I’m travelling, so posting will be light to non-existent for a while yet. In the meantime, another Monday Message Board. Post comments on any topic. As usual, civilised discussion and no coarse language. Lengthy side discussions to the sandpits, please.
There’s been a lot of excitement about the discovery of two Earth-like[^1] planets, a mere 1200 light years away. Pretty soon, I guess, we’ll be thinking about sending colonists. So, I thought it might be worthwhile to a little bit of arithmetic on the exercise.
I’m going to assume (generously, I think) that the minimum size for a successful colony is 10 000. The only experience we have is the Apollo program, which transported 12 astronauts to the Moon (a distance of 1 light second) at a cost of $100 billion or so (current values). So, assuming linear scaling (again, very generously, given the need to accelerate to near lightspeed), that’s a cost of around $100 trillion per light-second for 10 000 people. 1200 light-years is around 30 billion light-seconds, so the total cost comes out roughly equal to the value of current world GDP accumulated over the life of the universe.
Even supposing that technological advances made travel possible over such distances possible, why would we bother. By hypothesis, that would require the ability to live in interstellar space for thousands of years. A civilisation with that ability would have no need of planets.
[joke alert on] On behalf of my fellow Australians, I’m going to make a counter-offer. For a mere $10 trillion, we can find you an area of land larger than a typical European country, almost certainly more habitable than the new planets, and much closer. We’ll do all the work of supplying water and air, build 10 000 mansions for the inhabitants and guarantee a lifetime supply of food. I’m hoping for a spotters fee of 0.01 per cent.[joke alert off]
On a related point, what should we be wishing for here? The fact that no-one has sent a detectable signal in our direction suggests that intelligent life forms similar to humans are very rare. If habitable planets are very rare, then this is unsurprising – interstellar distances preclude both travel and any kind of two-way communication. If on the other hand, the emergence of intelligent life is common, then the evidence suggests that its disappearance, through processes like nuclear war, must also be common.
[^1] Where Earth-like means somewhere between Venus-like and Mars-like.
The Final Report of the Queensland Commission of Audit, headed by Peter Costello, has been released. It largely abandons the claims made in the Interim Report, suggesting that the state’s fiscal problems are the result of irresponsibility on the part of the previous government. To its credit, the Commission identifies the real problem, namely, the long-term tendency for the share of expenditure going to human services such as health and education to rise over time. Since these services are largely provided or funded by governments, they can’t be provided, on the scale people would like, without increasing taxation.
Unfortunately, that’s where the credit stops. The core of the problem, identified by William Baumol in 1967, is that, for obvious technological reasons, productivity in these services tends to grow more slowly than in other sectors, most notably goods-producing sectors. The Commission’s proposed solution is breathtaking in its simplicity – if we could raise the rate of productivity growth in the human services sector, the problem would go away. Yes, and if wishes were horses, beggars would ride.
Back in the early days of this blog, I was working on the idea of a new political dictionary, and made a start with a “Word for Wednesday” series. One of them is relevant to this comment from Megan, about whether we should put scare quotes around the word “reform”, to describe policies, advocated as beneficial reforms, but which we believe to be harmful. My general practice on this blog is not to use scare quotes, and I explain why.
As Raymond Williams points out in his excellent little book Keywords, from which I got the idea for this series, reform originally meant ‘restore the original form’ of something. In particular the Reformation was supposed to sweep away the abuses of the Papacy and restore the church to its original purity. As this example indicates, the worldview associated with this usage was one of decline rather than progress. The best one could hope for was to get back to things as they were in the good old days. This view was dominant in Western thinking from Plato to the 17th century.
From the 18th century onwards, reform underwent something of a reversal, since it now typically implied forming something new. But since the associated worldview was now one of progress, the assumption remained that reform entailed change for the better.
From the 18th century to the 1970s, the term reform was typically used to describe policies favored by the moderate left, in opposition to advocates of revolutionary change on one side and of conservatism and reaction on the other. From the 1970s to the end of the 20th century, though, the direction of policy change was reversed, with the rise of neoliberalism. However, the term reform continued to be used, even when the policies it described consisted of the dismantling of earlier reforms.
As a result, critics of neoliberal policies have frequently resorted to the use of “scare quotes”, as in my recent reference to ‘workplace reform’, or to similar alerts like “so-called”. While the automatic assumption prevails that the term reform applies only to desirable changes, such devices are necessary.
Where it’s feasible though, the best approach is to define reform as “any program of systematic change in policies or institutions” and make it clear that there is no implication of approval or disapproval.
I’ve been meaning to post about the Australian Energy Market Operator’s report on the feasibility of a 100 per cent renewable electricity supply system for Australia (H/T commenter Ben). In the meantime, Brian Bahnisch at LP has done a detailed summary, so I’ll refer you there and make a few points of my own.
First, this study should kill off, once and for all, claims made here and in many other places (notably, at Brave New Climate) that the intermittency of renewable electricity is an insuperable problem. The AEMO is the body that manages the electricity market on a minute-to-minute basis, so it has the expertise to assess this claim, unlike the many amateurs who have tried their hands. And, since it might have to do the job, it has no reason to understate the difficulties of a renewables-based system.
Second, the estimate cost of $111 to $133 per megawatt-hour represents an increase of $60-80/MwH on current wholesale prices, or 6-8c/Kwh on retail prices. That’s much less than the increase we’ve seen thanks to the mishandling of electricity market reform. If we wound back those costs, we could actually end up with both 100 per cent renewables and cheaper electricity.
Third, although the study envisages a role for electric vehicles, it doesn’t present a full-scale program for decarbonization. But once you have a scalable, fully renewable electricity supply, everything else is comparatively easy.
Finally, if we take Tony Abbott at his word in wanting direct action to deal with climate change, this report provides him with a blueprint. If we want to, we can eliminate the great majority of domestic CO2 emissions simply by mandating renewable technology and electric vehicles. The cost would be substantial in dollar terms ($250 billion for the electricity component). But, over a couple of decades, it would be a barely detectable deduction from growth in national income.
Update As it turns out, there’s a response at Brave New Climate from Martin Nicholson. Nicholson reports on a study of his own, in which nuclear is included in the mix. On Nicholson’s estimates, this substantially reduces capital costs, a point of which he makes a big deal. But obviously, renewables have much lower operating costs and Nicholson estimates the levelised cost for his system at $124/MWh to $126/MWh. As he says:
As this is in the middle of the AEMO range, wholesale prices are likely to be similar with or without nuclear
Given that very few current-generation nuclear plants have been built, cost estimates for nuclear are speculative. The obvious inference for Australia is that we should push along with renewables, and take a “wait and see” position on nuclear, observing developments in the UK, US, France and China. If they can deliver nuclear safely and at low cost, we can add it to the mix (say, after 2030).
Sadly, I think most of the BNC readership are locked into a position that nuclear must be the answer, which requires them to believe that renewables won’t work. Even a comprehensive demonstration that renewables can deliver a 100 per cent solution at a cost comparable with optimistic estimates for nuclear isn’t going to shift them.end update
fn1. This is part of a rhetorical manoeuvre aimed at pushing the conclusion that nuclear is the only feasible zero-carbon option. Once it’s admitted that 100 per cent renewable electricity is feasible, nuclear advocates need to present a case based on comparative costs. In the Australian context, it will be very hard to make that case, given the need to set up a complete nuclear infrastructure from scratch.
Crikey asked me to write 1000 words or so on my ideal budget. I didn’t respond exactly in those terms, looking instead at the strategy for the medium term. Crikey ran it today, and I’m doing the same (over the page).
A new sandpit for long side discussions, idees fixes and so on.
Another Monday Message Board. Post comments on any topic. As usual, civilised discussion and no coarse language. Lengthy side discussions to the sandpits, please.
Apparently, a new survey shows that Millennials (more precisely, US high school students interviewed between 2005 and 2007, and therefore born in the early 1990s) are lazy and entitled. More precisely, as textbook worker-consumers are supposed to, they would like nice stuff, but not if they have to work long hours to get it. I’m too bored to link to it, but you can easily find it.
The best that can be said for this kind of thing is that it relieves the monotony of boomer-bashing. Apart from that it is a repeat of the formulaic denunciation of adolescents that has been applied (in my memory) to Gen Y (insofar as this group differs from the Millennials) Gen X (Slackers), Boomers (hippies) and the Silent Generation (the original teenagers). Then there were the Lost Generation and so on back to the (apocryphal, I think) rant often attributed to Socrates. Only those who have the good fortune (?) to come of age in a time of full-scale war miss out on this ritual denunciation.
It’s time for another weekend reflections, which makes space for longer than usual comments on any topic. Side discussions to sandpits, please.
Ever since the Hawke government announced the “Trilogy” commitments in 1984, promising no increase in the revenue and expenditure shares of national income, Australian politics has been, in effect, a conspiracy of silence about the central issue of economic policy, that of the appropriate balance of private and public expenditure. The steady growth in demand for services like health and education has ensured that no reduction in the public sector share has been feasible, while the market liberal dogma enshrined in the Trilogy has prevented any increase.
In retrospect, it’s striking that Hawke’s commitment came just after the reintroduction of Medicare, funded (in part) by a levy on all incomes. Medicare’s success has made it politically untouchable. On the other hand, it has been assumed (though without much supporting evidence) that any increase in taxation (not matched by offsetting cuts) is politically impossible.
The Gillard-Swan government was, until yesterday, ruled by this doctrine. With their unfortunate habit of making categorical commitments out of aspirations, both Gillard and Swan had repeatedly ruled out a levy to fund the National Disability Insurance Scheme (by contrast, “conservative” state premiers like Newman were happy with the idea) But, as a recent Grattan Institute report has made clear, there is no way of meeting the needs for health and education without a substantial increase in revenue (as well as cuts in low-priority direct expenditures and tax expenditures).
So Gillard has announced a proposal for a 0.5 percentage point increase in the Medicare levy, raising $3 billion a year. Abbott has equivocated so far, but has stated his support for the NDIS, which leaves him no honest options except to go along.
If we could achieve consensus on paying for improved services through higher taxation in this case, we might finally have a serious debate about what, as a community, we are willing to pay for.
The full version of the Costello Commission of Audit Report has finally been released, along with the Newman government’s responses. As it turns out, the “Interim” report was the Commission’s last word on most of the big issues, such as the state’s debt position and fiscal outlook. The Final Report consists of
* A general discussion of the role of government, which is just a restatement of the market liberal orthodoxy of the 1980s and 1990s, proposing privatisation, competitive tendering and contracting and so on
* The specific claim that Queensland can deal with the problem of rising demand for health, education and similar services in coming decades by permanently raising the rate of productivity growth in those sectors.
* Detailed discussion of all areas of government activity.
Of these, the second is the important one. The fact that productivity grows more slowly in human services than in other sectors of the economy, and that this implies relative growth of the public sector, has been known since the work of Baumol in the 1960s. This pattern is unlikely to be changed by the kinds of measures being proposed by the Commission.
The Australia Institute has a report out making the point that the growth in the administrative and marketing costs of electricity companies, following the reforms of the 1990s, has added more to electricity prices than has the carbon price.
Also, the Centre for Policy Development has a nice piece on solar PV coming out soon. Look for it.
Finally, here’s a piece I wrote for the The Economic and Labour Relations Review in 2001. Conclusion over the fold. I think it stacks up pretty well, certainly compared to the gushing praise for reform that was commonplace at the time.
I appeared at a Senate inquiry into the Minerals Resource Rent Tax yesterday. Given the virtual certainty that the tax will be abolished after the election, I tried to focus on the future. Here’s my opening statement
A new sandpit for long side discussions, idees fixes and so on.
Thinking about Anzac Day, with the inevitable mixed emotions, I was struck by the resemblance of the Anzac legend to that of the Charge of the Light Brigade in the Crimean War – the same incredible bravery of ordinary men commanded by bungling leaders to undertake a doomed and futile mission.
There’s another, even more tragic, echo here. Both the Crimean War and the Gallipoli campaign arose from the same cause – the decline of the Ottoman Empire, and the struggle over its partition. But in the Crimean War, the British and French were on the side of the Turks against the Russians. In the Great War, the imperial alliances had shifted, and the Russians formed part of the Triple Entente, while the Turks were on the side of the Germans.
Whatever the justice of the Allied cause in the Great War as a whole, the war with Turkey was nothing more than a struggle between rival imperialisms. The British and French governments signed secret treaties with each other, and with the Russian Czar, promising to divide the spoils of victory. At the same time, they made incompatible promises of independence for the Arabs and of a homeland in Palestine for the Jews.
There are no consolations to be had here. The Great War did not protect our freedom, or that of the world. Rather, it gave rise to the horrors of Nazism and Bolshevism, and, within Turkey, to the Armenian genocide. The carve-up of the Ottoman empire created the modern Middle East, haunted even a century later by bloodshed and misery.
As we reflect on the sacrifices made by those who went to war nearly 100 years ago, we should also remember, and condemn, the crimes of those, on all sides, who made and carried on that war.
Lest we forget.
Back in the 1980s, there was a constant stream of international delegations to Wellington, seeking to learn from the “New Zealand miracle”, in which a group of radical free-market reformers turned around a sclerotic welfare state. While the results had yet to show themselves, everyone was confident that NZ would soon surpass Australia, where the political system threw up many more obstacles to reform. Everyone knows how that turned out. After 100 years of economic parity, NZ GDP per person has fallen to around 60 per cent of the Australian level. The gap closed a little when NZ abandoned radical reform (from the first MMP election to the end of the Clark Labor government) but is now widening again.
And, just in the last week, the intellectual foundations of austerity polices have been cut away with the discovery that the influential paper of Reinhart and Rogoff, predicting disaster when public debt levels exceed 90 per cent of GDP, was based on a coding error (not to mention some dubious statistical choices). That follows the demolition of the even more influential work of Alesina, Ardagna and other co-authors, some of which I criticised in Zombie Economics
Against this background, it’s truly bizarre to see the Australian right (IPA, CIS and Tony Abbott) presenting New Zealand as a model, on the basis that the budget has been returned to surplus. Apparently, it doesn’t matter that the economic outcomes have been consistently appalling, as long as the ideology is right.
I have a simple suggestion which I hope will appeal to everyone. Since the new NZ government came in, deluded Kiwis have been voting with their feet in large numbers. The resulting imbalance could be addressed if the CIS, IPA, Parliamentary Liberal Party and their keenest supporters moved across the Tasman to try out the marvels of free-market reform for themselves.
With the exception of an unnameable region bordering on the Eastern Mediterranean, posts on diet and exercise seem to promote more bitter disputes than any others. So, in the spirit of adventure, I’m going to step away from my usual program of soft and fluffy topics like the bubbliness of bitcoins, the uselessness of navies and the agnotology of climate denial, and tackle the thorny question of running vs walking.
Happily, and unlike, say climate science, this is a question on which you can find a reputable scientific study to support just about any position you care to name, and even some that appear to support both sides, so I’m just going to pick the ones I like, draw the conclusions I want, and invite you all to have it out in the comments thread. I’m also going to attempt the classic move of representing the opposing positions as extremes, relative to which I occupy the sensible centre.
There’s an important new report out from the Grattan Institute, which has received a fair bit of press (some of it rather off-point) for its prediction that, under current policies, Australian governments will need to find an additional 4 per cent of GDP (about $60 billion a year) over the next decade if they are going to meet new expenditure needs for health and education services and maintain a prudent fiscal surplus.
The options aren’t explored in much detail, but it seems clear that expenditure cuts (particularly the usual suspects like duplication and waste, “middle class welfare” and so on) won’t be enough, so more tax effort will be needed. The top priorities ought to be tightening up the income tax system and increasing income tax rates at the top. If that’s not enough, the next option (tough, but maybe necessary) is an increase in the rate of GST.
I’ll try to post in more detail soon, but I think Grattan gets the story right on most points, and their analysis will certainly help anyone who wants to take a serious look at Australain fiscal policy
At Crooked Timber, Henry Farrell points out that it is now exactly a decade (24 times 5 months) since Charles Krauthammer told us that
Hans Blix had five months to find weapons. He found nothing. We’ve had five weeks. Come back to me in five months. If we haven’t found any, we will have a credibility problem.
Despite being utterly and repeatedly wrong about Iraq, and many other things, Krauthammer is now, as he was then, a prominent columnist at the Washington Post.
What about our own Krauthammers? The leading candidate is surely Andrew Bolt, and a search through the archives finds him denouncing the Left saying, triumphantly “they were wrong”. Those attacked include Carmen Lawrence, Bob Brown, Robert Manne, Andrew Vincent and Paul Dibb. Here’s a typical example of Bolt’s vitriol
NO one tried harder to save Saddam than Greens leader Bob Brown, a notorious scaremonger, who claimed more than 100,000 Iraqi children would die in this war. He also quoted from a leaked UN report which predicted 900,000 refugees. In fact, hardly one Iraqi refugee has fled in four weeks.
Of course, Brown was right.
Bolt is pretty big on demands for retractions. So, has he ever apologized for this appalling, and utterly wrong, attack on the reputations of those who correctly predicted the disastrous outcomes of the Iraq war?
fn1. The News archive doesn’t seem to go back 10 years, so I’ve been using the Factiva database. Google found Bolt’s spray reproduced on the Free Republic (I haven’t heard anything of the Freepers for years, but apparently they are still going). I’d welcome any help with data sources, and also any suggestions for more absurd wrongness from 10 years ago. If there are enough good links, I might make this a regular feature
fn2. From the days of the Iraq debate, I can just imagine someone quibbling about Brown’s reference to “children” and demanding a source that specifies the ages of those who died as a result of this tragedy. Such quibbles, and their authors, will be treated with the contempt they deserve.
Another Monday Message Board. Post comments on any topic. As usual, civilised discussion and no coarse language. Lengthy side discussions to the sandpits, please.
According to a report in the Courier-Mail, Queensland Treasurer Tim Nicholls has just announced the sale of seven government buildings in the Brisbane CBD. This transaction has all the dodgy features we’ve come to expect from Queensland asset sales
* The buyers are “assorted funds managed by the [state-owned] Queensland Investment Corporation”. So, as often seems to be the case, we are selling assets to ourselves
* Nicholls says “the sale proceeds will be used to reduce state debt. The government will also save about $130 million in interest payments.” Of course, this is double counting – the whole point of reducing debt is to save interest payments. But what does the $130 million mean? It’s about 24 per cent of the sale price, so I’d guess it refers to savings of 6 per cent a year over the four years usual in forward estimates. But that’s a very short-term way of looking at transactions that will affect the public for decades to come
* The buildings will be rented back on set leases with fixed rent increases. So, we’ll also be renting them back from ourselves. Costs will mount over time, but the big increases will doubtless be outside the forward estimates. So, there might be net saving for the next few years, but there will be losses after that.
And of course, as Shadow Treasurer Curtis Pitt points out, selling assets without a mandate was exactly what this government (elected because of Labor’s mandate-free asset sales) promised not to do.
This Saturday, I’ll be at the Blackheath Philosophy Forum in the Blue Mountains, talking about the economic feasibility of social democracy.
That’s the title of my latest piece at The National Interest. The blurb sums it up pretty well. Under the efficient-markets hypothesis, a worthless digital currency should have never gotten off the ground.
A new sandpit for long side discussions, idees fixes and so on.
As has been true since 2010, our aspiring leaders seem to be determined to outdo each other in silliness this week. Since Julia Gillard will (with 90 per cent probability) be nothing more than a bad memory in a year’s time, while Tony Abbott will be an unavoidable reality, I’m going to ignore Gillard’s “Rob Peter to Pay Paul” aprroach to funding Gonski and talk about the National Broadband Network.
The Abbott-Turnbull proposal for a cutprice NBN has been an amazing success in clarifying issues that previously seemed too complex to be resolved. Until now, it’s been far from obvious how to assess the NBN – the complaint that we didn’t have a benefit cost analysis was obviously silly in the absence of any easy way of quantifying the benefits. But now that we’ve seen the alternative – a 25MBps network, dependent on Telstra’s failing copper network and non-existent goodwill, it’s obvious that the NBN is the only option that gives us any hope of keeping up with the steady growth in demand for information. The claim that individual subscribers can choose to upgrade to fibre-to-the-premises appears to have collapsed in the face of expert scrutiny. Instead, it seems, we’ll end up with lots of street-corner boxes, which will have to be ripped out and replaced wholesale when their inadequacy becomes apparent.
Given that he is going to win the coming election anyway, Abbott could greatly improve his chances of re-election in 2016 by admitting his mistake and going with the existing NBN plan, maybe with some cosmetic tweaks. As a bonus, from Abbott’s POV, Turnbull would have to eat a lot of humble pie.
The same is true for the other slogans on which he’s relied so far, like “Stop the Boats’ and “Axe the Tax”. Thanks to Labor’s implosion, he can afford to dump them now, and replace them with something more realistic – there’s no shame in changing policies before an election.
I don’t expect Abbott to take this unsolicited advice, but he could look at the cautionary lesson provided by Bligh, Gillard and NSW Labor among others, and consider carefully whether it’s better to take a few lumps now, or gain office on the basis of commitments that will prove a millstone, whether they are abandoned or adhered to.
[Comments are closed]
* I know, this quote attributed to Thomas J Watson is apocryphal, as is a similar one attributed to Bill Gates, but lots of similar statements have been made in reality, and they’ve all proved to be silly. For example, I can remember people saying in the early 80s that 8-bit address space of 64k (a double octet) were all we would ever need. Many more people said, well into the 1990s, that graphical interfaces were an unnecessary luxury and that personal computers would always start with a C:\> prompt.
Responding to my observation that Andrew Bolt’s estimate of the impact of the carbon tax/price on global warming was out by a couple of orders of magnitude (he calculated the impact for one year, not that over the decades for which the policy is supposed to operate), Quadrant contributor John Dawson jumped into the fray and pronounced himself satisfied with Bolt’s arithmetic (H/T Terje Petersen). Dawson’s piece is too confused for a link but confusing enough that Terje couldn’t see where he ran into error. Rather than try to clean up this arithmetic mess, I’ll step back to something much simpler – the inability of Dawson, and his mentor Keith Windschuttle, to count to three.
Long-term readers will recall that, back in 2002, Windschuttle made quite a splash with The Fabrication of Aboriginal History, Volume One, Van Diemen’s Land, 1803-1847, which attempted a revisionist account of the tragic history of the Tasmanian Aborigines. He didn’t achieve much except to point out some sloppy footnoting in a fairly obscure recent history. The main interest in the book was as an appetiser for the succeeding volumes, on Queensland and Western Australia, promised to appear on an annual schedule. Here, Windschuttle promised to refute the work of Henry Reynolds and others, who painted the frontier as a scene of prolonged violent warfare between the indigenous inhabitants and the white settlers who sought, successfully in the end, to displace and subdue them.
Year followed year, and promise followed promise, but Volumes 2 and 3 didn’t appear. Finally, in 2009, Volume 3 was published. Not only was there no Volume 2, but the new Volume 3 bore no resemblance to the book originally promised for 2004. Instead, it was a critique of the Stolen Generations report and the film Rabbit Proof Fence. Windschuttle said that this volume had been published “out of order”, and that the missing volumes 2 and 4 would appear “later”.
Even by Windschuttle’s standards, this is bizarre. The Stolen Generations debate refers almost entirely to the 20th century, so this volume, on his reasoning ought to come after the others.
It’s truly bizarre to see self-satisfied climate “sceptics” who can’t even calculate a standard error, but have convinced themselves they are smarter than professional scientists. Stranger still to see someone like Bolt, who’s incapable of basic arithmetic, treated as an expert by his readers. But surely even the editor of a literary magazine ought to be able to count to three.
There’s already plenty of commentary, here and elsewhere on Margaret Thatcher. Rather than add to it, I’d like to compare the situation when she assumed the leadership of the Conservative Party with the one we face now. As Corey Robin points out at Crooked Timber
In the early 1970s, Tory MP Edward Heath was facing high unemployment and massive trade union unrest. Despite having come into office on a vague promise to contest some elements of the postwar Keynesian consensus, he was forced to reverse course. Instead of austerity, he pumped money into the economy via increases in pensions and benefits and tax cuts. That shift in policy came to be called the “U-Turn.”
Crucially, Heath was defeated mainly as a result of strikes by the coal miners union.
From the viewpoint of conservatives, the postwar Keynesian/social democratic consensus had failed, producing chronic stagflation, but the system could not be changed because of the entrenched power of the trade unions, and particularly the National Union of Miners. In addition, the established structures of the state such as the civil service and the BBC were saturated with social democratic thinking.
Thatcher reversed all of these conditions, smashing the miners union and greatly weakening the movement in general, and promoting and implementing market liberal ideology as a response to the (actual and perceived) failures of social democracy. Her policies accelerated the decline of the manufacturing sector, and its replacement by an economy reliant mainly on the financial sector, exploiting the international role of the City of London.
Our current situation seems to me to be a mirror image of 1975. Once again the dominant ideology has led to economic crisis (now about 4 years old), but attempts to break away from it (such as the initial swing to Keynesian stimulus) have been rolled back in favour of even more vigorous pursuit of the policies that created the crisis. The financial sector now plays the role of the miners’ union (as seen in Thatcherite mythology) as the unelected and unaccountable power that prevents any positive change.
Is our own version of Thatcher waiting somewhere in the wings to take on the banks and mount an ideological counter-offensive against market liberalism? If so, it’s not obvious to me, but then, there wasn’t much in Thatcher’s pre-1975 career that would have led anyone to predict the character of her Prime Ministership.
fn1. I was too far from the scene to be able to assess the rights and wrongs of these strikes or the failed strike of the early 1980. It’s obvious that the final outcome was disastrous both for coal miners and for British workers in general, but not that there was a better alternative on offer at the time.
fn2. The popular series, Yes Minister, was essentially a full-length elaboration of this belief, informed by public choice theory
As you can see I’m back. The weekend is nearly over, but there’s still time for another weekend reflections, which makes space for longer than usual comments on any topic. Side discussions to sandpits, please.
… for the announcement that the Commonwealth government is spending $20 million to support the production in Australia of a Disney film of the Jules Verne novel 20000 Leagues Under the Sea. I was interviewed by Gary Maddox who wrote an opinion piece supporting the subsidy, but mentioning my opposition.
For dogmatic free-market advocates, there’s not much need to explain why the subsidy is a bad idea – it follows from the general claim that all subsidies are bad, and for the real dogmatists, that any kind of government expenditure is bad. But I’m happy to support subsidies to film production under some circumstances so I need to explain my position a bit further, and the Maddox piece provides a handy foil