The Ramsay Centre is frightened of academic freedom

John Quiggin18 Comments

I just signed a petition opposing any agreement between the Ramsay Centre and the University of Queensland, where I work. I am disappointed that things have reached this point. The areas of the humanities that Ramsay would support have long been underfunded: they don’t fit into either the market-driven ideology of “reform”, or the more recent technocratic push for STEM.

The problem is that, quite evidently, the Ramsay Centre wants to control who teaches the courses and how they are taught. Tony Abbott let the cat out of the bag a while ago when he said the courses would be “not just about Western Civilization, but for it”, and made it clear that his version of Western Civilization is one that would have seemed hopelessly reactionary by the 19th Century.

Abbott has kept quiet since then, but he is still on the board. The demands made to universities for a role in appointments and for Ramsay to appoint inspectors who would monitor teaching make it clear that his stated position was representative.

The disappointing thing is that they need not have bothered. The kinds of academics and students who would teach and sign up for classical and medieval courses are unlikely to be eager followers of the latest developments in critical Theory. And if Abbott and the rest had any faith in the merits of their literary and intellectual position, they ought to expect a neutral presentation of the works in question to carry the day.

It’s such a lot of money, for such an underfunded area, that I hope Ramsay finds someone to take it, even if they have to go to one of the Catholic institutions or start up their own. But any university that pretends to value academic freedom should reject this Greek gift*

Update: Just after posting this, I read that, only yesterday, the Ramsay Centre agreed to include a commitment to the principles of academic freedom in its MOU with Wollongong. Readers can judge whether this belated move, after months of resistance, represents a change of views or a piece of lip-service.

  • My little nod to classical learning.

Scandal

John Quiggin19 Comments

I’m not a big fan of political scandals. Still, it has to mean something when there are too many simultaneous scandals going on for anyone to keep track. Rather than attempt a summary, I’ll list some of the government figures currently involved in one or more scandals that would normally be expected to produce a resignation from office or Parliament: Cash, Cormann, Dutton, Hockey, Keenan, Wilson, Price [feel free to challenge these names, or add others, in comments]. The only comparable situation I can think of is the dying days of the last NSW Labor government.

In these circumstances, policy catastrophes like banking, the Murray-Darling Basin and climate change barely get a look in.

Despite all of this, the government and their media cheer squad are convinced they can eke out a win by demonizing refugees. We shall see.

The financial sector: discredited but unchallengable

John Quiggin32 Comments

The Economic Society of Australia regularly polls a panel of members seeking responses to statement on policy issues. The most recent was unusual both for a low response rate (admittedly, it was run in January) and for the unanimity of the answers. This may be attributed to the strong formulation of the statement “There is no way to significantly increase the degree to which Australian retail banks act in the interests of consumers.”

None of the respondents accepted this, but the answers broke into two categories: those recommending reforms broadly in line with the recommendations of the Hayne Royal Commission and those (including Allan Fels, James Morley and me) who wanted radical reforms that remain outside the realm of political feasibility.

My response:

None of the options that have been proposed so far are likely to do much good. What is needed is a reversal of the massive expansion of the financial sector that began in the 1970s. In the banking context, this would entail a “narrow banking” model in which retail banking was separated from trading and investment banking and regulated as a public utility, along with the recreation of a publicly owned “no frills” bank, along the lines of Kiwibank in New Zealand. These proposals may be beyond the realm of political feasibility, which is why I have expressed only modest confidence in my view.

This isn’t just a problem in the Australian retail finance sector. The whole structure of financialised capitalism is a recipe for greed and dishonesty. Everyone knows this, but there’s no obvious way to tackle it, given the entrenched power of the financial sector.

The situation is reminiscent of the last decade of the Soviet Union. Those in charge are utterly discredited but apparently irremovable.

Al Capone was done for tax evasion

John Quiggin10 Comments

It now looks possible that the fate of the Adani Carmichael mine will be sealed by an adverse assessment of the mine’s impact on the black-throated finch.

That’s a far less satisfactory outcome than if the Queensland Land and Environment Court had accepted, as its NSW counterpart has done, that the climate (and health) damage from burning the coal produced by the mine was relevant in assessing the costs and benefits. That reasoning leads to the conclusion that no new mines should be started, let alone marginal projects like Carmichael.

But even disregarding the main issue, the Galilee Basin has all the problems associated with large mining projects, and on a huge scale: disturbance of a large land area, heavy demands for water use, and the problems of shipping through the Great Barrier Reef, and conflict with indigenous owners. Even if these aren’t the biggest reason to reject a project that would open the entire Basin to mining, they are big enough.

This is, of course, a fairly common pattern in political and legal decisionmaking. It may be impossible, for procedural reasons, to reach a determination on the central issues that are at stake, so some less central but more definite point ends up getting to the necessary outcome.


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Opportunity cost and new coal mines

John Quiggin15 Comments

Opportunity cost provides the best way to think about the recent decision to reject a new coal mine at Rocky Hill. That’s the central theme of my latest piece in Inside Story and also of my forthcoming book, Economics in Two Lessons. Given a tight budget of the carbon dioxide and other greenhouse gases we can afford to emit while stabilizing the global climate, every new source of emissions comes at the opportunity cost of an existing source. Since phasing out coal is among the cheapest options any new coal mine comes at the expense of faster closure of existing mines. Almost invariably, its more costly to open a new mine, than to maintain production at an existing mine. So we should not start any new mines and, in general, not expand old ones.

100 per cent renewable electricity: the next steps

John Quiggin15 Comments

I’ve spend the last few days at a workshop on the transition to a renewable energy supply for Australia, which focused primarily on electricity. The presentations should be available soon, and I’ll write a longer post if I get time, but here are a couple of quick points I took away.

  • Adding storage to a system that is at or close to 100 per cent renewable will cost around $25/MWh, that is, about 2.5 cents/kWh
  • The big problem for Australia is transmission, to connect solar and wind resources to the grid. AEMO and AEMC are in denial on this. My view – we need to renationalise transmission immediately, and replace the current NEM alphabet soup with bodies that will plan for a rapid transition

The culture of financialised capitalism

John Quiggin47 Comments

After the righteous fury that pervaded Royal Commissioner Hayne’s interim report on the financial system, the final recommendations came as a letdown to everyone (except of course the insiders who bid up bank shares in anticipation of the news).

This ought not to have been a surprise. Hayne correctly identified greed and dishonesty as the key drivers of wrongdoing. But greed (or, more politely, incentive) is the guiding principle of financialised capitalism as is seeking profit to the limits of legality, even when this involves what would ordinarily be called dishonesty. In these circumstances, it’s unsurprising that those limits are regularly breached, particularly given that most such breaches go undetected, and the few that are detected go largely unpunished.

The financial system is at the core of the problem but, as Bernard Keane observes in Crikey (paywalled, I think) its effects are pervasive. As he says, it’s not individual industries, it’s our system. Ross Gittins is also good on this. Even Eugenie Joseph of the Centre for Independent Studies has noticed that there is a big cultural problem here.

The only thing that will change the culture of greed and dishonesty is a reversal of the policies of financial deregulation that produced it.