Author: John Quiggin

Financial transactions tax letter

John Quiggin12 Comments

From my incoming email

Groups across the world are inviting economists who are qualified by post-graduate degree (Master or PhD) to sign a letter in support of a financial transactions tax (see below). The goal is 1000 signers by Friday, April 8th.
Economists can sign the open letter by entering their details in the comments box at this link: or emailing euderzo@oxfam.org.uk.

Last year, 350 economists from all over the world signed a letter in support of a financial transactions tax, and over the past year there has been significant political movement towards implementing the FTT in Europe and some other countries. The campaign for the so-called ‘Robin Hood Tax’ is now hugely popular in many countries (www.robinhoodtax.org). The French have made an FTT a priority for their presidency of the G20 and there is a real chance of a breakthrough in the coming six months.

I’ve also had some contact with the organizers who would like some Australian academic economists (I take this to mean having an academic position in an Australian econ department) who would state their support as a group. If any of my readers fall into that category, please email me.

Menzies’ heir

John Quiggin78 Comments

Most of the press coverage of Julia Gillard’s Whitlam oration has focused on her partisan digs at the Greens, and even then only in an “inside football” way, that is, on the likely short-term political implications rather than the validity or otherwise of her criticism.

The only responses I’ve seen pay any serious attention to what is (or at least is presented as) a major restatement of Labor’s vision have come from bloggers, such as Trevor Cook, Kim at LP and Jonathan Green. It’s also worth rereading this piece by Mark Bahnisch responding to an earlier speech. I broadly agree with much of this commentary, but I thought it would be worth offering a response of my own.

Both implicitly, by omission, and explicitly, in rhetoric and substance, Gillard’s speech represents a repudiation of the Labor tradition exemplified by Gough Whitlam, and even, in many respects, of the market liberal reworking of that tradition under the Hawke-Keating government.

It is a speech that could have been given, with absolute sincerity, by John Howard on behalf of the Liberal party, and marks, in both large and small ways, Gillard’s acceptance and celebration of the values and beliefs of the Liberal party as espoused by its leaders from Menzies onwards. Indeed, with more historically apposite examples (Reid, Deakin and Lyons for example, instead of Barcaldine, Curtin and Chifley) this would have made quite a good Menzies oration.

Read More »

Weekend reflections

John Quiggin14 Comments

It’s time again for weekend reflections, which makes space for longer than usual comments on any topic. In keeping with my attempts to open up the comments to new contributors , I’d like to redirect discussion, and restatements of previous arguments, as opposed to substantive new contributions, to the sandpit(s). As always, civilised discussion and no coarse language please.

International realism and dictatorship

John Quiggin41 Comments

As a result of the events in the Arab world[1], I’ve been thinking some more about “international realism”, which I take to have the following central premises[2]

1. States have durable, long-term interests and their actions in international affairs are driven by the rational pursuit of those interests

2. The use or threat of military power is the pre-eminent way (or at least one of the primary ways) in which states pursue their interests

It struck me in thinking about recent events that this is essentially a theory for a world of autocracies. (Apologies to those for whom this is old news, but this is a blog, after all). In such a world, international realism reduces to the claim that individuals are driven by rational self-interest. While there are problems with this claim (it’s empirically problematic if self-interest is defined tightly, and tautological if it’s defined by “revealed preference”), it seems like a sensible starting point, at least for the kind of individuals who become successful autocrats.

Moreover, the idea that war is a central part of rational policy makes sense for autocrats. Although war is a negative sum game, it seems reasonable, under a wide range of circumstances to assume that the losses are borne primarily by the autocrat’s subjects, while the gains flow to the autocrats. Even a war that ends with the status quo ante can be beneficial to the rulers on both sides by providing a Malthusian check on a population that might otherwise prove restive, providing an excuse for increased taxation and so on. That implies the failure of the standard negative-sum game argument against war, namely, that both sides would be better off calculating the outcome of war, and agreeing to accept it without a fight.

Read More »

The fruitpickers lament

John Quiggin52 Comments

Way back in the 1970s, I spent a couple of short spells as an unemployed layabout, one of which was ended when I took a job as a fruitpicker, making (IIRC) $2 a day, which even then wasn’t food money (I wasn’t very good at it). Fortunately, the job included some basic accommodation and all the blackberries you could eat. And, even then the whinging from employers who claimed to be unable to get enough pickers was an old story.

Now, I see Tony Abbott is pushing the same line, wanting to stop dole payments in any district where there are (claimed to be) vacant fruitpicking jobs. After four decades of this stuff, we ought by now to have some actual evidence. So, I have a few questions

First, has there ever been occasion when significant volumes of fruit have gone unpicked because of a shortage of pickers? [1]

Second, has there been any occasion on which demand for fruitpickers has been enough that a person with no prior experience could make substantially more than the minimum wage (currently about $15/hour). ? [2]

And if, as I strongly suspect, the answer to both questions is No, what does that tell us about the expectations of the whinging employers. (I suggest, a ready supply of below-minimum wage workers, available on demand when needed, and ready to be sacked the moment they are not)

fn1 Not a strike, or some particular farmer so objectionable that all ir workers quit

fn2 I know that experienced pickers can do a bit better than this, but that’s not the relevant issue here.

Costa’s catastrophe

John Quiggin138 Comments

A catastrophe like the one that befell the NSW Labor Party at the weekend can scarcely be attributed to a single individual, and indeed there were many contributors. But one person stands out above all others as deserving of credit or criticism – former Treasurer Michael Costa. Having risen through the trade union movement, he made his bones in Parliament as a union-busting Transport Minister. Appointed by the utterly hopeless Morris Iemma as Treasurer, he persuaded Iemma to privatise the electricity industry, in direct contradiction of the platform on which Labor had campaigned, and the previous repudiation of privatisation by NSW voters.

As the massive unpopularity of similar moves in Queensland had shown, Labor was doomed unless it repudiated Costa, Iemma and privatisation. The party managed the first two, but, not unfortunately the third.

In keeping with his entire career, Costa quit the day he became eligible for a Parliamentary pension, and immediately emerged in his true colours as an open enemy of the labour movement and the Labor Party.

Read More »