Articles – Page 42

The Battle Between Political And Economic Freedom

It’s the ultimate political chicken and egg question: which comes first, economic freedom and the market economy, or political freedom and human rights?

Of course, some claim the chicken has no relation to the egg at all. Or worse, chickens are constitutionally incapable of providing eggs – many argue that free markets actively encourage political and civil repression.

The interaction between market freedom and social freedom is one of the most important questions in development. It’s crucial to the future of China and the Arab world, and it animates much of the revived anti-capitalist movement.

So a recent paper by two European economists, Indra de Soysa and Krishna Chaitanya Vadlamannati, is extremely important. Published in the journal Public Choice in July this year, the paper sets out to determine, as empirically as possible, whether human rights violations truly are the unhappy companion of pro-market economic reforms.

Soysa and Vadlamannati compare two sets of data. The first is the CIRI Human Rights Dataset, which assesses human rights practices in 195 countries – in particular the rights not to be tortured, summarily executed, imprisoned for political beliefs, or to be “disappeared”. Using US state department and Amnesty International sources, the coordinators of this dataset give each country a single human rights score.

The second is the Fraser Institute’s Economic Freedom of the World Index, which assesses 42 indicators of economic freedom – from property rights to tax rates to the regulatory burden – also spitting out a single score.

These are the two most comprehensive and authoritative indexes we have at the moment. Soysa and Vadlamannati also control for other factors which might affect the results: a country’s size, for instance, can make governing hard and therefore make repression more likely. Same with entrenched ethnic differences. By contrast, economic growth calms both population and government, so they control for that too. The famous “resource curse” has unpredictable effects, so they also factor in how dependent each economy is on oil exports.

And, critically, the authors control for democracy. Just because a country is democratic provides no guarantee human rights will be protected. The tyranny of the majority makes democracy an unstable foundation for civil liberties – unless there are significant countervailing pressures like a liberal culture or a free economy.

Even after taking all those factors into account, Soysa and Vadlamannati find that market-orientated economic reform is unambiguously beneficial for human rights. Between 1981 and 2006, freer economies have been freer societies.

This shouldn’t be a surprise.

Market reform takes economic power away from political interest groups. Indeed: it eliminates much of the financial reward from politics. In a market economy there are none of the vast sums of money to be made controlling nationalised industries. Economic freedom undermines power rather than strengthens it.

Property rights are revolutionary – reorientating sovereignty from the state to the individual. And private competitive industries mean people do not have to rely on the government and patronage for employment.

The liberating effects of economic freedom are particularly strong in the developing world. In the 20th century, many poor countries merged their traditional autocracies with socialist economics. The result was corrupt bureaucracies and networks of political power controlling entire economic systems.

Of course, market reform in these countries has to be done well. Crony capitalism can easily perpetuate corruption – an issue faced by countries like China. But when reform is done well, it breaks down those entrenched power structures.

So then why have we heard for the last two decades that market reform and globalisation are threats to human rights?

Many academics specialising in “globalisation studies” have long argued that humanity is being trampled by a single-minded race for corporate profits. And Naomi Klein’s bestselling Shock Doctrine: The Rise Of Disaster Capitalism claimed the greatest human rights violations of the last 35 years have been by governments terrorising their own population to prepare for privatisation and market liberalisation. For Klein, political repression is a necessary precursor to free market reform.

Soysa and Vadlammanati’s paper demonstrates just how wrong this claim is. And how desperate. The first-comes-privatisation-second-comes-murder story is apparently too seductive to check. Perhaps that’s because it gives otherwise dry debate over political economy a moral dimension. But more likely because it implicitly claims corporate power is more dangerous than state power – exactly the story you’d want if your goal was to increase state intervention in the economy and society.

The Public Choice paper finds that even edging towards economic reform is positively correlated with human rights protections. For the chicken and the egg question, this suggests economic freedom comes first.

Market reform is good for human rights. The corollary is true as well: reversing that reform, or simply delaying it, can be bad. We should be worried how the global financial crisis has taken much of the energy out of pro-market reform in the third world. Combine lack of reform with an increased likelihood of political unrest when economies stagnate, and the risks to human rights over the last few years have grown substantially.

The anti-globalisation crowd – by fighting economic reform in poor countries – could be unintentionally encouraging the human rights problems they claim to oppose. Economic freedom and political freedom are part of the same package.

Why Doubt Free Trade With China?

On Wednesday Tony Abbott told The Age that he would make a free trade agreement with China less of a priority than one with Japan – because China, he pointed out, is not a market economy.

Of course, there’s nothing sacred about bilateral free trade agreements. They’re a poor cousin to multilateral agreements. They can be written well or poorly. A lot rides on their negotiation, and interest groups and rent seekers will want their say.

But the pros and cons of bilateral agreements plainly have little to do with the Opposition Leader’s scepticism about a trade deal with China.

Last week’s comments are not isolated. Abbott also wants tougher laws against anti-dumping, to penalise goods subsidised by foreign governments. With these policies, the Opposition Leader is close to endorsing retaliatory protectionism.

Abbott says he wants to ensure a “genuinely level playing field with a fair go for Australian companies”. In recent interviews, he has begun to talk not about “free trade” but “free and fair trade”.

Abbott is not alone. Barnaby Joyce also talks about his full-bodied support for free trade but only if it is “genuine” free trade. The AWU’s Paul Howes says, “If trade is going to be on, it’s got to be on a level playing field.”

Of course, the entire point of free trade is that the playing field isn’t level. The world isn’t flat. The world is very bumpy. Different products are made more efficiently at different places. Environmental, geographic and social conditions vary wildly. If anything, the process of globalisation has emphasised just how different parts of the world are.

Free trade is beneficial precisely because the world is heterogeneous, not homogenous.

This applies even when those differences are created by deliberate public policy choices, not “naturally”.

Yes, China is not a market economy. As John Lee pointed out in Crikey last week, it would be flattering to even call it a mixed economy. It is led and dominated by the state, rigged so state-owned enterprises are the main beneficiaries, and corrupted by industry plans and subsidies.

These are all bad things. But to retaliate – or, to use less-loaded language, compensate – by bumping up our trade barriers would be compounding one error upon another.

We should feel sorry for Chinese taxpayers when they are asked to stump up for ever more industry subsidies, not resentful of them. China is a developing country. Yet it is taxing its citizens in order to prop up businesses. Which then go sell their products below the market cost to rich countries. These subsidies are a direct wealth transfer from third-world taxpayers to first-world consumers.

As Professor of Economics Donald J Boudreaux describes this perverse strategy: “To make its country’s exports artificially more abundant and artificially less costly for foreigners to buy, a government taxes its citizens, effectively forcing people within that country to bestow benefits on people outside its boundaries.”

It’s tragic. But Australians are the beneficiaries of such misguided policies, not the losers.

There is no reason to believe the efforts of foreign governments to build industries using subsidies and industry plans will be any more effective for them than it has been for us – that is, it will be entirely fruitless and extremely expensive.

So foreign subsidies do nothing to undermine the case for free trade. Self-sufficiency is no virtue. Just as it is nonsensical for an individual to make everything they need themselves, it is nonsensical for countries as well. Free trade would be beneficial even if Australia was the only country in the world that believed in it.

The union movement offers one further objection to trade with China – the Chinese government artificially undervalues the yuan, deviously making their exports more competitive than if their currency had been floated.

Perhaps. Currency demagogues in the United States (where the strength of the yuan is a major political issue) have long pointed to the Economist’s Big Mac Index, which compares the price of the iconic hamburger around the world. It’s a rudimentary but evocative test of currency health. It measures a standardised product, allowing us some indicative comparisons. The Economist found the yuan could be undervalued as much as 44 per cent.

At least it did until the index was drastically revised this year. Big Macs should be cheaper in countries with low labour and land costs. The index was adjusted to take account of that obvious complication. Its revised data suggests the yuan is much less undervalued than everybody originally thought.

The Big Mac Index is certainly crude. But we know an artificially low yuan is bad for China itself. An undervalued currency is an effective subsidy to exporters at the expense of domestic consumers, raising the price of imports and increasing costs across the economy.

In the last 12 months domestic pressures have been getting more intense. The Chinese growth model is a ticking time bomb. What we’re seeing is not cunning manipulation of a currency to undermine international competitors. We’re seeing an economy teetering on the edge of the abyss – and Chinese policymakers know it.

It seems bizarre to claim economic self-harm in China justifies economic self-harm in Australia.

But that is exactly what Tony Abbott, Barnaby Joyce, Paul Howes and other free trade sceptics now recommend.

Idealism Turns Us On, But Reality Bites

There’s a particularly idiotic moment in the 2003 movie Love Actually when British Prime Minister Hugh Grant loses it. Grumpy at President Billy Bob Thornton for hitting on No. 10 staff, he breaks off script at a press conference, describes his American ally as a ”bully”, and abandons the ”special relationship”.

Unbelievable? Absolutely. But what really throws this scene into the realm of high surrealism is the grinning faces of the PM’s political and policy team. Their leader has threatened the leader of the richest and most powerful economy on the planet. And Grant’s staff – who would have to deal with the consequences – are over the moon about it. Hooray!

Pop culture doesn’t do politics very well. The depictions of government (and the people we elect) in movies and television are either wilfully naive, or naively conspiratorial. Take The American President, where a Michael Douglas administration is inspired by the love of a good woman to decarbonise the US economy. Right now, in 2011, radical climate change action by America is pretty unlikely. But it was ludicrous to imagine when the film was made in 1995. In more pessimistic and dramatic films, politicians and governments head up elaborate conspiracies – they manufacture fictional wars (Wag the Dog), run military actions in secret (Clear and Present Danger) and cover up murders (State of Play, Absolute Power, and Enemy of the State).

But here’s the funny thing. All of these conspiracies pretty much work. They’re successful – at least until the movie’s hero intervenes. Doing the wrong thing might be wrong, but the movies assume it will be simple.

In the movies, covering up a conspiracy is no big deal. When needed, the wheels of government move effortlessly. It’s the same in the films with a more optimistic view of political leadership. Prime Minister Grant or President Douglas only have to put their foot down to get stuff done. Governments in the movies are competent. They’re nothing like the real world. In the real world, government projects are characterised by disappointment and compromise. Political operatives, not experts, make the final decisions over policy. Petty leaks and cheap betrayals are commonplace. Political favours are used like currency.

Even the worst fictional depictions of politics typically exclude the sad reality of policy botches, bureaucratic waste, and politicians with an exaggerated sense of self-importance.

More than anything else, the television show The West Wing has demonstrated pop culture’s bizarre faith in the competence of government and the goodness of politics. The show has a cult following among political boffins. No wonder: The West Wing flatters the political class by its suggestion that every person involved in politics is well informed.

And extremely well-intentioned. The West Wing‘s President Bartlett (pictured) is incorruptible. Power has done nothing to him. If anything, holding the most powerful office on earth has made him more honourable. And his staff are all dedicated to public service, extolling self-sacrifice and duty.

Something’s wrong here. In The West Wing‘s depiction of politics, there appears to be no politics. As Gene Healy, the author of the book Cult of the Presidency, has written: ”Fans of the show never saw the sort of infighting, backstabbing and jockeying for position that appear in real-world accounts of White House life.”

No wonder virtually every character in The West Wing has an unwavering faith in government action as the solution to every problem. They never come up against incompetence or dysfunction. And barely any opposition.

This matters because these portrayals of politics shape in a big way how we understand real-world politics. Rather than pointing at the inevitability of much government failure – caused by its plodding bureaucracy, its base politics, and the inevitability that power will be used to pursue private interests – movies and TV trivialise it.

If only the good people were in charge. If only Mr Smith really had gone to Washington. If only political leaders didn’t use their powers for evil. If only politicians weren’t weak.

Politicians have tried to exploit these sorts of sentiments, but the dull, sad reality of government always sinks in. Reforms go off the rails. Supporters lose faith.

There are rare exceptions, like Yes, Minister, and the more recent, even more cynical The Thick of It. But these are great because they are depressingly authentic compared with what we usually see on our screens.

Even in the darkest political thriller, pop culture’s overwhelming vision of government is optimistic, almost utopian. Shame the real thing can’t live up to the fiction.

Why Care About Freedom Of Speech?

The terms of reference for the Government’s independent media inquiry are limited but its ambitions apparently are not.

The inquiry released an issues paper last Wednesday which raised a big philosophical question: why should we care about press and speech freedoms?

Citing Oliver Wendell Holmes’s famous justification for freedom of the press, the paper asked, “Does this ‘marketplace of ideas’ theory assume that the market is open and readily accessible?”

The ‘marketplace’ theory holds remarkable currency. Justice Holmes provided the world with the metaphor (“free trade in ideas”) but the concept is older, variously attributed to John Milton in the 17th century and John Stuart Mill in the 19th. The argument is simple and appealing: we need to allow controversial statements because only through open discussion can issues be resolved. Democracy requires debate, so speech liberties help us maintain our democracy.

But the ‘marketplace of ideas’ theory is actually pretty flimsy support for freedom of speech.

After all, actually-existing non-metaphorical markets are anything but free. Many goods are illegal to trade or own – drugs, guns, hand grenades. Products and services are highly regulated. The circumstances which they are sold is carefully proscribed – most obviously alcohol or cigarettes. Even in an ideal ‘free market’ there would be much state involvement. Property rights have to be protected and contracts enforced.

So, as the economist Ronald Coase once sharply pointed out, if we treated ideas and speech as we treat the real marketplace, we’d be blessing all sorts of objectionable government interventions. (Coase went on to wonder why intellectuals were so accepting of regulation in real markets but not in metaphorical ones; he was writing in the early 1970s, before intellectual fashion had completely turned against free speech.)

This is not just being tediously literal. The ‘marketplace of ideas’ metaphor is the only justification for press freedom the issues paper mentions, and it frames the paper’s questions about ‘access’ to the press. The inquiry asks whether individuals (or groups) should be granted a right of reply if they have opposing views, or if their “honesty, character, integrity or personal qualities” have been questioned.

Implicit in the marketplace of ideas theory is that freedom of speech has a purpose. It is utilitarian. The only way to come to the truth about an idea is to freely debate it. The best ideas – that is, those which are most true – will out-compete the rest.

Yet it’s trivially easy to demonstrate this ‘marketplace’ is distorted. Some have access to louder megaphones than others, as everybody keeps pointing out.

And if speech has a utilitarian purpose, it never quite achieves its ends – even once ‘truth’ has been obtained through free discussion, speech freedoms continue to allow wrong ideas to be broadcast.

The utilitarian approach sows the seeds of its own failure. Twentieth-century commentators were more honest about that. One commentator in Forum in 1949 argued free expression “is a right because such expression is of benefit to the community. Obviously, then, the community through the government may at any time limit this right for its own protection.”

The marketplace of ideas theory doesn’t capture the true value we place on free speech. No-one believes that, for instance, 9/11 Truthers no longer have a right to share their opinions, no matter how discredited and ludicrous those may be.

Instead, we need to think of freedom of speech as a right, not a tool to achieve an end.

Freedom of speech is a subset of freedom of conscience. Not for nothing does the first amendment of the United States constitution bundle the right to exercise religion with the freedoms of speech and press. Liberty of thought is meaningless without a corresponding liberty of expression. What we believe, we should be able to say.

The American revolutionaries argued a people were only as free as their press. Echoing those sentiments, the legal academic Lee C Bollinger wrote in 1983: “Free speech is not just a practical tool for making systemic repairs, but an affirmation or statement of what we value as a people.”

(Just because the right to free speech cannot be absolute does not make it less of a right – the common law has for centuries recognised speech is limited insofar as it is threatening or defamatory. Expression is not unlimited either. Punching someone in the face may be “expressive” but does not deserve free speech protection.)

Characterising freedom of speech as a right rather than an instrument has policy consequences.

For instance, the right to speak must be also the right not to speak; to determine the content of your speech. This principle is breached clearly by one of the major proposals of the media inquiry issues paper – a legally guaranteed right of reply which would treat newspapers as regulated common carriers.

Those who hold a ‘marketplace of ideas’ view of free speech may find this proposal unobjectionable. But those who believe free speech is a human right should be repulsed. Perhaps newspapers should open their pages for wide-ranging debate. But that’s ultimately between them and their readers – a free speech choice, not a free speech requirement.

As Bollinger argued, “The reason we shelter speech is as important as the speech we shelter.” The frame in which we understand free speech shapes our attitude towards it. The dominant policy view – seemingly held by those who drafted the terms of reference to the media inquiry and those who drafted its issues paper – is that freedom of speech is only of utilitarian importance. But that view has too many limitations and inconsistencies to be useful.

We do not want the Government managing public debate for all sorts of reasons. First among them is that any attempt to do so will necessarily abridge our basic right to freedom of speech.

Fat chance of cutting calories

“Given the lack of evidence that calorie posting reduces calorie intake, why is the enthusiasm for the policy so pervasive”, asked an editorial in the American Journal of Clinical Nutrition in February this year.

It’s a good question, considering that mandatory nutrition menu labelling in chain restaurants is being rolled out in New South Wales and Victoria this year. Major fast food outlets, pizzerias, cafes, bakeries, and juice bars will have to show the amount of kilojoules in each item on their menu.

Mandatory menu labelling is a useful case study in the lack of good evidence behind much public health paternalism. “Useful” because it has a stronger evidentiary base than most. But that’s not saying much.

New York City began mandating nutrition labels in chain restaurants in 2008. The New York Department of Health predicted big things – 150,000 people would be saved from obesity within five years, preventing “more than” 30,000 cases of diabetes.

Preventative health policy is contagious. Menu labelling was picked up by Australia’s Preventative Health Taskforce, and included in its paper on obesity released in October 2008. The New York Health Department’s ambitious but well-publicised claims were quoted.

The critical piece of scholarly evidence that backers of this policy have relied upon is a 2008 study published in the American Journal of Public Health (it predates New York’s mandatory measures).

The study’s authors looked at a sample of customers from 11 fast food chains across New York’s five boroughs. All provided nutritional information to customers. But only one provided that information at the point of sale. The rest simply displayed it on a website or tucked away in the store.

No shock then only 4 per cent of customers reported seeing it in those latter stores, as opposed to 32 per cent who saw it when displayed on the menu.

A third of those who reported seeing the information purchased items with fewer calories.

Pretty conclusive, you’d think. Except for the fact that the restaurant which displayed the calories was Subway – a chain which has deliberately marketed itself to the health conscious, not least of all by displaying calories on its menus.

That’s no incidental detail. The big issue in obesity policy is that many interventions require a pre-existing preference to eat healthy. Subway regulars are likely pickier about their food intake than, say, McDonald’s regulars. There’s a reason their mascot is a guy who lost of lot of weight.

Even then, the overwhelming majority of Subway customers did not reduce calories even after they saw the information.

Still, as far as evidence goes the paper isn’t bad – equivocal in the details, but better than nothing. So Kevin Rudd’s Preventative Health Taskforce cited the paper, and recommended menu labelling (Of course, the taskforce didn’t mention the chain in question was Subway).

But evidence for the effectiveness of menu labelling has slid backwards fast since the policy was made mandatory for all New York chains in 2008.

A 2009 paper in Health Affairs found that while 27 per cent of people self-reported that the calorie labelling influenced their purchase decisions, analysis of actual purchase receipts did not bear this out. People were saying one thing, but doing another. Just one more example of why we shouldn’t put much stock in social science surveys.

The Health Affairs study looked at New York’s low income communities. Calories consumed had actually gone up slightly in some restaurants. Some academics have supposed that menu labelling helps a subset of consumers to calculate the most calories they can purchase for their buck.

A similar phenomenon was detected in a 2009 study in the American Economic Review, which found that “providing calorie information may have small effects on food choices, but may also produce perverse effects.”

A study published this year in BMJ also found that, while chain by chain the response could vary significantly, mandatory labelling led to no overall decline in calories purchased.

Of course, the New York City Health Department now says it has new – and unpublished – evidence which apparently proves the regulation works in four of the 13 chains it surveyed (alternatively: it doesn’t work in nine).

So it’s fair to say that in 2011 there is no good reason to suppose that mandatory menu labelling will have a discernable effect on obesity rates.

That the one real-world example of mandatory labelling appears to have failed should give pause.

But that failure has not stopped public health lobbyists from working hard to impose them. Or governments from pressing ahead.

The Australian Obesity Policy Coalition’s policy brief on menu labelling cites the Subway research, without naming Subway, and without mentioning the easily accessible recent studies of mandatory menu labelling’s real-world effectiveness. The brief was written this year, so no excuse.

Newspaper articles announcing the Victorian decision also only referred to the Subway research (again, without naming the chain), but not the subsequent studies. Politicians leant on the once-over-lightly – and now outdated – Preventative Health Taskforce report, which, as we’ve seen, also relied on this 2008 paper.

The Heart Foundation, to its credit, did a proper literature review up to 2010. And having done so, it could conclude no more than mandatory menu labelling should be trialled to see if more concrete evidence could be found.

Nevertheless, joining John Brumby at the policy’s announcement, the co-chair of the Heart Foundation claimed implementing menu labelling permanently was a “fantastic initiative” and “definitely will raise the awareness around what people are eating”. No calls for a limited trial. No equivocation. No scholarly dispassion there.

It’s almost as if the evidence is beside the point. The public health community have their mind fixed on mandatory menu labelling.

Menu labelling is now going to be rolled out across the United States. In Australia, activists are talking about the need for a “national approach”.

Sure, as far as regulations go, it’s a relatively minor one. Yes it is expensive to implement. But many restaurants are doing it anyway (Subway was merely first). The legislation is limited to large chains which can spread the cost. And if it saves just one calorie…

But the published data can be very inaccurate. Sixteen-year-old pizza chefs don’t exactly measure pepperoni by the gram. The McDonald’s auditors can’t control exactly how many fries constitute “medium” fries. There’s a lot of variation in even the most regimented cooking.

It should be concerning that labelling could result in poor people consuming more calories rather than less – a result which nobody predicted before the New York regulations were imposed. Unintended consequences are like that.

Nevertheless, as a case study in public health paternalism, it should be more concerning how policies which have little evidence to support them gather an unstoppable inertia.

Inside Dirt On Clean Energy Schemes: They Don’t Work

If Julie Gillard isn’t paying attention to what’s happening in Washington DC right now, she should be. The first major scandal of the Obama administration looks similar to one of the centrepieces of her carbon price package.

Solyndra was the jewel in the crown of Barack Obama’s green energy program. This California-based solar cell manufacturer received a $US535 million loan guarantee from the US government in 2009. Part of the administration’s stimulus package, the guarantee was supposed to help spark the green revolution.

When Obama visited the company in May 2010, he announced Solyndra would demonstrate that ”the promise of clean energy isn’t just an article of faith” and would lead the way ”towards a brighter and more prosperous future”.

It wasn’t just the federal government: Solyndra was the biggest beneficiary of California governor Arnold Schwarzenegger’s energy subsidies. It was one of the most well-funded start-ups in history.

But last month Solyndra declared it was bankrupt. A year and a half after Obama waxed lyrical about the oodles of green jobs the company would create, 1100 people are out of work. There’s a criminal investigation under way. Executives have been put in front of a congressional hearing, where they have refused to answer questions for fear of self-incrimination.

Solyndra is Obama’s Enron. Not only a political mess (one of the company’s private investors is a major Democrat donor), but it’s a huge policy mess, too.

So why should Gillard care? Because the program that financed Solyndra does much the same thing as her proposed Clean Energy Finance Corporation.

The corporation is part of the deal to get Greens support for the carbon package. It will have a piggy bank of $10 billion to invest in ”clean energy proposals and technologies”.

Solyndra burnt through half a billion dollars of taxpayer money in two years. The reason for its failure is obvious: if the market thought Solyndra was good value, then the company wouldn’t have needed the federal loan guarantee in the first place.

Companies collapse all the time. But who could think a company that can only attract investment if the government promises to bail it out is the portent of a bright, green future?

The phrase ”picking winners” is deeply misleading. Governments generally subsidise firms that the market has already decided are losers. Sure, it’s possible to imagine a committee of career bureaucrats might stumble onto a great opportunity that investors have missed. But you wouldn’t want to put money on it. Well, perhaps somebody else’s money.

Like Obama in 2010, Gillard in 2011 is stamping her approval on a few trendy, subsidised companies.

The government’s Clean Energy Future advertising blitz is stuffed full of fawning interviews with wind and solar energy companies. It boasts about the new jobs they’ll create. But these jobs rely on government grants, or the carbon price, or mandatory renewable energy targets. They wouldn’t survive on their own. The market has already bet against them. Soon there will be $10 billion more to fund dozens of antipodean Solyndras.

And that money puts the lie to the claim that Gillard’s climate package is a ”market-based” solution to global warming. Not even the government believes so. Otherwise it would have eliminated the masses of climate programs that already exist. (According to the Commonwealth Auditor-General, there are 550 across the country.) Instead, they’d leave the tax to do the work of directing investment. They definitely wouldn’t be offering up even more subsidies.

Tony Abbott should study Solyndra, too. Conservative parties aren’t shy about spending money on energy boondoggles. Even as they happily dance on Solyndra’s grave, Republicans support loan guarantees for nuclear power plants.

And the Coalition’s direct action plan will do its fair share of winner picking. In fact, that’s its whole point. Their Emissions Reduction Fund will spend $1 billion per year on projects that an Abbott government reckons might reduce emissions.

When Obama announced his green stimulus plan in 2008, a coalition including the ACTU, the Australian Conservation Foundation, the Property Council and the Climate Institute urged the government to ape the American program. Renewable energy outfits are fashionable, after all.

But doling out other people’s money to businesses that only bureaucrats think are exciting is begging for trouble. Most people thought governments had gotten over this sort of speculative activity. Clearly that’s not the case. But the collapse of Solyndra should remind us why governments gave up, for a short while, trying to pick winners.

Have The Media Watchers Undermined Press Freedom?

It’s not hard to see where the media inquiry is headed.

The terms of reference were released last week. The inquiry will look at “the effectiveness of current media codes of practice”, “ways of substantially strengthening the independence of the Australian Press Council”, and “any related issues pertaining to the ability of the media to operate according to regulations and codes of practice”.

Private entities are welcome to develop ethical and professional codes. Indeed, they probably should. But it doesn’t follow that government should muscle in to enforce those codes – particularly if the entities in question are newspapers critical of the government. The risks to press and speech freedom are obvious.

But the path from self-regulation, to quasi-regulation, and then to black letter law is well-trodden.

Many industries have introduced self-regulation to stave off government interference. Many also discover years later that governments turn those voluntary measures into heavy-handed regulation.

In the case of the press, the story dates back nearly 40 years.

The relationship between the press and the Whitlam government was deteriorating rapidly during 1975. So much so that by August Whitlam’s minister for the media, Dr Moss Cass, was openly canvassing ways to increase political control of the print media.

Cass offered choices. He suggested licensing of newspapers. He suggested government subsidise print journalism. He suggested a Royal Commission into the Media. And he suggested a Press Council run by the newspapers.

Obviously, from perspective of the media and press freedom, a council was the lesser of many evils. The Australian Press Council was established in 1976.

As the Age editor Graham Perkin had said a few years earlier, “I have no doubt that we will have a Press Council forced on us one day by this government or the next. It would be best if we initiated this move ourselves so that the Press Council we get reflects the best ambitions and motives of the press rather than the ignorance and misunderstanding of public servants and some academics.”

But self-regulation is only ever a delaying tactic. The terms of reference to the Gillard Government’s media inquiry clearly suggest government involvement over developing and enforcing professional standards. The current chairman of the Press Council, Professor Julian Disney, is asking for government funding and statutory powers.

Last week Media Watch’s Jonathan Holmes mounted a stirring, but limited, defence of freedom of the press, writing in The Drum that “Three hundred years of history would be turned on its head” if Disney got his way.

It’s an important article, and a revealing one. Holmes’s arguments are worth dwelling upon. They’re held by many other apparent supporters of free speech. And they illustrate how heartfelt pleas for self-regulation are used to push for government interference.

Holmes argues regulation of the content of the print media is objectionable on freedom of the press grounds. Excellent.

But he undercuts that by arguing regulation of broadcast media content is justified.

A lot rides on how the distinction is drawn. Holmes describes broadcasters as “licensed semi-monopolists”. True, but only because government artificially restricts broadcast competition with radio spectrum licenses.

Rather than challenging this basic policy problem, Holmes would have bureaucrats regulate broadcast content to compensate – chasing one regulatory error with another.

(An alternative is to grant property rights in radio spectrum and get the Government out, as the Nobel-winning economist Ronald Coase suggested half a century ago.)

And on closer inspection such an argument doesn’t quite demonstrate why, say, the Herald Sun shouldn’t be made as “accountable” to government regulators as 2GB.

Yes, broadcasters are unconscionably protected from competition. But there are still many more metropolitan radio stations than newspapers. Towns that now have only one paper still have five TV channels. So if an exception to freedom of the press must be made, surely it must be made for our limited print media, not our relatively vibrant broadcasters?

Rather than defending freedom of the press, Holmes’s rickety distinction between print and broadcast undermines it – opening a huge gap that opponents of free speech can drive their regulatory desires through.

Yet there’s a more critical way in which Media Watch has been complicit in self-regulation becoming government regulation.

Media Watch takes a very legalistic approach to media criticism. Rather than simply pointing out lapses in ethics or inaccurate reporting, the program goes to lengths identifying codes of conduct or professional standards guidelines which have been breached. And, as I argued in The Drum in March, where regulators do have power, Holmes has been quick to call for legal action.

Citing the codes of conduct is a rhetorical ploy that Media Watch has used to emphasise the naughtiness of editors and journalists.

But it is a very influential program with a very powerful audience.

It should be no surprise then that, as a result, the Government has latched onto the apparent inadequacy of those codes, and want to make them legally enforceable.

Media Watch’s carefully documented collection of self-regulation botches have handed the political class an opportunity to restrain the press freedom Holmes so passionately defended in his column.

This is a dynamic we’ve seen in many other industries. Activists pressure private industries to follow voluntary standards. Lobbyists then convince governments to turn those standards into mandatory regulation. Rinse, repeat.

Which is, it seems, exactly what’s happening with the media inquiry.

Prime Ministerial Musical Chairs

What possible benefit would the Labor Government receive from ditching Julia Gillard now?

Yes, a Fairfax poll on Monday suggested Kevin Rudd would win an election handily if only he was swapped back in as prime minister. Forty-four per cent of voters prefer Kevin. Only 19 per cent prefer Julia.

But there are some heroic assumptions here, not least of which the changeover would be seamless and appear effortless. No late-night press conference with Gillard about how she won’t stand by as her party lurches to the left on asylum seekers. No teary farewell. Some convincing explanation of why a leadership change was necessary.

And entirely absent from hypotheticals like these are any consideration of the shape of the alternative government.

It wasn’t, after all, the simple fact of Julia Gillard’s appointment as Prime Minister that put voters off her. It was what happened next: a series of backdowns, reversals, preening factional warlords, major policies announced without checking whether they were actually possible, and, as Annabel Crabb pointed out in The Monthly, her Government’s complete inability to describe why she is Prime Minister in the first place.

In politics, like policy, implementation matters more than intention.

The air of illegitimacy about this Government grew over time. It didn’t spring up instantaneously. It’s not Julia Gillard, but the policy and political decisions she has made – from the over-scripted “moving forward” speech, to the carbon price turnaround, to the High Court’s ‘Malaysia Solution’ case.

So the question is not really who the Labor Party would like as leader, but what they plan to do when they get there.

That’s, in part, why Stephen Smith would be such a bizarre choice. His primary qualification for the role appears to be that he exists. Not that he has any particular views, or is driven by any standout philosophy of government.

Lots of people seem to think that Simon Crean would be good as PM, but, then, lots of people thought Julia Gillard would be good too.

There seems to be growing sentiment from within the Government that a change in leadership may be necessary, but no indication that a leadership change would have any policy consequence.

Prime minsters Smith or Crean would have to decide what to do about the one policy which is eating Labor alive – the carbon tax. It’s not just ‘Convoy of No Confidence’ types who disapprove. Newspoll suggests the climate policy only has the support of 37 per cent of Australian of voters.

“Putting a price on carbon” is a political trap. From the moment the carbon bills are signed into law, the Government will – fairly or unfairly – take ownership of every single job loss in energy and manufacturing. Gillard may get her bills through but the next Labor prime minister would have to decide whether to maintain the system as it stands. If the new PM does nothing, then almost every dissatisfaction with Gillard will apply to them.

And the image for the Labor Party will be even worse. What was an aberration would become a pattern. Is the modern ALP fundamentally unable to keep one prime minister in the Lodge for a full term? If Labor really wants to give the electorate the impression that it is completely unable to govern like adults, then continually swapping out prime ministers would be the best way to do it.

It wouldn’t be just this Government at stake. It would be the electoral viability of the party over the next few decades. In 2007, Labor argued voters couldn’t be sure whether the Coalition was offering prime minister Howard or prime minister Costello. In 2013 voters won’t know who in the entire ALP ministry they’re being asked to support. And then in 2016, and 2019, and on and on.

The story would be a little different if Kevin Rudd was returned to the leadership. Imagine a Rudd coup tomorrow. Gillard herself would be the aberration, not the leadership spill: a 14-month failed experiment. The Labor Government would be back on the path it set out on in 2007. Wounded, embarrassed, contrite, but alive.

But that assumes that everything goes smoothly, and that voters don’t mind political parties making colossal leadership errors whilst trying to run the government.

And Rudd would still face policy questions which have no easy answers. The former PM certainly has more forthright views on questions about climate change and refugees, but they wouldn’t provide much of a guide out of the Government’s mess. On the carbon tax, Rudd would be more likely to double down than fold.

A change in leadership is an answer to a question that hasn’t been asked. The Government’s problem is not just the personality at its top.

Let’s face it: Labor cooked its Government when the smartest warlords in the room decided Kevin Rudd had to go. Everything since then has been an extended death monologue.

Liberty Gets The Chop

Where are our great public intellectuals on new threats to freedom of the press? Under the Howard government, there was a minor genre of books and essays condemning the prime minister’s apparent antipathy to public debate. With titles like Silencing Dissent, academics and activists lined up to say John Howard was cracking down on his opponents. David Marr argued in a 2007 essay that Howard was ”corrupting public debate”. Howard had ”cowed his critics” and ”muffled the press”.

So the silence on the inquiry into media bias is jarring. Yesterday the Greens proposed an inquiry to look at ”whether the current media ownership landscape in Australia is serving the public interest”. Those are weasel words. The inquiry – also supported by some independents and many within the government – is obviously intended to influence what the media publishes.

After all, Rob Oakeshott supports an inquiry because he thinks ”complete rubbish” is being written about him. Labor MP Steve Gibbons spoke of the need for an inquiry because of ”vendettas of hate” being waged against the government. Greens senator Christine Milne has said ”bias is certainly one of the things which is going to be looked at”. Bob Brown talks of the anti-Green ”hate media”.

The federal cabinet reportedly held lengthy discussions several weeks ago about ”going to war” with News Ltd and The Australian newspaper. Along with an inquiry, the cabinet also canvassed a government advertising boycott, because it wasn’t happy with coverage of the Craig Thomson affair and journalist Glenn Milne’s airing of old allegations that Julia Gillard had been tangentially associated with similar things.

But recall: in his Howard-era essay, David Marr described the government’s reluctance to use taxpayer money on objectionable artistic grants as ”censorship by poverty”.

Many agreed. Surely by this loose standard, the Gillard government’s threat of withdrawing advertising from a media company it objects to is ”censorship” as well? Where’s the outcry?

In 2007, Robert Manne wrote the foreword of Silencing Dissent. But in a Quarterly Essayreleased last week, Manne complains the ”real and present danger to the health of Australian democracy” is actually Rupert Murdoch and The Australian.

It couldn’t be that the ”health of our democracy” has been hurt by this government’s unfathomably low popularity. Or how it dumped a prime minister, reversed a core election promise and fouled up its refugee policy beyond belief.

No, more concerning is the The Australian‘s ”jihad” against the Greens. In his essay, Manne praises the Greens as ”the most important left-wing party in Australian history”. The Labor Party – Australia’s oldest political party and the first labour party to hold government on the planet – might disagree.

Well, perhaps Manne is using ”left wing” as a synonym for ”authoritarian”. Surely there’s no other word to describe Bob Brown’s recent suggestion the government should impose newspaper licences.

The only reason you’d impose a licence is so you have the power to take the licence away. That’s why in the English-speaking world, newspaper licensing was abandoned nearly four centuries ago. It was tyrannical.

Certainly, the proposed media inquiry may be limited to studying things like privacy or media ownership. Or it may not go ahead at all. The government has enough on its plate. And it is a legitimate question whether the law has set correct limits on media ownership concentration. (Or whether any limits should exist. The press is under extreme commercial pressure from the internet. At no time in history have media moguls been less powerful.)

Still, there’s a comprehensive review going on right now into every facet of media regulation – the convergence review. Few seem to care about that.

The idea that a government might regulate a media organisation specifically because it didn’t like an editorial line is an obvious attack on free speech. Should companies be broken up, their ownership divested, as punishment for being critical, fairly or unfairly, of a government?

Indeed, the fact the government is talking about an inquiry gives it leverage over critics. Surely few genuine supporters of free expression are comfortable with that. Imagine the furore if John Howard had done – or suggested – anything similar.

The Gillard government is one of the most shambolic in history. No surprise then that some people want to talk about failings of the press. Fixating on unfair media coverage must be comforting for those let down by Labor’s performance in government.

In his recent book, Sideshow, former finance minister Lindsay Tanner argued the media was too easily distracted by the frills of public life, to the detriment of policy analysis.

This might be a fair point. But his publicity tour was revealing. Tanner was the fourth most powerful person in the Rudd government. He retired just as it imploded. He’d know some things of public interest. Yet in interviews, Tanner refused to be drawn on the inside workings of that government. He just wanted to speak about media perfidy. Complaining about the media sideshow is just another sideshow.

Predictably, the News of the World scandal in Britain was used by Australian politicians to embarrass their press critics. Months later there’s still no evidence to suggest phone hacking of any kind has occurred Australia. Yet cries for a media inquiry have only gotten louder.

Silencing Dissent asked readers to ”judge for themselves whether the erosion of democratic institutions described in this book is the accidental result of a particular leadership style or part of a more insidious attempt to reshape democracy”.

The question was shrill then. But many nodded along at the time. And for those who did, that same question should now be asked of the politicians clamouring for legislative solutions to negative media coverage.

National Curriculum: Labor’s Big Failure

Less than two months after the Rudd government took power, education minister Julia Gillard announced her national curriculum, and announced it would start in 2011.

Just four subjects, mind you – English, Maths, Science and History. The rest were to follow later.

The deadline was missed, and introduction was delayed until 2012. (Kevin Rudd nevertheless listed the national curriculum as one of his achievements in his farewell speech.)

But the replacement deadline was missed too – bumped down the track to 2013. Now last month New South Wales said it would hold the curriculum back until 2014 at the earliest. And teachers’ bodies have urged education ministers across the country to follow NSW’s lead.

Three years seems like a short time to enact a four-subject curriculum across the country. But for it to take six years is a debacle.

Sure, it hasn’t got one-tenth the publicity of the Malaysia Solution, or pink batts, or the mining tax and health reform reversals. Or even GroceryChoice. But the national curriculum should be one of the Government’s most embarrassing failures.

This is not the first national curriculum proposal to flounder.

In 1989 the Commonwealth government (Labor) got together with the states (also mostly Labor) and tried to forge a uniform curriculum. Education is, of course, a state responsibility. You can’t make a national curriculum without the consent of the states. But when the states started to turn Coalition, the deal collapsed.

That seems to be happening again. The Commonwealth’s authority to drive curriculum change relies entirely on the acquiescence of the states. While the new Coalition state governments in Victoria and New South Wales were initially supportive, they are turning hostile.

Perhaps a national curriculum is quixotic. But for decades it has been an article of faith among bureaucrats and the education establishment that Australia needs a national curriculum.

There are a large number of politicians and academics who seem to believe a policy is not serious unless it is a federal policy, a “national” approach is inherently and unquestionably better, and the Commonwealth Government is better placed to make good policy than state governments. Those beliefs are more ideological than anything else.

No doubt some state curricula are sub-optimal. But the Commonwealth has a less-than-absolute success rate in policy formation and implementation too. Simply claiming you want a “world-class curriculum” is no guarantee you can design one. And the slipping implementation of the curriculum does not inspire much hope.

In 2005, the academic Alan Reid argued in a Department of Education research paper previous attempts collapsed largely because they “failed to develop a rigorous rationale for national curriculum collaboration”.

Indeed, the practical arguments for a national curriculum stretch the bounds of credibility.

Gillard – and now Peter Garrett – speaks of the need to provide a consistent education to the 80,000 students who migrate between states each year.

It’s an old claim: in 1968, the federal education minister Malcolm Fraser spoke of the “very real difficulties faced by children who move from one state to another”. And it’s one which sounds convincing until you realise 80,000 is less than 3 per cent of the entire student body of three million.

Reforming the entire school system to cater for these students is absurd – even if we grant the doubtful assumption those students struggle terribly to adjust to their adopted state curricula, and that it’s a problem the Government must tackle urgently. (There are probably simpler ways to ease the transition for these few children.)

When the Howard government was considering their own national curriculum, Julie Bishop claimed it was necessary because “ideologues” had “hijacked” the state curriculum bodies.

This makes even less sense. It’s easier for ideologues to hijack one national curriculum than eight separate ones. And much more rewarding.

After all, under a national curriculum every single student in Australia will be taught from one song sheet. The Australian Curriculum Assessment and Reporting Authority speaks about “shaping the lives of the nation’s future citizens”, how the curriculum must teach students to “work for the common good, in particular sustaining and improving natural and social environments”, and ensure they are “responsible global and local citizens”.

These are heady sentiments. The curriculum is explicitly designed not just to teach, but to “shape”.

So if the curriculum presents a distorted view of, say, the Industrial Revolution (an historical event which profoundly influences our understanding of the contemporary economic order) it matters. Do markets oppress or liberate? Is economic progress good?

Or if the curriculum suggests, as this one does, that human rights were given to us by treaty-makers at the United Nations, that strange but suggestive view will be embedded in future generations when they come to consider debates over rights in Australia.

Yet even as its implementation problems pile up, the national curriculum has still not been given the same critical examination as this Government’s other policy flops. That needs to change.