Tertiary education should be universal, non-profit and free

July 28th, 2017 7 comments

Last week, I spoke at the Australian Conference of Economists in a panel on Higher Education Policy. My talk was covered by John Ross of The Australian Higher Education Section which, unlike much of the Oz, seems still to be more interested in accurate reporting than political pointscoring. I talked to Steve Austin of ABC Radio Brisbane http://www.abc.net.au/radio/brisbane/programs/mornings/mornings/8733698

To sum up my main points

* As a society we should set a goal of providing appropriate tertiary education (that is, post-school through university or TAFE) for all young people. Instead, policy is still heavily influenced by nostalgia for the days when working class kids (actually, just males) could leave school at Year 10 and be apprenticed to a trade, middle class kids could leave school at Year 12 and get a nice safe job in a bank, and universities were the preserve of an elite, either smart enough to jump the hoops to get in or with parents rich enough to pay

* The provision of a universal publicly funded service like this should not be entrusted to for-profit firms, as has been shown by the VET FEE-HELP disaster

* We should abandon the market liberal rhetoric of choice, competition and incentives and instead focus on professionalism and a service ethos.

* Once we get close enough to the goal of universal tertiary education, we might as well finance it through the tax system as we do with schools, and develop some special policies for those who, for one reason or another, miss out. I’ll post more on this sometime.

Categories: Economic policy Tags:

Most Australians ineligible for Parliament?

July 26th, 2017 44 comments

A few weeks ago, I commented adversely on challenges by the ALP to the eligibility of government minister David Gillespie to sit in Parliament, on the basis that he owned a block of shops one of which was leased to an Australia Post branch. Since then, we’ve seen the resignations from Parliament of Greens Senators Ludlum and Waters, and from Cabinet of Senator Canavan. Eligiblity of others remains in question. This has led me to change my view. Instead of trying to make the best of this disastrous system, we should do away with it by constitutional amendment. The only way to make this happen is to enforce the existing provisions in their full absurdity.

According to the ABC, 49 per cent of Australians were born overseas or had a parent born overseas. Add to that everyone employed in the public sector “an office of profit under the Crown”, or who does business with the Commonwealth, and it’s conceivable that a majority of Australians are ineligible to run for election to Parliament. And, while Antony Green thinks it unlikely that pensioners are ineligible, the report he quotes says “However, the meaning of the phrase is not absolutely clear and there are divergent views about its effect.” Speaking personally, although I’ve never seriously considered running for election, I’d also never considered the possibility that, as an academic and ARC Fellow, I’d be ineligible. But it appears that I may be.

Of course, there are steps that can be taken to fix this problem for any individal, but we need a systemic solution.

Obviously, the authors of our Constitution never intended any of this. At the time, there was no separate Australian citizenship, so any British subjec was eligible, which would have solved the problems faced by Ludlum and Waters. And the public sector was much smaller, so the other constraints weren’t nearly as problematic. Age pensions hadn’t been introduced, so the provision against pensioners was meant to exclude personal pensions, granted by the monarch direclty

On the other hand, while the framers guarded against the sources of corruption evident to them, they never anticipated the problems we have now. It’s OK for political parties to be in hock to foreign donors, for someone who has renounced his Australian citizenship to control most of our media, and for careerist politicians to start out as hack staffers, give out favors in office, and cash them out afterwards. But if you don’t do the paperwork to cancel potential citizenship in a country you’ve never seen, you’re out on your ear.

At this point, the situation is so bad that “worse is better”. The best outcome would be for another dozen or two members of Parliament, from all parties, to be thrown out. Then we might get the unanimous support we would need to fix the absurdities of Section 44. Of course, that wouldn’t do anything about the real problems, but at least we would be free of this anti-democratic nonsense.

Categories: Oz Politics Tags:

A trolley problem

July 26th, 2017 8 comments

I’ve generally been dubious about trolley problems and similar thought experiments in ethics. However, it’s just occurred to me that an idea I’ve tried to express in the economistic terms of opportunity cost, without convincing anybody, might be more persuasive as a trolley problem. So, let’s start with the standard problem where the train is about to kill ten people, but can be diverted onto a side track where it will kill only one.

In my version, however, there is a second train, loaded with vital medical supplies, which is about to crash. The loss of the supplies will lead to hundreds of deaths. You can prevent the crash, and save the supplies, by diverting the train to an alternative route (not killing anybody), but you don’t have time to deal with both trains. Do you divert the first train, the second train, or neither?

Hopefully, most respondents will choose the second train.

Now suppose that the first train has been hijacked by an evil gangster and his henchmen, who will be killed if you divert it, but will otherwise get away with the crime. As well as the gangsters, the single innocent person will die, but the ten people the gangster was going to kill will live.

The impending crash of the second train isn’t caused by anybody in particular. The region it serves is poor and no one paid for track maintenance. If the train doesn’t get through, hundreds of sick people will die, as sick poor people always have, and nobody much will notice.

Does that change your decision?

Read more…

Categories: Philosophy Tags:

A couple of quick links on inequality

July 25th, 2017 5 comments

The issue of inequality is finally attracting some attention. I have a piece today in Inside Story, an update of a post here from 2012, on inherited wealth. Also, Greg Jericho in The Guardian and Bernard Keane in Crikey (paywalled) refute the attempts by the government and its apologists to claim that inequality is not growing in Australia. I’ll have a bit more on this soon, I hope.

Categories: Economic policy Tags:

Monday Message Board

July 24th, 2017 36 comments

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.

Categories: Regular Features Tags:

Can we get to 350 ppm? Yes, we can

July 18th, 2017 27 comments

In a recent post, I made the optimistic argument that, despite all the obstacles thrown up by rightwing denialism, the world is on track to reduce CO2 emissions to zero by 2050, on a trajectory that would hold atmospheric concentrations of greenhouse gases below 450 ppm. On current models, that gives us a 67 per cent chance of holding the long term increase in global temperatures below 2 degrees. Warming of 2 degrees would not be cataclysmic for humanity as a whole but it would be a disaster for many people and also for vulnerable ecosystems such as coral reefs. That’s why 350.org wants to reduce concentrations to 350 ppm from current levels above 400 ppm.

Is that even possible?
And, what would it mean for global warming?

In this post, I’ll argue that the answer to the first question is definitely yes. I’m going to start with the assumption (based on this post) that we can reduce emissions from fossil fuels to zero by 2050, and keep concentrations below 450 ppm at that point. What are the options to reduce concentrations over the following fifty years? In the absence of some new technological fix (not implausible, but there’s nothing in sight as of 2017), there are three main possibilities

* Reducing methane emissions and concentrations. Methane emissions arise mainly from agriculture (paddy rice and ruminants), with some possible addition from fracking. It appears feasible, though not trivial, to greatly reduce these sources at fairly low cost. And because methane has a short residence time, a reduction in emissions will lead fairly rapidly to a reduction in concentrations. The conversions are very tricky, but the radiative forcing associated with methane is currently about 0.5 watts, compared to 1.94 for CO2. So, if methane concentrations were reduced by 40 per cent, that would be equivalent to a 10 per cent reduction in CO2, or about 40 ppm.

* Natural absorption. Only around 50 per cent of the CO2 we emit (the so-called atmospheric fraction) ends up as increase in atmospheric concentrations, with the rest being absorbed by oceans. After that initial addition to sink, CO2 stays in the atmosphere for a long time. However, there is still some additional absorption by sinks. Yale Climate Connections suggests that around 50 per cent is absorbed in 50 years, and around 70 per cent in 100 years. So, by 2100, an additional 20 per cent or so of the CO2 emitted around now will have been absorbed by sinks. A rough estimate would be 0.2*(450-280) or 35 ppm, where 450 is the peak concentration and 280 the stable pre-industrial level. Of course,this is far from an ideal solution, since CO2 contributes to acidification of oceans and therefore to coral reef decline.

* Reforestation and other land use changes. Land use change is currently a big net contributor to global warming, but a systematic program of reforestation could turn this around. The potential has been estimated at 85 ppm.

Against these possibilities, there is currently a net cooling effect, equivalent to around 50 ppm, from aerosols associated with air pollution. Hopefully, pollution will be reduced over the coming century, but that makes the task of stabilizing the climate a bit more difficult.

A question I haven’t yet been able to find a good answer on is: how much warming would a trajectory peaking at 450 ppm and declining to 350 ppm ultimately produce? If anyone can point me to a good source, that would be great.

Finally, at least some of the pollutants we’ve emitted over the past century will, on our current understanding, stay there for hundreds or thousands of years, leading to long term problems of sea level rise. But if we can get to 2100 without destroying the planet through climate change or nuclear warfare, I’m sure our great-grandchildren will work out some way of cleaning up what’s left of our mess.

Categories: Environment Tags:

Sense and senselessness in transport policy

July 18th, 2017 31 comments

I’ve been doing various pieces of work on transport. Here’s a quick update:

* I’ll be speaking at a one-day seminar organised by the Institute for Sensible Transport in Sydney on 8 August. It should be a good event for those with a professional interest in road pricing and related topics.

* For those with a general interest, I have a section over the fold from my book-in-progress, Economics in Two Lessons. Comments and criticism much appreciated.

* While I was a Member of the Climate Change Authority, I put a lot of work into a report the Authority did on vehicle fuel efficiency standards. With the rejection of just about every other policy measure to reduce CO2 emissions in Australia, this was the government’s last chance to do something useful. Naturally, Turnbull and Frydenberg went to water the moment the denialists who dominate the LNP raised an objection. Perhaps, now that the laws of mathematics have been subordinated to Australian law, Turnbull can solve our problems by simply decreeing a change of sign, so that an increase in emissions becomes a decrease.

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Sandpit

July 17th, 2017 5 comments

A new sandpit for long side discussions, conspiracy theories, idees fixes and so on.

Categories: Regular Features Tags:

Monday Message Board

July 17th, 2017 8 comments

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.

Categories: Regular Features Tags:

Census crowdsource (repost)

July 16th, 2017 8 comments

In 2012, I crowdsourced an analysis of the census results, looking at the extent to which the increase in religion was driven by changes in stated affiliation from religious to non-religious, as opposed to the demographic replacement of older more religious cohorts by younger, less religous ones. A couple of wrinkles on this

* I didn’t mention immigration last time. It appears (unsurprisingly) that those born overseas are more likely to be religious, but less likely to be Christian, than the Australian born.

* As the ABS notes

The religious pattern of those under 18 is most similar to the 35-49 year olds, suggesting the form may be completed with their parents’ beliefs.

It seems likely that when they report for themselves, these young people will be more like the 19-34 age group. It’s hard to say whether we should call this an affiliation change or a cohort effect.

I’d like to ask again for a crowdsourced analysis. It may be useful to read the comments thread to my previous request.

Read more…

Categories: Life in General Tags:

Are the Nationals a political party?

July 15th, 2017 15 comments

I’ve made this point before, but I’m constantly reading articles about the rising share of “protest” votes going to “minor parties” in which the set of minor parties excludes the National Party. The reason is, of course, that the Nationals are a long-established party which, with a few state-level exceptions, operates in permanent coalition with the Liberals.

But, for all practical purposes, the same is true of the Greens. Roughly speaking, Labor and the Greens are in the position the Liberals and Nationals (and previously the Country Party) were for most of the 20th century. They fight three-cornered contests, often bitterly, and do a lot of agonising about preference swaps, coalitions and so on. But, when push comes to shove in terms of forming governments, they almost always line up together, whether in a coalition, with a formal agreement, or with informal support.

The most important difference between the two is that the Greens get more votes from a wider range of electorates. The difference that drives the spurious analysis of “protest parties” is that the coalition between Labor and the Greens is less formal and more fractious than that between the Liberals and Nationals.

If you count Labor and the Greens as a coalition, then the rise of protest parties in Australia appears primarily as a crackup of the political right. We’ve seen a profusion of rightwing protest parties, with only
the Xenophon group in the centre, and nothing much at all on the left. That differs from the situation in some other countries, where social democratic parties have embraced austerity and collapsed (Greece, Netherlands) or where the established leadership has been pushed aside (UK and possibly soon US also). I have some ideas about this, but I’ll have to write about them later.

But, coming back to the main point, a consistent analysis should treat both the Nationals and Greens as minor parties, or else neither of them.

Categories: Oz Politics Tags:

Technology to the Rescue ?

July 12th, 2017 38 comments

There’s been a fair bit of buzz about an article in New York Magazine with an apocalyptic picture of climate change over the next century. I’ll for a more complete response later. But as it happens, I was already thinking about a much more optimistic post.

From the Climate Change Authority, of which I was a Member until recently, here’s a set of emissions trajectories consistent with a 67 per cent probability of limiting warming to 2 degrees.

There’s a pretty good case to be made that we are on the blue trajectory, and that, with decent political outcomes, we will be able to go below it and hold warming to the Paris aspirational target of 1.5 degrees. That would still have plenty of negative effects, for example on coral reefs, but it would not be an existential threat to humanity.

The points that are critical in the blue trajectory are a peak in emissions, right about now and a drop to zero net emissions by 2050. The first looks to have been achieved. As for the second, we are already seeing commitments to this goal from developed countries and jurisdictions, and there’s every reason to think it can be achieved at low cost.

As an economist, this is about the outcome I would have expected given a global commitment to an emissions trading scheme with a carbon price on a rising trajectory to $US100/tonne or so. In fact, we’ve seen nothing of the kind. There has been no real global co-ordination, and where carbon prices have been imposed, they have been low and limited in scope.

Instead, we’ve had a series of favorable technological surprises of which the most striking have been the plummeting cost of solar photovoltaics, and advances in battery technology allowing both low-cost electricity storage and affordable electric vehicles. There’s no reason to think these advances have run out, or that any of the remaining problem areas (air transport, cement manufacture and so on) will prove insuperable.

Read more…

Categories: Economics - General, Environment Tags:

Monday Message Board

July 10th, 2017 5 comments

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.

Categories: Regular Features Tags:

Not the way to bring down a government

July 7th, 2017 31 comments

According to the Sydney Morning Herald, Labor is launching court action with the objective of having a government minister disqualified from holding his seat in Parliament.

The opposition believes Assistant Health Minister David Gillespie may have an indirect financial interest in the Commonwealth – grounds for disqualification from office under section 44(v) of the constitution [which bans anyone who “has any direct or indirect pecuniary interest in any agreement with the Public Service of the Commonwealth”

As revealed by Fairfax Media in February, the Nationals MP owns a small suburban shopping complex at in Port Macquarie and one of the shops is an outlet of Australia Post – a government-owned corporation.

This is an absurd technicality, and I hope the High Court throws the case out. The Parliament is full of people on both sides whose main interest in holding office is in building up contacts for their future careers as lobbyists, bank sinecurists or both. If we can’t do something about this disgraceful situation, the idea of disqualifying someone for an obviously honest transaction with no potential for corruption adds insult to injury.

Categories: Oz Politics Tags:

My latest weekly email

July 7th, 2017 1 comment

The seventh in my (almost) weekly email series is over the fold.
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Categories: Regular Features Tags:

Expertise and punditry (updated)

July 6th, 2017 19 comments

I concluded my post “Against Epistocracy” with the question “Who gets to decide who is well-informed? And who gets to decide who gets to decide?”. This is, I think, a fatal flaw in any system proposing to replacing democracy with rule by a well-informed elite, or any kind of putative aristocracy. But even in a democratic system, we have to make decisions about who should decide things. In many cases, we would like to call on expert advice, and that brings us back to the question “who, if anybody, is an expert on a given topic”. I don’t have a complete answer, but I think it’s helpful to distinguish between experts and pundits or, better, between expertise and punditry.

Update: I just saw this review of The Death of Expertise: The Campaign Against Established Knowledge and Why it Matters by Tom Nichols which is obviously relevant. A crucial requirement for a successful defence of expertise is that we avoid defending authority based on mere punditry.
Read more…

Categories: Politics (general) Tags:

Governments are buying up where the market has failed. Is this the end of privatisation?

July 5th, 2017 8 comments

That’s the title of my latest in The Guardian. The write-off sums it up nicely.

What we are seeing is the inevitable chaos that follows the collapse of a dominant orthodoxy. But we shouldn’t see it as a new dawn of socialism

Categories: Economic policy Tags:

Sandpit

July 3rd, 2017 15 comments

A new sandpit for long side discussions, conspiracy theories, idees fixes and so on.

Categories: Regular Features Tags:

Monday Message Board

July 3rd, 2017 5 comments

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.

Categories: Regular Features Tags:

Adani: trouble on all fronts

June 30th, 2017 11 comments

My latest report: The Economic (non)viability of the Adani Galilee Basin Project

and, news that Adani is blending more domestic coal in the fuel for its Indian power plants to cut costs. That makes high-ash Carmichael coal even less appealing.

Categories: Environment Tags:

Weekly email #6

June 27th, 2017 2 comments

Here’s my latest weekly email. If you want to be added to the recipient list email me at [email protected]

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Categories: Regular Features Tags:

Murray-Darling Plan Doomed to Fail

June 26th, 2017 28 comments

That’s the conclusion of a recent depressing report from the Wentworth Group. There is, of course, an “unless”, but having spent decades of my professional life on this issue, I can’t say I’m hopeful. Certainly, there’ll be no progress under the current government, as this issue is now part of the culture wars. Whether Labor will do any better, I don’t know. Here’s the comment I provided to the Australian Science Media Centre.

The depressing outcomes reported by the Wentworth Group are the inevitable result of the policy decision to abandon buybacks, that is, the voluntary purchase of water entitlements from irrigators who are willing to sell those entitlements. Buybacks are by far the most cost-effective method of securing additional water for the environment as well as providing a direct benefit to farmers, who can use the proceeds to reinvest in dryland agriculture or to assist a transition out of agriculture. The abandonment of buybacks, combine with a failure to address the needs of irrigation-focused communities in the Basin represents the worst of all policy worlds.

Categories: Environment Tags:

Monday Message Board

June 26th, 2017 11 comments

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.

Categories: Regular Features Tags:

A new New Deal?

June 25th, 2017 4 comments

I’ll be talking to the Fabian Society in Melbourne on Wednesday night, looking at the failure of neoliberalism and options for a new “New Deal”.

Categories: Economics - General Tags:

A Potemkin HQ? (updated)

June 23rd, 2017 10 comments

A few weeks ago, Queensland Premier Palaszczuk and Adani’s Australian head, Jeyakumar Janakaraj opened the company’s new Regional Headquarters in Townsville. It was announced that “Townsville will benefit from about 500 jobs in Adani’s regional headquarters and about half of those should happen within weeks”. “Within weeks” can mean anything, I guess but the obvious interpretation is that things ought to be happening about now.

If so, it’s hard to detect from afar.

Update A Townsville reader informs me that Adani’s sign is still adorning its new HQ, though it’s unclear whether there’s anything more than a sign. Also, Adani has reannounced a jobs portal that has been up on its website since January.
Read more…

Categories: Oz Politics Tags:

Indigenous rights and the Adani Project

June 22nd, 2017 5 comments

As a part of my work on the Adani mine-rail-port project, I’ve been providing economic input to a project with Kristen Lyons and Morgan Brigg at UQ aimed at supporting the Wangan and Jagalingou Traditional Owners Family Council (W&J) in their attempts to assert control over their traditional land. So far we’ve produced an initial report, a summary of which has appeared in The Conversation.

My general aim in this work is to examine more sustainable economic models than coal mining for both indigenous and non-indigenous people in the North Queensland region. More on this soon, I hope.

Categories: Oz Politics Tags:

Weekly email #5

June 18th, 2017 2 comments

Here’s my latest weekly email. If you’d like to be added to the list, email me at johnquiggin1 at mac dot com

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Against epistocracy

June 17th, 2017 43 comments

I’ve finally been got around writing something about US philosopher Jason Brennan’s arguments for “epistocracy”, that is, restricting voting to people who are well-informed about the issues. For a long time, I assumed that such an idea would be ignored, and fade into oblivion, as most academic ideas do. But it’s popped up here in Australia. And, with democracy under challenge all around the world, it’s obviously not enough to say that it’s self-evidently a Good Thing that everyone should have the right to vote, and exercise it. So, I’ll try to offer some more specific objections.

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Categories: Politics (general) Tags:

OECD vs Globalisation

June 16th, 2017 11 comments

Not quite, but the OECD has finally recognised that globalisation isn’t currently working to deliver improved living standards for everyone, a fact implicit in the title of its latest report Making Globalisation Work: Better Lives for All, I have a piece in Inside Story, headlined: The OECD joins the backlash against unfettered globalisation looking at a recent report they’ve issued. The subheading is

But can an organisation that has promoted a globalised world economy take on the massively powerful finance sector?

(Hint: Probably not).

Categories: Economic policy Tags:

Finkel

June 16th, 2017 11 comments

I’ve been flat out for the last couple of weeks, and haven’t had time to post. But I’ve finally found enough time to read the Finkel Review into the Future Security of the National Electricity Market (NEM). There are four inter-related points that come out of the report

1. The NEM has failed in its own terms, that is, with respect to the objective of providing reliable and affordable electricity. The Review recommends a variety of tweaks to the market rules, but the core measure is a shift to central planning by a new Energy Security Board, which effectively overrides the multiple existing market bodies. Not surprisingly, given the political environment the Review ignored my submission calling for renationalization of the Grid, but the logic is the same.

2. We need a carbon price, in one form or another, if we are to reduce emissions in line with our commitments. Given that all economy-wide options have been ruled out, we may as well start with an electricity specific policy. Within electricity, the existing Renewable Energy Target is a crude kind of price mechanism, with only two prices, one for renewables and the other for non-renewables. But, if we tweak that a bit, we can replace the largely irrelevant notion of “renewability” with emissions-intensity, and we have something like a carbon price. I pointed this out a couple of years ago. The Clean Energy Target Finkel Review doesn’t quite get there, but it goes most of the way.

3. The only way to get lower wholesale electricity prices is to expand renewables and let the owners of coal-fired power station take a corresponding hit to their profits.

4. Policy uncertainty has been at least as big a problem as bad policy. This was most obviously true of the Abbott government’s attacks on the RET, which stalled investment in renewables, while doing nothing for coal. Abbott is correctly blamed for many of our current problems. The implication is that a bipartisan compromise is better than holding out for the right policy, only to see it reversed after the next change of government. Whether that judgement stands up remains to be seen. If Turnbull does indeed face down Abbott, Abetz and the rest, and can reach an agreement with Labor, the arguments of the Review will be vindicated. And, with the denialists sidelined, it will become obvious that we need and can easily achieve more ambitious targets.

Categories: Economic policy, Environment Tags: