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Monday Message Board

September 22nd, 2014

It’s time for another Monday Message Board. Post comments on any topic. Civil discussion and no coarse language please. Side discussions and idees fixes to the sandpits, please.

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  1. Brett
    September 22nd, 2014 at 10:53 | #1

    What constitutes an enterprise that could be run efficiently under state ownership versus one that isn’t? Is it any of them, as long as there’s private counterparts to provide market pressure on the state firm to run efficiently? Only the kinds that fall into “natural monopoly” territory? Enterprises where identifying innovation isn’t important whereas providing some basic, mostly unchanging service or good is? Only those where there’s effective, mostly non-corrupt oversight?

    I’ve been tumbling around some thoughts on it after reading some pieces arguing against state-owned enterprises, then some arguing that no, they worked under French rule, then others pointing out that that’s rare and most of them do poorly, and so forth.

  2. Donald Oats
    September 22nd, 2014 at 13:17 | #2

    John Howard is a bit embarrassed about the WMDs in Iraq fiasco of 2003. He “genuinely believed” at the time that there were WMDs in Iraq, so he says now. I remember being called all sorts of insulting things, including having my patriotism questioned, by that man. He couldn’t demonstrate the slightest hint of WMDs, and even if there were any, why Australia should be involved in some sort of military intervention of the scale of the Bush Jr Iraq War. Unbelievable.

    Now though, we are being asked to believe we are under such a serious threat of local terrorism that we are to give up yet more of our liberty, allowing secret incarceration without charge–just no torture by Australian agencies! Now, in a country of around 23–24 million people, the common car accident despatches a good couple of thousand of us per annum, and maims several thousand more; a terrorist bomb, as horrific as it is to those affected, is nothing like on the scale of the road toll, or cancer, or heart attacks, etc. I am glad that we are vigilant and that we have good public servants doing their level-headed best to track down the would-be terrorists amongst us; it doesn’t follow that we should throw out the hard-fought for laws of the country, laws which do actually work.

    Torture was an abject failure in the previous Iraq War. It potentially radicalises the recipient, or reduces them to a gibbering wreck of humanity: either result is problematic, to say the least.

    Once again though, we see the ALP standing with a government known to lie profligately, based on the before-and-after comparisons of pre-election promises and “iron-clad” commitments with the actual statements since election day. The ALP should pause a moment and reflect on the shambles of a situation they were left with in Iraq, reflect on how even our own intelligence agencies were telling us the WMD evidence was fanciful, heck, Andrew Wilkie brought it to our public notice in no uncertain terms. Having reflected on that, and noting the Abbott government’s propensity to fib, the ALP should forget about the short term polling and step away from the government’s position; goodness, the ALP should be sinking the boot in, criticising the government’s clear lack of comprehension as to the situation they are jumping into (again).

    Right. I’ve got that off my chest now, carry on…

  3. ZM
    September 22nd, 2014 at 16:23 | #3

    It seems this new grave immediate terror threat we suddenly have been alerted about lately coincides with the government trying to get its anti-terrorist and spying etc legislation through the parliament :/

    “In a speech to the Parliament on Monday, Prime Minister Tony Abbott said the “delicate balance” between freedom and security would have to shift for some time in light of the heightened terror risk.
    Mr Abbott warned that there could be “more restrictions on some so that there can be more protections for others”.”

  4. Donald Oats
    September 22nd, 2014 at 16:45 | #4

    This is to be noted as a personal comment (i.e. not the view of any employer, present or past): this Abbott guvm’nt is really sowing the seeds of future trouble in our scientific research sector. This recent CPSU and CSIRO Staff Association submission to the Senate Standing Committees
    on Economics inquiry into Australia’s Innovation System
    is worth a read; best done with a strong whiskey at hand.

  5. bjb
    September 22nd, 2014 at 17:39 | #5

    @Donald Oats
    Interesting juxtaposition of the dire state of CSIRO with the news today of the Chairman’s employer (if he’s still at Mac Bank) paying the senior exec a sum total of $50 mill. Obviously it pays better to be a financial engineer than a real one.

  6. Ivor
    September 22nd, 2014 at 20:33 | #6

    @Brett

    maybe it is worth defining efficiency? If a state enterprise employs 10 staff to produce 1 load of widgets, and a private enterprise employs 9 to produce 1 load of widgets, then this suggests a measure of efficiency….

    UNTIL

    You factor in 10% unemployment.

    If the 9 staff enterprise then under-cuts the 10-staff enterprise, we get your “market pressure” for all firms of widgets to adopt 9-staff practices and so unemployment rises.

    Market pressure also tends to encourage producers to sell as long as the benefit of selling outweighs the cost of selling (which is fine) BUT ALSO, selling to maximise profits.

    So selling to cover costs is one form of efficiency, selling to maximise profits is another.

    A cost recovery enterprise will sell more at lower prices than a profit-maximiser although both will champion efficiency.

  7. Sancho
    September 23rd, 2014 at 00:27 | #7

    Bear in mind that John Howard pressed George Bush to invade when he was wavering. No matter what Howard says now, he was determined to go to war, as all conservative leaders always are.

  8. Ken Fabian
    September 23rd, 2014 at 06:59 | #8

    Brett, my own thoughts include that efficiency within a single government run “business” probably need to be compared to the combined efficiency of all the businesses that might do the same things. ie it’s not just the efficiency of the market winners after the competition dust has settled but should include all the less efficient ones and the costs of the ones that are forced out of business along the way as well.

    I don’t know to what extent good management practices successfully create the incentives for improving management practices internally but surely that’s a management concern and subject for skill development in it’s own right. The hit and miss of brutal commercial competition may get results by picking winners amongst the variation in approaches and practices but results also include the consequences for the losers. The costs of developing and implementing the more efficient approaches are not avoided by competition.

    I suppose that being both government run and a monopoly makes for advantages and disadvantages. Their business being everyone’s business makes it open to external scrutiny and review and limits options like regulation avoidance and other less savory means to up the profit margin. Although the way things are going “operational matters” may become more embedded fall back to avoid public scrutiny. To what extent mandated service delivery outcomes for commercial enterprises actually deliver better than government enterprises that have service delivery, rather than profit as primary goal looks a lot to me like one of those issues where “derps” abound. There seems to be a lot of room for input from those commercial businesses into the way the mandating is designed – which may include overt and covert assurances that allow inefficiency to arise and persist, and disallow scrutiny on the basis of “commercial in confidence”. It can become rent seeking in the hands of powerful lobbying and susceptible politicians.

    Within the political rhetoric around provision of services the idea that we need successful businessmen (almost always men) to run government more like business has become a common one. It’s one I don’t subscribe to. Efficiency is worthy goal but nations include the unsuccesful businesses as well as the successful ones, the capable individuals and the ones who are disadvantaged. Successful businesses arise on the corpses of failed competitors and the losers are not the concern of the winners. I don’t think nations can run that way and should not be attempting to emulate successful businesses. It’s not a successful business that our nation should be analogous to, it should be a healthy family – which does conduct many activities analogous to business, but includes many that are not, like providing for the needs of those that can’t provide for themselves, supporting all the members in achieving prosperity and security and less substantial goals like happiness.

  9. Donald Oats
    September 23rd, 2014 at 10:33 | #9

    @bjb
    That pay would cover nearly 40% of the money clawed out of CSIRO in this Budget. What I find frustrating is that short term decisions, such as the significant staff cuts and resource budget cuts in CSIRO, have very long term consequences which society pays for, not the decision makers. In other words, if we want an organisation like CSIRO to thrive and prosper, then we had better be prepared to fund it in such a way that it can have diverse scientific research programs which encourage strong cross-over relationships between programs; the strength of a research organisation comes from its scale and breadth of research, as much as it does from the depth of research in any one area, and that is because the most radical innovations are often a synthesis of ideas and technologies spanning multiple fields of enquiry. That is how modern science becomes modern technology. Of course it is still possible for a very narrowly focussed deep research program to make great discoveries and the like: in fact, it is essential; however, the synergistic effect of strong ties among different research programs makes an entirely new category of research discovery and development possible.

    In short, de-funding a modern research institution like CSIRO is to risk creating an expensive organisation which looks the part but can’t actually act the part. I certainly hope that is not the intention and that some sense prevails (eventually). Modern research organisations are either expensive and failures, or even more expensive and radically successful: 10% to 20% of budget is enough to flip the switch from one kind of organisation to the other kind. Is anyone in government listening?

    PS: These comments are personal, mine alone, and do not necessarily reflect the position of any organisations I currently work for or have worked for in the past, etc, etc.

  10. Donald Oats
    September 23rd, 2014 at 10:35 | #10

    @Sancho
    I took Howard’s comments, made in an interview with Janet Albrechtsen–which says it all, really, with a large dose of the ol’ cod liver oil; history revisionism in its purest form.

  11. sunshine
    September 23rd, 2014 at 10:36 | #11

    Julie Bishop says the call by IS for its supporters to attack Australians shows why we have to attack them in the Middle East. Could it be the other way around -that because we attacked them they attack us ? Its a win-win situation when two forces that need an enemy meet. In this way our leaders are working with IS. I’m starting to wonder if all this war, terror, fear etc will in fact will work out for the Coalition as it has for Conservatives past. I think(hope) there is a real chance that the people will see through it ,and it could backfire this time around. It will seem surreal if they get away with it -like living in a Walt Disney cartoon.

  12. Geoff Andrews
    September 23rd, 2014 at 14:31 | #12

    @sunshine

    … also, I can’t see the logic of preventing someone who wants to leave and become an IS fighter. I would have thought it smarter to put a target on his chest in Iraq rather than have him see a target on someone wandering along Pitt Street. Just stamp his passport “never to be readmitted”. Otherwise, what’s the long term strategy … a couple of hundred would-be combatants in gaol never to be released, even if the IS forces are defeated? Talk about breeding the enemy within.
    And another thing: when did literate people start talking about “net profit” or “net result” instead of “nett profit”?

  13. ZM
    September 24th, 2014 at 16:57 | #13

    Last week student groups at uni partnered with 350.org to run a referendum for staff and students on whether Melbourne University should divest from fossil fuels. Apparently the bequestment fund currently has something like $2 billion invested in fossil fuel sort of companies. The results were announced today and out of a total of 1800 formal votes 97% supported divestment. As universities have a leadership role they should be acting responsibly and following the lead of the Uniting Church in divesting from companies that are heavily causing climate change. All this freed up capital can then assist Australia in transitioning to a non-ghg emitting society in the not too distant future.

  14. Hermit
    September 24th, 2014 at 17:48 | #14

    Divestment could be a gift if others can buy the shares cheaper. Suppose the shares are now priced at $20 with expectations of a $1 or 5% dividend. If a massive selloff lowers the price to say $16 that dividend now yields 6.25%. You have to stop sales of product. As I’ve said on other threads fossil fuels utterly dominate most energy markets (eg transport, all-weather electricity) and until that changes FF interests are sitting pretty.

  15. kevin1
    September 24th, 2014 at 19:53 | #15

    @sunshine

    I hope that teachers of politics/cultural studies/philosophy/psychology/sociology/journalism etc. will make the most of the “teaching moment” created by the fracas between police and the young guy in Melbourne. They might look at:

    • Why it is that politicians (govt and opposition) and police opened their public statements with support to the police officers but NO condolence to the family of the deceased young man. Is the family considered responsible for what happened? Are they not Australians? Do they not bleed for their loss?

    • How come this one case has led to a heightened “terror threat”? How many social scientists (in any field) have spoken out to call this generalisation from a single anecdote as unscientific nonsense?

    • Is “confirmed terror suspect” a legitimate journalist or police description? How much of it reflects the “descriptor” rather than the “descriptee”?

    • Is the alternative narrative of a man with a knife attacking 2 police officers (which happens frequently), but this time with a political motive, a more balanced description

    • What is the detail of the “threat to the PM” which we are now told posed no danger, and may have been no more than “chatter” (do we now have to cuss under our breath about this rotten PM?)

    • How the professional standards of a mainstream media spiralling downwards every year are influenced by this opportunity for attention-seeking and commercial gain

    • How much continuing professional education of journalists takes place, to correct the above failings, and do the proprietors resist it

    • The political factor: the relationship between opinion polls and partisan political responses

    • What is it that the Muslim leaders want? OK, they can’t control their youngsters (like the rest of us), but do they blame the govt for lack of “programs”? Honestly, they sound as remote and ineffectual as their Christian counterparts

    • The common disgust with many aspects of capitalism creates the millenarian other: previously as marx-inspired socialism, now religious mysticism ‘somewhere else’. After Paul Hollander, Melbourne expert Tim Lindsey in ‘The Romance of K’tut Tantri and Indonesia’ talks about the Western quest for paradise, being “the quest for an enchanted Utopia in distant places necessarily entails travel and so the Utopian genre is tied to the notion of pilgrimage to distant lands.” Has Islam imaginings filled the space?

    No doubt there’s lots more.

  16. James
    September 24th, 2014 at 21:00 | #16

    @Brett The concept of efficiency in economic terms is related to maximising outputs using available inputs. This assumes that all the inputs and outputs are factored into the equation. The trouble with many government services is that the inputs and outputs (or costs and benefits) cannot be simply priced, as on both sides of the ledger are large externalities that at best can be estimated, and in more normal accounting practice, can be ignored.

    A classic case is a public hospital, where the cost of the institution is considered a sunk cost, and the only ongoing costs are maintenance and operation. A private hospital, on the other hand, expects to make a return on the capital sunk into the institution, as well as covering maintenance and operational expenses. Is this a true reflection of the real cost to the state? The answer is no, as the return on the sunk cost by the state is realised in better and cheaper health outcomes for their citizens, an unquantifiable but no doubt very real benefit.

    This in part explains the dysfunctionality of the US hospital system, where nearly half of hospital costs represent return on capital for the institution itself. This is part of the reasoning that led to doctors in the US not being banned from buying hospitals, as they were considered to be double-dipping (but hedge funds are OK).

    The same sort of illogic applies to most PPPs.

    Markets and competition are wonderful things where externalities are low, and disastrous where they are high. Buying a piece of land (if there are no significant overlays) has very few externalities. Buying an education has all sorts of externalities, which is why universities don’t operate anywhere near student cost/hour of tuition.

    My favourite bugbear, being a rural resident, is that the current government is intent on destroying national equality of access to fast internet services by scrapping the business model of the NBN and allowing private providers to cherry pick profit centres in major urban areas. If this means, as it may well in my case, the difference between earning $100+/hr or being on the dole, the fact is that neither of these numbers appear in the NBN or private provider’s accounts, but given there could be many thousands of such cases nationally could have a significant impact on government revenue and national productivity.

    Therefore efficiency as a measurable at the micro-economic level must be considered in the context of (political) economic efficiency at the macro-economic level.

  17. jungney
    September 26th, 2014 at 18:49 | #17

    On the security state and how to makes a phone call:

    Take you’re mobile out of your pocket. Leave it behind. Put on a hoodie before you leave the house. Hood up. Wear a lower face mask, a kerchief or bandanna. Cover your face. Walk, don’t drive, because if you drive your plates will be captured everywhere, to a distant public phone booth. Remember them? about five k’s is the minimum. Have an alibi for your absence from the home. After the call, wipe the mouthpiece and other ares with a strong bleach. This corrodes the DNA. Leave a short message. Under all circumstances, refuse to agree to voice identification technology on the phone.

    Keep your mouth shut.

  18. kevin1
    September 27th, 2014 at 13:35 | #18

    @jungney

    I see the phrase “confirmed terror suspect” has entered the lexicon. So I guess before he was confirmed, he was a “suspect terror suspect”: the more likely are “suspect” and some go to the front as “confirmed”.

    By implication the rest of us are relegated to the bottom rung as unassessed “terror suspects”. But don’t worry, everyone has potential in them; you can’t get a lower classification as long as you keep breathing.

  19. Megan
    September 27th, 2014 at 19:26 | #19

    @kevin1

    Yes, but being a white non-muslim good-old-boy, the guy who shut down the airport in the US by setting fire to the FAA building is just a garden variety petty crim.

    The evangelical christian who terrorized the kids in the Sydney islamic school with a knife, is charged under the old fashioned: “intent to commit indictable offence”. No “Terrrrsm” here folks, this is just plain old crime. We’ll let you know if it’s terrrsm, but you’re getting pretty good at working it out for yourselves.

  20. Fran Barlow
    September 27th, 2014 at 19:51 | #20

    @Hermit

    Of course, if a divestment campaign were sustained and the company ceased getting favourable treatment by the state then the fact that you could buy shares at a discount might be moot. If the buyer pool dries up, the securities become less liquid and any downturn in the company’s fortunes apart from the general divestment context presents greater downside risk, prompting other institutional shareholders to make a virtue out of the changed risk profile — by selling and claiming high principle. What we have then is a scramble for the exit door and lots of unhappy shareholders.

  21. Collin Street
    September 28th, 2014 at 08:10 | #21

    I see the phrase “confirmed terror suspect” has entered the lexicon. So I guess before he was confirmed, he was a “suspect terror suspect”: the more likely are “suspect” and some go to the front as “confirmed”.

    Confused language reflects confused thinking; it’d be interesting to see the differences in language used by police officers and by politicians.

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