Australia (Act) Day

As usual, 26 January has been marked by protests, denunciations of those protests, and further iterations. Even apart from the fact that it marks an invasion, the foundation of a colony that later became one of Australia’s states isn’t much of a basis for a national day.

A logical choice would be the day our Federation came into force. Unfortunately for this idea, our Founders chose 1 Jan 1901. The first day of the 20th century[1] must have seemed like an auspicious choice for a new country, but it ruled out the anniversary as a national day.

The ideal thing would be to fix the problems of our current system with a republican constitution including a treaty with the original owners of our land. That would provide a date really worthy of celebration.

In the meantime, I suggest 3 March, the anniversary of the day in 1986 when the Australia Act came into force, finally establishing beyond any doubt that Australia is an independent country, entirely separate from the UK[2]. We had by 1986 a constitution and public policy that was at least formally non-racist, thanks to the 1967 referendum and the end of the White Australia policy. Many of the symbolic problems with the current date would be avoided, though the real injustices would remain to be addressed.

It’s true that the Australia Act doesn’t have a lot of resonance. But any date with a lot of resonance is bound to resonate badly for a large proportion of the population. At least this would be a choice nearly all of us could celebrate without worrying too much about its precise significance.

fn1. At least if you start the count from 1CE. I think it would be more sensible to cross-label 1BCE as 0 CE, making 1900 the start of C20. I had always assumed that Dionysius Exiguus, who invented the AD calendar was unaware of the concept of zero, but Wikipedia accords him a prominent role in its history.

fn2. Whether, when and to what extent, we had become an independent country before 1986 remains a mystery, but there’s no doubt after that.

Spooled thread on Biden and bipartisanship

Amateur political analysis ahead. What are the chances for bipartisanship under Biden. Roughly speaking, that means whose votes would he need to get to 60 in the Senate, requiring 10 Republicans

Repubs who have voted with Trump less than 75 per cent of the time
Of these, Paul and Lee have dissented mostly from the right

Next 5
Scott voted to overturn the election

Next 5
Toomey, Graham, Johnson, Hawley (!), Lankford

Need I say more


Note: I excluded far-right Senator Lummins, who took her seat two weeks ago, and has cast hardly any votes

A pretty dodgy article …

from Peter Collignon on Sydney outbreak Among the problems:

  • The text doesn’t mention mask mandates at all, and captioned photo implies that government initiated this measure rather than being pushed into it, after failure to require them led to Berala cluster (at least according to AMA)
  • Collignon claims that “many prominent individuals” demanded a total lockdown. One link is to Norman Swan, who did suggest it. The other is to Raina McIntyre who said a short lockdown might be necessary if case numbers rose.
  • Opposes border closures while claiming Victorian response as a success
  • There’s no discussion of SCG test, which may still turn out badly, despite original superspreader plans being wound back under pressure
  • Premature triumphalism given that cases and venues of concern keep on coming. A short lockdown might have been a better choice, than daily announcements sending hundreds or thousands into isolation.

The 21st century economy

Last year, getting started on my book I posted some facts and claims about the 21st economy. The key points (slightly elaborated)

(1) Most economic activity in the 20th century, including ‘primary’ industries like agriculture and mining and services such as wholesale and retail trade, was fairly directly related to the production and distribution of manufactured goods

(2) This is no longer true: around half of all employment is now related to human services, information services and finance, and these are at most indirectly related to goods production.
On the basis of (1), the 20th century economy could properly be described as ‘industrial’. The economy of the early 21st century is harder to classify. Information technology and communications play a central role in the economy and society, and are the main focus of technological progress, but don’t employ all that many people. Service industries employ most people, but it’s critical to distinguish between services that are part of the industrial goods economy and human services like health and education. So, neither ‘service economy’ nor ‘information economy’ captures the whole picture. ‘Post-industrial’ carries too many implicit assumptions, as does the use of the ‘post’ prefix in general.

But that’s just semantics. The key point for the book is how the pandemic changed the different parts of the economy, and to what extent those changes will be sustained. A general observation is that the changes most likely to be permanent are those that reinforce processes that were already underway. So, some thoughts

The goods economy

The pandemic exposed the vulnerability of the global (goods) trading system, a point emphasized by the fact that China was (and remains) the world’s largest producer of surgical masks. In the early days of the pandemic, supply chains for goods of all kinds were disrupted, leading to calls for a greater degree of self-sufficiency. The supply problems are less severe now, but it seems unlikely that we will return fully to the complex global supply chains, characterized by “just in time” delivery that were the most distinctive feature of late C20 globalization. As I argued last year, these complex chains were already under threat as the neoliberal consensus broke down, reflected in Trump’s trade wars, Brexit and more recently China’s largely undeclared trade war with Australia.

The human services economy

The human services sector has been hardest hit by the pandemic, in multiple ways. The burden of dealing with the pandemic has fallen hardest on workers in health, aged care and education. Non-essential services involving human contact, like restaurants, have borne the economic brunt of lockdowns. The process has exposed the disastrous effects of decades of wage stagnation and labor market reform. People holding multiple insecure jobs, without sick leave, have been forced to work even when they are ill, ensuring the spread of the disease. The patchwork nature of much modern employment has created significant difficulties in providing assistance to workers displaced by the pandemic.

The information economy
  • The information economy has been the big gainer from the pandemic. Reliance on information technology the expense of both the physical goods economy and service activities centred around human contact.

Again, this is an acceleration of pre-existing trends, but in many instances we’ve seen a qualitative rather than a merely quantitative change. Most strikingly, at the beginning of a year holding a meeting virtually using Zoom or one of its rivals required a fair bit of organization (often, more than flying all the participants to a single location), it’s now become the default*. That’s unlikely to change, and it implies a permanent reduction in demand for business travel and accommodation (at least relative to the pre-existing trend). By necessity, the regulatory obstacles to things like telemedicine have been removed, and are unlikely to be restored.

The information economy is different in crucial respects, which will be spelt out in more detail below. First, information is inherently a public good: it can be shared without being diminished [econ jargon- nonrival], and it is hard, though not impossible to lock up [econ jargon- nonexcludable]. That makes any kind of pricing problematic. Second, information technology is characterized by rapid capital-saving innovation. A modern smartphone has more computing power than a 1990s supercomputer and (thanks to the information encoded in software) does a vast range of things that a supercomputer could not. Even allowing for the R&D embodied in the smartphone, the capital requirements of the information economy are much smaller than those of the physical goods economy. That means much reduced investment demand, which in turn pushes interest rates down.

More to come on all this, but for now I’d very much appreciate comments and criticism

  • Just as the Internet went from being a tool for nerds in the 1990s to a (near) universal communications platform in the 2000s]

China’s grievances, for anyone to read

A few weeks ago, the Chinese embassy leaked a list of grievances against the Australian government to the Nine Newspapers. I’ve seen lots of references to items in the list, but searching for the whole thing produces very little. It turns out that Nine published an image of the list, but did not convert it into text, and no other media organization appears to have bothered to do so. In the interests of producing an accessible document, I spent the five minutes required to do this.

Here’s the list

— foreign investment decisions, with acquisitions blocked on opaque national security grounds in contravention of ChAFTA/since 2018, more than 10 Chinese investment projects have been rejected by Australia citing ambiguous and unfounded “national security concerns” and putting restrictions in areas like infrastructure, agriculture and animal husbandry.

— the decision banning Huawei Technologies and ZTE from the 5G network, over unfounded national security concerns, doing the bidding of the US by lobbying other countries

— foreign interference legislation, viewed as targeting China and in the ‘ absence of any evidence.

— politicization and stigmatization of the normal exchanges and cooperation between China and Australia and creating barriers and imposing restrictions, including the revoke of visas for Chinese scholars.

— call for an international independent inquiry into the COVID-19 virus, acted as a political manipulation echoing the US attack on China

— the incessant wanton interference in China’s Xinjiang, Hong Kong and Taiwan affairs; spearheading the crusade against China in certain multilateral forums

— the first non littoral country to make a statement on the South China Sea to the United Nations

—siding with the US’ anti-China campaign and spreading disinformation imported from the US around China’s efforts of containing COVID-19.

— the latest legislation to scrutinize agreements with a foreign government targeting towards China and aiming to torpedo the Victorian participation in B&R

— provided funding to anti-China think tank for spreading untrue reports, peddling lies around Xinjiang and so-called China infiltration aimed at manipulating public opinion against China

— the early dawn search and reckless seizure of Chinese jounalists’ homes and properties without any charges and giving any explanations

— thinly veiled allegations against China on cyber attacks without any evidence

—outrageous condemnation of the governing party of China by MPs and racist attacks against Chinese or Asian people.

-an unfriendly or antagonistic report on China by media, poisoning the atmosphere of bilateral relations

Fighting on two fronts, and losing on both

My latest piece in Inside Story, and also the Canberra Times, is headlined Punching above our weight looks like getting us knocked out (CT slightly varied). The key point is that having picked a fight with China, the government is alienating potential allies through its climate donothingism. Key para

Australia is a lightweight, and we are fighting out of our class. If we want to succeed on issues like our trade dispute with China, we can’t afford to poke our potential allies in the eye by suggesting, as Scott Morrison has repeatedly, that our climate policy will be determined by our own national interests and not by our obligations to the rest of the world.

That point has been illustrated again by an article in the New York Times on China’s boycott of Australian coal. The government would doubtless have liked a story along the lines “Plucky Aussies bullied by Chinese dictator”. Instead, it’s more like “Climate cheats get well-earned comeuppance“. The opening para “China is forcing Australia to confront what many countries are concluding: The coal era is coming to an end.”

We are fighting on two fronts and losing on both.

There’s been a lot of publicity for Morrisons. exclusion from the speakers list at the recent climate summit and resistance to our push for Matthias Cormann as head of the OECD. One thing that hasn’t attracted much attention is an earlier insult we delivered to the OECD when we appointed a climate denier, Alex Robson, as our Ambassador to the OECD. Robson was closely associated with the IPA, and contributed to their denialist volume Climate Change: The Facts I engaged in a dispute with him in the ANU magazine Agenda, but can’t now locate his piece.

Trumpism and crony capitalism

Some tentative thoughts, for a chapter I’m writing about the decline of neoliberalism, and the crony capitalism I see as replacing it (unless we can achieve a leftwing alternative)

An important difference between Trumpism[1] and neoliberalism (in both hard and soft variants) is that Trumpism is associated with crony capitalism, rather than global corporations and finance. This is obscured to some extent by shared interest in corporate tax cuts and deregulation. But it’s a clear pattern,exemplified by Erdogan, Modi, Orban and Putin (search “X + crony” for illustration). Why is this? The core appeal of US Trumpism is a negative kind of identity politics, reaffirming the rightful dominance of the “unmarked category”, or default identity, that is assumed when a term like “real Americans” is used. Unmarked categories in the US context include white, male, employed, English-speaking, Christian and cis-het.

Trump’s global counterparts have the same kind of politics, but their unmarked categories are different, most obviously with respect to language, race and religion. These differences are problematic for global corporations, who want to operate in different national markets and employ the best talent they can find anywhere.

As long as neoliberalism was dominant, Trumpist voters could be bought off with gestures, while policy was run in the interests of global business. But now that the Trumpists are in charge, they are demanding measures that harm global businesses both economically (restrictions on trade and investment) and culturally (by making ascribed characteristics, rather than market outcomes the measure of esteem). By contrast, local capitalists (like Trump himself and the billionaires who now back him) mostly benefit from these measures as well as from pro-rich policies in general. Even under neoliberalism, many operated largely on the basis of connections. Provided they can stay in the good graces of the strongman (not guaranteed, as various Russian oligarchs have discovered), they are well placed in the new environment. And, unlike global corporations, crony capitalists can operate with a short time horizon. Even if Trumpist policies are ultimately disastrous in economic terms, they have time to make their pile and cash out.

fn1. In 2016, I used the unsatisfactory term “tribalism”, for want of a better alternative, but Trumpism fits the bill perfectly.