Chris Berg – Page 67 – Politics, economics, technology, and civil liberties

Rudd is gone, but he’s still the focus

Tony Abbott and Julia Gillard agree: Kevin Rudd must not be allowed to win this election.

The former prime minister will not be a big participant in the campaign, but it seems he will be its primary focus.

Labor candidates across the country have photoshopped him out of their campaign photos. We can now see the results: in the western Sydney electorate of Macquarie an ALP flyer is being distributed that features Gillard rejecting a ”big Australia”. The bogyman on that flyer is not Abbott, but Rudd.

So far, all Gillard’s policy announcements have been Rudd-centric. She’s backed down on Rudd’s mining tax, she’s toughening up the refugee policy she inherited from Rudd, she’s fudging climate change as much as she can.

The statement to the Canberra press gallery this week that her campaign would be frugal sounds responsible. But it has to be frugal. She, and Rudd, and the rest of the kitchen cabinet have used up all the government’s money already.

One thing wasn’t about Rudd. Last week she announced, with the sort of pomp and ceremony befitting a declaration of war, that school uniforms would be eligible for the education tax refund. Whether that’s a good policy or not is immaterial; it’s not much policy at all.

The ALP seems to be asking for three more years to retract the last three. ”Moving forward” is, well, a little backward looking. And it’s not a lot to hang a campaign on.

Gillard has no lack of issues she could pick up. The former prime minister’s irritable policy-making style ensured that.

If there’s a slow news day, she could jump aboard any of the few hundred recommendations from the Henry tax review, the Preventative Health Taskforce, and the 2020 Summit, or the health reform, or the Asia union. She could even take up the entirely futile and entirely noble campaign for nuclear disarmament.

At the very least, Gillard will have to decide which of Rudd’s proclamations she wants to support or discard.

Spare a thought for Tony Abbott.

The Coalition wanted to run against Kevin10. Their policies on refugees, population, the mining tax and climate change are concentrated to capitalise maximally on his weaknesses.

Rudd was the Coalition’s best asset. Soldiering on, Abbott has started referring to the ”Rudd-Gillard government”.

But with no Rudd, the Opposition Leader appears to be just hoping Gillard will break something.

With the failure to lock in a refugee processing centre in East Timor, Gillard may have.

Yet surely what’s more memorable about the Dili solution is that the new PM is – again – repudiating her predecessor’s approach.

Rudd is skulking around, pretending to be the political powerhouse he isn’t.

But now the election is on, both Gillard and Abbott are going to have to face each other directly. Doing so will take serious policy creativity.

Climate change: healthy debate not a health debate

Want the earth to be cooler? Unleash the psychologists.

At least, that’s the argument presented by one of the keynote speakers at the 2010 International Congress of Applied Psychology, being held in Melbourne this week.

According to Robert Gifford, a Professor of Psychology and Environmental Studies at the University of Victoria in British Columbia, the profession needs to help scientists and policymakers overcome the psychological barriers to action on climate change – things like the public’s limited understanding of the dangers of global warming, ideological reluctance, and mistrust of government.

He’s not alone: it’s a developing area of study. The American Psychological Association has a Task Force on the Interface Between Psychology and Global Climate Change. In a report last year, it too found psychologists should try to overcome our psychological barriers to saving the planet.

Of course, all this assumes that having governments take aggressive action on climate change as soon as possible is inherently desirable.

And if you don’t think so, well, you have psychological problems. Or, at least, we as a society do.

In other words, if we think the costs of climate change policies could be greater than the benefits, if we think there are better uses for the money governments want to spend on the environment, if some of us don’t want to make the lifestyle changes necessary to cut carbon emissions by 80 per cent, then we need psychological treatment.

Case closed.

But there is serious debate to be had about climate change. Debate about the best response to the changing climate and the degree to which we are responsible for that change. Debate about how we can adapt to a warmer or colder environment. Debate about whether Australia should bother trying to “lead the world” if the world isn’t interested in following.

Instead of tackling those questions, many climate activists would prefer to treat the existence of public uncertainty about the origin, costs and consequences of climate change as not just wrong, but corrupt, immoral, and, now, unhealthy.

This attitude has the stale whiff of authoritarianism. Not to the degree that dictatorships have used psychology as a tool of political power, jailing dissidents in mental institutions, sure. But it is distinctly authoritarian to respond to a political disagreement with a medical diagnosis.

The Australian Psychological Society claims the profession has a “special responsibility to be proactively involved in fostering more ecologically sensitive and sustainable behaviours and lifestyles”. This seems a little outside its brief.

Yet it accords with the trendy view that lawmakers should team up with psychologists to manipulate our decisions. People apparently need a little help from social engineers to ensure they make the “best” choices about their personal diet, finances, and lifestyle.

Thus the huge range of personal values and opinions held by individuals can be treated as if they are deviant in some way, and need professional and legal treatment.

No-one is disputing the electorate has misguided views about many public policy questions.

In his 2007 book The Myth of the Rational Voter: Why Democracies Choose Bad Policies, Bryan Caplan documented the four big economic biases – views held by the general public but rejected by economists who have spent years or decades studying them.

People tend to underestimate the value of labour-saving practices. They overlook the benefits of free trade. They believe the economy is always in decline, and they undervalue the social benefits of the voluntary interaction in the marketplace.

These beliefs account for much of the harmful demagoguery which surrounds economic debate.

Yet neither the Australian Psychological Society nor the American Psychological Association has a section on their website dedicated to the psychological barriers to sound economic policy making, as they do with climate change. Nor do their conferences focus on diagnosing the impediments to international support for lower tariffs.

Instead we all rightly treat economic policy as a legitimate area for discussion and disagreement. Climate change policy needs to be approached with the same open attitude.

The way the debate over climate change has developed has encouraged this sort of public policy dogmatism.

The Intergovernmental Panel on Climate Change (IPCC) has been promoted as the last word on climate.

The IPCC process is a bold attempt by a small number of experts to distil an enormous amount of scholarship into a single document, with enough coherence for politicians to act upon.

So the IPCC’s reports are not just dispassionate reviews of the scientific literature. They are riddled with economic assumptions, political judgements, and ethical and moral assessments.

That the general public is sceptical the IPCC has reached scholarly perfection – to question some of its judgments – is not an indication we all have psychological issues. It’s healthy debate.

Chris Berg is a research fellow with the Institute of Public Affairs and editor of the IPA Review. You can follow Chris Berg on Twitter.

Strange bedfellows make for better government

Something strange is happening in Britain. When the Conservative Party failed to get an outright majority in the May general election, it was forced into coalition with Britain’s (distinctly left-leaning) third party, the Liberal Democrats, to take government. But here’s the strange part: the coalition seems to be working.

The Liberal Party in Australia should be watching this embryonic alliance closely. David Cameron and his Liberal Democrat Deputy PM Nick Clegg are getting along like a parliament house on fire. The two men are even proposing to address each other’s national conferences this year.

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It’s more than just a personal relationship. Surprisingly, the coalition seems a lot stronger than you’d expect from a marriage of convenience.

If it holds, the UK could see a dramatic ideological realignment. After all, David Cameron’s project to soften the Tory image was about more than just looking green and modern.

No party calling itself ”conservative” will ever be a fully libertarian one. Social conservatives who’ve voted Tory forever would not look kindly upon mixing social liberalism (gay marriage, for example) with its Margaret Thatcher-style economics (lower taxes, smaller government).

But while the Tories are in coalition with the Liberal Democrats, the government could get close to that philosophical union. At their best, the Liberal Democrats are socially liberal and civil liberty-minded.

The dynamics of coalition with the Liberal Democrats gives influence to social liberals in the Conservative Party. It also gives power to those Liberal Democrats who want to cut down the size of government and deregulate.

So the coalition could be a generally centrist, modest and mainstream government, but one that cares about individual liberty – a new ”liberal conservative” government. That’s what seems to be happening.

Clegg is working on the Great Repeal Bill, a suite of legislation to clear away some of the restrictions on civil liberties, government intrusions on privacy, creepy government databases, and nutty nanny state laws that built up in the Labour government’s decade in power.

The government is eliminating the compulsory national identification card scheme. They’ve promised to stop detaining asylum seeker children. They’re talking about devolution, giving more power to local councils and communities, expanding school choice and pushing public sector reform.

Sure, there are big things the two parties disagree on. On immigration there is tension. But Labour has evidently decided disaffection with foreigners was the reason it lost government. So while Labour is going after British National Party types, the Liberal Conservative coalition can temper its own position.

It is early days for the Cameron-Clegg partnership. But it looks good so far. So if the Liberal Party isn’t paying attention, it should be.

When Malcolm Turnbull was rolled last year as Liberal leader, there was a minor sub-genre urging him to start his own party – a party for social liberals and economic dries. Sounds delightful. But not many of the people who proposed this new party would vote for it, let alone join.

Turnbull may be all loveable and cuddly on climate change and Bill Henson, but such a party would also have to be economically pretty dry. Imagine a party with an industrial relations policy to actually deregulate Australia’s workplaces, rather than, as with WorkChoices, just smack around trade unions a bit. Or one that wanted to do more horrifying things: privatise Australia Post, cut taxes, abolish the Australian Institute of Sport.

Of course, the chances of a breakaway party are pretty slim. But it is a central tenet of the Australian Liberal Party that it’s the party of individual freedom, small government and personal responsibility.

The Cameron-Clegg alliance is a real-world test of the marketability of a government that cares about individual liberty in both economic and social spheres. It’s a style of government with promise. The Australian population is becoming more liberal on social issues every year. Gender and sexual equality are no longer debatable. Even multiculturalism, so controversial in recent decades, is widely accepted.

Yet many on the Australian right believe the reason David Cameron didn’t win big enough against Gordon Brown to hold government on his own was because he was insufficiently conservative. He could have talked more about immigration, for instance. The lesson from Britain, they argue, is that Tony Abbott needs to tack right, and tack right hard, to be credible.

But the new British coalition could offer a very different example for the Australian Liberal Party. If Cameron and Clegg can make it work, the combination of social and economic freedom may not be such electoral poison after all.

Chris Berg is a research fellow with the Institute of Public Affairs and editor of the IPA Review.

The Great Disappointment

For progressives, if 2007-08 was the financial year of hope and change, then 2009-10 must have been the financial year of disappointment.

The relentless disappointments of Kevin Rudd have been documented well enough, I think.

Now Julia Gillard, less than a fortnight into her new job, is condemning “political correctness” and planning to harden up the government’s asylum seeker policy.

It’s gotten so bad even Phillip Adams has quit the Labor Party. Adams was an ALP member for half a century. Can you imagine how many disappointments he has lived through? And still sent in his membership renewal?

The Great Disappointment is a worldwide phenomenon.

In the United Kingdom, Gordon Brown was supposed to be a principled revitalisation of the British Labour government – less polished, but more progressive. That didn’t last long.

There’s Barack Obama, whose ascent to the White House throne was accompanied by the global equivalent of a Hillsong service: non-sexual ecstasy by crowds of swaying thousands.

Yet in retrospect, it doesn’t seem like that was really “the moment when the rise of the oceans began to slow and our planet began to heal”, as Obama manically put it in a post-campaign address.

(What did Obama mean saying the planet would begin to heal? Geologists have discovered the African continent is slowly ripping itself in two, and will eventually form a new ocean. Chalk that up as another Obama failure.)

Not only has Obama failed to shut down the Guantanamo Bay detention camp, he’s deliberately affirmed many of the war on terror policies – indefinite detention, warrantless wiretaps, renditions, the assassination of American civilians – which he damned during the 2008 presidential campaign. The United States is still in Iraq, and it’s ramping up in Afghanistan.

Then there is the disappointment of international action on climate change. Spare a thought for the 6,172,820 frustrated citizens of Hopenhagen. They discovered that the awesome power of concentrated motherhood statements could not convince the Chinese economy to power down.

My point is not to revisit the last few years.

And it’s not to ask why this generation of leaders have failed to live up to the imaginings of their supporters.

It’s to ask why those supporters had such imaginings in the first place.

Many extremely intelligent, politically-mainstream people took Obama’s “change” rhetoric deeply seriously, were charmed rather than repulsed when Rudd said “he was here to help”, and imagined that Copenhagen could be a kind of international Kumbaya, where heads of governments would set aside the demands of their own domestic politics and think only of humanity.

Turns out Obama’s “change” was referring just to a change of government. Rudd was talking about helping himself. And Copenhagen was nothing more than a conference full of politicians doing politician things.

So a little more cynicism wouldn’t have gone astray.

Writing in The Monthly before the 2007 Australian election, Robert Manne prophesied if Rudd won, “Australia will become a different and, in my view, a better and more generous country.”

That was a bizarrely optimistic assessment of Rudd’s potential. Yet it was one shared – perhaps not so boisterously – by much of the intellectual left who had been traumatised by years of conservative government.

It’s too easy to blame the Great Disappointment on the fact that Kevin Rudd was a crazy person. Or that Barack Obama can’t stand up to the Tea Party movement.

Instead, blame the system. Politics – and the people who chose to play politics for a living – don’t deserve the ludicrous amount of faith they were given by much of the left.

Liberals and conservatives are used to disappointments.

George W Bush and John Howard were extremely high taxing, high regulating supporters of big government. If you had hoped otherwise, you’d have had a glum decade.

But more than that, the idea politicians are inherently disappointing is built into liberal and conservative political philosophy.

Politics is not a form of self-expression, or an opportunity for catharsis. Politics is a game of winners and losers, a means by which special interest groups seek to get themselves maximum private benefit with other people’s money. It’s grubby.

Sure, not all politicians are venal and self-serving, but enough of them are. Even the most honourable political leader has to make compromises which tear their principles apart.

After all, the pursuit of power isn’t an ennobling one. The American journalist Henry Adams called politics “medieval”, a description I quite like.

Incidentally, that’s why liberals and many conservatives believe politics kept in a small, discrete box, as far away from society and as far away from the economy is possible.

Optimism might be a nice way to live your personal life. But in politics, it just leads to disappointment.

Chasing the xenophobic vote

Tony Abbott must be feeling a little like Victorian opposition leader Ted Baillieu this week.

For the last 12 months, Baillieu has been trying to identify issues where the Coalition can make headway against John Brumby’s government. More cops, abolishing suspended sentences, an anti-corruption commission – those sorts of things.

The Victorian government has responded by ostentatiously adopting those policies as its own.

Tony Abbott made population a key plank of the Liberal Party Federal Council this weekend, claiming an Abbott government would link population growth to infrastructure investment, and saying he would make sure “immigration does not out-strip environmental and economic sustainability.” (It’s in his “Action Contract”, just above his signature, so you know he means it.)

So Julia Gillard’s announcement that “Australia should not hurtle down the track towards a big population” may have taken a little wind out of Abbott’s sails.

Like many other things in Australian politics these days, one reason we are now debating population is because Kevin Rudd got overexcited. For many people, Rudd’s noble but politically inept claim last October that he believed in big Australia and “makes no apology for that” was a helpful reminder that Australia’s politicians rarely take the train to work.

With his October speech, Rudd managed to take personal responsibility for decades of state government failure to invest in transport infrastructure, and personal responsibility for the refusal of those governments to release more land for housing.

Remember when Rudd was described as a political genius?

Abbott capitalised on this when he won the Liberal Party leadership. Rudd had to back away from defending population growth.

But now the primary reason the two parties are talking population is because of asylum seekers. Under Kevin Rudd, the Labor Party was losing votes on all sides.

On the left, Rudd’s ban on refugee claims from Afghanistan and Sri Lanka was pushing voters to the Greens. On the right, the ALP was losing votes every time a new boat full of refugees arrived.

Getting tough on “population” pleases both these camps.

Green voters seem to love the word “sustainable”. It’s like tomato sauce: everything tastes better with sustainable on it.

Having a sustainable population implies asylum seekers can come to Australia, but no-one else. You may flee your third world country to Australia if there’s a war on, but not if you’re starving. That, after all, would be bad for the environment.

Yet on Twitter yesterday, the now Minister for Sustainable Population Tony Burke said “This is the first time I’ve heard any commentators describe talking about environmental sustainability as a ‘lurch to the right’.” He is being stunningly disingenuous.

A quarter of Australians think asylum seekers make up 25 per cent or more of Australia’s total migration intake, according to an Essential Report poll earlier this month. The real figure is less than one per cent.

Those Australians must believe every new boat person is another seat on the train they miss out on. Or another bidder at suburban house auctions. Refugees apparently have deep pockets.

But the Labor government has been losing votes to the Greens, so directly going after asylum seekers, Liberal-style, would only add to the government’s electoral problems.

So population has to be the proxy. Just because it’s badged as “sustainable” population, doesn’t mean the government is only thinking about plants and water and clean air and koalas. Gillard isn’t talking about salinity levels in the Murray Darling Basin when she talks about making sure Australia gets the “right kind of migrants”.

Of course, the Coalition lacks even that subtlety.

In his Federal Council speech on Sunday, Tony Abbott claimed population growth should be tamed because it is putting pressure on infrastructure. But at the same time, he claims his paid parental leave scheme will be “good for our economy because it will increase population.”

In other words: grow local.

(Tony Burke might notice the opposition also uses the phrase “sustainable population”, although no doubt he would be comfortable casting the Coalition’s policy as right-leaning.)

Obviously, in population, Tony Abbott found a powerful message which resonates with voters the ALP would like to retain. Gillard used to work as John Brumby’s chief of staff. Like her former boss, she has no reluctance simply copying her opponent’s policies.

Abbott and Gillard can dress it up all they want. They can talk about infrastructure and the environment, about the hard decisions, about their deep personal desire for migrants to find new lives in Australia, and about how their own parents brought them to this country.

But it’s all pretty transparent. With population, both the Labor government and the opposition are now trying to chase the xenophobic vote.

Coup is good news for Whitlam

Julia Gillard has a lot to thank Kevin Rudd for. The failure of Rudd’s personal leadership style gave Tony Abbott a fighting chance at changing the government. But it is that very failure which should allow Gillard to hold power against the Coalition. Assuming nobody dies from an overpriced school hall.

The rot that set in to Rudd’s prime ministership hasn’t really infected the Labor government he led. Rudd announced every major policy personally. He pushed his ministers to the side, and claimed personal responsibility for every policy breakdown. Rudd’s desperation to make it about him buffered the government from its own fiascos.

The sole minister to pay for the government’s hasty policy making is poor old Peter Garrett — taking the fall for a rushed stimulus he had little part in devising. Even then, Rudd assured the country he himself was to blame for the insulation debacle.

Prancing about no man’s land as a lone soldier in an executive government, it was no wonder the PM drew all the fire from the opposition.

Rudd and Gillard are neither the socialists they are described as, nor the conservatives they claim to be. But Rudd’s centrism was defined by bursts of manic, uncontrolled energy. Each of those bursts would eventually end with deep lows.

Nothing shows this pattern more clearly than the mining tax. We got the resources super profit tax because Rudd wasn’t quite sure what to do with the 138 recommendations of the Henry tax review. We got the tax review because Rudd wasn’t quite sure which of the 900 ideas of the 2020 Summit to choose. And we got the summit because Rudd wanted to demonstrate he had single-handedly ended the culture wars. Robert Manne and Cate Blanchett were to symbolically slay the Howard dragon with the sword of intellectual harmony, offered up by the new prime minister. Think that metaphor is overdone? Well, overdoing things was Rudd’s style.

Climate change was the “biggest moral challenge” of our time, which would have surprised war, third world development, state tyranny, racism, and poverty. The global financial crisis was of “truly seismic significance”, and he would “move heaven and earth” to keep Australia out of it.

The crisis was actually quite mild, causing problems only in countries with deep economic and budget issues already.

One big bluster after another and eventually we’re in 2010. The prime minister who made world headlines on the first day of parliament by saying sorry for the actions of previous Australian governments has spent the past six months apologising for the actions of his own.

Rudd’s personal failure leaves Gillard in a strong position. Rudd’s “clearing the decks” in April of all outstanding loose ends before the election season (abandoning the emissions trading scheme, freezing applications from Sri Lankan and Afghan asylum seekers, passing the education stimulus rorts to a committee) was a dismal failure.

Yes, Gillard has been a senior member of the government that made all these disastrous decisions, as Abbott quickly pointed out. But with the four-person kitchen cabinet now halved (Lindsay Tanner has gone too), Gillard can reasonably claim this is an entirely new executive, if not an entirely new government. So now would be the time for Gillard to do some deck-clearing of her own.

First of all: there can be no ETS without a global agreement. This should be a no-brainer. With the climate change issue cleansed of Rudd’s bombastic moral rhetoric, perhaps now we can focus on whether the government’s policy will or will not meaningfully impact global emissions levels.

Without international agreement, Australia could shut every industry in the country and not change the temperature a nano-degree. A “price on carbon” is utterly pointless if Australians are the only ones paying it. Make Rudd special envoy for climate change. If he can get China and India on board, we’ll talk again.

Drop the internet filter. Nobody seriously thinks it will work. Communications Minister Stephen Conroy is tying himself in rhetorical knots pretending it can.

Scrap the ludicrous freeze on accepting Afghan and Sri Lankan refugees. It’s another relic of Rudd-era policy panic. And it has that air of awkward machismo which would normally be funny, except that barring asylum claims from specific countries is just a teensy bit racist.

Gillard may do none of these things. She’ll probably still be better at selling and enacting bad policies than Rudd ever was.

If nothing else, the Gillard coup has been good for Gough Whitlam. What was once called Whitlamesque can now be called Ruddesque. Being the first prime minister to be bumped before serving a single term is pretty poor. Even Mark Latham, who has complained about being the bipartisan bogyman of Australian politics, now might be able to catch a break.

Gillard, Latham, Whitlam: This week, they’ll all be muttering their thanks to former prime minister Kevin Rudd.

The pursuit of economic growth

The financial crisis must be over.

Whenever the economy crashes, wise men and women say we need governments to manage the financial world for everybody’s benefit. Capitalism, left by its lonesome, can’t make everybody rich.

But when the economy is growing, those sages complain that being rich is no good anyway.

Take one of the keynote speakers for this year’s Alfred Deakin lecture series. Tim Jackson, a professor of sustainable development and author of Prosperity without Growth?, claims that the era of economic growth is over. Jackson writes: “Questioning growth is deemed to be the act of lunatics, idealists and revolutionaries. But question it we must.”

Sounds brave.

French President Nicolas Sarkozy wants nations to abandon their “fetishism” for growing their gross domestic product (perhaps easy to say if you’re the president of a country whose economy has had a sluggish few decades). And luminaries like Nobel Prize winning economist Joseph Stiglitz also believe we have to drop growth and focus on well-being.

This message has its appeal. There is only so much coal, copper, tin, iron and uranium buried in the ground. We’re richer, but we seem more stressed. We have more choices, but they’re complicated and confusing choices. We have better hospitals, but we have fatter stomachs too. And then there’s the environment.

Nevertheless, the growth sceptics couldn’t be more wrong.

We can mock all the trivial inventions and gadgets which make up modern life. (Although I believe the invention of the flat-bottomed taco shell is a worthwhile innovation.) But economic growth is about more than iPads and tooth-whitening solutions.

Growing richer means getting healthier. People in wealthy countries live longer – this graph, which compares GDP per capita with life expectancy demonstrates that clearly enough.

In the first world, only steadily-increasing personal wealth will make expensive health technologies affordable. In the third world, basic public health requires strong economies. To eradicate malaria you have to drain swamps. It’s expensive.

Then the big one: a wealthy country is a clean country. That’s counterintuitive, sure. But the same policy settings which fuel economic growth – property rights, individual liberty, and the rule of law – are a powerful incentive to protect the environment. The drive for wealth involves the drive for competitive efficiency. There is nothing less efficient than waste and pollution.

Electricity generators in the first world are cleaner than those in the third. Priuses cost money.

And it is only desire for profit which leads entrepreneurs to develop and commercialise green technology. If we powered down to a motionless “stable” economy, as growth sceptics believe we should, we’d be discarding our biggest incentive to invent green things.

Yes, many natural resources are limited, but our capacity to innovate – given the incentive to profit – is unlimited. The economist Julian Simon wrote a book called the Ultimate Resource. He was referring to humanity’s ability to adapt to changes and invent new ways of doing things.

We’ve all heard the trite quip the Stone Age didn’t end because we ran out of stone. But we’ve been abandoning finite resources in more recent times. We used to light our homes with whale oil and heat our homes with Europe’s ancient forests. Now trees are mostly farmed in plantations and whales are only used for scientific purposes (I’m sure).

In Prosperity without Growth? Jackson writes economic growth has “failed the two billion people who still live on less than $2 a day”. This is tragic. But it’s still an improvement on past performance. The developing world might be poor, but it’s wealthier than it was. And healthier. With good governance, stable legal systems, and secure property rights regimes, there is no reason to believe the poorest parts of Africa and Asia couldn’t be future boom economies.

Those countries will need that economic growth if they are to adapt to natural and unnatural climate change.

It is fantasy to believe through careful planning and clever coordination we could get the inestimable benefits of economic growth without having the growth itself.

And it’s a weird sort of hubris to imagine we are the generation who will see the multi-millennia project of economic growth suddenly stop.

We want growth because we want our children to live better than we do – to be richer, with all the health, education, and lifestyle benefits wealth can bring. We want the poorest members of our society to be richer than we are now. We want the developing world to be infinitely richer. We want the Bangladeshis of tomorrow to be twice as rich as the Australians of today.

To pursue economic growth is to believe progress – better living standards, better health, and a better environment – is possible.

Chris Berg is a research fellow with the Institute of Public Affairs and editor of the IPA Review. You can follow Chris Berg on Twitter.

It’s alive, after a fashion

Tony Abbott is a strange person to run an anti-tax, anti-spending election campaign. Sure, Abbott got the leadership on the back of a simple phrase – ”great big new tax” – liberally applied to the government’s emissions trading scheme. He’s picked up Malcolm Turnbull’s theme of careless waste in education and insulation, and run with it hard.

His budget reply speech in May sung loudly with ”this reckless spending must stop”.

But it was quickly revealed that the night before his reply Abbott had asked his shadow cabinet to approve a pretty reckless piece of spending of his own: a quick cash payment of $10,000 for stay-at-home mothers. This idea was quickly shut down by his colleagues.

That was to be on top of the opposition’s proposed paid parental leave scheme, which had been announced in March, supported by a $2.7 billion tax imposed on businesses. It would give Australia parental leave to rival Sweden’s.

(As an aside, for decades we’ve been told Australia should be like Scandinavia. So why Abbott’s policy has been so enthusiastically laughed at by those who believe we should be playing policy one-upmanship with Pippi Longstocking is beyond me.)

Anyway, now the opposition is back condemning great big new taxes. Abbott claims increasing the tax paid by the mining industry would be like digging out the heart of the economy and sending it, still beating, to Guangdong Province to work the rest of its life making iPad knock-offs.

Putting aside the merits (and demerits) of the mining tax, there’s a reason for this barrage of mixed messages.

It’s that Abbott’s small government identity doesn’t quite fit him properly.

One of the most common claims made about the Opposition Leader is that his ideas are little more than nostalgia for John Howard – to elect Abbott is to give Lazarus another triple bypass. It’s an understandable view. When in 2003 he was asked if he could think of anything he disagreed with Howard on, Abbott responded: ”No. No. I can’t.”

But Abbott isn’t exactly Howard. Abbott represents strongly just one side of the Howard legacy, a side that became more and more dominant as the Howard government got longer in the tooth – big government conservatism.

That’s the best description of the Howard government’s mix of modest social conservatism and giving the middle-class as much welfare as they can stomach.

Howard was much more like a progressive leftie than anybody gives him credit for.

Under Howard, the rich got taxed more, and the poor got taxed less. In 1996, the top 25 per cent of income earners paid 60 per cent of the Commonwealth’s total tax revenue. By 2007, they were paying 67 per cent. That’s a big increase.

On the other side of the city, the bottom 25 per cent of earners were paying 3.4 per cent of the total revenue in 1996. Eleven years later, that number had dropped to 2.5 per cent.

Yet Howard had made his way in the 1980s as an economic dry. He was supported by the rump of free marketeers in the Liberal Party who believed Australia needed to privatise the big, lumbering bureaucrat-run businesses, deregulate and destroy the cosy government cartels (the government’s official Egg Marketing Board, for instance), lower taxes, cut spending and generally get off the economy’s back.

Let’s just call them neo-liberals. Everybody else does.

In government, Howard spent heavily and regulated heavily, but he did come good on some of the neo-liberal agenda. Telstra was fully sold, the GST implemented, media markets deregulated, and so on. Small steps, but enough of them to keep the free marketeers on side. Howard still got to call himself a neo-liberal, and everybody else got to damn him as one.

Howard was a neo-liberal on Mondays, Wednesdays and Fridays, and a big government conservative on Tuesdays, Thursdays and Saturdays.

Neo-liberalism in Australia is primarily an economic agenda. And Abbott’s lack of interest in economics is famous: ”I have never been as excited about economics as some of my colleagues; you know, I find economics is not for nothing known as the dismal science.”

Much more than Howard, Abbott sees the economy as simply an engine to produce money for governments to spend. A good economy is important. But mainly so governments can fund social programs: ”You can’t run a decent society without a strong economic base.” The word ”run” is crucial. That’s hardly a vision of a neo-liberal, dry-as-dust, no-such-thing-as-society Brutopia.

All signals suggest an Abbott government would continue to bump up taxes in order to fund lavish subsidies to the middle class. Like Howard.

But unlike Howard, Abbott’s interest in neo-liberal reform seems limited to WorkChoices.

So there was considerable disquiet within the Liberal Party when the parental leave scheme was announced. Not just with the way it was announced, but the very idea of levying a big new tax on business.

Former treasurer Peter Costello wrote in The Age: ”I have been to a lot of Liberal Party meetings in my life and I can honestly say I have never heard a speech in favour of higher tax.”

After all, many in the party still harbour an intuitive resistance to tax increases, let alone whole new taxes. Howard and Costello knew what they were doing. Their later budgets invariably had some sort of tax cut, no matter how piddly or token.

Any leader will do if you’re winning. (That’s politics. If you’re losing, no leader is good enough.) The Opposition Leader has made big gains. But iron-man Abbott will have to work out harder if he’s going to fit into the clothes of an anti-tax, anti-waste warrior.

Capping trade

Last week’s Freedom Flotilla incident has highlighted an old truth. Trade – or, in this case, the forced closure of trade – is an ineffective foreign policy tool.

The blockade of Gaza by Egypt and Israel is actually a massive trade and travel embargo.

Humanitarian supplies can be legally brought into Gaza, but also much more than that: frozen salmon and low-fat yoghurt can come in too. Coriander, margarine and A4 paper cannot. Wood for doors or window frames, yes. Wood for construction, no. The list seems completely arbitrary. Hillary Clinton had to personally intervene to have dried pasta allowed in.

That’s because Egypt and Israel don’t just want to force the end of weapons smuggling. They want the trade embargo to undermine Hamas’ support in Gaza. One Egyptian politician said “Egypt will not accept the establishment of an Islamic emirate along [its] eastern border.”

Gaza under Hamas is a rogue state.

That’s a regional problem, not just an Israeli one.

Since coming to power, Hamas has led brutal attacks on opponents and civil society organisations. In the days after the Freedom Flotilla, Hamas security forces raided six NGOs in Gaza. Thuggish political violence and repression is an essential part of Hamas’ program.

And despite the blockade, with Hamas acting as an Iranian proxy, they seem to be having no problem getting weapons.

That shouldn’t come as a surprise. There have been few occasions when trade embargos have succeeded. Embargos rarely hurt those in power, who have the money and the political means to acquire things others do not.

Fifty years of economic sanctions have utterly failed to budge the Castro regime in Cuba.

And worse, they’ve given the Cuban dictatorship an easy excuse for its own failures. Directing domestic attention towards the American trade embargo is simpler than dealing with the deep economic problems caused by a half a century of socialism.

The same holds true for North Korea, where isolation from the world economy supports rather than challenges the regime. The state ideology of Juche – socialist autarky – is how the regime embraces this forced seclusion, and uses it to cement its control over the population. And, as in Cuba, the responsibility for North Korean poverty is levelled solely at the West.

Restrictions on trade with Iraq failed to topple Saddam Hussein. They were some of the toughest sanctions in history. Yet before 2003, the only major destabilisation of the Iraq government came from the bombing in 1998.

Trade embargoes have failed in Burma, Iran, Zimbabwe, and Syria.

A 2007 study of 204 separate economic sanctions over the last century found they were successful in achieving regime change in only 31 per cent of cases. Their success at disrupting military adventures was successful in just 19 per cent.

And they can have some terrible unintended consequences.

Certainly, humanitarian goods are getting into Gaza. But simply sustaining the population isn’t the main game.

The trade embargo stops Gazans from integrating themselves into the world economy. Their domestic economy is busted. It will remain busted as long as they are unable to trade. Imports to Gaza may be strictly limited, but exports from Gaza are effectively banned.

The Palestinian Trade Centre claims that, as a consequence, the number of private sector firms has shrunk at least 70%. In 2005, around 25,000 people were employed in Gaza’s clothing industry. That number is now around 230. Unemployment in Gaza is nearing 50 per cent. 80 per cent of the population relies on aid. Recent Iraqi history has taught us sudden mass unemployment is not a harbinger of peace.

There is little Israel and Egypt could do to divert hardline Hamas fighters from their path of violence. But the blockade could convince many Gazans there is no prospect for mutually beneficial cooperation with its neighbours – the sort of cooperation that open trade encourages.

The only peaceful future of the Middle East will be one with trade and economic cooperation.

History tells us the blockade is unlikely to budge their rule. Worse, it could legitimise it, in the minds of some Gazans.

That’s why what happened on the Freedom Flotilla has been such a massive win for Hamas. The blockade hides the extraordinary repressiveness of the ruling regime. Last week in Gaza there was a 2,000 person demonstration against new taxes being levied on smuggled commodities by Hamas. But the Freedom Flotilla turned the attention right back on Israel, inside and outside the Gaza strip.

And of course, Egypt’s role in the blockade has been popularly ignored.

Nations have an absolute right to defend themselves. Egypt and Israel are unquestionably justified in inspecting for weapons entering Gaza, and taking action against aggression. But rather than destabilising Hamas, the economic blockade might be only encouraging the violence.

Seeking a political crisis

“Stop the boats, we must” stated Tony Abbott last week, announcing the Coalition’s intention to bring back temporary protection visas for asylum seekers.

Must we? It’s not clear why. This has all the hallmarks of a concocted political crisis.

Certainly, 4,893 asylum seekers arrived by boat in 2009-10, a significant increase on the previous year’s 1,000 arrivals. According to the federal opposition that’s the most ever, higher than it was before the Howard government introduced temporary protection visas nearly a decade ago.

Sounds like a lot, unless you recall the federal opposition has also been claiming Australia currently has total net migration of 300,000 people per year. Or recall the fact that there are 50,000 people already in the country who have over-stayed their visas – as they are not seeking asylum, this is true ‘illegal immigration’. If we really want to secure our borders, we’ll have to eliminate tourist visas first.

It’s also worth noting the large number of boat arrivals to Australia in 2009-10 is not actually the largest influx in any 12-month period ever. If we measure by calendar years, rather than by financial years, 5,516 people arrived in 2001.

Accounting trickery, sure. But comparing calendar years is no more arbitrary than comparing financial years. Neither has our refugee program as a whole gotten out of control.

Australia’s humanitarian intake has remained stable for the last twenty years, teetering around 13,000 humanitarian visas granted per annum. Our intake has been much higher in the past. Under the Fraser government, this figure was well over 20,000.

We could easily take more. Expanding our immigration program is hands-down the best thing we could do to help the developing world. Migrants send money and skills back home. Allowing more people to move freely across national borders to work would be overwhelmingly more beneficial than anything we could do with foreign aid.

Anyway, the number of asylum seekers who come by boat is a tiny proportion of the masses of people who come through Australia every year. So while asylum seekers are a controversial political football, they are not a serious policy problem.

You wouldn’t know that from all the bellicose political rhetoric. After one boat tragically exploded in April last year, Kevin Rudd claimed “People smugglers are engaged in the world’s most evil trade and they should all rot in jail because they represent the absolute scum of the earth”.

The Prime Minister is becoming known for his hyperbole. But he misses the serious point. We mustn’t pretend trying to stop people from fleeing persecution is being compassionate.

Refugees are active participants in the choice to risk the long journey to Australia. Their decision to take the risk comes from their wish to escape and build a better life.

The dreadful risks of taking a boat to Australia are an indication of the desperation of the passengers, not of the depravity of those who they pay to help them. After all, the big disincentive to take the dangerous journey is the dangerous journey itself. Not the bureaucratic hurdles which the government throws in the asylum seekers’ way.

More than eighty per cent of boat arrivals to Australia this year have come from Afghanistan and Sri Lanka. Both countries have been in strife, and are nearby. It’s not just us: since 2008 the rest of the world has experienced substantial surges in Afghani and Sri Lankan refugees as well.

The opposition’s proposed reintroduction of temporary protection visas would do very little to alter the calculated risk asylum seekers make when they hop on the boats. But it could do considerable harm once those refugees arrive.

A source of much conservative and right-of-centre unease with refugee programs (and immigration programs in general) is that they can be a drain on the welfare system. They fear migrants often fail to integrate fully into the Australian economy; that they will not make productive members of society.

If anything, temporary protection visas would make this worse.

Refugees with temporary status are substantially less likely to find stable work than refugees with permanent status. Employers are understandably reluctant to hire and train someone whose residency is insecure.

And migrants left out of the workforce struggle to participate in Australian society. Indeed, as they may be unable to gain permanent residency once their temporary status has expired, refugees have less of an incentive to try. Learning English, for example, is a substantial investment. Refugees are less likely to make the investment if their residency could be revoked.

This should be as much a concern about Australia’s social cohesion as it is about the wellbeing of individual refugees. After all, we want refugees to join the Australian community. Making refugee status temporary – telling them their stay here is only provisional, or even transitory – does nothing but undermine their integration.