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Weekend reflections

January 27th, 2017

It’s time for another weekend reflections, which makes space for longer than usual comments on any topic. Side discussions to sandpits, please. Absolutely no personal criticism of other commenters.

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  1. Ikonoclast
    January 28th, 2017 at 06:58 | #1

    What are we to make of the strange mix of policies coming out of the “left” and the “right” these days? Of course there are boasts and policy claims (Trump issues a lot of both) and then there are policies that are actually implemented. The latter is a much smaller number. I am not completely sure myself what to make of the odd mixes of policy on both political wings. Perhaps I can hazard a few guesses and others can offer their ideas in turn. These are my thoughts;

    (1) The global social-economic system (or system of systems) taken as a whole, or that of any significant country, has a lot of momentum. One can’t turn a supertanker on a dime and I imagine one can’t turn a big economy on a dime either. So politicians’ claims that they will fix this or that when they get into office are just (in a lot of cases) what they think must be said during the election process to win the election. Either they don’t really mean it or they mean it but find it too hard in office to address the issue, whatever it is.

    The prime example here is “jobs, jobs, jobs”. Every political leader and her/his party is going to “create more jobs”. It never happens any more. Secular (long-run) stagnation seems to have set in. In their desperation and lack of ideas both “wings”, left and right, dabble in a mix of policies which span the moderate left to the very right spectrum. The very left is left of the Overton window so gets no traction at all of course.

    2. Immigration is a clear case (to me) where left and right thinking gets all muddled up. Right Libertarians want free movement of people. Alt-Rightists (like Trumpists) want closed borders. The last few Australian governments have been acting like Alt-Rightists on refugees, if not on immigration. Many moderate left wingers say they want to let all bona fide refugees in. They talk the talk but don’t walk the walk. Left wingers and Greens who say they are concerned about climate change and limits to growth nevertheless will not countenance an immigration policy based on a population policy for an arid continent (Australia).

    3. Moderate left wingers (mostly) accept all the neoliberal saws about the need to balance the budget, above real outcomes affecting real people, and they also tamely accept that “full” employment is when the official unemployment rate is about 5% – and when the unofficial but true unemployment rate is really more like 10%.

    4. Moderate left wingers accept market fundamentalist capitalism is okay, privatisation is okay and private monopolies are okay. They accept all this in practice, no matter what they say. All this is okay provided you have a bit of welfare.

    The above are a couple of examples where modern left and right seem all mixed up and blurred. It reminds one of the denouement of ‘Animal Farm’.

    ” There was the same hearty cheering as before, and the mugs were emptied to the dregs. But as the animals outside gazed at the scene, it seemed to them that some strange thing was happening. What was it that had altered in the faces of the pigs? Clover’s old dim eyes flitted from one face to another. Some of them had five chins, some had four, some had three. But what was it that seemed to be melting and changing? Then, the applause having come to an end, the company took up their cards and continued the game that had been interrupted, and the animals crept silently away.

    But they had not gone twenty yards when they stopped short. An uproar of voices was coming from the farmhouse. They rushed back and looked through the window again. Yes, a violent quarrel was in progress. There were shoutings, bangings on the table, sharp suspicious glances, furious denials. The source of the trouble appeared to be that Napoleon and Mr. Pilkington had each played an ace of spades simultaneously.

    Twelve voices were shouting in anger, and they were all alike. No question, now, what had happened to the faces of the pigs. The creatures outside looked from pig to man, and from man to pig, and from pig to man again; but already it was impossible to say which was which.”

    In the same manner now, we look at official or organized left and right and it is impossible to say which is which. My analysis is that all of this is the result of;

    (a) momentum (the system has its own momentum and neither side can do much about it);
    (b) inherent tendencies (the system has its own immanent tendencies and biases);
    (c) corruption, seduction and subornation of those who reach power (this is always an issue) and;
    (d) a result of “ideology meets populism”.

    The last needs a little explanation. Certain ideologies are quite pragmatic. Gaining and keeping power and wealth are much more important than any ideological purity. Thus, while keeping covertly to policies that suit plutocrats is the sole guiding principle, all sorts of concessions can and will be made to populism provided it means this. The downtrodden being induced to focus resentment on other downtrodden and bash them rather than focusing upwards and actually doing something about their oppressors.

  2. Donald Oats
    January 29th, 2017 at 14:16 | #2

    @Ikonoclast
    With neo-liberalism so firmly entrenched as both a reality and a belief system, not much good comes from government. There are still a number of public services that can be “privatised,” so Labor can make soothing noises that if they were in power, they wouldn’t touch those things; and, the LNP can make noises that it is going to cut spending (by eventually privatising those services). Meanwhile, the rot continues.

    We need an entire party that can break the squirrel-grip that neo-liberalism has on our political culture, but I don’t see any group that has the political heft or even the will to do this. And, since that is the case, I am not aware of any political group who is proposing a feasible alternative to neo-liberalism. The Hansonites are too diffuse and auto-contradictory; the Greens haven’t the opportunity; the ALP is too close to the action; the Nationals are risible; the Liberals are the problem writ large. A few independent senators notwithstanding, there is no clarity of vision bar more of the same.

    During the reign of neo-liberal thought, we have had one near-death experience after another, and each time we cut taxes, increase rebates, and/or privatise something else, only to trot along to the next near-death experience. We had the 1981–1984 period, which is when I came out of high school and if I hadn’t gone to uni, would have confronted more than 10% unemployment; in 1987 the ASX blew up and melted down, knocking the economy for six; then we had “the recession we had to have” in 1990–1991, which was shocking, and saw several friends lose jobs or be stuck on unemployment benefits; then we had the tech-wreck in 2000–2001, which cost several hundred people I knew of their jobs too, wiped out whole companies and white collar jobs of some technological expertise; then the GFC meltdown, in which Australia narrowly avoided a messy trainwreck, but is suffering from lingering after-effects in any case.

    Overlaid across that neo-liberal tapestry of one nearly ruinous collapse after another, we have had the ratcheting effect of public service spillage of jobs, loss of services for good, the private sector picking the eyes out of the privatisation of those services. The grinding effect is to remove job security, to the point where zero-hour contracts are wide spread.

    We confront this century with the combined issue of increased longevity and decreasing job opportunities and loss of any semblance of job security. We have increased the likelihood of people being life long renters with the attendant decrease in housing security, especially in their retirement age. We have under-employed people who are also under-paid, a double whammy; we have social security criteria that are tighter than a frog’s arsehole, and self-contradictory in any case; and we have a loss of proper statistical accounting of employment and unemployment in this country. Instead of looking at the problem of what replaces work in the future and dealing with it, the neo-liberal way is to make the social security criteria so ludicrously difficult to meet, people simply can’t get on it, yet have no means of supporting themselves. A moment’s reflection would indicate that such people will eventually get caught up in the criminal justice system, caught stealing to eat, or trespassing to doss down for the night, or failing to pay fines for loitering in public places, etc. And the neo-liberal solution to that? Private prisons!

    On the positive side, there isn’t too much left that can be eff-ed up by neo-liberalism. Sweet.

  3. Ikonoclast
    January 31st, 2017 at 19:01 | #3

    @Donald Oats

    That sums it up. How long can this system limp along? I don’t know. My guess is about three years to three decades. It’s unpredictable except, of course, that it cannot continue indefinitely. There are far too many unsustainable trends for that to happen.

  4. GrueBleen
    February 3rd, 2017 at 14:16 | #4

    Gentle persiblings <<- note gender neutrality

    Now I'm not sure I really have anything to contribute on this topic, so I thought I might ask a favour: many – including Ikono above – pepper their wriitings, and speakings, with references to "the left". Which provides me with an ongoing problem: I have no idea who the left" are, and whenever I inquire I just get brushed off with quibbles and putdowns.

    I mean, the current ALP isn't "the left" is it ? Nor the Greens. and the Fabian Society stopped being "the left" a long time ago; and the Australian Communist Party (Marxist-Leninist) never were. And Mao's Little Red Book is just the ramblings of a Chinese Trump.

    So, can you help me – who is "the left" ? Who can speak for and think for, "the left" ?

    Thanking you in advance.

  5. February 4th, 2017 at 07:34 | #5

    According to the original political spectrum, the extreme Left under the name of Socialism, defined as “the social ownership of the means of production” and meaning in economic terms govt. monopoly capitalism – was confronted by the extreme Right of Royalty based capitalist plutocracy, with a widening “middle class” (bourgeoisie) towards the middle of the spectrum – which on the basis of property/capital ownership is clearly definable by at least a minimally meaningful level of capital ownership by all citizens.

    In our more centrist democracies both the un-democratic Socialist/Communist “dictatorship of the proletariat” and Royalty based feudalistic capitalism are seen as outdated –

    and Socialism gave birth to the mixed capitalism based “Third Way” social democratic welfare state, which flourishes in most of the western world even under the current extent of “neoliberalism”, a drive to re-energize self-destroying welfare economies where widening needs and reliance on welfare reduce the capacity and willingness to save and invest enough for adequate wealth creation to meet the increasing demands for consumption.

    So, would not the most effective progress from our current dilemma be not towards the Left or Right of the political spectrum, but the “Third Way” upwards for and by all like on a rising tide, by perfecting Social Democracy through systematically 100% of citizen participation in direct personal wealth creation and ownership (capitalism) and thus eliminating the socio-economic split into “haves” and “have-nots” – and with this narrowing instead of widening welfare dependency – which would result in better welfare potential for the inevitable proportion of unfortunates among us ?

  6. Donald Oats
    February 4th, 2017 at 16:52 | #6

    Reading about Trump’s inflammatory remarks in numerous phone calls to leaders of other countries, there is a pattern emerging, in my opinion: the other leaders are provoked in the hope that they withdraw from some aspect of previous cooperation/partnership with the USA. If he is sufficiently insulting that a leader does formally end some arrangement, Trump can trumpet it all over the news, saying “See, see? Other country took advantage of us, then dumped us!!! See, SEE??!!” and hence gains justification for his “America First!” meme and actions. If the foreign leader tries to play it smooth back at home, the Trumplers leak the contents of the phone call so it is apparent just how rude and disdainful Trump was towards the other leader, and this makes that foreign leader look weak, for they tried to play it as a decorous phone call when it patently wasn’t. And Trump wins again, by making a foreign nation look needy and clingy, willing to take abuse and to be America’s doormat. Makes Trump look like a strong man.

    The only way to beat that is to call him out on it and to break off all political relations, send US troops back to the USA, and start being better neighbours in the Asia area. The new US power base is with a bunch of isolationists, and they are only interested in deals with a huge power asymmetry that lets them renege, then return with a new highly reeking bullsh*t proposal that they wipe all over their pet doormat—i.e. Australia. Australians do not deserve to be put in that position, and I strongly urge the Prime Minister to break free from political binds, sever the link. We can still trade with the USA, but politically, we shouldn’t be bound to follow them into a stupid stupid stupid war with another country. Especially a country with lots of nukes.

  7. Ikonoclast
    February 4th, 2017 at 19:54 | #7

    @Donald Oats

    I am starting to think Trump might be a one-term President. Of course, “It’s tough to make predictions, especially about the future.” – Yogi Berra.

    “President Donald Trump on Friday plans to sign an executive action to scale back the 2010 Dodd-Frank financial-overhaul law, in a sweeping plan to dismantle much of the regulatory system put in place after the financial crisis.” – The Australian.

    One would think this will pretty much guarantee another severe financial crisis at some point. I guess the unknown is whether it will occur in Trump’s first term.

    As far as dealing with Trump goes, the best idea is not to. You can’t deal with him and you can’t ask him for anything. He holds all the aces and asking him for anything is a sign of weakness. So, make no approaches, no overtures of any kind, except in the utmost extremity such as a Chinese invasion of Australia, certainly nothing less. Deal with U.S. officials down the line, a fair way down the line if possible, and never his inner circle if you can help it. Otherwise say and do nothing. If he makes approaches or asks for things or deals (very unlikely) then it gets tricky. Deal with that on a case by case basis I guess.

    He’s gone completely rogue already. No telling how bad this might get. I guess WW3 is on the cards now or dangerous climate change or a big overshoot of the limits to growth. Our goose is completely cooked. I’ve given up all hope for the future and am living for the day, every day. Of course, that’s easy to do as a healthy retiree with a decent retirement income. I’m quite serious. I regard it as a 50-50 proposition now whether I die of natural causes or a world crisis.

    I’ve stopped worrying and I’m learning how to fully live for the now, albeit while obeying proper precepts of behavior, and then die like Buddhist. Death is the end of the cycle (one life cycle) of suffering. I don’t worry about that re-birth, re-incarnation claptrap. There’s no empirical evidence for that.

  8. GrueBleen
    February 4th, 2017 at 20:06 | #8

    @Ikonoclast

    Just think: he may not even complete one term – all that presidential stuff is getting in the way of his watching TV apparently. And the breakneck pace at which he’s signing executive orders means he’ll have the whole world sorted in another month or so.

    You know, like how he sorted the F35 project by getting Lockheed-Martin to reduce the price by $600 million (or about the cost of two planes), so it’s all copacetic now.

    PS: who or what is “the left” ?

  9. GrueBleen
    February 4th, 2017 at 20:14 | #9

    @Donald Oats

    Australians do not deserve to be put in that position

    Oh yes we do.

    We can still trade with the USA

    Yair, but can we wait until he cancels AUSFTA ? It would be just the first step of recovering some national pride.

  10. Ken Fabian
    February 4th, 2017 at 21:49 | #10

    A nation led by a successful businessman – who may be the sort that thinks unfair competition in his favour is the best kind and the failures of competitors is something worth striving for. But even if the liabilities of the loser’s isn’t on the winner’s balance sheet it remains on the balance sheets of the nations of international economy. Applying this kind of “winning” strategy at the national and international level could be incredibly damaging.

    It looks to me like decisiveness is being applied without competence and if President Trump is selecting for and demanding compliance over competence from those around him, they will be unlikely to have it for him to tap. Yet given that lack of competence, it leaves him open to being led, by those who can frame and present what they want to the President’s taste.

    Unlike a Hanson, he knows how to select compliant staff and enforce his will but like her, lacks that essential competence that underpins good judgement. Having leaders who have risen above their competence is hardly new but Trump may have risen higher and yet be more capable of having his will done regardless than any US leader in recent times.

  11. Ikonoclast
    February 4th, 2017 at 22:56 | #11

    @GrueBleen

    Google is your friend. Ask Google. 🙂

  12. Ikonoclast
    February 4th, 2017 at 22:57 | #12
  13. February 5th, 2017 at 11:18 | #13

    Thanks Ikonoclast for the exhaustive wikipedia explanation of Left-wing politics, and it would be interesting to see to what extent GrueBleen accepts it for the answer to his/her question.

    In the search on how political Centrism is to be identified as not Right or Left wing I also looked up Wikipedia’s material on political centrism, and while I found nothing wrong or debatable on that there, I did not discover (or comprehend?) a clear, undisputable, factual and measurable hallmark of it there either.

    So herewith some simple and basic contemplation about that.

    If commonly political centrism can be seen as the middle ground (even “sitting on the fence”) between the extremes in politics, as it could exist within any political party, this kind of Centrism does not reveal the crucial factor that separates the “centre Right” and “centre Left” on the whole political spectrum.

    Therefore ideologically the Center could be defined with a priority not in favor of Right or Left wing sectional interests, but raising (improving) the interests of all – in an egalitarian way, like a rising tide.

    If that is accepted as reasonable, then would not the Ownership Society concept, aiming at all citizens during an average life span becoming personal owners of at least a minimally meaningful level of (retirement) wealth (if not born as such already) – be a clear slogan and measurable goal of political Centrism, at least on the socio-economics of wealth ownership ?

  14. GrueBleen
    February 5th, 2017 at 11:21 | #14

    @Ikonoclast

    Google is your friend. Ask Google.

    Not always, and indeed sometimes quite the reverse. It’s been getting worse ever since Google “smartened” it up – instead of just finding the stuff which contains the bunch of words I’m looking for, it picks one or two words as “core” and basically ignores everything else. Then I have to spend time trying to find both the ‘neutral’ words and a ‘neutral’ word order that mostly – but not always – finds what I’m after.

    Here ya go, Gruebleen,

    And I thank you for that, Ikono, but that article is really mostly about “what” is “the left“, not “who” is “the left“. Now when the terms “the left” and “the right” were coined, it was really easy to say who were “the left” – they were the folks who sat on the left-hand side of the Frnch Parliament. And it was they who thought for “the left” and spoke for “the left” because they were all of the only “left”.

    A bit different today though. Who now thinks and speaks for “the left” ?

    In your opening post (#1) you say: “What are we to make of the strange mix of policies coming out of the “left” and the “right” these days?” And then you go on to say: “I am not completely sure myself what to make of the odd mixes of policy on both political wings.” as though it was just “political wings” who are “the left” and “the right”. But then we have thoughts and pronouncements that are called “left” or “right” but without any apparent connection to any “political wings”.

    So all I can do is reiterate my total confusion: who is it that thinks and speaks for “the left” ? Unless, as I frequently suspect, the whole mess is just an invention of the agitprop press (eg the Murdoch media) so that they can use “alternative facts” to simply villify some made up ‘bogies’, who, because they don’t exist, can’t invoke 18c or the libel laws.

  15. Ikonoclast
    February 5th, 2017 at 12:42 | #15

    @GrueBleen

    I should have said “Wikipedia is your friend”. I take your correction on that issue. P

  16. Ikonoclast
    February 5th, 2017 at 12:49 | #16

    @GrueBleen

    Oops, somehow “return” got hit when I was shaking crumbs out of my keyboard. I thought I was careful about eating at the PC (on rare occasions). Obviously not. I was going to say…

    People always seem to want simple answers to questions like this. “What is capitalism?” , “What is the left?” , “Who is the left?” , “Who speaks for the left?” There are never simple answers. I am not prepared any more to attempt simple answers for people who seemingly want only simple answers and won’t research for themselves. Sorry mate, but there it is is. You are on your own. Have a nice day. 🙂

  17. GrueBleen
    February 5th, 2017 at 14:20 | #17

    @Ikonoclast

    won’t research for themselves.

    Research what and who and where for myself ? All right then, I will ask you one simple question that is very germane to “researching for myself”: when you said “What are we to make of the strange mix of policies coming out of the “left” and the “right” these days?”, what meaning did you ascribe to the term “the left” in that sentence ? What am I, and everybody else who reads you, supposed to understand by what you’ve said.

    Who are you talking about when you use that term, “the left” ? Who wrote or otherwise espoused those “policies” to which you refer, and why did you use the term “the left” to apparently identify them ?

    Now I don’t mind, Ikono, if you are just using “the left” as a convenient “noise” term – ie you don’t actually have any meaning to give to the term, but I’ll try to be as clear as I can: I am trying to do some “research for myself” by asking people who use these terms what meaning they ascribe to them.

    Like I said, Ikono, its ok with me if you don’t have any meaning that you can reveal, but please just say so and I won’t bother you again. I’ll try ProfQ instead, who gave me just about exactly the same response as you have – in short, avoidance of the question.

    Oh, and i don’t know where you got the “simple ideas” putdown to use on me, I’ll just say that your assumptions are your own.

  18. GrueBleen
    February 5th, 2017 at 14:21 | #18

    @GrueBleen

    Ooops, sorry, didn’t mean to ‘bold all that much – forgot the /

  19. Ikonoclast
    February 5th, 2017 at 15:26 | #19

    @GrueBleen

    Well the fact that I used scare quotes should have alerted you that I myself distrusted what people call left and right these days.

    Left can mean anything from full socialism to a social democracy slant on the mixed economy. Right can mean anything from a basically market oriented economy to full market fundamentalism. Politically, left tends to mean democratic and worker based decisions, right means minimal genuine democracy, more autocracy and more bosses’ power and decisions.

    Always remember too that politically, left and right are relative terms. Shorten is left of Turnbull. Shorten is still a long way right of socialism. Obama is left of Trump. Obama is still a long way right of worker cooperativism. Tony Blair’s New Labor ideology was left of Thatcher (a little) but far right of traditional UK labor values. False advertising, dishonest labeling, you know how it is. It’s so common these days of course. Please don’t “blame” me for all this post-truth, post-logic confusion of the neoliberal era, 1970s to present. It’s not my doing mate. 🙂

  20. GrueBleen
    February 5th, 2017 at 16:47 | #20

    @Ikonoclast

    Your response still seems to be in terms of what “the left” is – though valuable, because I no longer believe I quite understand that either – but I was more after the who.

    So to reemphasize, when you say there’s a mix of policies coming out of “the left” my question is: who is articulating these policies ? Who is propagating them ? Is it Bill Shorten ? Who, just for completeness sake I have never personally identified with “the left” though he does have some “left leaning” convictions, apparently.

    Who, Ikono, is “the left” ? Who has the broad identification and acceptance to “speak for the left” Is there anybody ? Was there ever anybody ? Marx and Engels, perhaps ? Were they once upon a time the personification of “the left” ? Was Mao ever such ?

    That’s why I mentioned the Fabian Society – to some fairly active sections of society, the Fabians were once those who could speak for the left – but not now for many years.

    Sanders ? Corbyn ? Who ?

  21. February 6th, 2017 at 07:31 | #21

    GrueBleen – with you now apparently confused even about WHAT “the left” is, then could you perhaps tell us what you think/thought it to be ?

    In view that the Fabian Society was founded to promote Socialism through non-violent “friendly persuasion”(?) – and Socialism as the “social ownership of the means of production” – i.e. state monopoly capitalism – is developing into mixed capitalism as soon as there is some freedom permitted for that to happen – your and Ikonoclast’s confusion is understandable –

    because the Fabian Society together with the free democratic world is moving away from the original concept of Socialism – and beside some unfamiliar radicals there just are no uncompromising Socialists to “speak for the left “anymore. (???)

    Or, GrueBleen – does your concept of “the left” go perhaps even beyond Socialism to the vision of “from everyone according to ability – to everyone according to needs” in capitalistic abundance, and not in its pre-stone-age “paradise” state of hand-to-mouth survival as hunters and gatherers of the “gifts of nature” ?

  22. GrueBleen
    February 6th, 2017 at 07:50 | #22

    @Jens Meder

    I’ll give your question some thought and respond a bit more later. But in the meantime I’ll just summarise things by proposing my two primary principles:

    1. Put people first !

    2. Make humanity great again !

    And I’m not sure there’s room, or need, for ‘socialism’ there.

  23. Luke Elford
    February 6th, 2017 at 15:44 | #23

    Garis posted a long and interesting comment about housing on the last Monday message board, which I only recently saw. I’m posting some responses here, since that comment thread is closed.

    @Garis

    “Avg prices have increased from about 3 times avg wages to 7 or 8 times in the last 30 years. i.e. 2.5 x real increase whilst the cost of construction in theory should be declining in real terms, but marginal in any event. The current prices are unsustainable as they depended on unsustainable rates of real price increases.”

    It’s certainly true that increases in average dwelling prices have been driven, to a considerable extent, by reductions in the user cost of housing—the ratio of the annual net cost of owning or renting a home to its price. However, faster housing appreciation has played a relatively minor role in this.

    Between the early 1980s and the early 2010s, the user cost of housing halved, from a little over eight per cent to a little over four percent. Over the same period, the ratio of the average dwelling price to average household income doubled, from a little over two to a little over four. This is consistent with the idea that households devote a roughly constant share of income to housing, about 20 per cent.

    However, of the reduction in the user cost, no more than one per cent—less than a quarter of the reduction—can be explained by faster appreciation, with other factors, such as reductions in real interest rates, playing a larger role.

    See the following RBA papers: ‘Is housing overvalued’ by Ryan Fox and Peter Tulip, and ‘Dwelling prices and household income’ by Ryan Fox and Richard Finlay.

  24. Luke Elford
    February 6th, 2017 at 15:45 | #24

    @Garis

    “Avg prices have increased from about 3 times avg wages to 7 or 8 times in the last 30 years. i.e. 2.5 x real increase whilst the cost of construction in theory should be declining in real terms, but marginal in any event.”

    I’m baffled by the widespread belief that construction costs (or, more accurately, construction expenditure per dwelling) haven’t played a significant role in rising dwelling prices (more accurately dwelling values), since it’s quite clear from the evidence that they have.

    There are a number of relevant sources. As part of the national accounts, the ABS reports on the total value of the nation’s dwelling structures. Dividing by the number of dwellings yields the mean value per dwelling. In 2015, the implied average real dwelling structure value was 1.76 times its 1985 level. The ABS also provides chain volume measures of the value of the nation’s dwelling structures, which allows the role of increasing average dwelling size and quality to be separated from real increases in construction costs. These imply that there has been a 36 per cent increase in mean dwelling size/quality and a 29 per cent increase in real construction costs.

    In addition, the ABS reports on the number of new dwellings being built and the value of the associated building work. Since the Victorian government provides useful data on mean land and dwelling prices in Melbourne, and Victoria more generally, from 1985, I’ll report changes in average construction costs for Victoria. For new houses, the average construction cost in 2015 was 1.85 times the 1985 level, whilst for “other residential” 2015 costs were 2.29 times their 1985 level. For other residential, the increase in construction costs likely reflects, in addition to the factors considered above, a movement to taller buildings, with higher construction costs, in response to rising inner-city land prices.

    By comparison, in unconstrained outer suburban parts of Melbourne—Casey, Cardinia, Hume, Melton, Whittlesea, and Wyndham LGAs—2015 mean house prices were 2.19 times their 1985 levels. Combining the ABS and Victorian government data implies that in 2015 a new house in Melbourne would cost 2.17 times as much as in 1985. Of course, for Melbourne and Victoria as a whole, house prices rose by more as a central location became more valuable. In Melbourne, 2015 mean house prices were 3.28 times their 1985 values; the equivalent value for Victoria was 3.06.

    In the same parts of outer Melbourne, the 2015 mean price for other dwellings was 1.92 times the 1985 level. For Melbourne as a whole, the corresponding value was 2.53, and for Victoria it was 2.46.

    Broadly speaking, prices for fringe houses and dwellings other than houses in Melbourne have increased in line with construction costs, with marginal reductions in the share of dwelling value that is accounted for by dwelling construction costs in the range of five per cent.

  25. Luke Elford
    February 6th, 2017 at 15:48 | #25

    @ Garis

    “High rise is not the answer as construction costs are towards twice medium density, high rise is a luxury and at best is a solution to the Manhattan problem (and noting that land in simple terms has no cost and its price is largely an artefact of government policy).”

    Of course land has a cost—its forgone use for an alternative purpose, such as its existing use—as well as a cost of converting land between uses. It matters if a new dwelling replaces 1/6th of an existing dwelling, for example, or 1/60th. Land taxation allows the government to appropriate part of the return to land, but it doesn’t alter this fact.

    The term “towards” is doing a lot of work here. The 2016 version of the Rawlinsons construction guide gives construction costs for low-rise apartments—a maximum of three storeys, without a lift—as well as high density apartments for a range of finishes. Averaging across the cost ranges for Australia’s five main cities, the cost premium is about 25 per cent for both basic and medium finishes. Turner and Townsend’s 2016 international construction market survey gives construction costs for low-rise and high-rise apartments for Australia’s four biggest cities. Again averaging over cities, the implied cost premium is 40 per cent.

    These differences in construction costs aren’t insignificant, but they can easily be dwarfed by differences in site costs. To take some realistic figures, suppose that construction of low-rise apartments costs $1,800 per square metre and construction of high-rise apartments costs $2,500 per square metre. Suppose that the low-rise apartments have a plot ratio of one and the high-rise apartments have a plot ratio of four. Taking p as the site cost per square metre, the combined site and construction costs will be lower for high-rise apartments if 2,500 + 0.25p 700/0.75 = $933. If the potential sites are detached houses on 600 square metre lots, then high-rise construction will be cheaper if the typical house price is greater than $560,000, hardly a particularly high price in the context of Australian cities.

    Playing with the numbers will yield marginally different results of course, but will not alter the underlying conclusion that, despite your contention that high rise is a “luxury”, it is likely to be the most cost-effective form of development across significant parts of Australia’s big cities.

    Land taxation doesn’t reduce the cost of using land less intensively—it reduces the upfront payment that must be made to a site’s initial owner, but replaces it with an equivalent ongoing tax liability. The whole thing about land taxation that makes it desirable from the perspective of economic efficiency is that it doesn’t distort these types of incentives.

  26. February 7th, 2017 at 12:08 | #26

    GrueBleen – if the Fabian Society replaced its definition or meaning of Socialism from govt. monopoly capitalism to Social Concern or “being socially concerned”, then would it not come pretty close to your altruistic(?) principles of “putting people first”, and “make humanity great again” ?

    However – as in the case of an emergency on air travel they advise to put the oxygen mask on yourself first before aiding anyone else, is it not a natural and basic priority that normally (apart from some specific circumstances) oneself is “the people” one has to put first?

    And that only by doing so in a fair way are we able “to serve others best” in the interest of humanity ?

    Because how can we successfully “put others first” if we ourselves are not reasonably “up to scratch” on moral and physical health and wealth ?

    So – when reasonably “up to scratch” oneself, what is the most fair and effective way to “put people first” for “humanity (in physical and mental welfare) to be great” (again?) and more or less “rule the world” ?

  27. GrueBleen
    February 7th, 2017 at 16:01 | #27

    @Jens Meder

    Hmmm, now let me see:

    1. Put people first !
    2. Make humanity great again !

    Have you heard of somebody named Donald John Trump, Jens ?

    But I might just have to agree with you in the main, after all if everybody exhibited the ” natural and basic priority that normally (apart from some specific circumstances) oneself is “the people” one has to put first?” then it might get really hard to get enough people to fight wars. Unless “Dulce et decorum est pro patria mori” was the main one of the “specific circumstances” you had in mind.

    However, I do have to ask just how you somehow transmuted “Put people first” into “put others first” ? “Put people first” is usually used as a contradiction to those who “put profits first” (or fame or power or whatever). Some even use it to criticise the various animals rights movements (eg PETA) which they accuse of putting animals first.

    Well I do have a lovely, affectionate feline that I would certainly put way ahead of lots of people. You may guess who.

    As to “make humanity great again”, well, yes, again – we started heading along the right track back in 1685 when at least some of homo sapiens sapiens began the long, slow walk towards logic, rationality and science. But we just didn’t quite make it, did we. Now we’ll have to start all over again (yes, again) to once again dispose of those “alternative facts”. So it goes.

    As to socialism well is that a myth or is that a utopia ? If it were 100 years ago, we could have asked Georges Sorel in person, but at least we can read his works. If there ever will be anything such as Socialism, then if we have indeed made humanity great again, it will be treated as the simplistic means that it is, not some kind of religiously believed ‘end in itself’. If we accept that each individual is an end in his/herself, then nothing else ever can be, can it.

    However, let me just say that day after day after day people – eg Ikonoclast, but also Prof Quiggin – write about “the left”/or even “the Left”. And I simply try to ask them what they mean by this – who is the, what is the, “left” – but they can never tell me. They just say things like “go and do your own research, GrueBleen” which simply means that they have some idea that I should be able to guess the meaning(s) that they assign to words and terms in order to unscrew what they say.

    Unfortunately, I possess no psychic powers whatsoever, so what they say just whiffles off through the tulgey wood and is lost forever.

  28. February 8th, 2017 at 08:50 | #28

    GrueBleen – yes, I have heard of Trump, but would not like to be distracted from the more fundamental subject matter of our discussion.

    On that, in view of the many contradictions or exceptions possible to “put people first”, would not the answer be in “put the truth (or tangible facts) first ?

    On the truth I am almost embarrassed to draw attention to the reality, that since life as an energy consuming process, at least in its growing phase cannot continue without a profit over the energy consumed, or adequate energy reserves for that having been accumulated.

    If that is understood and not refuted as wrong or dubious, then according to the natural laws of physics, exactly the same applies to growth and decline on the economics of human welfare, which regardless of our ideologies and legislations, are ultimately all subject to the same natural laws of physics, which cannot be changed by human ideology and legislation.

    In other words – before any other needs can be met satisfactorily in a sustainable way – THE BASICALLY CRUCIAL NEED BEFORE ANY OTHERS IS PROFITABILITY IN OUR ENERGY CONSUMPTION.

    Without it – some people die of starvation until profitability has been restored again for supply to catch up with demand – or a state of economic stagnation has been at a “hand-to-mouth” level of poverty by all, with no profitability (permitted?) for progress, anywhere.

    If that is true, then would not the most successfully altruistic policy to enable “putting people first” be, in making sure, that the crucial factor of profitability over energy consumed is “part and parcel” of each individual’s life in the form of a basic personal “profit” or savings rate at the expense of consumption potential is built into our taxation system ?

    Would that not be acceptable to both the compassionate “Left” and “Right”?

  29. GrueBleen
    February 8th, 2017 at 16:40 | #29

    @Jens Meder

    yes, I have heard of Trump,

    No, I don’t think you have, otherwise you might have recognised this:

    1. Put America first / Put people first.
    2. Make America great again / Make humanity great again.

    You see, that’s called “ironic spoof”, not intended to be taken seriously.

    Would that not be acceptable to both the compassionate “Left” and “Right”?

    Now you’re using the terms “Left” and “Right” yourself and you haven’t explained what you mean by either of them. Do you intend to explain or am I just supposed to guess ?

    But just for interest’s sake:

    in view of the many contradictions or exceptions possible to “put people first”, would not the answer be in “put the truth (or tangible facts) first ?

    No, it wouldn’t: putting “truth or tangible facts first” is a MEANS not an END. It is simply a way in which we can work towards putting people first. The only END is to put people first and we should use any MEANS available to achieve that.

    Once again: if people are the only ‘ends in themselves’ then nothing else can be an ‘end in itself’.

  30. February 8th, 2017 at 21:21 | #30

    Aah, GrueBleen – by you apparently preferring any means available towards the end to be achieved, are you not aware of the inhumane means justified in the Soviet Union to achieve
    Socialism – and failing in that, because their ideological means of “production for needs, not profits” ignored the basic fact that profitability is the priority nee before any other needs can be met in a sustainable way after all the reserves have been consumed ?

    Is it not plain common sense, that any means to “put people first” regardless – or in conflict – of physical realities – is in danger of ending in disaster ?

    But my apologies – if your points 1 and 2 were supposed to be jokes.

    However, perhaps the following might help you to differentiate between Left and Right, in that the Left’s priority is in communal capitalism before individual capitalism, and the Right’s priority is in individual capitalism before communal capitalism.
    Propositions that apply to the whole nation in proportional equality are clearly of the Center and cannot be placed to the Left or Right of it.

    “Co-operative capitalism” might belong to the Center even though I think that based on individual share ownership with easy withdrawal options, it is more flexible and “participant friendly” than a communal co-operative with its administrative rigidities.

    If that is not good enough for you, GrueBleen, the please describe the proposition(s) that you find hard to place.

    But what sense is there in the statement, that “if people are only ‘ends in themselves’ then nothing else can be an “end in itself’ ?

    Surly say buying a house can be “an end in itself” ?

  31. GrueBleen
    February 8th, 2017 at 23:22 | #31

    @Jens Meder

    …by you apparently preferring any means available

    Hmmm. Now that’s the kind of distortion and misunderstanding that just ruins a nascent interlocution.

    the inhumane means justified in the Soviet Union

    And this is a clear case in point: if the means are “inhumane” then, by definition, by logic, by common sense and by any measure of reading comprehension, then those means can’t be a way of putting people first, can they. Putting “people” first. not Soviet Commissars. Can you grasp the subtle difference ?

    …the following might help you to differentiate between Left and Right,

    .
    No, I don’t want to “differentiate” between “Left” and “Right”, I want to know who you are talking(writing) about. Is that so totally recondite that it is incomprehensible to you ? I’ll try one last time: when you say “Left” (or “Right”) I want you to name names of people or oraginsations. So, for example, you might say “When I say Right I mean Cory Bernardi and his Australian Conservatives.”; “When I say Left I mean ??? (well, who do you mean ?)”

    Surly say buying a house can be “an end in itself” ?

    You mean people just buy houses in order to just own them ? They don’t live in them ? Houses aren’t a means to the ends of shelter, safety, capability for cooking, sleeping, having family time ? Or maybe just to rent out to others so as to make some money. People, you want to tell me, don’t buy houses to make any use of them, just as “ends in themselves” ? You must know a really weird set of people, Jens.

  32. February 9th, 2017 at 07:51 | #32

    GrueBleen – does not your statement “The only END is to put people first and we should use ANY MEANS available to achieve that” mean clearly, that you (unscientifically?) urge any means with no concern nor knowledge of the consequences of those means to “put people first” ?

    The Soviet Union only praised their means to achieve their end of “from everybody(the people) according to ability, to everybody (the people) according to needs”, only enemies of the Soviet Union accused them of inhumane means.

    I don’t think there is practical value in arguing whether house ownership is an end or a means to a variety of ends, because does not human life actually proceed in steps from one priority (end?) to the next ?

    On “Left” or “Right” give me the names, organizations and propositions – or statements of mine – that you cannot place, and I will see if I can place them for you with explanations on what grounds they are to be placed left, right or center.

  33. GrueBleen
    February 9th, 2017 at 18:01 | #33

    @Jens Meder

    …clearly, that you (unscientifically?) urge any means with no concern nor knowledge of the consequences of those means to “put people first” ?

    That would have to be the most absurd statement aimed at me for quite a while. Really, Jens, wake up and smell the chloroform, mate.

    On “Left” or “Right” give me the names, organizations and propositions – or statements of mine – that you cannot place, and I will see if I can place them for you

    This is almost as ridiculous. What I have asked – simply, clearly, repeatedly – is that when you use the terms “left: or “right” that you tell me who you are talking about. If you can’t understand that very simple statement, then we have nothing further to communicate about.

  34. February 10th, 2017 at 13:54 | #34

    O.K. GrueBleen.
    As long as anyone – e.g. Cory Bernardi – is and remains a member of a private enterprise liberal or conservative party, then he is “of the right” regardless what he/she might have said, and as long as e.g. you are a member of the “socialistic” or govt. capitalism preferring party (or the Fabian Society?),you, I, or anyone – would be of the left.

    However – if no party or other left/right association affiliation of a person is known – and it is not clear whether the statement made is on the social capitalistic or private capitalistic side – then it clearly qualifies as possibly being centrist – i.e. universally capitalistic – meaning 100% of citizen participation in private capitalism in a mixed economy including all imaginable varieties of it, e.g. govt., cooperative, corporative etc., etc. capitalism.

    I belong to the all-inclusive “Center”, which fits in very well with mixed capitalism based progressive Social Democracy.

    Is that not now a clearly understandable straightforward answer to your (simple?) question, GrueBleen, and if not, then why ?

  35. GrueBleen
    February 10th, 2017 at 14:32 | #35

    @Jens Meder

    You truly are a gem, Jens.

    Now what I want you to do, is sit down very comfortably, with a hot or cold drink (depending on whether you’re in the northern or southern hemisphere or between the Tropics, and try very hard to analyse what you’ve said above (#34) and then describe clearly just exactly how what you’ve said bears even a remote connection with my question.

    To help you, I will try once again:

    What I have asked – simply, clearly, repeatedly – is that when you use the terms “left: or “right” that you tell me who you are talking about.

    Capiche ?

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