What I’ve been reading

National Insecurity: The Howard Government’s Betrayal of Australia by Weiss, Thurbon and Mathews, which follows up their earlier book How to Kill A Country, an attack on the US-Australia Free Trade Agreement.

The hyperbolic titles of these books are not to my taste (though they may help to sell books). The books themselves are less strident than the titles would suggest, and raise issues that should be debated more. Weiss, Thurbon and Mathews take a left-nationalist perspective on Australia’s relationship with the United States, seeing the Liberal party and the Howard government in particular as representing a segment of the capitalist class that benefits from an alliance with US Republicans at the expense of Australia as a whole including workers, domestically-focused business and Australians in general considered as citizens of a putatively independent country.

Before examining this claim, I think it’s worth making some factual points that ought to be common ground to most of us

First, since World War II, Australia has followed the US line in foreign policy more closely than any other country (maybe there are some unimportant statelets who’ve been closer, but I’m not aware of them).

Second, the Liberal party has generally favoured an more complete identification of Australian and US interests than Labor

Third, among Liberal governments, the Howard government has gone further than any other in this respect[1}

Fourth, the Howard government has, since 2000, aligned itself strongly with the Republican Party and the Bush Administration, and explicitly against the Democratic Party.

The first question this raises is whether it is a good thing for Australia to support US foreign policy as closely as it has done since World War II. There are a number of arguments in favour of this, but none I think that really stand up

(A) we might consider gratitude to the US for saving us from Japanese invasion in World War II. As we discussed a while ago, however, it seems clear in retrospect that Japan had no more desire or capacity to conquer Australia than it did to conquer and occupy the US. Japan wanted to knock us out of the war and would probably have attacked and occupied parts of Northern Australia if its forces had not been defeated. But, had we signed a separate piece with Japan, the US would have faced exactly the same risk, of Japanese attacks on the US West Coast. So, our alliance in World War II was that of partners in a fight of importance to both, not a rescue of Australia by the US.

(B) from the perspective of national interest, we might regard uncritical support of the US as insurance premiums for US protection against some future invasion threat. But for most of the Cold War, European countries faced far greater threats than we did, and relied more directly on the US. Yet none of them, not even the UK, felt the same need to follow the US line on all issues.

(C) it might be argued that the US is the main force for good and deserves our support. Granting that the US role has been more often beneficial than not, it’s easy to point to cases where most people in the world, and even in the US, came to the conclusion that US policy was mistaken. It makes no sense to suggest that we help the US by supporting its policy even when it appears to be in the wrong.

What’s even clearer is that identification of our national policy with that of a foreign political party is a very bad idea, and one which, as Weiss, Thurbon and Mathews say, puts the government that follows such a policy in direct conflict with the national interest.

1. Arguably Harold “All the way with LBJ” went as far, but residual attachment to the British Empire mitigated this a little).

42 thoughts on “What I’ve been reading

  1. John Mathews,

    I should say up front that I haven’t read your book as yet. I am responding to the invitation to comment on your description on the central claim of the book.

    It seems to me your cases (1),(2),(4),and (5) are examples of ‘globalisation’. If this is a reasonable interpretation, then the central claim of your book is that ‘globalisation’ entails a ‘betrayal’ of a country. The tensions created by the notion of ‘globalisation’- in the sense of ‘one market’ – for the economic and social policy functions of governments of sovereign countries is a theme that sprang up almost as soon as the term ‘globalisation’ popped up. It is a theme that is central to Vernon’s 1977 book, “Storm over Multinationals�.

    On the other hand, there are many examples in history showing links between the promotion of international trade by some countries, the spread of multinational firms with headquarters in these countries, and political and military alliances between sub-sets of countries. Your cases would seem to fit this picture too. One might call this a biased form of globalisation – so far the only empirically observed form of ‘globalisation’ I know of.

    Call it globalisation, biased globalisation or betrayal of a country, the way I see things is that there is a ‘world-wide’ realisation that environmental externalities can no longer be ignored and the pipe-dream of ‘one market’ (and its associated ‘key’ phrases) is going to come to an end in the very near future. Perhaps this will ease the above mentioned tensions (and detailed industry economics will become popular again). This leaves the political-military alliances; a subject about which I am ignorant when it comes to details.

  2. “If Hal900 actually went to the trouble of reading what I wrote he would have noticed that I beat him to the punch on this.”

    Fair cop, Jack. You got me bang to rights.

    The trouble is that JWH and Co. seem to believe that earning US military-industrial customer loyalty reward points is part of the game. Why do you suppose they think this?

    Meanwhile, “But the onus is on the critics to prove that this combination has done a poor job in maintaining AUS national security over the past decade.” NZ has adopted an alernative policy, and I fail to see how NZ national security has been any less than ours. And it hasn’t involved outsourcing sovereign policy to a foreign power run by a gang of cynical crooks, either.

  3. Ernestine Gross
    Thank you for your thoughts on the central claim of our book. I certainly agree that increasing levels of economic integration may pose challenges for the traditional policy functions of governments. However, external market (and political) pressures are only peripheral to the various policy shifts we document in the book – external pressures alone cannot account for these shifts. Indeed what makes the policy shifts we document so surprising is not merely the fact that they all demonstrably undermine Australia’s interests (commercial, military, social), but that the Howard government was NOT forced by any stretch to effect them. To at least some degree, the policy arenas we discuss – related to the security of the national blood supply, defence procurement, energy security, quarantine controls, and protection for cultural industries – are protected under/ exempted from international agreements. For example, in relation to the national blood supply, it is internationally recognized that countries have the right to strive for and maintain national self-sufficiency. It is internationally recognized that countries have the right to establish and maintain quarantine controls appropriate to their disease (or disease free) status. What is so surprising – and therefore what we try to explain in the book – is the fact that the Howard government itself has vigorously pursued – and in some instances initiated – the security-diminishing shifts we document. It would be excellent to hear your thoughts (and the thoughts of other bloggers!) on our explanation for the government’s behaviour when you’ve had a chance to read it.
    All best, Liz Thurbon

  4. themeda,
    I just want to pick up on one point you made – on Singapore. A careful read of the historical record would show the reason why it was not defended properly – a shortfall in Australian funding. From the books I have read Australia committed in the early 1920s to funding the building of proper defences for Singapore as part of our national security. The seaward defences were built first but, due to the depression and a change of government the landward (Malay side) defences were never built.
    The reason the Brits were blamed is simple – Curtin could not blame his own party for the decision to can the build.
    Liz Thurbon,
    Ernestine and I have long standing disagreements about globalisation, so I expect her to put a differing view to mine, but I believe the government is acting here not to diminish security but to increase welfare. The gains from trade are clear at all levels, from the individual to the international and are supported by both theory and evidence.
    On these grounds the bias must be to reduce impediments to trade as far as the scientific evidence allows – with the burden of proof lying on those who would seek to restrict.
    To me the fact that we, as a sovereign nation, are allowed to restrict trade under international treaty is neither here nor there. If the evidence is such that to allow trade in an item would be very harmful to this country we should restrict it – even if by treaty we may not. On the other hand, even if we are allowed to restrict trade in an item but there is little or no evidence that doing so is needed we should allow it.
    To say that any government should ban or restrict something merely because we can (although I appreciate you are not making that argument) would be, to me, to argue that we should cut off our own noses to spite our faces (and apologies for the cliché).

  5. Andrew, I certainly agree that freer trade can be enormously beneficial – indeed, in our previous book How to Kill a Country, one of our main critiques of the Australia-US FTA was that many aspects of it were aimed at protecting entrenched US monopolies and restricting freer trade (in agriculture, IP intensive industries, government procurement etc). In National Insecurity, the policy shifts we are critical of are in no way aimed at promoting ‘freer trade’ (although they might be sold in that way to the Australian public). For example, in defence procurement, we are critical of the government’s proclivity for ‘buying American’ even when there are safer, cheaper, technologically/operationally superior alternatives (which are often Australian too). The government’s ‘buy American’ bias is hardly about ‘freer trade’ , nor is it ‘welfare enhancing’. In energy too, our argument is that the government has been actively suppressing the development of the renewables sector in order to protect the entrenched monopoly of the non-renewables sector – again this is hardly about creating ‘freer markets’, nor is it ‘welfare enhancing’. Now one might argue that, in the name of freer trade, we should open Australian blood fractionation services to foreign firms – as the government promised to do in the Australia-US FTA and as it has been trying to deliver ever since. But not even the most ardent advocates of the benefits of free trade would suggest that ‘market openness’ should come at the expense of the security of the national blood supply. Australia is one of the few countries to have approached self-sufficiency in blood supply, and our national blood supply system is one of the safest and most respected in the world. And self- sufficiency in blood is an internationally recognised and promoted goal. We have had two government-funded Reviews of our blood supply and fractionation system (one chaired by Sir Ninian Stephen) – debating the question of whether we should alter this system and open the market, and both reviews (the most recent last year) concluded firmly that we should not – than liberalising fractionation services would increase the risk of contamination without delivering any meaningful economic benefits. And yet the government promises the US in the FTA that it will open the market anyway – and is still trying to push through the changes (over fierce state opposition). ‘Welfare enhancing’ policies? Not economically, not socially… so the question remains… why??

  6. Liz Thurbon,
    I cannot claim that I am in any way expert on our national blood supply so forgive my apparent ignorance, but why would openness come at the expense of security? Is foreign blood necessarily any worse than Australian?
    I would have thought that arranging diversity of supply, with appropriate safeguards in place as to its quality, would have improved the security of supply.
    I see no reason why self-sufficiency in blood is any different to self-sufficiency in food.

  7. I did a lot of work on blood supply back in the 90s and its been a long-standing policy failure. The Labor government privatised CSL at a giveaway price, then locked itself into a highly unfavorable supply contract. Allowing supply from the US has huge problems because of paid donors there, who have a strong incentive to evade quality controls.

  8. Andrew,
    we are not simply assuming a that openness is likely to risk security and is therefore too great a gamble – this is the explicit conclusion of both the Stephen Review (2001) and the Flood Review (2006) which make compelling reading if you are interested. We cover the relevant sections of these Reviews in chapter 6 of our book. The Howard govenrment has ignored both. We also examine the record of the foreign company that has been waiting on the sidelines for entry to the Australian market – and it’s safety record is less than impressive.

    The idea that the government is locked into unfavourable supply contracts with CSL is a widely held belief, but it is not supported by the evidence. When the Department of Health moved to shorten CSL’s contracts in 2002 on the basis of the assumption that the govenrment was not getting “value for money”, there was much controversy, and the decision was referred to the Australian National Audit Office for investigation. The ANAO found that the Department of Health had no evidence whatsoever upon which to base its claims of ‘insufficient value for money’ . Indeed, they found that the government had been benefitting from gradual price DECREASES under CSLs two tier pricing arrnagement between 1996-2002. Moreover, the Joint Public Committee for Accounts and Audits found that:

    “current Australian plasma product prices were substantially less than the corresponding prices on European and other commercial markets – on the face of it, good value for money” (cited on p. 207 of our book).

    There is simply no evidence to support the claim that the government does not enjoy value for money from CSL, or that CSL is more expensive than its international counterparts.

  9. Andrew
    I should have also noted – of course we are not suggesting, by any stretch – that “foreign blood” is not as good as “australian blood”. It’s about the way in which blood is collected overseas (as John mentioned in his post, in the US, the issue of paid donations is a big problem, and that’s why importing blood is seen as a risky business) – and also the question of how to effectively regulate the offshore fractionation of Australian blood by foreign firms – for which the govenrment has been trying to gain approval. Many of the foreign firms involved in this business have very poor safety records. That’s the concern. It’s not about “foreign” vs “australian” blood. The point is – the Australian system is world class in terms of safety, security and value for money. Our welfare would not be increased by changing this system. That’s the conclusion of the two reviews.

  10. Liz,
    If the CSL and the other providers are delivering plasma (and presumably the other blood products) cheaper than overseas prices then, surely, openness will not change where the supply is coming from – and therefore there is no issue. Additionally, if the safety record is “less than impressive” then convincing the state health authorities and others to buy the products would be very difficult – again, no problem.
    Presumably the Feds have no power to force people to buy a more expensive, less safe product.

  11. Andrew,

    If opennesss will not deliver any benefits in terms of price or safety, then why pursue openness as an end in itself? Isn’t openness supposed to be a means to an end? (‘welfare enhancement?’).

    In the case of blood, the Stephen’s Review also detailed a number of significant economic costs associated with the entry of a new player in the Australian fractionation market – which might be one reason to avoid ‘openness for the sake of openness’. (we summarise the costs on p. 204 – I won’t type it out here).

    But I guess the question really comes down to this – why does one pursue openness? To increase economic and social welfare, or as an end in itself despite economic and social risks (and in the absence of any forseeable benefits).

    In my view, openness is desirable to the extent that it facilitates some economic or social goal. Openness for the sake of openness I don’t really understand.

  12. Liz Thurbon,

    Thank you for expanding on your book in response to my initial comments to your co-author, John Mathews. In the meantime I’ve read your book. I can’t say much more than what I have said already because politics, which is really the main content of the book, is not my area of interest.

    To indicate the difference in backgrounds, I would not call the content of chapter 7, “Political Strategy and Political cringe�, an explanation but rather a set of sociological-psychological hypotheses.

    Best wishes, E.G.

  13. Liz,
    I view interaction, economic or otherwise, as a positive freedom. Why should a government (or anyone else) be able to tell me that I cannot do what I wish in the absence of any evidence that what I do will harm others?
    If I, for some reason, decide that I want to import plasma from the US, in the absence of evidence that this will harm others why should anyone be able to prevent me from doing so?

  14. Hi Liz Thurbon and John Mathews,

    I have nearly finished reading your book. On the whole very good, but I am dubious about some alternatives to fossil fuel tath you support, particularly bio-fuels, which are causing the clearing of rainforests and prices of grain to go up.

    I have written my own review at http://candobetter.org/node/96 admittedly with holes not having completed the book. (I was inspired to write the review by Cate Molloy’s media release copied to http://candobetter.org/node/97

    Also, I have taken the claims made about Australia’s preparedness in 1941 at face value although I haven’t yet been able to read Andrew Ross’s “Armed and Ready”. I have got into an argument at http://forum.onlineopinion.com.au/thread.asp?discussion=860 over this claim, but can’t proceed any further until I am able to read Ross’s book.

    Please feel encouraged to help out on Online Opinion.

  15. Most interesting readin on page 36 of Andrew Ross’s “Armed and Ready” referred to in “National Insecurity”:

    The Commonwealth Aircraft Corporation “succeeded in making front-line miltary aircraft in Australia, although this was not achieved until 1942 with the Boomerang aircraft. From Leighton’s point of view the Australian aircraft production industry could have been ready for the Second World War if 16 years had not been wasted between 1920 and 1936. And the only reason his objective was not realised was because of Austraian Conservative governments’ stubborn belief that the industry would emerge from within private industry.”

  16. The following threads on Online Opinion may be of interest:

    Can Australia ever be self-reliant for national defence?, started by myself, and

    Does Australia have a bomber gap?

    I have adapted the following from the former:

    This revelation that Australia succeeded in deterring the Japanese from invasion in March 1942 even before their defeat at the Battle of the Coral Sea raises a number of important questions:

    1. Why has Australia’s proud history of technological and industrial achievement been allowed to have been forgotten?,

    2. Why has Andrew Ross’s groundbreaking work been largely ignored?, and

    3. Why is it that this Government, supposedly the one which best has Australia’s defence at heart, has chosen to turn its back on our proud history and, instead, has discriminated against both Australian and European defence equipment suppliers in order to make Australia dependent upon inferior and more expensive equipment supplied by the U.S.?

    I can only conclude that it actually suited the predominant section of Australia’s current ruling elite, who John Howard now serves, to have allowed Australia to have been turned from an advanced industrial nation that it was in 1945 into what it is today – an economic basket case which achieves the false illusion of prosperity by digging up and exporting to the world its climate-changing non-renewable mineral resources and by flogging its real estate on the world market.

    The former requires effort, whilst the latter delivers easy money to those who are willing to sacrifice the wellbeing of fellow Australians and future generations.

    To conclude, I think Mathews, Thurbon and Weiss have done a fantastic job in having written “National Insecurity”. It is possible to find fault with the work here and there, but it would be very difficult not to produce such a work in such a timely fashion without the odd shortcoming. I urge everyone to go out and by a copy now.

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