticism coming from a conservative party. Conservatives believe change for change’s sake is fundamentally bad. The last thing a conservative would want is frenzied reform. ”Do nothing” should be a compliment. Let society evolve by itself.

Just as bizarre are the opposition’s complaints the government hasn’t planned for enough parliamentary sitting days. The government will sit ”only” one in four working days in 2012. But that’s excellent. ”No man’s life, liberty or property are safe while the legislature is in session,” wrote a 19th century lawyer. The fewer sitting days the better. The father of liberalism, John Locke, argued that while parliament was better than monarchy, parliamentarians need to be restrained. One way was to limit how often they sat.

Conservatives who understood these issues hoped the 2010 election result might restrain Parliament’s obsessive law-making. Obviously not. If only the hung Parliament was as deadlocked as its critics claim.

Commonwealth Games Bad News For The Gold Coast

Poor Gold Coast. Acting Queensland Premier Andrew Fraser told reporters after the city won the right to hold the 2018 Commonwealth Games over the weekend that the economic benefits would be “priceless”.

That’s right: the Queensland Treasurer suggested that the financial gain for the Gold Coast was completely unquantifiable.

Politicians are living in a fantasy land when it comes to the economics of major events.

Evidence that international sporting festivals provide any economic benefit to their host is almost non-existent. The games will discourage as much economic activity in the Gold Coast as they will boost. Probably more.

We have enough serious, scholarly, dispassionate studies of major events to be strident here. Winning the Commonwealth Games is nothing to celebrate. It is bad news for the Gold Coast.

Of course that is not how the Games bid has been pitched to voters.

Anna Bligh has argued the bid is “vitally important for the future of the Gold Coast”. Fraser may believe the benefits are priceless, but the Government and the bid team have been spruiking an economic benefit to the city of between $1.4 billion and $2 billion (naturally, the Government prefers the higher number).

According to comments by the bid chair Mark Stockwell late last year, the Games will also create 24,000 jobs. In Queensland Government press releases, that projection has become a nice round 30,000 jobs. One press release is higher again, and weirdly specific: 33,540 jobs between 2015 and 2020.

These figures are apparently based on a “feasibility study”, which the Government commissioned. The study is not available for public scrutiny.

It doesn’t have to be. We already know it’s wrong.

In their 2008 paper “Do Economists Reach a Conclusion on Subsidies for Sports Franchises, Stadiums, and Mega-Events?”, the economists Dennis Coates and Brad R. Humphreys survey the “large and growing” peer-reviewed literature on major sporting events.

There is an overwhelming consensus among academic economists that no tangible economic benefits from subsidising events, stadiums, or sports franchises exist. None at all. In fact, some papers have found substantial losses from hosting these big national or international sport festivals.

After all, major events are not all economic boom. They are disruptive. Roads are closed. Residents stay away; when locals might have gone out for other entertainment, they stay home fearing crowds. Businesses which cannot take advantage of the visitors see their sales slump.

Major events are not even unambiguously positive for the hospitality industry. One study failed to find any statistically significant relationship between the US Super Bowl – which moves from city to city each year within the same country and provides a convenient natural experiment for major sporting events – and hotel occupancies or retail sales.

Infrastructure gets built, sure, but not necessarily the most useful infrastructure. Events distort spending priorities. Stadiums have only limited uses once the event is over. Transport designed to ferry thousands to an event only held once might not be the most useful transport once fans go home (and why governments don’t do their job and build needed infrastructure until a major event forces them to do so is beyond me).

Add these problems to the large amount of taxpayers’ money used to directly finance major events, and the economic case slips away very quickly.

One academic analysis of the 1994 World Cup in the United States estimated the host cities lost up to $9.3 billion.

But beforehand the boosters were predicting it would increase economic activity by $4 billion.

Every single Commonwealth Games, World Cup or Olympics is matched by a consultancy report forecasting the huge numbers of jobs that will be “created”, the flood of tourism which will be unleashed, and the massive infrastructure investment that will be sparked.

Anna Bligh launched Queensland’s bid for the Commonwealth Games in August 2008. The feasibility study came well after. She told parliament in June 2009 she had “recently” agreed to commission the study, but the Premier was already talking up all the glorious new jobs it would bring. You might say that was jumping the gun. It wasn’t. It was a study commissioned by a Government for a major event. Of course it was going to find a squillion jobs would be created.

Last year the Gold Coast Business News decided the benefits of the Games so concrete, the reverse must be true as well. They titled an article on the bid “Unsuccessful Games bid could cost Gold Coast $2B”. Sounds serious.

What happens from now is all very predictable. Tourism lobbyists will spend the next seven years talking up the event. A few years after the Games have ended, and once it is blindingly obvious the influx of long-term tourism dollars has not arrived, they will blame the Government for “failing to capitalise” on the global goodwill.

Then everybody will move onto bidding for the next event, armed with fresh new consultancy reports and suffering amnesia.

Such is the fantasy world of major events.

Media Inquiry Motives: Accountability Or Revenge?

Bob Brown’s submission to the Independent Media Inquiry has an appendix of criticisms he’s received in the press since calling for a media inquiry: ‘totalitarian’, ‘self-serving’, ‘prejudicial and dishonourable’, ‘witch-hunt’, ‘pillory’, ‘fascism’ and so on.

It’s a strange appendix to include, considering that the substance of those critiques is how the Greens leader’s support for a media inquiry is motivated by personal animus. And, further, such a motivation means the inquiry is not a benign investigation of the current media regulation, but something more sinister – politicians trying to use their powers of legislation to punish critical newspapers.

So a bit of an own-goal there.

The Government has repeatedly rejected claims that the inquiry will be focused on News Ltd. That’s clearly not the way many of the inquiry’s supporters see it. Brown can barely go a media appearance without talking about The Murdoch Press. Critics of the Greens say the minor party is actually the government. If so, then Brown sees Rupert Murdoch as his loyal opposition.

Labor’s backbenchers are also loose-lipped on the inquiry. A furious Senator Doug Cameron said last week, “The Murdoch press are an absolute disgrace, they are a threat to democracy in this country and we should absolutely be having a look at them”.

Cameron was angry about reports of leadership instability in the Daily Telegraph. Maybe the Telegraph reports were a beat up. Maybe they were not. ‘Government backbencher says leadership speculation is baseless’ is not a decisive rebuttal.

But regulation of the press imposed as revenge for anti-government reporting is much more a threat to democracy than any tabloid headline could be. That neither Bob Brown nor government backbenchers like Doug Cameron appear to recognise this blindingly obvious problem is worrying enough.

Governments and the press have never gotten along. The two are, and will continue to be, absolutely opposed to each other. One accumulates power. The other undermines it. Australia’s first media proprietor, Robert Wardell, described the free press as a weapon to “frustrate the designs of tyranny, and restrain the arm of oppression”. One 19th century Chicago Times editor said “It is a newspaper’s duty to print the news, and raise hell”.

This is certainly not to defend media ethics. Bad journalism deserves harsh criticism. Raising hell can bring up devils. But the choice presented is not between our current media and a noble, ethically-unimpeachable media. It is whether the Government should to try to ennoble it for us.

What constitutes ethical practices is not for governments or bureaucrats to decide, and certainly not for them to enforce. Governments are subordinate to civil society. They must not be the supervisors of their critics. This is a much more fundamental principle of democracy than the often-repeated idea that free elections require an informed citizenry. Restraining the actions of government once a parliament has been formed is surely just as important making sure people can decide who to vote for every couple of years.

Sometimes attacks on government or politicians are misinformed, simplistic, or propagandistic. Sometimes those attacks mix up facts and opinion. Wrongheaded views – even wilfully ignorant ones – are not unique to the press. They are a feature of democracy.

In his submission, Brown suggests the fact a journalist described him as “self-serving” helps strengthen his case. God knows we wouldn’t want the public to think politicians can be that.

Nevertheless, Brown’s submission is interesting. The Greens leader has said journalists don’t tell both sides of a story accurately or reasonably. The submission builds his case at length, free of media gatekeepers.

Brown conflates two separate grievances into one. First: The journalist’s Code of Ethics, administered by the media union, “has become a hollow vessel”. Second: Rupert Murdoch has oligarchical control over the print media.

Are these two linked? Brown thinks they are. A core problem for the Greens leader is “Almost all the news media in Australia is owned by private corporations, outside of the ABC and SBS”. In July, as the News of the World scandal hit its stride in the UK, Brown asked whether the News Ltd board meetings should be opened to public broadcast. This would impose a degree of public scrutiny on a single company that isn’t even applied to federal cabinet, or, indeed, his own party conferences. Perhaps he thinks all private companies should open their boardrooms. But that’s not what he said. Just News Ltd – a firm which employs his most strident critics.

The profit motive is one of the most powerful forces in our society precisely because it delivers consumers what they want. Organisations which offer people goods or services which are attractive and desirable and not prohibitively expensive succeed. Those which do not, fail. All government should do is provide a legal framework, under which laws are universally applied. For instance, to choose a law completely at random, don’t hack phones.

The profit motive seems like a pretty good way to deliver journalism which people want to read, watch and listen to. But, otherwise, the Government spends a billion dollars a year on the ABC – specifically to address an assumed failure by the market to provide quality media in the absence of a public broadcaster.

Bob Brown would no doubt like the ABC budget increased. But that’s not the argument he is mounting. Tellingly, the ABC barely rates a mention. His focus is on the private News Ltd, not the ability of existing institutions to achieve any democratic objective.

Brown’s enthusiasm for the media inquiry seems more about fighting his party’s critics than any principled position about the relationship between democracy and media.

Greens pressure led to the formation of the inquiry in the first place. So it is hard to take the Government’s reassurances that the Independent Media Inquiry has nothing to do with the hostility of the press.

Memo To Unions: White Australia Was A Bad Idea

Rarely was the relationship between economic nationalism and xenophobia made so clear. The Transport Workers Union’s Tony Sheldon, after complaining about Qantas’s industrial relations tactics, said that his union would ”stand by the workforce, the Australian brand of Qantas and not have it Asianised”.

Asianised? This was not a slip of the tongue. A variant Sheldon has also used is ”Asianisation”. So is Asianisation worse than normal outsourcing?

That’s no dog whistle; there is no subtext. Google ”Asianisation” and the first page of results offers up ”Australian nativists”, manic claims about the Yellow Peril, and warnings about our ”national suicide”. Sure, those hysterics are on the margins of Australian society. But the TWU boss is the chief opponent of the Qantas restructure and of Alan Joyce who, as many people have pointed out, has a thick accent, betraying his foreignness. Sheldon’s easy use of these terms is damning.

Damning, but not damned. Contrast this missing outrage to the handwringing that followed Tony Abbott’s clearly rhetorical ”blood pledge” to repeal the carbon tax. There would have been fury if a conservative leader said anything remotely like what Sheldon did. The ABC’s Q&A would have spent a show debating whether Australia is a racist country. Serious talkback hosts would have spent the week talking about Enoch Powell. None of those things happened.

Opposition to trade, outsourcing and labour migration has always been tightly bound up with xenophobia. In Australian history, racism has usually had an economic context. After all, why should it be a matter of urgent public policy that some jobs be kept within Australian borders? On what moral basis is limiting immigration to protect workers from competition a good thing, as was proposed by unions at the start of the financial crisis.

Protectionism is bad for many reasons. It raises prices and lowers living standards – worrying enough. But its moral core is dark. Surely Australians are no more deserving of jobs than people from China, Japan or Singapore. Economic nationalism implies natives are worth more than foreigners. The far right is explicit about this. The Australian Protectionist Party makes its regressive views (nationalisation, high tariffs, less immigration) part and parcel of its hostility to multiculturalism. One Nation was also sceptical about globalisation.

So given the union movement’s historical culpability for the White Australia policy, you would think someone like Sheldon might be sensitive to the nuances of xenophobia.

Labor-sympathetic historians in recent decades have tried to sheet the White Australia policy home to prejudice. Immigration restriction was, many post-1960s historians have claimed, simply the result of a racist zeitgeist.

But the White Australia policy was led by a union movement trying to eliminate competition in the labour market. This is an awkward truth.

The government’s own fact sheet on the policy mentions how ”hard-working” immigrants were, yet neglects to mention the role played by unions and the Labor Party in kicking them out.

Immigration restrictions were just a part of it. It was the official policy of Labor prime minister Andrew Fisher to grant ”absolute preference” to white unionists in workplaces – and to encourage employers to fire ”coloured” workers. The Australian Socialist League called for the ”exclusion of races whose presence under present competitive conditions might lower the standard of living of Australian workers”.

The only serious opposition to White Australia came from pro-market thinkers – particularly the great free-trade MP Bruce Smith, who described the policy as ”racial prejudice”.

Steven Landsburg, an American professor of economics, asked recently: ”If it’s OK to enrich ourselves by denying foreigners the right to earn a living, why shouldn’t we enrich ourselves by invading peaceful countries and seizing their assets?” Obviously the latter is wrong. The former is just as wrong.

There’s no reason to believe workers made redundant by Qantas will end up on the scrap heap. That sort of theory was barely plausible when the Australian economy was being opened up in the 1980s and 1990s. It is ludicrous now. We’ve had 30 years of globalisation and the unemployment rates are at record lows. International trade is not war. There is no fixed pie of jobs over which protectionist governments must fight for a share. Nor is there any reason to believe basing some Qantas services in Asia will be bad for consumers. Few companies would deliberately make their service less desirable.

All this leaves us with is a union boss attempting to stoke xenophobia in service of his own economic interests. That’s something with which Australian history is sadly familiar.