Tag: ABC The Drum

Is The Looming Internet Filter Justified? Not Yet

Is intellectual property “property”? Kinda. Sorta. Not really.

That question might seem a bit abstract, on par with how-many-angels-can-fit-on-the-head-of-a-pin. But it matters. Because how Parliament sees the fundamental nature of one form of intellectual property – copyright – is almost certainly going to determine whether we are subjected to a new internet filter.

A bill now before Parliament, the Copyright Amendment (Online Infringement) Bill 2015, would give courts power to require internet providers block access to foreign websites whose dominant purpose is to facilitate copyright infringement.

In practice this means that Time Warner, which owns the copyright to Game of Thrones, could go to a judge and demand Telstra or iiNet block access to the Pirate Bay.

There are lots of problems with this bill. Its language is absurdly vague and broad. What counts as “facilitating” copyright infringement? Maybe it would block sites that offer virtual private networks, perhaps – those VPNs that Malcolm Turnbull has been encouraging us all to use.

But these are legislative technicalities. More importantly, blocking websites is censorship. The bill is an internet filter, no matter how stridently the Abbott Government rejects the comparison.

Supporters of the bill argue that technicalities and censorship aside, the real issue is that property is being stolen, and the Government – whose job it is to protect property – needs to act. After all, private property is a human right as much as free speech is. (Check out Article 17 of the Universal Declaration of Human Rights.)

It is true that intellectual property shares some of the characteristics of property. Like tangible property, intellectual property can be owned. It can be traded. So it’s property in those senses.

But, unlike tangible property, the use of intellectual property is not exclusive. When one person listens to a song or watches a movie they do not prevent others from doing so. It can’t be “stolen” in anything but a metaphorical sense.

This is why the law hasn’t treated intellectual property like real property. We don’t have a moral right to perpetual ownership and unimpeded exclusive control over the songs we write or movies we produce. For instance, copyright lasts 70 years after the death of the creator. Real property has no such time limits.

The scholar Tom W. Bell says that intellectual property would be better called intellectual privilege. This privilege is conferred for a specific purpose – to provide an incentive for the creation of new works. The theory is if we don’t confer that privilege people will supply less creative work than is socially desirable.

But that privilege has costs. For instance, copyright also stops us from using our other, real property as we see fit – we can’t use our computers, printing presses or internet connections as we would like. And we can’t build on the cultural capital created by others.

Thus the Howard government’s Ergas Report into Intellectual Property and Competition Policyargued that “over-compensating rights owners is as harmful, and perhaps even more harmful, than under-compensating them”.

So will the proposed Copyright Amendment (Online Infringement) Bill 2015 inspire the creation of new works? Even if placing a block on the Pirate Bay successfully stops internet piracy (please bear with me on this fantastic hypothetical) will artists go out and create more art as a result? And would enough new work be created to compensate for the restriction on free speech?

Many economists theorise about an “optimal” level of copyright protection – a sweet spot of enforcement and rules where the benefits of copyright are maximised and the costs are minimised.

Yet it is very hard to figure out where that sweet spot is. Even impossible. And the political system isn’t looking for the optimal policy – it’s looking for the most politically palatable policy, the one where the benefits are being maximised for politicians, not consumers.

In the United States, every time Mickey Mouse threatens to fall into the public domain the Walt Disney Company lobbies hard to extend copyright term limits. Nobody really thinks that maintaining Disney’s exclusive rights over Mickey for another decade or two will lead to more creative works being produced. But these are decisions made by politicians, not blackboard economists, so the extensions get granted.

The Australian Parliament has been considering copyright enforcement changes since last year. We’ve heard a lot of pontificating about “theft” and digital access and global release dates.

But the only policy question is whether website blocking would inspire the creation of enough new content to make up for the fact that the Government is censoring the internet.

And, so far, nobody has shown that would be the case.

Labor Can Stop Beating The Inequality Drum

The Labor Party’s new Inclusive Prosperity Commission is driven by the principle that “equality itself is a driving force for economic growth”, in the words of Wayne Swan.

It is a lovely idea. Inequality is a bad thing. Growth is a good thing. Wouldn’t it be great if by reducing inequality we would also be boosting economic growth? A true win-win. For Labor, it would be a win-win-win, given that it would align with their philosophical interest in redistributive tax and welfare policies anyway.

Unfortunately for Labor, this is voodoo economics – ideological wish-fulfilment dressed up as analysis. The proposition that equality and growth are intrinsically linked is weak.

Two extremely high-profile documents published last year made the economic case for action against inequality. The first, “Redistribution, Inequality, and Growth” was published by the International Monetary Fund (IMF) in February 2014. The other, “Trends in Income Inequality and its Impact on Economic Growth”, was published by the Organisation for Economic Co-operation and Development (OECD), in December.

(There was of course another other major inequality document of 2014: Thomas Piketty’s Capital in the Twenty-First Century. I looked Piketty’s book on The Drum when it was published.)

Now, there are lots of reports published every year by these and other bodies. The IMF and OECD have been talking a lot about inequality recently. But it was these two papers that most clearly spelled out a causal relationship between reducing inequality and boosting growth. It helped that they came from the IMF and OECD – two apparently neoliberal, conservative organisations. It wasn’t so long ago that the IMF was protested as a bastion of anti-poor plutocracy.

Hence the prolonged press coverage. This Guardian story on Labor’s new Commission cites the IMF paper. A piece breathlessly citing the OECD report was published in The Age this week.

Yet there were less to these reports than the media coverage suggested.

The IMF report is actually a staff discussion note with the usual “does not necessarily represent IMF views” caveat. It found a correlation between less inequality and growth. That’s not new. Remember that correlation does not equal causation. The real question is: what is the economic impact of policy designed to reduce inequality? The IMF paper concluded that income and wealth redistribution does not harm growth. This was the finding that made global headlines.

But there’s an important qualification in the paper. The IMF authors were only willing to say that redistribution is “generally benign”. In “extreme cases” they found that redistribution does harm growth. So what is an extreme case? As the economics journalist Tim Worstall points out, what the IMF paper calls extreme redistribution is the exactly sort of redistribution many first world countries indulge in.

You can see the key chart in figure 7 on page 23. According to the IMF paper’s findings, the United States could afford to do a little more redistribution without harming growth. Countries like France and Germany do too much – that is, if they’re worried about growth.

Australia is dead on the line between extreme and benign. If this is right, any more redistribution would hurt our economy. Is this really the story that Wayne Swan and Labor want to tell right now?

So much for the IMF report. It shows exactly the opposite of what is claimed in the Australian press.

The story contained in the OECD report is a little more complicated. Again, it’s not a report – it’s a working paper with the standard caveat (“should not be reported as representing the official views of the OECD” etc.). This paper says that increasing inequality has a causal effect on growth, and “it follows” that reducing inequality is necessary to sustain long term growth. That’s all well and good, as far as it goes.

But the paper also has some strange findings. For instance, its modelling finds that investment in human capital – that is education – has no positive effect on economic growth. (They write: “the results … do not point to a positive effect of human capital on growth. Those findings are in fact hard to reconcile with the large amount of evidence on the positive consequences of education on individual productivity … and on the significant contribution of human capital to aggregate growth”.)

Huge, if true. All the money we put into skills and education as individuals and as society as a whole does little to grow the economy. If that’s not strange enough, the economist Eric Crampton observed that the OECD paper nonetheless calls for greater spending on education. Huh? If the authors don’t believe the own findings of their own model, why should we?

Yet despite these issues, the OECD and the IMF papers are Exhibits A and B for political action on inequality.

Let’s be fair. Comparisons between countries are fraught. Untangling the relationship between inequality and economic growth is complicated. The mechanisms by which one affects the other are controversial and unclear. Thomas Piketty’s book was one attempt, and a very idiosyncratic one at that.

Still, politics rarely waits for scholarship to come to a conclusion. What one New Yorker writer recently said about the British election could stand in for the entire inequality debate:

While [John Maynard] Keynes was being unceremoniously booted out the front door of Labour’s headquarters, Thomas Piketty was being ushered in through the side entrance.
It’s obvious that the Australian Labor Party needs a new agenda – particularly after the grubby politics of the Rudd and Gillard years. And they probably think focusing on inequality is a nice counterweight to the Coalition with its rich mates and its unfair budget.

But it’s not obvious that tackling inequality will grow the economy. If Labor is looking for an agenda, it would be wise to look elsewhere.

A Single Drink Puts Media Over The Limit

Tony Abbott skolled a beer this weekend.

The Australian press made sure this skol received the hyperbolic, wall-to-wall coverage it deserved.

No doubt you read about it in the Herald Sun, The Australian, the Canberra Times, the Sydney Morning Herald, the Courier Mail, the Guardian, the Adelaide Advertiser, or the West Australian.

You would have read that the Prime Minister was cheered on by a football team at Sydney’s Royal Oak Hotel. You would also have read that the act took him about six seconds, although whether this is a fast or slow pace for drinking a schooner in one go has unfortunately been left un-analysed.

And finally, you would probably have read that this was a bad example for a prime minister to set to young people. The Foundation for Alcohol Research and Education expressed concern that it sent the wrong signal.

Journalist Judith Ireland said Abbott was “supposed to be a vocal advocate against binge drinking”, and that this sort of macho behaviour seemed to go against his claim to be “also the Minister for Women”.

Another writer, Andrew P Street, immediately connected this single skol with the binge drinking”scourge that’s destroying Australian society, turning our young men into animals”.

It would be hard to invent a better symbolic clash between the Australian self-image as larrikin and the po-faced posturing of the media than Abbott’s drink.

It is now apparently impossible for any public figure to stray outside the incredibly tightly prescribed rules of behaviour – prescribed, not by the public, but by the press, who of course would be horrified if those standards were applied to them.

The idea that a politician’s personal behaviour influences the behaviour of the public is pretty dubious.

Nevertheless, Abbott violated no cultural norm, his actions pose no ethical dilemma, they were neither reckless nor self-harming, and they had no political, economic, or social consequences. It was one beer. Abbott is a fitness fanatic. He’s famous for having once ordered a light beer shandy with 60 per cent lemonade. The weekend’s skol would be barely worth mentioning in a colour piece.

Yet once we hear from earnest prognostications of public health lobbyists, downing a single drink in one go becomes symbolic of a deeper, dangerous, threatening moral panic about alcohol consumption.

Alcohol consumption and risky drinking has been steadily declining, as the statistics from the Institute of Health and Welfare have consistently shown. The proportion of Australians drinking daily is at a 20-year low, and young people are taking up drinking at a later age than ever before.

These facts contrast with the frenzied, and well-funded, anti-booze movement who pop up in the bottom half of every news story tangentially related to alcohol.

Take the suggestion aired over the weekend that the Abbott Government might make a step towards volumetric alcohol taxation in the May budget.

If you were designing an alcohol tax from scratch, you’d want it to be volumetric – that is, levied on the alcohol content, rather than the type of drink. But we’re not designing a tax system from scratch. In the middle of a budget crisis what is really being proposed is a simple tax increase on one specific good.

Yet the story was quickly filtered through a paternalist prism: “Cheap cask wine is a serious health issue in many communities,” one public health activist said.

Thus the Government might be able to dress up a tax hike that disproportionately affects poorer Australians as if it were a compassionate health measure.

Last week the NSW Bureau of Crime Statistics and Research (BOSCAR) released research suggesting the Sydney liquor licence lockout had achieved its stated goals by dramatically reducing the number of assaults in Kings Cross.

Determining cause and effect in a complex system is incredibly hard. But BOSCAR found that one of the possible reasons that the assaults declined is because the number of people visiting Kings Cross declined dramatically. Business groups say revenue in Kings Cross is down 20 to 50 per cent. The City of Sydney says footpath congestion in Kings Cross is down 84 per cent. And BOSCAR says foot traffic at night from Kings Cross station is down too.

Obviously shutting down Kings Cross was going to reduce assaults in Kings Cross. But this is an extraordinary disproportionate response to what was a policing problem.

HL Mencken thought that one of Australia’s best contributions to the English language was “wowser”. The word’s origins are obscure but some wowsers at the start of the 20th century liked to say it stood for “We Only Want Social Evils Remedied”.

Yet in going after social evils, Australia’s wowsers have rarely been able to avoid attacking the harmless, knowing choices of people who are perfectly capable of making decisions about their health, and who can distinguish between a prime minister having a joyful, boisterous single drink and serious alcohol abuse.

Shorten Must Start Thinking About Life After Opposition

One of the unsurprising consequences of Tony Abbott’s modest poll recovery has been the new focus on Bill Shorten.

If you’ve read one column on Shorten, you’ve read them all. The Opposition Leader doesn’t stand for anything. He promised a year of policies but hasn’t yet offered any policies to speak of. And (for a certain type of commentator) he’s abandoning the Hawke-Keating legacy of reform and so forth.

All this is obviously true. But come on. Would you do any different if you were in his shoes?

Almost every incentive Shorten faces is telling him to stay quiet about his plans for government – to avoid making any potentially divisive statements or holding any potentially controversial positions. (I’ll return to the word ‘almost’ later.)

This is perfectly rational. No matter what the opposition does – no matter how opportunistically or rashly it acts – popular dissatisfaction with the economy or society will be directed towards the government of the day. The opposition’s job is to gently fan the flames, confident they are unlikely to be caught in the backdraft.

The last thing Shorten wants to do is get caught up in a debate about the specifics of what he would do in government. Detail is death. Better to keep the attention on Tony and his unfair-out-of-touch-just-don’t-get-Aussie-mums-and-dads Tories.

Oppositions that have tried an alternative strategy – outlined detailed policies, even transformational agendas – have been torn down by incumbent governments, who have the entire bureaucracy at their disposal to fact check and nit-pick anything the opposition throws up.

Think John Hewson, Mark Latham. Whatever your view of their political philosophy, they both tried the big-picture, year-of-ideas, stand-for-something strategies people are urging Shorten to pursue. And look at them today.

So now tell me you’d do anything different. Don’t blame Bill for Labor’s fecklessness. He’s just a company man.

In the simple model of political competition outlined in Anthony Downs’ seminal 1957 book An Economic Theory of Democracy, political parties will delay announcing any policy for as long as possible. The winner will be the party that announces last.

But incumbent governments can’t put off making choices forever. They can’t fully participate in this game of policy chicken.

The best strategy is the one that wins government, and maximises longevity in government, and allows the most flexibility to implement policies.

The need to govern benefits the opposition. Government policy announcements helpfully identify what the electorate hates. So the simplest opposition strategy is to copy the government’s popular policies and oppose the unpopular ones.

Abbott was an especially talented opposition leader. He didn’t just oppose unpopular policies. He managed to make policies unpopular, seemingly through sheer force of will.

Shorten as Opposition Leader looks as if he’s trying to mimic Abbott’s example. Yet Shorten is drawing the wrong lesson.

Remember that ‘almost’? The optimal opposition strategy isn’t just the one that wins government. It’s the one that wins government, and maximises that party’s longevity in government, and allows them most flexibility to implement their policies.

The Abbott team has learned – apparently to its surprise – that strategies adopted in opposition constrain what can be done in power.

Voters expect some promises to be broken, as I argued in the Drum last year. Yet this is only true within a certain range. The public wants to know what they are buying, even if they have a reasonable tolerance for products that do not exactly match the packaging. Expectations still matter.

The Coalition forgot this. The Coalition did not prime the electorate for the sort of policies it introduced within its first six months. Having pared its campaign message down to the most memorable essentials, voters were surprised to learn that End The Waste and Cut The Debt actually involved large-scale policy change, not just swapping one party in power for another.

Even in government the Coalition tried to hold back the policy reckoning as long as possible. It disavowed the Medicare co-payment when it was first discussed in Christmas 2013. It delayed the Audit Commission until the eve of the budget.

I won’t bother recapping how everything has played out since. But the legacy of that opposition strategy has left us with a badly denuded Coalition government. It is shell-shocked and weak. It is unable to pursue its own agenda. Now it grasps at whatever it thinks will keep it stable and in power until the next election.

A year ago the question was whether the Coalition was bold enough to tackle industrial relations head on. Today the question is whether the Coalition will ever feel confident enough to tackle the deficit it was elected to reduce.

No doubt Bill Shorten likes to imagine he can win the 2016 election. It’s not impossible. But winning is only half of it. He needs to start imagining how Labor’s small target strategy might harm him if he does win.

This Small Business Fetish Has Gone Too Far

As part of its back to basics campaign, the Abbott Government has telegraphed a small business tax package for the 2015 budget.

The plan, as far as we know, is that small business will get a tax cut of about 1.5 per cent. Big business will be left paying the standard rate of 30 per cent.

The Coalition has long had a romantic attachment to small business as a sort of moral heart of Australian private enterprise, but this policy is the worst sort of small business fetishism.

It threatens to further undermine an already complicated corporate tax system, confuses the sources of economic growth, and will distract policymakers from the much more fundamental task of opening protected areas of the economy up to competition.

Let’s take these one at a time.

It beggars belief that while the political class is banging on about the convoluted the tax code, “unfair” tax concessions, and clever corporate tax minimisation, the Government is planning to increase the complexity of the corporate tax system.

How long before we see the first exposé in Fairfax business pages about large corporates rearranging themselves to take advantage of the concessional small business rates?

The proposed small business tax cut would make the Australian corporate tax system explicitly progressive. Just as we pay a higher rate of income tax according to our wealth, firms would pay a higher rate of corporate tax depending on their size. The United States has a progressive corporate tax. Ours is flat – 30 per cent no matter what.

Now, in practice, firms don’t pay the same 30 per cent rate. As my Institute of Public Affairs colleague Sinclair Davidson has documented, all those deductions, offsets and credits mean the effective tax rate – that is, the amount of tax paid – hovers about 25 per cent. On top of this, small businesses tend to have much more variable profitability, so they tend to pay less than big business already.

Even with this caveat in mind, progressive corporate taxes are a terrible idea.

Corporate taxes are very different from income taxes. Income taxes are ultimately paid by the people whom the tax is levied upon. The money comes out of the pocket of the person who fills in the tax return. I’d prefer our income tax to be flat. But progressivity for income tax at least has its own internal logic.

Corporate taxes are very different. The cost of corporate tax is ultimately paid by someone other than the corporation – passed on to consumers through higher prices, or to shareholders, or even to the company’s employees.

After all, companies don’t pay corporate tax, people do.

It’s not at all clear why we would want to tax people who buy products from large firms more than those who buy from small firms. Unless, of course, the small business tax cut is a form of primitive industry policy to prop up small business and make it artificially competitive.

Large firms exist for a reason: to take advantage of economies of scale. Large scale manufacturing is more efficient than small scale manufacturing. Big is beautiful. All else being equal those big multinationals that everyone hates have given us cheaper products and higher living standards.

This hints at a much deeper confusion underlying the Government’s small business fetishism.Joe Hockey likes to describe small business as the “engine room of the economy”. Funnily enough Wayne Swan used to say the same thing.

Of course, no single sector is the engine room of the economy. That’s just rhetoric. (Anyway, what happened to mining?)

But the Government seems to be attributing the economic characteristics of entrepreneurship onto small business. Entrepreneurs bring new products to market, put competitive pressure on existing firms to do better, undercut monopolies, and keep not just the economy going but our living standards improving.

All those giant firms that dominate the 21st century economy – Google, Apple, Microsoft, etc – were originally garage start-ups. Why would we want to penalise the next Google for growing by taxing them at a higher rate?

Obviously by definition entrepreneurs start as small business owners. But not all small businesses are equally entrepreneurial. The defining characteristic of an entrepreneur is that they do something new. They are driven by an idea. We hear from Canberra that big business is a threat to small business. Well, entrepreneurs are a threat to big business. Paper beats rock.

If the Government wants to help entrepreneurs, it shouldn’t be looking first at the tax code. It should be looking at the sorts of things raised by the Harper review into competition policy last week. That is, the regulatory restrictions on entering markets, like the taxi or retail pharmacy markets, which hold back entrepreneurs from exerting competitive pressure on incumbent businesses.

It’s true that the small business tax cut is a lot less objectionable than the tax increases being proposed, like the bank deposit tax and an increase in the GST. Maybe it’s churlish to criticise a tax cut when the real risk is tax increases.

But the Abbott Government says it understands the importance of free enterprise and the market economy. It should want to reduce corporate tax on all firms – not just small ones.

Why Should We Join Another Development Bank?

Over the weekend Australia announced it will be part of the initial negotiations on the Asian Infrastructure Investment Bank (AIIB).

The AIIB is a global financial institution intended to rival the World Bank and the International Monetary Fund (IMF). The idea is that the AIIB will fund large scale infrastructure development in the region.

But if the AIIB is anything like the World Bank or IMF, then the new body is certain to be heavily politicised, bureaucratic, and imperialistic.

The AIIB is a China-led initiative, so unsurprisingly the bulk of discussion about Australia’s participation in the AIIB has been filtered through a geopolitical prism.

The United States doesn’t want us to join. But then our closest, fondest ally doesn’t have much diplomatic high ground to stand on here.

In Brisbane last year the US gave the Australian government a swipe when Barack Obama tried to make climate change a centrepiece of the Australian-led G20 meeting. Obama did this against the advice of his embassy. So after that very deliberate diplomatic jab, it’s hard to see why their sensitivities about China should be our concern.

And anyway, the US is hardly working to make existing international institutions any better. For instance, the IMF badly needs reform. But the US Congress has a veto over any IMF reform. That intransigence is in part why Britain signed up to the AIIB earlier in March.

Still, it’s easy to understand why the United States is upset.

The establishment of the International Monetary Fund and the World Bank at the Bretton Woods conference in 1944 represented a formal shift in economic power from the United Kingdom to the United States.

Britain had a leading role under the gold standard but Word War II ended that. After Bretton Woods, American leadership of the international economy was reflected in the role of the dollar and the country’s influence over the IMF and World Bank.

Seventy years on, the United States is resisting any sense that it might have its historical role usurped by China.

But the geopolitical symbolism of the AIIB is one thing. Whether the AIIB is a good idea is quite another.

As a general rule, we ought be very sceptical of an economic institution explicitly intended to pursue political, rather than economic, purposes.

The AIIB is part of China’s Economic Belt and Silk Road program to build a regional network of infrastructure that would counterbalance the United States.

So already the AIIB is starting with political goals in mind. Ignore whatever governance structures are imposed on the AIIB by Australia and Britain and other western participants. The AIIB’s investment decisions are almost certainly going to be made on the basis of strategic and political factors, rather than what investments are most economically viable or effective.

How do we know this? Well, because we’ve had 70 years’ experience with the equivalent institutions of the World Bank and IMF.

The IMF and the World Bank are inefficient and interfering and deeply politicised. Often they create the problems they are intended to resolve.

The World Bank has the modest goal of ending extreme poverty. To do so it finances projects in the developing world. This 2006 US News and World Report investigation uncovered a bevy of inefficiencies, wasteful programs, accounting problems, bureaucratic featherbedding, and quasi-corrupt practices in the World Bank. No wonder, as the economist Adam Lerrick points out, “After half a century and more than US$500 billion, there is little to show for World Bank efforts.” Unsurprisingly the World Bank wants more money.

The IMF offers financial assistance to countries in economic strife. But that assistance comes with bureaucratic interference, as the IMF tries to reshape the country they are assisting. Sometimes IMF reforms are worthy, sometimes they are not. But they are always imposed as a condition of assistance, often against the democratic wishes of the people.

The anti-democratic nature of IMF intervention is made worse when it combines with the “moral hazard” created by IMF bailouts. Domestic policymakers feel they can act recklessly because the IMF will save them if they get into trouble.

Development banks are supposed to fund projects that the private sector deem too risky. But a project which is too risky for the private sector remains risky even once funded by a development bank. The projects these banks fund too often fall prey to corruption and poor management. That’s why private investors don’t want to get involved in the first place.

Last week the Wall Street Journal rhetorically asked, “Why does the world need another development bank?”

For China, the answer is to enhance its geopolitical influence. The question Australia needs to ask is: why are we getting involved?

Why It’s OK To Strip Foreign Fighters Of Citizenship

Citizenship is one of the central ideas of political philosophy. But not one most people spend a lot of time thinking about.

The Abbott Government proposes to strip Australian citizenship from dual nationals who fight for Islamic State. (This would only apply to dual citizens as there is a strong presumption in international relations against making anybody stateless.)

And there is legislation before Parliament that would make it harder for children who have lived in Australia for 10 years to automatically qualify for citizenship.

Announcing the citizenship amendments, Parliamentary Secretary to the Minister for Communications Paul Fletcher told Parliament that, “Australian citizenship involves a commitment to this country and its people. It is a privilege which should not be taken lightly.”

Yet beyond fuzzy little nostrums about “membership” and “belonging” it’s not obvious what citizenship actually means.

What principles would allow us to judge whether such legislative changes are good or bad? Is citizenship a right or a privilege? Who should be a citizen? But most importantly, why?

Some countries give citizenship automatically to anybody born on their soil. Australia doesn’t. Here you need an Australian parent too.

The word “citizenship” is absent from the Australian constitution, save an incidental, negative mention in the prohibition on foreign citizens from serving in parliament.

Legally, citizenship is an odd beast. Citizenship is neither necessary nor sufficient for many of the most important Australian rights and privileges.

Citizenship doesn’t give you an absolute right to vote. Underage citizens can’t vote, and neither can citizens who are serving a prison sentence of three or more years.

Citizenship isn’t the criteria for enjoying welfare and publicly funded health. They are protected by our laws. Non-citizens pay taxes and have access to our courts. Permanent residents can buy property.

Non-citizens enjoy our version of free speech – the right to political communication – and the freedom to lobby and protest.

A Senate committee roundtable last week batted around the pros and cons of putting citizenship in the Australian Constitution. (I was one of the participants.)

The idea is that this would offer the High Court some clarity when deciding cases that concern questions of who is and isn’t a citizen for legal purposes.

But if we’re not clear what citizenship is, then why trust the High Court to decide?

At Federation, Australian “citizenship” was based on whether you were a British subject. However, this worldly and cosmopolitan idea co-existed clumsily with the other, racist idea of Australianness that was manifest in the White Australia Policy.

Putting anything that reflected that idea of citizenship in the constitution would have been a disaster.

While there exists a thing called citizenship in Australian law, citizenship is really a philosophical concept not a legal one. And it is a fuzzy concept because the idea of group membership is a fuzzy concept.

Yet, for all that fuzziness, it is central to our notions of identity and politics.

The whole point of citizenship is that it is exclusionary – it is a unique national identity, one that confers specific rights and privileges.

To adopt a nationality is not to join just any old community. At citizenship ceremonies, new citizens transfer their identity and allegiance from the old country to their new one.

Dual citizenship sits awkwardly with even the most modern ideas of citizenship.

One argument for dual citizenship is that formally offering it is something we sell to potential migrants, making Australia an attractive destination for foreigners.

A more powerful argument is that dual citizenship is simply inevitable. Children born to parents with different nationalities automatically receive the citizenship of both. And we have no way of forcing other countries to strip the nationalities of those who become Australians. We live in a complex, globalised world, etc.

Dual nationals who go to fight for the Islamic State are effectively renouncing their Australian citizenship. Many dispose of their passports when they get to Iraq and Syria. It would be hard to imagine a more thorough rejection of democratic values – the values that citizenship is supposed to represent – than going to wage war for a theocratic slave state.

Surely, if we were willing to deny people citizenship because they failed a trivia quiz about Don Bradman, then fighting for Islamic State is also a reasonable disqualification.

Some experts say that giving the government the power to revoke citizenship status from dual citizens makes the very idea of citizenship less valuable. Citizenship is meaningless if it can be taken away.

But this argument confuses the legal concept of citizenship – a contingent and not particularly coherent bundle of privileges and rights – with the deeper philosophical one.

At a philosophical level, dual citizenship is a lesser form of citizenship, as it represents a less than absolute allegiance and national identity.

And just as importantly, if citizenship is most valuable as a bond between members of a political community, then treating the citizenship of those who reject the community as inviolate undermines that bond.

Fuzzy nostrums sometimes matter. And if citizenship is to matter it has to mean something.

Islamic State Is Destroying Ideas, Not Just Artefacts

It is characteristic of totalitarian societies that they feel they need control over the past as well as the present.

So it’s hard not to see an echo of Stalin’s erasure of his former comrades in the deliberate destruction of ancient artefacts and archaeological sites by the Islamic State.

The difference being that when IS bulldoze the 3000-year-old Assyrian city of Nimrud, as they reportedly did last week, they’re not just trying to erase their victims’ history, but humanity’s history as well.

In late February the United Nations released a report describing IS persecution of Christians, Shiah Muslims and religious minorities like the Yazidis as “war crimes, crimes against humanity and possibly genocide”. IS has been murdering gay men and politically active women. It is guilty of genocidal atrocities on a historical and savage scale.

Among this human slaughter the destruction of a few antiquities might seem like a small thing. And of course it is. But it still offers a revealing window into the mindset of radical Islamism.

By now everyone has seen photographs and video of IS militants smashing up statues in the Mosul museum last month. Happily some of those were plaster replicas. Not all were.

In the last few days IS has apparently been tearing down the ruins of the ancient Iraqi city of Hatra.

The most prominent Islamist destruction was that of the Buddhas of Bamiyan – two towering Buddha statues in Afghanistan dynamited by the Taliban in March 2001.

Obviously much of the destruction is deliberately done for Western eyes. The destruction of the Bamiyan Buddhas was one of the rare times Afghanistan made headlines before the September 11 terrorist attacks.

The Taliban sent mixed messages about the purpose of the destruction of the Buddhas. Some officials claimed it was done for standard iconoclastic reasons. An Islamic state could not tolerate the image of an idol from another religion.

But a Taliban envoy to the United States offered a more prosaic, political reason: the Buddhas were destroyed because the West was only offering aid money to restore statues rather than to prevent malnutrition.

The footage of the Mosul museum and Bamiyan Buddhas was broadcast across the world. One Syrian anthropologist told the New York Times in February that “it’s all a provocation”.

And it is true that IS’s iconoclastic principles don’t apparently prevent them from exploiting the lucrative black market for antiquities.

Nevertheless, IS relishes its reputation for brutality and inhumanity. That reputation is part of its recruiting strategy. It offers foreign fighters an absolute break with, and resistance to, the Western world – an ascetic and violent Islamism that is totalitarian in the truest sense of the word. It believes in nothing except itself.

This brutality is its reason for existence. It is what makes the Islamic State, in its mind, the bona fide caliphate, rather than just another militant theocracy in the Middle East.

Last week two writers at the Daily Beast said we shouldn’t attribute this historical destruction to “militant Islam” – lots of totalitarian states try to erase the past.

This is like saying we shouldn’t blame fascism for German atrocities between 1933 and 1945.

And IS’s symbolic ambitions are greater than their 20th century predecessors. Where Hitler and Stalin sought to rewrite history, Islamist totalitarians are trying to destroy it.

Much of the destruction is taking place out of the eyes of the West. Some we only learn about through rumours and unconfirmed reports. For instance, a stunning Ottoman castle in the Iraqi town of Tal Afar has been destroyed – we think. IS has been destroying Christian monasteries, Yezidi shrines and Muslim mosques, both Shiah and Sunni, with little reaction in the West. In Mali Islamist radicals destroyed ancient libraries and tombs.

This destruction isn’t just a calculating provocation for the benefit of Western audiences. It’s ideological.

Worse than those who would downplay the role of Islamist radicalism in this arc of destruction are cultural relativists that excuse it.

Take this academic paper, which condemns not the destruction of the Buddhas but “Western Civilisation’s … fundamentalist ideology of heritage preservation”. The Taliban’s dynamite was just part of the back and forth of history. Why are we so precious? “This paper should not be read as a call for more destruction,” the author says. But, as they say, if you have to write it…

In fact, the Islamist war against artefacts and archaeology is part of a broader “cultural terrorism” being waged around the world, where the target is not an enemy but their idea of themselves.

The Charlie Hebdo killers – and all those who have threatened cartoonists and critics with murder – waged this sort of cultural terrorism as well: attacking not just people, but ideas and symbols that speak to how we understand ourselves. We think of ourselves as an open society, they try to close it by force.

David Hume believed that from the diversity of history we discover the “constant and universal principles of human nature”. By trying to destroy their own heritage, IS and other Islamists are trying to separate themselves from the world.

Meet The Man Who Could Change The Budget

No Australian bureaucrat is as influential – intellectually as well as politically – as the Secretary of the Treasury.

Under the Rudd government Ken Henry was a de facto minister. And think of John Stone, Sir Frederick Wheeler, Sir Roland Wilson. Every word they said was a synonym for authority.

So we probably should have all paid more attention to the new Treasury Secretary’s political debut last week.

Especially considering that, ultimately, the Abbott Government will live or die on the performance of its next budget – something the secretary is responsible for designing.

John Fraser, a former asset manager and public servant, became Treasury Secretary in January this year. On Wednesday he had his first appearance at Senate estimates and on Friday he gave his first major speech, to the Committee for Economic Development of Australia.

What he said was significant. Let’s start with his approach to stimulus – particularly important given rumours and reports of a need to prop up the economy with some government spending in 2015.

You probably remember that at the height of the Global Financial Crisis Ken Henry came up with a simple slogan for Labor’s enormous stimulus package: “Go hard, go early, go households.”

At estimates last Wednesday, John Fraser had an entirely different perspective on radical stimulus: “I approach fiscal stimulus in whatever circumstances with a great deal of care.”

While he declined to directly criticise the previous government’s damn the torpedos! approach, Fraser wondered aloud about the economic models that justified fiscal stimulus decisions.

And he argued that the decision to stimulate had to take into account the productive capacity of the economy. This is a subtle point, but it is one that indicates that the secretary might want to shift focus from the demand side of the economic equation to the supply side.

Ken Henry’s stimulus advocacy was the result of a shift in thinking within Treasury that had begun in a series of secret workshops in 2004.

So the question is whether John Fraser’s comments will represent a shift the other direction: away from Keynesian demand management and towards a focus on production and supply.

If so, then we’re in for some interesting times.

In December I pointed out that Joe Hockey’s rhetoric had taken a very Keynesian turn. The budget is now seen as a “shock absorber” for the economy. Hockey’s been saying that the economy is far too weak for any substantial cuts to the budget – and playing down any return to surplus any time soon.

Fraser seems by disposition and argument unsympathetic to this sort of orthodox crude-Keynesianism. In his Friday speech he said repairing the budget was “an immediate priority”.

He rejected the idea that the economy could grow the budget back to surplus in the short term – the policy settings had to be changed. He told estimates that “I do not like public debt”.

He made it clear that the budget’s problem is just as much on the expenditure side as the revenue side.

In fact, he praised Ronald Reagan’s tax cuts for having “helped to reinforce the entrepreneurial spirit” of the United States. (Although he was less complimentary about Reagan’s overall fiscal position.)

And finally he rejected the International Monetary Fund’s claims that “austerity” had done more damage than good, by pointing out that the IMF had no monopoly on good advice.

You might say these claims would be very amenable to the Government. After all, the 2014 budget was in theory all about cutting expenditure, and Tony Abbott has long said he wants to deliver tax cuts by the end of his first term.

But Abbott and his Treasurer have been backing away from the small government fiscal policy Fraser advocated last week.

At the National Press Club last month the Prime Minister said that “because we have done much of the hard work already, we won’t need to protect the Commonwealth budget at the expense of the household budget.”

Social Services Minister Scott Morrison is apparently seeking more funds for social services like childcare from the budget. It’s all very Howard-era middle class welfare.

And those promised tax cuts are reportedly off the table, according to the Australian Financial Review.

This makes Fraser’s staunch defence of the Government’s previous agenda very important. What would Reagan say to the Great Budget Backdown?

Under Fraser’s supervision, the 2015 federal budget could look very different to what it might have looked like under previous Treasury management.

Because the Treasury view of the world matters.

The department has a reputation for both stubbornness and intellectual dominance of the political agenda. Patrick Weller once wrote of Treasury:

Giving the advice it considers to be correct, regardless of the known policy preferences of minister, indeed, sometimes sticking to those views long after an alternative strategy has been adopted by a government.

Elected politicians have fought for and against the so-called “Treasury line” since the department came into prominence in the 1930s.

Right now, the Abbott Government is understandably gun-shy. But with a deteriorating economy, it’s not clear they can afford to be.

It looked like the Abbott Government was all set for a status quo budget that abandoned the project of fiscal repair. Here’s hoping Fraser can be a strong force against reform lethargy.

Retain Our Privacy, Not Our Data

Australian Federal Police Assistant Commissioner Tim Morris told an audience at the weekend that “those with nothing to hide have nothing to fear”.

This was written up in Fairfax papers as “carefully worded case” for the Government’s mandatory data retention policy.

Now, every piece of evidence we have suggests the terrorist threat right now is severe. It might be growing.

But Morris’s statement is a worry. It lacks all sense of proportionality – essential when crafting security policy.

More importantly, it shows how poorly defended our privacy rights are. Are we really at the stage where we even have to justify the very existence of private spaces – spaces where we are hidden from the all-seeing state?

It is true that the value of privacy is conceptually difficult. We’re constantly trading away privacy for other goals.

Whenever we provide our details to someone at a call centre, share secrets with friends, interact with governments, even simply go outside, we’re in some small way relinquishing control over our own personal information; allowing others to see or know details about ourselves that might otherwise be secured.

It’s particularly difficult today, when we have more opportunities than ever to share information – and the authorities have more capacity than ever to obtain information about us without our consent.

So many people dismiss privacy as a sort of anachronism: either a lost cause or something that only a recluse would care about. Privacy is dead. You’ve heard this before.

But I’ll bet even AFP assistant commissioners secure their internet banking passwords and close their blinds at night.

Privacy fulfils a deep psychological need. Society demands that we mask our true selves and moderate our behaviour when we interact with others. Social norms regulate how we act in public. In many ways these norms are valuable because they ensure a well-ordered public space.

But those norms can also be stifling. We need a space of our own as relief from the judgment of others, if nothing else.

Indeed, the move towards toleration for identity that violated current social attitudes – like homosexuality – was begun by defending the privacy of one’s own home.

Happily we’ve moved past the days where sexuality is just a matter of what people do behind closed doors. But we shouldn’t forget how for such a long time privacy offered protection against an oppressive society.

The need for privacy seems to be an innate part of the human condition. Ethnographers have found that privacy is a universal cultural attribute.

And if you believe in individual freedom – if you believe in any way that we should protect the rights of the individual against the collective – you should be very jealous of any coercive encroachments on the private realm.

As the sociologist Wolfgang Sofsky writes:

Privacy is the citadel of personal freedom. It provides defence against expropriation, importunity, and imposition, against power and coercion.

With all this in mind, the nothing-to-hide, nothing-to-fear argument is truly creepy.

Think of all the assumptions that underpin it.

First: you have to know what you’re doing is wrong. Second: you have to agree that what you are doing is wrong. Third: you have to trust government agents to only violate the privacy of the bad guys. Fourth: you have to trust government agents to not misuse what they find when they observe you. Fifth: you have to believe that only government agents are able to observe you.

These assumptions are questionable, to say the least.

Attorney-General George Brandis has been assuring us we can trust the Government, but that’s not very satisfactory.

Anyway, government agents aren’t the only people who might access data kept under data retention laws.

What about rogue staff of internet service providers? Or hackers attracted to these giant new honey-pots of data? Or private litigants? Data kept under data retention laws will be available in civil litigation as well.

In his national security statement on Monday Tony Abbott flagged further legislation clamping down on “organisations that incite religious or racial hatred” and signalled his intention to strengthen “prohibitions on vilifying, intimidating or inciting hatred”.

But the Government passed legislation that, we were told, was intended to do pretty much the same thing. I argued on The Drum in September that new limits on “advocacy of terrorism” were redundant at best, dangerous at worst.

Who knows what this next tranche of laws outlawing advocacy of terrorism are supposed to add.

But recall the first assumption of the nothing-to-hide argument. You have to know what you are doing is wrong.

With speech prohibitions growing as fast as legislators can draft them, there’s every reason to be afraid for our privacy, and every reason to care when it is taken from us.