Wise in hindsight

John Quiggin50 Comments

My article on the failure of for-profit competition in human services included a hook to the recently published Productivity Commission report recommending more of the same. I haven’t had time to go through the report in detail, but I was struck by reports that the PC mentioned the FEE-HELP fiasco in the VET sector as an example of the way not to go about things.

It’s good to see some recognition of this but what matters here is foresight, not hindsight. So, I thought I’d check back to see what the PC was saying a couple of years ago, when the disaster was obvious, but was still being denied by those in charge of it. Here’s a quote from their submission to the Harper Competition review

The Commission’s study into the vocational education and training (VET) workforce (2011f) found that there had been a rising trend to harness market forces in the allocation of VET services, with principles such as user pays and user choice increasingly underpinning VET policy. The Commission suggested that, as the VET sector becomes increasingly competitive, a move towards greater managerial independence for public providers would give them the autonomy and flexibility they need to respond.
The Commission (2011f) also noted that opening up of the VET sector had not been a complete success, with some stakeholders raising concerns about quality assurance, monitoring and enforcement (especially in the international student sector).

Going back to the 2011 report, there is indeed a box referring to problems with international students, which drew a lot of attention at the time. But there’s nothing to suggest any awareness of the broader problems, which were already apparent*, let alone any capacity to predict them using the PC’s analytical framework.

* I wrote a report for the National Council on Vocational Education Research in 2012, making many of these points, and drawing on several years of evidence from Victoria. I was roundly derided for my pains by the private provider lobby.

Worse than the Bourbons

John Quiggin35 Comments

I have a couple of pieces in The Guardian. The first, which came out a few days ago, points out the consistent failure of market competition and for-profit firms to deliver human services effectively and equitably. The second gives the mainstream economic analysis of the problem, in terms of market failure and the mixed economy, developed 40 to 50 years ago, and ignored by the policy class of today, which takes the assumptions of market liberalism (aka neoliberalism) for granted. My summary:

The problem is that the political class, along with much of the economics profession, have done worse than the Bourbons, of whom Talleyrand observed “they have learned nothing, and forgotten nothing”. … Our leaders, and the economists who advise them, have not only shown themselves incapable of learning from experience, they have forgotten much that we once knew.

Brexit and bigotry (crosspost from CT)

John Quiggin63 Comments

Following my previous post, I’d like to add a bit more to the debate about Brexit and migration. On this issue, a common defence of the Leave campaign is that the central concern was about the need to cut the number of migrants to the UK so as to reduce competition for jobs. The plausibility of this defence has been undercut by recent negotiations, widely reported in the Australian press, but largely ignored by British media.
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New Zealand’s zombie miracle

John Quiggin39 Comments

Twice in the last couple of days, I’ve bumped into the seemingly unkillable zombie idea that the New Zealand economy is doing well and ought to be a model for Australia. Checking Wikipedia to make sure I hadn’t missed anything, I found that, as of 2015, NZ income per person was 30-35 per cent below that in Australia, as it has been ever since the miraculous reforms of the 1980s and 1990s. NZ is down with Italy and Spain on most rankings, while Australia is comparable to Germany (above on some rankings, below on others).

This wasn’t always the case. Before the reform era, New Zealand and Australia had almost identical income levels, among the richest in the world. NZ took a bigger hit from British entry into the EU in the early 1970s but after 50 years, that can scarcely serve as an excuse (and of course, no one is predicted that Brexit will be a gigantic benefit to NZ; rather the reverse)

Then there’s migration. I dealt with this here, but I’ll repost crucial points over the fold.

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Last chance on climate change policy

John Quiggin68 Comments

With August 2016 setting yet another record for global temperatures, the need for action on climate change is obvious. The good news is that most national governments are finally recognising the urgency of the problem. The bad news is that Australia is not among them. Having commissioned a Special Review from the Climate Change Authority (of which I’m a member) and received recommendations designed with the current policy as a starting point, the government’s response has been that it might take another look at the problem in 2017.

I’ve written the statement over the fold in response. Comments very welcome. I won’t engage in discussion; in this context, I’d rather let the statement speak for itself.

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Recognising racism (crosspost from Crooked Timber)

John Quiggin93 Comments

Back in 2004, I wrote that

There is only one real instance of political correctness in Australia today and that is that you are never, ever allowed to call anyone a racist.

This was one side of an unspoken agreement among mainstream politicians, the other being that no one would ever make a statement that was overtly and undeniably racist (this was the central content of “political correctness” in its normal usage). Both the use of overtly racist language and the use of the term “racist” in political debate put the speaker outside the Overton Window. The official debate was undertaken in terms of “dog whistle” coded appeals to racism on one side and euphemisms such as “prejudiced” or “racially charged” on the other. The peace was maintained by the fact that the political class as a whole shared a broad neoliberal[^1] consensus in which marginal differences over economic issues were central, and where social/racial issues were primarily seen as a way of motivating the base to vote the right way.

With the rapid rise of tribalism on the political right this tacit agreement is breaking down.
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Edison in reverse

John Quiggin53 Comments

The takeaway from my latest piece in The Guardian on the failure of for-profit provision of services like health and Education

Blair, and like-minded reformers throughout the English-speaking world, have delivered an Edison in reverse. Edison experimented with many things that didn’t work, but ended up with a light bulb. Market-oriented reforms, particularly in the provision of human services like health, education and public safety, have begun with a working system and replaced it with a string of failed experiments.