Inside This Issue Volume 56 • Number 3 • September 2004

ARTICLES & REGULAR FEATURES

2 Editorial 25 There are Votes in the Murray Whatever we think of representative democracy, it is fairer A close look at the politics of water in the Murray reveals and more open than the perverted form of ‘participatory something odd: why does everyone seem so keen to return democracy’ that is gaining force in Australia. Mike Nahan water to a river that may not need it? Jennifer Marohasy 3Why Profits Are Good 27 Who Can Insure Against the Climate? An outstanding exposition of how countries grow rich and Believe it or not, insurers are trying to insure against acts bring prosperity to the largest number of people— from of God. When it comes to climate, it seems that blame- the First World to the Third, it is called profits and free shifting is more important than research and planning. markets. Roger Kerr R.M. Carter 6 Green Arithmetic and Doctors’ Wives 29 Education Agenda An analysis of some important electorates in the forthcom- Should the government fund private schools? As an ing election and how radical environment groups are election issue for Labor, this is a no-brainer. Just look at influencing an important, prosperous middle-class group. where students are going. Kevin Donnelly Christian Kerr 30 Around the Tanks 9 Have Research and Innovation Failed Australia? News from think-tanks around the world, courtesy of the ‘Picking winners’ and foisting them on our universities may Heritage Foundation’s The Insider newsletter. not be the way to create a vibrant and innovative economy. 32 The Capacity to Manage Index: The Australian Tom Quirk Petrochemical Industry 12 Discrimination Divas Our latest Index gives the overall rating of the petro- The media and feminists simply do not understand. Earning chemical industry in relation to other sectors as well as gaps between men and women have absolutely nothing to assessments for individual petrochemical companies. IPA with discrimination. Nowadays, women choose. Work Reform Unit. Janet Albrechtsen 34 Epstein on Epstein 14 Participatory Democracy: Cracks in the Façade A recent visitor to Australia, the distinguished Chicago Active, ‘participatory’ democracy allows some lobbies and Law professor discusses some of his formative experi- NGOs to get two undeserved bites of the cherry when it ences and his classical liberal outlook on the world. comes to influencing policy. Gary Johns Andrew McIntyre 16 Triumph of the Swill 36 Free_Enterprise.com Our television film reviewers fail dismally in their assess- In their zeal to secure and promote human rights, some ment of Michael Moore’s film Fahrenheit 9/11. Ted Lapkin organizations tend to overreach, with some strange results 18 The ‘R’ Files as a consequence. Stephen Dawson The rate at which public money is being spent for anti- 38 What’s A Job? business regulatory zealots is cause for alarm—just where It appears that labour has at last become more aware of, and how is our money is being spent? Alan Moran and responsive to, the external market signals experienced 20 Choosing and Reforming Schools by firms. Ken Phillips Why is there widespread disenchantment with the state 39 Strange Times education system, and why do parents send their children The weird, the wacky and the wonderful from around the elsewhere in spite of the extra costs? Geoff Partington world. Compiled by IPA staff and columnists SPECIAL INSERT 40 Letter from London There is quiet desperation in England. Blair is walking Good, Safe, Banned backwards and the Conservatives are getting nowhere. Professor Richard T Roush John Nurick An edited version of his address to the annual HV McKay Lecture in Melbourne in August 2004. BOOK REVIEWS 23 Blackboys Tell An Interesting Story Recent research on that icon of the bush, the Blackboy, 41 Patrick Morgan reviews Culture of Fear: Risk-Taking and the proves that ‘muddled headed’, Green-inspired fire-exclusion Morality of Low Expectation by Frank Furedi; David Robertson policies on vegetation are just that. David Ward reviews In Defense of Globalization by Jagdish Bhagwati. R E V I E W Editor: Mike Nahan. Publisher & Executive Director: Mike Nahan. Production: Chris Ulyatt Consulting Services Pty Ltd. Designed by: Colin Norris, Kingdom Artroom. Printed by: Pinnacle Printing, 288 Dundas Street, Thornbury VIC 3071. Published by: The Institute of Public Affairs Ltd (Incorporated in the ACT) ACN 008 627 727. Level 2, 410 Collins Street, Melbourne Victoria 3000. Phone: (03) 9600 4744. Fax: (03) 9602 4989. E-mail: [email protected] Website: www.ipa.org.au Inside cartoons by Peter Foster [(03) 9813 3160] Front cover photo by John Carr Unsolicited manuscripts welcomed. However, potential contributors are advised to discuss proposals for articles with the Editor. Views expressed in this publication are those of the authors and do not necessarily reflect the views of the IPA. Reproduction: The IPA welcomes reproduction of written material from the Review, but for copyright reasons the Editor’s permission must first be sought. From the Editor

MIKE NAHAN

PARTICIPATORY While the NGOs—the political DEMOCRACY parties of participatory democracy— often claim to represent the One of the main planks of the Left’s unorganized, the inarticulate and the remaking of itself which has taken place disadvantaged, they seldom do so in over the last 30 years has been the either a formal or informal manner. Few promotion of what it calls ‘participatory have many members or even seek the democracy’. views of the people they claim to The concept appeals at many levels. represent. Most, as Dr Johns explains, First, it is rhetorically correct. By are nothing more than small groups of combining the two motherhood activists who share an ideology—an concepts of participation and demo- ideology which is often at odds with the cracy, it provides its proponents the values of the people for whom they high moral ground. It also implies that claim be acting. As such, they are both the alternative, representative demo- Finally, by focusing on process rather unelected and out-of-touch with their cracy, does not allow the direct than outcome, participatory democracy proclaimed constituents. participation of citizens. offers the much-desired opportunity for The ‘participatory democracy’ push Second, it is highly malleable. While activists to turn their ideology into a has not been restricted to the formal the concept has a long intellectual long, and hopefully lucrative, career. political process, but is increasingly tradition, it has remained undefined, The Left’s revitalization and, in seeking, and getting, access and with few institutional guidelines. As such, particular, its development of influence in the bureaucracy, regulatory it was ripe for the Left to capture the participatory democracy has been bodies and in business. Alan Moran idea and structure it to their advantage. hugely successful. Indeed, it has allowed (‘Funding the Consumerist NGOs’, page Third, after being ejected from the erstwhile activists of the Left to 18) explores the growing tendency of commanding heights of representative become the ‘new political regulatory bodies such as the ACCC to democracy, the Left needed to find a establishment’. It is supported by many, open their doors and their purses to new political path and set of institutions funded by all, invited into the halls of groups who claim to, but do not with which to mould society to its power in parliament, the bureaucracy actually, represent broader interests. image. Participatory democracy has and the boardrooms, and is paid Their impact, at least in the case of the been made to fit the bill. handsomely for doing so. The NGO ACCC, is perverting the fundamental Fourth, the problem with the old sector—the main institutional purveyor character of the Commission. It is ideologies of the Left—socialism and of participatory democracy—has grown turning it from a neutral enforcer of the communism—was that they were based to become a global business with an Trade Practices Act to a ‘campaigner’ for on achieving explicit outcomes—high annual income of $10 billion. In fact, causes identified by activists—activists levels of economic growth, redistributing large NGOs, such as Greenpeace, who for decades have been amongst wealth and power, changing people from World Wide Fund for Nature, Oxfam the most vocal critics of market-based being self-focused to being focused on and World Vision, now provide much competition which the Commission was the greater good. These objectives were safer, longer and more lucrative career- established to encourage. testable, the Left failed the test and paths than do government and business. Although our formal democratic were rejected at the ballot box. Rather As argued by Gary Johns in this issue system has it weaknesses, and although than fundamentally changing their beliefs (‘Participatory Democracy: Cracks in there is a need to encourage greater and aims, it sought to wrap much of the Façade’, page 14), while participatory direct participation in the political their old ideology in a new, less testable democracy has deepened and extended process, the representative system is far and transparent, set of concepts and access to political decisions for some, it more democratic and open to all than institutions. Participatory democracy, has not done so for all. It has skewed the perverted form of participatory along with other planks of the Left’s the political process in favour of the democracy that is gaining force in revival—sustainable development, social organized, the political and the Australia. justice and peace—are sufficiently articulate: those best able to get their opaque to avoid testing and therefore to voices heard in the noisy, free-for-all of avoid clear-cut rejection. the ‘participatory democracy’ world. I P A

R E V I E W 2 SEPTEMBER 2004 Why Profits Are Good

ROGER KERR

HE chief social role of customers to part with their money, including consumers, employees, business is to produce the they will flourish. If they don’t, they suppliers and the communities in goods and services that won’t. which it operates. Even if it were T people need in their daily Ordinary the role of business may true that shareholders are only in- lives. By making better and cheaper be, but boring it is not. It has pro- terested in a company’s bottom line, products, and creating new ones, duced amazing products from peni- its profitability is sensitive to the firms raise living standards and coun- cillin to Prozac, and from gramo- firm’s reputation among its stake- tries grow richer. Business is the phones to iPods. As historian and holders. Simply because of their size, wealth-creating institution of soci- journalist Paul Johnson has written, large firms are more visible to the ety. business is creative: public and therefore more vulner- I propose to examine this core [T]his is a point often missed able than small firms to negative function of business and set it against about the capitalist system. We perceptions affecting their reputa- the backdrop of recent economic have been taught to see it, tion. While a small firm in the fast history. I take a very positive view particularly by Marxists and their food industry would seldom be at- of the primary role of business. In contemporary successors, purely tacked on the grounds that if you eat this I differ from those who believe in financial terms … But too much of its products you will that the alleged effects of globaliza- capitalism also involves starting become fat, that is precisely the ba- tion mean that business must accept from nothing, building vast sis of recent adverse publicity aimed new and potentially costly obliga- factories, digging mines and at McDonald’s. tions. launching exciting new products So there is no argument that Business is the instrument that onto the market. businesses have social responsibili- has freed many people from mind- All of this ingenuity is a natural ties, as do other organizations such less toil. Over the past 200 years it consequence of the central impulse as partnerships, co-operatives, clubs, has transformed the way we live. It of business—to achieve profits by trade unions, universities, charities has expanded opportunities, un- delivering products at prices that at and churches in which people join leashed advances in technology and least cover their costs of production. together voluntarily to pursue com- even civilization, and has allowed Or, in common parlance, to make mon goals. countless individuals to apply their money. This is what people seek to The only debate—and it is an talents to achieve their own aspira- do in their working roles every day. important one—is about the specific tions. Teachers, for example, seek a return roles and responsibilities we should Competitive economies are orga- on their human capital just as inves- ascribe to businesses on the one nized in the interests of consumers, tors in a firm seek a return on the hand and governments on the other. not producers. Consumers are the financial capital they have contrib- Establishing and maintaining an employer’s employer. Firms respond uted. Investors who don’t care about open and competitive market to the demands of customers by the returns on their savings are rare economy is a matter for public keeping down costs and prices, and creatures; so too are teachers who policy. It lies outside the power of by timely innovation. They supply don’t care how much they are paid. an individual business. Economic jobs and generate returns on the in- Of course, money must be made progress does not depend on a com- vestments that savers make in them. honestly. Businesses must operate mitment by businesses to bring it Through competition, companies lawfully and ethically. Situations can about, but on the twin stimuli that are forced continuously to give bet- arise in which directors and manag- a market economy provides: wide- ter value for the consumer’s dollar. ers, and shareholders too, need to ranging entrepreneurial opportuni- On a practical level, one could consider what it is right for a com- ties and pervasive competitive say that business is just the ordinary pany to do, not just what is legally pressures. It is governments that de- stuff of life. It is about trading in the permitted or required. termine public policy, which in- marketplace for mutual gain, as has To be successful, a business has cludes creating the policy happened from time immemorial. If to have regard to the views and in- environment in which businesses firms do their job well and persuade terests of a range of stakeholders— must operate. ▲

R E V I E W SEPTEMBER 2004 3 In a forthcoming study, The Role of recent years is not a new phenom- market have lifted millions out of of Business in the Modern World, Brit- enon. It was strongly in evidence poverty. The usual problem with the ish economist David Henderson over the century that ended in 1914, most backward countries is not too looks back over the past half-cen- and though reversed between World much globalization but too little. tury. He finds that the ‘record of un- Wars I and II, was clearly re-estab- The further liberalization of foreseen economic achievement lished, albeit with many limitations, cross-border transactions has opened often goes unrecognized or underval- in the decades following 1945. It did up new opportunities for enterprises ued’. He notes that, generally speak- not assume a new character, nor cre- to innovate and has strengthened ing, sustained high growth rates have ate a radically new situation, in the the competitive pressures on them owed little or nothing to direct for- 1990s. to do so. In this process, the primary eign aid, to public-spirited conduct Governments have made trade role of business—as agents of change by large international firms, or to and capital flows freer in recent de- within a market economy—has nei- collective resolutions and initiatives cades, and some of them have even ther been undermined nor put in on the part of ‘the international made international migration flows question: to the contrary, it has been community’. Instead, everywhere, freer, because they considered with confirmed and reinforced. Multina- ‘the material progress of people, rich good reason that this was in the in- tional enterprises are under greater and poor alike, depends primarily on terests of their citizens. But govern- pressure than ever to perform. the dynamism of the economies in ments have remained sovereign; Mistaken ideas about globaliza- which they live and work’ and the tion have, however, helped fuel the performance of businesses within argument for the adoption of ‘cor- them. There is no argument porate social responsibility’ (CSR). Martin Wolf, the economics edi- Using the claim that ‘the business tor of the Financial Times, argues in that businesses have of business has changed’, advocates his new book, Why Globalization of CSR tell us that today’s company Works: social responsibilities, should meet ‘society’s expectations’ The active force of profit-seeking by pursuing the goal of sustainable business people exploited and as do other development and thus consciously drove the economic transform- contributing to the public welfare. ation, as it continues to do to this organizations such They also seek to impose on firms day. It is they who choose the new obligations, such as ‘triple bot- investments and make the tech- as partnerships, co- tom line’ reporting, and the require- nological innovations. The mar- ment to consult and negotiate with ket economy is, as a result, the operatives, clubs, trade non-governmental organizations only human institution that (NGOs) and other ‘stakeholders’. generates a ‘permanent revo- unions, universities, The term ‘sustainable develop- lution’. ment’ is problematical. Nobody is for There are those who oppose this charities and churches ‘unsustainable development’. But ‘permanent revolution’. I will look the idea that economic growth is the at two of the most common threads antithesis of sustainable develop- of this debate: the pot-shots often they continue to lay down the rules ment is flawed. Growth typically aimed at globalization and the argu- for business operation, whether lib- leads to improved environmental ment for new forms of ‘corporate so- eral or illiberal. They may voluntar- quality by raising the demand for it cial responsibility’. ily sign up to international agree- and providing the wherewithal to The myths about globalization ments, such as those arising out of meet that demand. include the idea that it is a sudden, the World Trade Organisation, but The additional obligations pro- new development that has been equally they are free to reject or (sub- posed by advocates of CSR would be forced on reluctant governments; ject to meeting procedural commit- likely to raise the costs of firms and that it has ‘marginalized’ poor coun- ments) withdraw from them. reduce shareholder value and na- tries; conferred undue benefits or Globalization has brought gains tional income. Firms adopting the new powers on multinational enter- to people in all countries, rich or doctrine of CSR have an incentive prises; deprived governments of the poor, where market economies are to ensure that competitors are forced power to act; and created a need for sufficiently developed for business to follow their example. This makes new procedures for ‘global gover- enterprises to be able to profit from for over-regulation and a weakening nance’. greater economic freedom. In of competition. Moreover, CSR re- Contrary to assertion, the closer China, India and many other devel- quires companies to make highly international economic integration oping countries, moves from plan to debatable political judgements. By

R E V I E W 4 SEPTEMBER 2004 diverting the focus of boards and the case of business, the real are essentially those in David Hen- managements from shareholder question is: What are the pre- derson’s forthcoming book. value maximization, it also allows conditions for earning a profit? First, business is the wealth-cre- them to escape accountability for From an economy-wide perspec- ating institution of society. Its prime poor financial performance. tive, David Henderson argues that social role is to meet consumers’ Martin Wolf, in an article, Sleep- the right preconditions are: a reason- needs in the most efficient manner, walking with the enemy (Financial ably stable government that acts re- and thereby raise living standards. Times, 17 May 2001) has pointed sponsibly in matters of public finance Second, it is the responsibility of out that: and the control of the money sup- governments to create an open and … behind the pressure to adopt ply, well-maintained property rights, competitive economic environment social responsibility lies hostility and freedom for individuals and en- in which business can make its most to the profit motive itself. What terprises to control their own eco- effective social contribution. is needed, critics argue, is to put nomic decision-making. Third, alternative notions of cor- ‘people before profits’. The truth A key element is economic lib- porate social responsibility should be is the opposite. It is by seeking eralization. Liberalization has two re- rejected on the grounds that they are out opportunities for profit that lated purposes. First, it enlarges the based on incorrect premises and business contributes to economic domain of economic freedom for would deflect business from its pri- and social development. Com- people and enterprises alike. Second, mary role. One of the mistakes of our petitive businesses are forced to it furthers the material welfare of time is to divert people or organiza- seek new markets and employ people in general. From a liberal tions from the good they do for so- previously under-used resources. ciety by performing their roles well In so doing they benefit their and to assign them instead the prob- customers, their employees and In China, India and lematical role of trying to do good the countries in which they directly. operate. many other developing Fourth, profits and losses serve an Economic profits reflect the dif- essential function in a competitive ference between what consumers are countries, moves from economy; generally speaking, they willing to pay for goods and services signal where society’s resources can and the costs of producing them. In plan to market have be put to best use. a well-functioning market economy, And fifth, there is ample scope enterprise profits are performance- lifted millions out in most countries for further eco- related: they can only be earned by nomic liberalization. Recent trends serving consumers in resourceful and of poverty in the opposite direction here are innovative ways. Profits can thus worrying. As Henderson puts it: serve as an indicator of each enter- Measures and policies that nar- prise’s contribution to the welfare of standpoint, both purposes can be row the scope of markets and people in general. As such, profits viewed as ends in themselves, while reduce economic freedom can do and losses provide an indispensable the first is also a means to the sec- extensive harm. Not only do economic signalling function. How ond. they act as a brake on economic well they serve this purpose depends The Economic Freedom of the progress, but they are liable to largely on the extent of competition World 2004 Annual Report showed impair the quality of individual and economic freedom—they cease that economically free nations and social life. A well-function- to perform the same role if they are achieved an average of 3.4 per cent ing market economy gives people due to subsidies, protection or ex- per capita growth a year from 1980 the freedom to act in ways that ploitation of a monopoly position. to 2000, compared to 1.7 per cent will make their lives more com- The American economist Tho- for countries with middling eco- plete, as well as materially richer. mas Sowell in his book, Basic Eco- nomic freedom and just 0.4 per cent This is a reality that should be nomics: A Citizen’s Guide to the for ‘unfree’ nations. The results are taken to heart by those who wish to Economy, has responded to critics of even more startling for poor nations. see our prosperity continue. the profit motive by saying that: Economically free poor nations had The greatest contribution that a an average growth rate of 5.2 per Roger Kerr is Executive Director of the New business makes to the economy cent compared to 1.7 for the middle Zealand Business Roundtable. This is an edited version of a speech given at The and the society is in producing group and 0.6 per cent for the least Insurance Brokers Association of New Zealand, the most goods with the least free group. Rotorua, on 13 August 2004. resources … What matters is not Let me therefore summarize the the motivation but the results. In points I have been making, which I P A

R E V I E W SEPTEMBER 2004 5 Green Arithmetic and Doctors’ Wives—The Election 2004

CHRISTIAN KERR

HEN a newspaper with and 4.96 per cent in the Lower electorates ranked by relative socio- the popular—and popu- House. economic advantage prepared by the list—instincts of Sydney’s These voting patterns, tied with Parliamentary Library from the 2001 W Daily Telegraph claims a po- their increased vote, mean that the Census. litical tag as its own, poll watchers Greens’ preferences will be more in- Indeed, Wentworth and Kooyong take notice. And so it was late in May, fluential than the Democrats’ in shap- and Dennison—and much of Sydney when political editor Malcolm Farr ing the outcome of the House of and Grayndler and Melbourne Ports wrote about ‘the doctors’ wives … the Representatives results and deciding and Melbourne—take us back to the women the Government most fear’. who will win government. doctors’ wives. Who are these people? Who are they? ‘They look and Since the last election, the Aus- Farr explains that these women come sound like Liberal supporters’, said tralian Democrats have lost a leader from comfortable families created by Farr, ‘but this year they are consider- and disintegrated. Simon Crean has high-income husbands. ing voting Green—even Labor’. become the first Labor leader to be The ‘doctors’ wives’ are not When Parliament resumed at the dumped without ever contesting an seriously troubled by financial end of the winter recess, Newspoll election and his party has embarked pressure and have plenty of time still had the Greens on six per cent. on the Latham experiment. Electoral to think about other issues. They This was fifty per cent higher than redistributions have also occurred in have opposed the Government’s the Nationals, who only managed Victoria, Queensland and South Aus- border protection policy and four. The Greens thrashed their old tralia. cannot forgive John Howard for rivals for the protest vote, the Aus- Using these new boundaries and Tampa. Now they are angry over tralian Democrats, who just managed the 2001 primary voting figures, it Australia’s presence in Iraq. They to rate one per cent. appears that the Greens’ ten stron- are appalled by the atrocities The Morgan Poll results from the gest seats are Melbourne, Sydney, committed on Iraqi prisoners and same period put the Greens in a stron- Grayndler (NSW), Batman (Vic), believe Australia has been ger position. Morgan gave the party Melbourne Ports, Kooyong (Vic), tarnished. Like most Australians eight per cent, with the Democrats Denison (Tas), Richmond (NSW), they didn’t want us to sign on for on 2.5 per cent and a mere 1.5 per Wentworth (NSW) and Franklin the war and now they are ready cent of voters signalling support for (Tas). to punish the Government. the Nationals. Of these, Richmond is the only Farr specifically warns that their Where is the Greens support com- rural or regional seat, and it includes backlash could be felt in seats such as ing from, and what might it mean for the hippie havens of the New South Wentworth, and adds that the doc- the Federal election? Wales north coast. Franklin is semi- tors’ wives could also influence Sen- First, some matters of electoral rural, but most of the electors live in ate contests, with the Liberals the arithmetic need to be looked at. The the Hobart suburbs on the Derwent’s losers. Australian Democrats have tradition- eastern shores. So why will they vote this way? ally been a Senate party. Electoral Batman, in Melbourne’s northern The ‘Power’ edition of The Australian Commission figures show that, in suburbs, is the only genuinely blue- Financial Review Magazine, published 2001, they won 7.25 per cent of the collar electorate on the list. Sydney, at the end of July, may have some Senate primary vote, compared to Grayndler, Melbourne Ports and answers. 5.41 per cent of the first preference Melbourne are fashionable and rap- The figure at the top of its Cul- ballots in the House of Representa- idly gentrifying. Denison takes in tural Power list was, and remains, in- tives. Hobart’s poshest parts, while Went- visible—the young woman whose The Greens, in contrast, received worth and Kooyong respectively rate sexual assault allegations against 4.94 per cent of Senate primaries third and fourth highest on the list of members of the Canterbury Bulldogs

R E V I E W 6 SEPTEMBER 2004 Rugby League Club sparked off a re- Its author, Patrick West, postulates all. It may make their lives worse thinking of sexual mores throughout a fascinating hypothesis that explains by rewarding their kleptocratic organized sport and in the wider com- the motivation of the ‘doctors’ wives’ governments, freeing up their munity. and many Green voters. His thesis is budgets to buy more guns to Then, at number two, was the simple: he claims that we live in an perpetuate their pointless wars … Australian Greens leader, Senator age of conspicuous compassion. I believe that conspicuous Bob Brown. Immodest alms-giving may be as compassion … is a symptom of He was propelled there by an un- old as humanity—consider the what the psychologist Oliver likely pair of experts, according to the tale of Jesus rebuking the self- James has dubbed our ‘low sero- AFR—Robert Manne, the conserva- exalting Pharisee—but it has tonin’ society. We are given to tive, turned bleeding heart, Professor flowered spectacularly of recent. such displays of empathy because of Politics at La Trobe University and We are given to ostentatious we want to be loved ourselves. Max Moore-Wilton, a friend of John displays of empathy to a degree Despite being healthier, richer Howard’s, former head of the Depart- hitherto unknown. We sport and better off than in living ment of Prime Minister and Cabinet countless empathy ribbons, send memory, we are not happier. and now Sydney Airport Corporation flowers to recently deceased Rather, we are more depressed CEO. celebrities, weep in public over than ever. This is because we have Manne offered this view: the deaths of murdered children, become atomized and lonely. Outside the economy, some apologise for historical mis- Binding institutions such as the people think—and maybe they demeanours, wear red noses for Church, marriage, the family and are part of the elite—that the the starving of Africa, go on the nation have withered in the country has not gone well in the demonstrations to proclaim ‘Drop post-war era. We have turned into last few years with regard to things the Debt’ or ‘Not in My Name’. communities of strangers … No like indigenous matters; the We feel each other’s pain. In the wonder we are given to crying in republic; multiculturalism; refu- West in general, and Britain in public. gees; the environment. I’m one of particular, we project ourselves as This, surely, offers an explanation the people who think that this humane, sensitive and sympa- for the doctors’ wives in the leafy sub- period will be seen, when it is thetic souls. Today’s three Cs are urbs and the trendies in the luxuri- understood, to be a backward- not, as one minister of education ous new apartment blocks rising looking period in our history said, ‘culture, creativity and amongst the former industrial lands where all the possibilities of the community’, but rather, as com- and decaying terraces and workmen’s seventies, eighties and nineties mentator Theodore Dalrymple cottages in seats such as Sydney and have been squandered. In so far has put it, ‘compassion, caring Port Melbourne. as there is anyone who stands for and crying in public’. But what of the seats where the at least part of that vision, it’s Bob West is no old man despairing the Greens score the lowest vote? Brown. decay of his culture. Instead, he is a They are Capricornia, in Queens- Moore-Wilton was more succinct: 30-year-old cultural historian. His land, Calare, Chifley and Gwydir in ‘I actually think Bob Brown should thesis is that these ‘displays of empa- New South Wales, Maranoa, Wide be there. I think the Greens are a ris- thy do not change the world for the Bay and Kennedy in Queensland ing force, not a declining force’. better: they do not help the poor, dis- again, New England in NSW, Mallee Canberra Gallery veteran Mich- eased, dispossessed or bereaved.’ In- in Victoria and Makin in South Aus- elle Grattan observed in The Age just stead, he writes: ‘Our culture of tralia. before Parliament resumed that ‘the ostentatious caring concerns, rather, All but Makin and Chifley are ru- politics of the grand gesture will be projecting one’s ego, and informing ral or regional seats. Chifley, in on show in Election 2004’. others what a deeply caring individual Sydney’s outer west, has the highest But why, in a time of prosperity, you are. It is about feeling good, not proportion of people aged between are presumably well heeled, well edu- doing good, and illustrates not how five and 14 and the second highest cated voters planning to cast protest altruistic we have become, but how proportion of one-parent families with votes? selfish’. He continues: dependent children. At number 71 An intriguing explanation comes This phenomenon is not some out of 150, Makin, out of these, is the in the form of a paper published in harmless foible. Outlandish and highest ranking seat in the Index of Britain in February by Civitas, The cynical displays of empathy can Relative Socio-Economic Advantage. Institute for the Study of Civil Soci- bring about decidedly ‘uncaring’ Calare and Capricornia come in at ety, entitled ‘Conspicuous Compas- consequences. In terms of the numbers 51 and 52 respectively, fol- sion: Why sometimes it really is cruel Third World, ‘dropping the debt’, lowed by New England at number 38. to be kind’. may not help starving Africans at The rest are in the bottom 25 per cent. ▲

R E V I E W SEPTEMBER 2004 7 Wide Bay, the area of Queensland sioned modelling of its own by La for a sustainable future. Losses of coast around Maryborough and Trobe University’s Centre for Sustain- key sectors such as banking or Hervey Bay, is the inverse of able Regional Communities. petrol retail businesses will often Wentworth. It comes in third from ‘Water’, as the report states, ‘is the be enough to force residents to the bottom, not third from the top. economic lifeblood of the region’. travel to larger regional centres It contains the highest proportion of The Centre’s modelling found and change their shopping habits families in the nation with a weekly that a 500 GL increase in environ- to the detriment of local busi- income below $500 and lowest na- mental flows through reduced alloca- nesses. Falling populations can tional family median income, just tions would cost the region just over also lead to the loss of a number $608. $100 million. Some 752 jobs would of services such a schools and The voters and residents of Makin be lost, mainly from agriculture and hospitals, thus further threatening are getting on with life. They live in the viability of the smaller towns. the growth corridor of Adelaide’s Employment opportunities for north-east, and aren’t doing too badly All this, not because younger people, even in the with a median family income of $932 regional centres, would be a week. That may be why they don’t of evil economic expected to diminish further until vote Green. few or no employment oppor- The problems and preoccupations rationalism, but tunities will force nearly all young of the people of Chifley must be people to leave the region and shaped by the suburbs of the Mt because of conspicuous exacerbate existing trends of Druitt public housing estate it encom- ageing populations in these areas, passes. These clearly exclude matters compassion. How many thus threatening the long-term Green. And what of the other 10 sustainability of the region. electorates, the rural and regional other little groups All this, not because of evil eco- seats where Bob Brown’s vote is low- nomic rationalism, but because of est? Victorian Farmers Federation’s of communities face conspicuous compassion. How many Paul Weller has some answers. other little groups of communities ‘Bob Brown’s Greens political similar threats from face similar threats from the Greens? party represents farmers’ biggest In his speech, the VFF’s Paul threat,’ he told the VFF annual con- the Greens? Weller warned how radical environ- ference in July. ‘The Green move- mental groups must be made account- ment is very powerful. It is able to able for the positions they take. influence the metropolitan media and manufacturing, but also from the re- ‘There is a role for the media in this, political decisions. Prime examples of tail, hospitality, transport and storage, too’, he said. ‘The Greens have got this are the decision to commit more and property and business services off too easily for too long in the pub- environmental water to the Snowy sectors. If the water was sourced by lic debate, with feel-good statements. and Murray rivers.’ purchases from the market, however, It is no longer good enough for jour- The Murray provides the perfect output would be reduced by some 4.6 nalists just to report what Bob Brown micro example of impacts of Green per cent and lead to the loss of 3,288 says. Journalists should critically re- whim. The Council of Australian jobs across the council areas, a drop port the Greens’ policies and poten- Governments has decided to increase of five per cent. tial impact in the same way they do environmental flows to the river by The final evaluation was familiar. for the major parties.’ 500 gigalitres under the Living It said that the impact of any of these But what do they do when those Murray First Step decision. This is eventualities would be serious in re- parties are off chasing Greens’ prefer- only a third of the volume originally gional centres, particularly those en- ences? What happens when those proposed, but local communities and gaged in agriculture-related value- preferences make the difference be- irrigators are already disputing Murray adding activities such as food process- tween government and opposition? In Darling Basin Commission claims ing, but may be ‘terminal’ for a num- the age of conspicuous compassion, that the move will cost $17.9 million ber of rural towns in the region. The what comes first—the needs of coun- annually. report continued: try communities or the feelings of The Living Murray Local Govern- The flow-on effects to every sector doctors’ wives? ment Alliance, a group of nine local in an economy have been governments in north central demonstrated above and Christian Kerr is a postgraduate politics student, Victoria and south central NSW, cov- reductions in rural towns could be political commentator and former federal and state Liberal ministerial adviser. ering 35,473 square kilometres and expected to take many of them home to 161,095 people, commis- below the critical mass sufficient I P A

R E V I E W 8 SEPTEMBER 2004 Have Research and Innovation Failed Australia?

TOM QUIRK

VER the last 20 years, we Our policy-makers consider our has been completely beside the have been invited to get universities ‘golden geese’. The point? We have had endless repeti- up early to stand on the golden eggs of technical innovation tion of the theme, but could it be O summit of innovation are expected to hatch and grow to that none of it—including the ap- and watch the sunrise industries be new, high-tech and dynamic parent failures of university or com- rise. businesses. The process is called re- mercial R&D—has anything to do The road map has been laid out search and development (R&D) or with the real economy in Australia? for us. Australia has a perceived mar- sometimes, ‘industry policy’. Fur- ket investment failure because it has ther, our universities are expected SOME FACTS spawned so few high technology to help solve important issues of the In 2001, the total R & D expendi- businesses—a consequence of low day, such as global warming. ture for Australia was 1.53 per cent business research and development Yet, after many years of effort, of GDP with the business contribu- expenditure compared with many what has been accomplished? tion at 0.72 per cent of GDP. The OECD countries. Industry does not Within the OECD, Australia has equivalents for Finland were 3.40 do enough, so governments—both remained in the lower third of busi- per cent and 2.40 per cent. Federal and State—must help. Uni- ness expenditure on research and Are we in trouble? No, the ex- versities and research institutes are development for the last sixteen planation for the difference is struc- to be the vehicles to carry the load. years. But, despite this failure, the tural. In Finland, the electronics The start-up ideas are to carry Aus- country has enjoyed dramatic and industry’s R&D is 1.3 per cent of tralia to an increased standard of liv- sustained economic growth. GDP. It is a technology-intensive ing and protect us from the decay of Could it be that all our hand- business and the major contribution our present economic base. wringing to the siren’s song of R&D comes from one business, Nokia. ▲

Table 1: Countries arranged by Business R&D

GDP % Total Business Business R&D Higher Growth R&D R&D Education R&D 1992 to 2002 % GDP 2001 % GDP 2001 % Business R&D 2001 % GDP 2001 High- Medium Low- Service tech high-tech tech

Sweden 29 4.27 3.31 49.1 29.1 7.1 12.8 0.83 Finland 38 3.40 2.42 57.0 15.3 12.8 12.0 0.61 Japan 12 3.09 2.28 41.8 39.8 13.4 2.1 0.45 United States 37 2.82 2.10 39.4 19.4 6.1 34.4 0.40 Germany 14 2.49 1.76 30.1 53.8 7.3 7.8 0.40 Denmark 28 2.19 1.42 35.9 17.9 10.3 35.2 0.45 United Kingdom 32 1.90 1.28 48.3 24.6 7.4 16.6 0.41 Canada 41 1.94 1.12 53.4 6.9 7.0 29.0 0.59 Norway 38 1.62 0.97 21.4 15.8 17.2 48.0 0.42 Ireland 114 1.17 0.80 51.5 11.8 11.7 24.6 0.26 Australia 47 1.53 0.72 21.4 15.4 13.7 39.9 0.41 Italy 17 1.07 0.54 42.3 31.2 6.4 19.7 0.33

Source: OECD in Figures 2003: Selected data from Tables on pages 14, 70 & 72

R E V I E W SEPTEMBER 2004 9 By way of comparison, Merck, of some five to 15 years for feed- dom data in 2001) showed that uni- Intel and IBM each spend more on through from higher education versities contributed 4 per cent and R&D than the sum of all Austra- to business. research organizations accounted for lian businesses. • Australia’s industrial structure is 2 per cent of innovations. The re- The R&D figures are based on very different from that of high- mainder was made up from industry an OECD definition which excludes tech Europe and America. In the with 80 per cent and the balance the exploration and development Pacific, we are very different from its customers, competitors and expenses of the mineral and petro- from Japan. This is reflected in inventors. Within companies, the leum industries. Yet this expenditure the R & D spending pattern. commercial staff was twice as suc- on exploration and development is A comparison with our perfor- cessful as the technical staff in the exact equivalent of manufactur- mance in the 1980s shows that choosing winners but still had a suc- ing R&D. Exploration and develop- along with other low-tech countries, cess rate of only 55 per cent. (The ment requires graduates and we have lifted our industrial R&D worst hit rate from a limited assess- post-graduates as a professional expenditure significantly. Perhaps ment came from the CEOs). group, and frequently operates at the this represents no more than the Of course, innovation does not leading edge of technology, using general industrial shift to the use of have to be technical or science- exotic sensors, satellites and com- more advanced technology. Varia- based. Service industries thrive on puters—all perfect for the ‘high tions in the performance of Euro- innovation, supplying new products tech’ world. A mineral or petroleum pean countries reflect their different to customers. The banking, insur- discovery comes as much from ance and broking sectors have pio- someone’s head in terms of concep- neered new products. It is even tual thinking as any invention. Af- Studies in the 1980s arguable that News Corporation is ter all, a deposit only gains value by Australia’s greatest technical suc- its discovery and subsequent devel- showed that univer- cess, using everything from satellites opment to the point where it can to the most advanced printing be exploited. sities contributed presses. Macquarie Bank has grown So depending on what year is se- on its ability to pioneer new finan- lected and the accounting method 4 per cent and research cial offerings that facilitate resource chosen, another one billion dollars allocation. All this, however, is ex- could be added to Australia’s R&D organizations … 2 per cluded from the debate. account, giving it a 0.2 per cent of GDP boost. cent of innovations. POLITICIANS AND TECH- Australia’s R & D performance NOLOGISTS has to be understood by looking at The remainder was At present, our politicians are fo- our industrial structure compared cused on biotechnology. It is diffi- with other countries. made up from industry cult to identify the probable cause Table 1, taken from the OECD’s of this love affair, but it may be the Figures Report for 2003, shows with 80 per cent … business equivalent of kissing ba- countries ordered by business R&D bies! expenditure. It also shows growth in Nonetheless, universities that GDP and higher education expen- industrial development histories. accept government funds are told to diture on R&D. This would be mirrored by regional strive to commercialize their re- A number of observations can be variations within the United States. search, matched to the needs of the made from this table: country. A report of the Business • Australia’s higher education R&D IS NOT INNOVATION Council of Australia recently sug- R&D is not out of line with most One reason for the interminable dis- gested a target of 10 per cent of uni- of the major developed coun- cussion about university and com- versity revenue from this activity. A tries. So universities are not dis- mercial R&D is the belief—not dis- sobering comparison is to look at the advantaged in Australia. couraged by research institutes and CSIRO. Revenue from royalties and • There is little to demonstrate a universities—that they are the licensing has just reached 1.5 per connection between the levels of source of innovations. In a very im- cent of total income of near one bil- higher education and industrial portant way they are (see below) but lion dollars. This is after 70 years of R&D. Increased high-tech R&D they are not the direct source of in- practice! levels are not matched by in- novation. Studies of European and At the present time, we have creased higher education R&D United States innovation in the concerns about global warming, de- levels. There should be a time lag 1980s (confirmed by United King- pleting energy resources, renewable

R E V I E W 10 SEPTEMBER 2004 energy, viral plagues, genetic ma- another, but equally important, as- problems can be quite as intractable nipulation and finally destruction by pect. A local illustration of this is as the problems of pure science, but rogue asteroids. All this is amplified to be found in the long-running re- whereas the pure scientist may have by pressure groups, be they environ- search of Professor Donald Metcalf freedom of choice to avoid these, mentalists, NGOs or those seeking at the Walter and Eliza Hall Insti- the applied scientist often does not. funds for their own investigations. tute in Melbourne. This led to the Intractable problems do not lead to So we find that scientific break- discovery of Colony Stimulating academic promotion. throughs are being replaced by Factors (CSFs). This discovery was The most sensible research direc- impending ‘disasters’. The con- the key to the success of the US cor- tions for Australian tertiary institu- founding problem is the politi- poration, Amgen, which has grown tions must be those where cization of these issues and partisan from a million dollar start-up of the excellence is affordable. Thus it science. 1980s to a ten billion dollar giant. would make little sense to support This has led universities and re- Universities are not driven and programmes that require instru- search institutions to chase funds to ordered institutions. They reflect ments costing tens to hundreds of investigate these issues. By entering their origins as associations of schol- millions of dollars unless the coun- areas of partisan science, they risk ars, and those who choose to be aca- try and its scientists possess or cre- reputations and may do long-term demics would not necessarily fit ate some extraordinary advantages. damage to their institutions. easily into more ordered institutions This has been the case in astronomy, The greater danger is that pre- nor take the entrepreneurial risks of where instrumentation is expensive, cipitate action, taken against these but where Australia has excellent supposed approaching disasters, astronomers and access to the skies costs the economy billions of dol- There is no of the Southern Hemisphere. But no lars and achieves little. advantage lasts forever, and orbit- If we are to see a repeat of gov- compelling evidence ing satellite telescopes will finally ernments attempting to pick busi- deprive us of this advantage. Mean- ness winners, then we are in trouble. that our obsession while, the astronomers have There is a long and well-docu- achieved such eminence in their mented history of failure in this from with research and field that access to the new obser- many countries and by many gov- vatories should be assured. ernments. George Pompidou is sup- development is really posed to have counselled Valery CONCLUSION Giscard d’Estaing that the three the critical There is no compelling evidence great dangers for politicians were that our obsession with research and wine, women and technologists. determinant for the development is really the critical de- terminant for the economic well- WHY ASK UNIVERSITIES TO economic well-being being of the country. In fact, it is PRODUCE THE IMPOSSIBLE? arguable that marketing and selling How the universities influence eco- of the country are more important, and that the in- nomic performance is clearly diffi- teraction with customers and mar- cult to track if the important fac- kets sets the direction for innova- tors are ‘being there’ and under- starting a company and leaving their tion. standing markets—not parts of gen- university. Moreover, the research We are following a path with our eral university experience. It is the conducted in universities, particu- universities that will lead to disap- skills and training of graduates that larly in science, is determined by pointment. Inappropriate tasks are constitute the great contribution goals set by international competi- being put upon them and in their that universities make to the tion and relevance. So if research is willingness to obtain funds they economy. It is those trained to un- to be directed at ‘commercial needs’, readily agree that they are capable derstand, interpret and explain who those receiving the direction may of delivery. will carry that background in their not readily accept it. The more se- Instead we should allow them to work (whether in commerce, law, riously the science and the scientist do what they do best: teach and re- arts, engineering or science) to the are limited and constrained in their search. issues and problems of their business. chosen fields, the greater the con- They are the likely innovators. sequent loss of the real excitement Tom Quirk is a member of the Board of the IPA. He has helped set up and manage biotechnology companies The importance of knowledge- of science and the loss of talent from and before that worked as an academic physicist. seeking research and the unpredict- the country. An interesting aside to able consequences of such work is this problem is that applied science I P A

R E V I E W SEPTEMBER 2004 11 Discrimination Divas

JANET ALBRECHTSEN

OT SO long ago, feminists But where are they? Very few are using savvy marketing to get the the world over reviled judges in our courtrooms, partners in message across, handing out beer Miss Universe contests law firms or silks at the bar. Very few coasters that say ‘What’s a nice girl N and the like. Driven by are in our boardrooms or running our like you doing in a pay gap like this’. two parts ideology and, perhaps, one big companies. But raw numbers rarely support part envy, they bemoaned how beau- In support of this thesis, we are the sort of simple story that discrimi- tiful women in high heels would strip presented with a range of raw num- nation divas would have us believe. down to their bikinis or glide around bers. For example, recently, newspa- Look at the law. As women embark in evening gowns. It was, they said, pers ran headlines such as ‘Women on a legal career, pay packets are evidence that women were still play- still poorer in economy boom’, more or less equal. A wage gap be- ing roles assigned to them by a sexist ‘Women’s pay falls further behind’, gins to appear when you compare society. That some women might ‘Women’s wage inequality grows’. women and men aged 30–34. In choose to do so swayed few feminists. 2001, women in that age bracket Back then, nothing was too frivolous earned 81 per cent of their male for feminism’s anti-choice ideology. The best that can be peers. Over time, with each decade, What a relief, then, that the Miss that wage gap increases, so that by Universe contest came and went re- said is that feminists her fifties, a female lawyer is earning cently without the usual feminist 72 per cent of her male colleagues. angst-fest. Not even a home-grown in our midst are now So is the pay gap a case of genu- winner from Newcastle, the stunning ine discrimination or is it dogma? Jennifer Hawkins, could lure our more discerning in The mere fact that one group of feminist anti-fashionistas out. These people earns less than another is not, days, feminists are even strapping on choosing their targets of itself, evidence of discrimination. their own soul-destroying instru- A finding of discrimination de- ments of torture, high heels. So has of disdain. And the pends on a great deal of detail that feminism matured? numbers like these simply do not tell The best that can be said is that enduring favourite for us. Dr Anne Daly, associate profes- feminists in our midst are now more sor of economics at the University discerning in choosing their targets discrimination divas is of Canberra, says that they don’t tell of disdain. And the enduring us anything about how differently favourite for discrimination divas is the workplace men and women work, the sorts of the workplace. That women are not areas they work in, whether they in the workplace in equal numbers work in high-fee grossing areas, or to men, that they do not earn the Behind these headlines was the what level of commitment in terms same as men, that they have not risen story that the wage gap between men of hours they put in. to the top in equal numbers can and women had grown by a further All of these variables matter mean only one thing: women are still $80 a week. According to the Aus- when you compare earnings of men victims of a sexist society. tralian Bureau of Statistics, average and women at this later career point. The orthodox view says that the weekly earnings for men are $894 But we never hear about them when feminist revolution has stalled. The and $582 for women. feminists peddle their tale of dis- statistics at the starting gate are The message is clear enough. crimination woe. promising enough. Women are pour- Women are victims of pay discrimi- So let’s add some detail. Sociolo- ing out of universities in greater nation. Sex Discrimination Com- gist Catherine Hakim is now well- numbers than men. But down the missioner Pru Goward told one known for her research into women’s track, the picture is apparently bleak. newspaper that equality will only preferences. Her research reveals After all, these highly educated move from an idea to reality when that only 20 per cent of women treat women were the ones who were the pay gap closes. In Britain, the their jobs as the primary focus of their meant to have taken on the world. Equal Opportunity Commission is lives.

R E V I E W 12 SEPTEMBER 2004 By contrast, 60 per cent of men to work more hours. An overwhelm- A few years ago, when the Interna- describe themselves as work-centred. ing majority of women—by a factor tional Social Science Survey of Thus for every woman who regards of 4 to 1—said ‘No thanks’. That 15,000 Australians revealed that work as the centrepiece of their lives, may explain why the proportion of two-thirds of the general population there are three men. So men and women aged 15–64 working full- believe it’s best for young children if women are not competing in equal time has changed very little since the their mothers care for them full-time, numbers. Yet some feminists illogi- mid-60s. Adele Horin used the ‘c’ word three cally believe that equality for women Old-style feminists will dress up times when reporting the ISSS re- means a 50/50 per cent ratio in the numbers in simplistic terms as bad sults in a news item in the Sydney workplace—at all levels. news, as evidence of discrimination. Morning Herald. A few months ago, the Australian But for every negative slant, there is Personally, I don’t mind the con- Financial Review magazine, Boss, a positive one. It is not just a case of servative moniker at all. But I can added some more detail. It pointed the glass being half full. Sometimes tell you that the women I know who to statistics that show how, overall, the other angle, for example the one choose to stay at home are hardly women work fewer hours than men. about women’s choices, is a more conservative. God forbid, many of It concluded that ‘as long as that re- truthful one. Unfortunately, that them wouldn’t vote for John Howard mains true, it means that women’s in a pink fit. But the sisterhood’s con- chances of reaching parity in the descension for those who make dif- corner office will remain remote’. Let’s not forget how ferent choices runs deep. Let me suggest that choice is the Along the same lines, old-style detail that old-style feminists are re- old-style feminists feminists tell tired old stories about luctant to include in their big pic- a collective ‘duty to gender’. Upon ture of discrimination. Many deride those who make her appointment as Victoria’s first professional women are choosing to female Chief Justice, Marilyn War- work less or not at all. The New York different choices. ren announced that when the big job Times called it the opt-out revolu- offer comes, ‘there is a duty to ac- tion. Some will say that these are all Feminists like to label cept. A duty to gender’. rich, have-it-all, women; women Well, only if you believe that be- lucky enough to make choices. But those who stay at ing a member of a group and a pro- that is precisely the point. These are ponent of an agenda is more the women who perhaps should have home with children as important than being true to your taken on the world, climbed the lad- ‘conservative’, and it is own preferences, having a duty to der, made partner, taken silk. But one’s self. It strikes me that this has they didn’t. These are the women not meant as a always been feminism’s failure. who can afford to employ full-time If there is a duty to one’s sex, nannies or pay for five-day-a-week compliment surely it is to allow women to choose. child-care if they wish. But they It is a large and offensive presump- haven’t. tion that the ‘duty to gender’ is a duty And the trend to work part-time doesn’t get much of a run in the me- to put work at the centre of one’s life. goes beyond professional women. As dia because those doing the writing Most women get on and do what of May 2004, of 1,026,000 women tend to be the ones who also try to they want, oblivious to this rigid in the work-force, married or sell us discrimination dogma. agenda of working hero stereotypes partnered with children under the The details behind the raw num- and discrimination dogma. Con- age of 15, 622,000 work part-time bers suggest that women’s preferences strained neither by the 1950s’ picket and 404,000 work full-time. By con- for part-time work, or just less work fence nor the 1970s’ feminist shack- trast, for men in that same category, or different work, with its inevitable les, many young women now enjoy almost 1.5 million work full-time and consequences for promotion and pay genuine choice when it comes to 93,000 work part-time. Some will say packets, is a voluntary act, not the having and raising children. That is that this is evidence of a stalled revo- result of patriarchal oppression. feminism’s success. But you won’t lution, of women being excluded And if we are to talk frankly hear it from the discrimination divas. from full-time work. about discrimination, let’s not forget The alternative view is that the how old-style feminists deride those Janet Albrechtsen has a doctorate in law from the University of Sydney and has practised commercial law. boom in part-time work is a blessing who make different choices. Femi- She writes a weekly column for The Australian. This for women. In the Labour Force Sur- nists like to label those who stay at piece is from a talk given at an IPA Melbourne Dialogue. vey for May 2004, women working home with children as ‘conservative’, part-time were asked if they wanted and it is not meant as a compliment. I P A

R E V I E W SEPTEMBER 2004 13 Participatory Democracy: Cracks in the Façade

GARY JOHNS

HY DOES the Trade Min- to make the car manufacturing in- poor and disadvantaged, the environ- ister regularly consult with dustry more competitive, it does so ment lobby to the environment, the the head of the Australian by imposing the discipline of the human rights lobby to refugees and W Conservation Founda- market through lowering tariffs. It others, the indigenous lobby to Ab- tion? Is there some insight that ACF then uses the consensus of unions origines and so on. has on the intricacies of the trade and manufacturers to manage the In reality, the welfare lobby ex- agenda that others do not? Is it just costs and difficulties of the structural aggerates the extent of poverty, mis- to keep a lobby quiescent? Or is it adjustment. The norm for many represents its causes and boosts an the final acceptance by the Coalition years was not making the adjust- egalitarian ideology, none of which government of the consensus ment, and the unions and manufac- help the poor. The environmental method—tripartism, now multi- turers used the consensus method to lobby exaggerates some harms to the partism—for which it so admonished lobby government to impose tariffs environment, such as greenhouse Labor? and send the bill to the consumer. gases, at the expense of scientific so- There are environmental treaties lutions to harm, such as the depen- to which Australia is a signatory— dence on chemical sprays and water and the Minister is best to be well The consensus rationale that GM crops are designed to over- informed on such matters—but come. The human rights lobby, in should this involve a formal and for engagement with the case of refugees, seeks to impose regular consultation with an envi- a legal method that weakens the ronment advocate? Are other views the community is of rights of citizens in preference to the best consulted in such things? Does rights of non-citizens. The indig- the formal and ongoing relationship no assistance unless enous lobby seeks the collectiviza- create an opportunity for the values tion of Aboriginal life that is promoted by ACF, or any like orga- it is driven for good antithetical to the welfare of Ab- nization, to affect the trade agenda, origines. Each of these groups is not perhaps to the detriment of the wel- policy reasons representative, rather they are a fare of others? These are matters that policy community. They approach Ministers must grapple with, but The consensus rationale for engage- government with a suite of pre-de- forming permanent policy commit- ment with the community is thus of termined solutions to the things they tees with NGOs begs the question no assistance unless it is driven for decide are problems. as to the credentials which some good policy reasons. Why, then, does so much debate bring to the table. The way in which policy com- revolve around these voices? The The mechanisms of participatory munities are formed can make a big answer lies in the appeal of partici- democracy, in particular the consen- difference to policy formulation. In patory democracy. A democracy of sus method, confuse the distinction the absence of a sure direction, sit- active citizens is held to be superior between representation and public ting everyone around the table be- to a democracy of politically apa- recognition as criteria for selection, comes political management, not thetic citizens. On close reflection, and between expertise and values in policy formulation. it may not be so. A consensus of ac- the process of policy formulation. The consensus method becomes tivists is a process-oriented policy, it even less likely to produce good sets a premium on a saleable out- WHAT HAS CONSENSUS TO policy when the participants repre- come. It does not ensure a least-cost DO WITH POLICY? sent values rather than constituents. or public interest outcome. It lends Consensus may work when there is This occurs in the newer lobbies, the itself to interventionist outcomes a strong policy in place. For example, NGOs. For example, the welfare because it promises to further involve if a government decides that it wants lobby claims to give a voice to the the participants. Participants begin

R E V I E W 14 SEPTEMBER 2004 to own the policy and want to imple- direct forms, such as joining NGOs, and to attend school. The agenda has ment it, monitor it and meet again, the workers are left for dead. condemned generations of Aborigi- in endless iterations. The consensus In fact, participatory democracy nal children to live in a drug-induced method is very different to the in- gives two votes to the ‘progressives’. stupor because they cannot gain the quiry method, for example, which The environment lobby could con- skills to live in the modern world. allows for voice, but then allows for sist of those who believe in sustained The figure (below), Social Status reflection and analysis, and an op- development based on technological Inequality in Participation2 indicates portunity to study the situation with- innovation as the best means to pre- that while as great a proportion of out the filter of the groups of policy serve the environment. It does not. people of low education as middle apparatchiks. Instead, it consists of the sustainable and high education voted in the EU While advocacy democracy val- development lobby that assumes lim- 1989 election, an inequality gap ues know-how and expertise in its to physical resources, and prefers emerged when it came to other forms the citizenry, it devalues those abstinence to innovation. The wel- of participation, such as campaign same characteristics among fare lobby believes in fairness, but activity, joining a citizen group policy makers.1 only an egalitarian version. It be- (NGO), signing a petition or partici- Participation by policy groups lieves that equality is a more impor- pating in a demonstration. Austra- with a set of values, each gaining for- tant objective than the living lian data assembled in 20033 are not mal access to the policy apparatus is standards of the poor. To pursue its available yet, but may well show the increasingly becoming the norm. It primary objective it is prepared to use same pattern of inequality in partici- is driving up the price of governing public funds to support policies that pation, placing in doubt the claims and the likelihood of sub-optimal deny jobs to the poor. The human of NGOs to represent civil society. solutions. It is also increasing the rights lobby prefers to use ‘interna- Participatory democracy and its tendency for government interven- tional norms’ to achieve ends that techniques have produced a demo- tion where none is warranted. they are unable to achieve by a com- cratic process which makes govern- bination of a national majority tem- ing and policy-making more open, TWO VOTES TO THE LEFT? pered by the equitable application of but less effective for the disinterested Advocacy democracy deepens and the national law. The indigenous public. It creates a policy class, which extends access to political decisions, policy community is dominated by is no more representative than in the but it lacks representative demo- those who believe in a collectivist former, cruder, representative model. cracy’s ‘one person, one vote’. In idealization of a long-gone Aborigi- Policy makers, including Trade Min- Australia, there is an equality in ac- nal culture, which undermines mat- isters, need to be aware of pitfalls in cess to the vote, but when it comes ters such as private property, the participatory model. To regard to participation through other more contract, obligations to seek work NGOs as ‘policy communities with attitude’, and not as voices of the Social Status Inequality in Participation electorate, is a good place to start.

80 Low education NOTES Middle education 1 Dalton, R., Scarrow, S. and B. 70 Cain, 2004. ‘Advanced Democra- High education cies and the New Politics.’ Journal of Democracy, 15(1): 136. 60 2 Figure produced from data in, Dalton et al., 2004, 135. 50 3 The Australian Survey of Social Attitudes, 2003 has embargoed 40 until 1 March 2005, the public re-

Percentage lease of variables that explore the political participation of Austra- 30 lians, including involvement in NGOs. See The Australian Social 20 Science Data Archive at http:// assda.anu.edu.au/analysis.html

10 Dr Gary Johns is a Senior Fellow with the Institute of Public Affairs and the Head of the Institute’s NGO Project. 0 Vote Campaign NGO Petition Demonstration I P A

R E V I E W SEPTEMBER 2004 15 Triumph of the Swill

TED LAPKIN

INCE Fahrenheit 9/11 two public broadcasters. In fact, Bush stole the Presidential election made its cinema debut, a both the ABC’s ‘At the Movies’ and of 2000. He found precisely such a diverse range of critics the SBS’ ‘Movie Show’ gave Fahr- headline, ‘Latest Florida recount S has ripped strips off this enheit 9/11 rave reviews. Nary can shows Gore won election’ in the work of crude celluloid agitprop. be heard a discouraging word about pages of a small daily paper in From recovering Trotskyist Chris- Michael Moore or the film on ei- Bloomington, Illinois. topher Hitchens to dyed-in-the- ther of these publicly funded Well, not exactly. That headline wool conservative Andrew Bolt, programmes. Both gave it the freest originally appeared on the letters- pundits have pointed out the of four-star rides. Moore’s numerous to-the-editor section of the paper plethora of distortions and prevari- factual transgressions are summarily above a partisan anti-Bush missive cations that pervade Michael dismissed as ‘some rather cheap from one of the newspaper’s read- Moore’s film. shots early on’. What is portrayed ers. But a letter-to-the-editor did But, of all the dissimulations that as the occasional minor lapse is not not contain sufficient gravitas for those critics have documented, the allowed to interfere with the rous- Moore’s tendentious purposes. So most obnoxious was Moore’s use ing vote of endorsement that both he superimposed that headline onto and abuse of bereaved mother Lila shows afford to Michael Moore and the front page of the Bloomington Lipscomb. Ms Lipscomb is a work- Pantagraph. ing-class mother from the blue-col- As one might imagine, the lar town of Flint Michigan, whose Nary can be heard a Pantagraph’s editors were less than eldest son was killed in Iraq. The pleased with Michael Moore’s death of her son served as the cata- discouraging word sleight of hand. The 30 July 2004 lyst for her transformation from sup- edition of the paper declared porter of the war into anti-war about Michael Moore ‘Pantagraph to Moore: Headline use activist. “misleading”.’ The lead editorial Yet, opposition to the war is one or the film on either declared ‘If he [Moore] wants to thing, and active support for the “edit” the Pantagraph, he should ap- Iraqi insurgents who are fighting of these publicly ply for a copy-editing job.’ The pa- American troops is something else. per also sent a legal letter to In a posting from 14 April 2004 on funded programmes Michael Moore demanding an apol- Michael Moore’s ‘official Website,’ ogy and compensation of $1. the film-maker ventures quite It is true that both ‘At the Mov- clearly into cheerleading territory: his film. The result is an exercise in ies’ and the ‘Movie Show’ reviewed The Iraqis who have risen up fawning, uncritical assessment that Fahrenheit 9/11 before the story of against the occupation are not appears to be motivated by an ideo- Moore’s cut-and-paste job became ‘insurgents’ or ‘terrorists’ or ‘The logical affinity for Moore’s point of public. But, one would think that enemy’. They are the REVO- view. Your tax dollars at work. such a serious case of journalistic LUTION, the Minutemen, and Nowhere to be seen on the malpractice would warrant some their numbers will grow—and Websites of either movie review sort of addendum on their Websites, they will win. programme, as an addendum, was at the very least. One is forced to wonder whether any reference to the fact, which ad- The critical faculties of reviewer Lila Lipscomb would have given mittedly came to light after the re- Margaret Pomerantz, in particular, Michael Moore the time of day if views had been published, that the appear to be on permanent vacation she had known that the film-maker film-maker was accused of gross where 9/11 is concerned. She in- would hail as heroes the very people journalistic malfeasance by an genuously swallows the Michael who had killed her son. American newspaper. It turns out Moore vision of the world, hook, But, there are no such second that Moore had been looking for a line and sinker, declaring that the thoughts about Michael Moore on newspaper headline that would sup- movie demolishes George Bush as the movie review programmes of our port his contention that George a ‘hedonistic buffoon’.

R E V I E W 16 SEPTEMBER 2004 She then proceeds to parrot some love the military and simply want pet-meisters from Riyadh, why has of the many factual inaccuracies to be soldiers. so much US foreign policy been dia- that pervade the film, such as While the review by Jamie metrically opposed to Saudi wishes? Moore’s contention that the war in Leonarder for the SBS ‘Movie American support for Israel is anath- Afghanistan was really about the Show’ is more abbreviated in length, ema to the House of Saud, yet building of a pipeline to benefit it demonstrates the same fawning at- George Bush has been one of the Bush’s partners in crime at those evil titude towards Michael Moore and best friends the Jewish state ever had oil companies. Pomerantz declares his movie. A mere three paragraphs in the White House. Moreover, the ‘within a couple of months that long, it is replete with the same pe- American invasion of Afghanistan pipeline deal is signed, and its sort jorative references to the ‘Bush Dy- and the liberation of Iraq went for- of like “hang on a tick! Who’s run- nasty’ that abound in the review ward despite the vehement opposi- ning this world?”’ from its sister network, the ABC. tion of Saudi Arabia. This is a fine piece of conspiracy Leonarder praises Moore for un- Michael Moore doesn’t even at- theorizing. The only problem is that covering the ‘many unacknowl- tempt to explain the stark contra- it bears little resemblance to real- edged questions of the Bush dictions between his theses and real ity. Not only was the deal not signed, presidency’. By contrast, ‘At the events on the ground. Like a bee in it never had anything to do with Movies’ Stratton gives himself a bit perennial search of nectar, he flits George Bush. The pipeline plan was more credit, congratulating Moore from one wild-eyed allegation to the promoted by the Clinton Adminis- next, leaving nothing in his wake tration, and the negotiations with but a few crumbs of pollen that al- the Taliban over a pipeline deal per- Pomerantz and most uniformly fail to bear substan- manently collapsed in 1998. tial fruit. Both Pomerantz and her fellow Stratton have no Pomerantz concludes her written reviewer, David Stratton, blathered review of 9/11 with the observation on about inherent inequity caused respect for the that ‘you can’t fail to be affected by by the predominantly blue-collar its big picture portrait of a grand and composition of the United States autonomy and free smug betrayal’. Quite frankly, I’m far armed forces. ‘The have-nots in more affected by the betrayal of my America are merely fodder for cor- will exercised by tax dollars that have been used to porate greed’, declared Pomerantz, subsidize such a travesty of critical while Stratton relates how ‘scary’ it those who elect to judgement. was to see Marine recruiters doing enlist in the United Writing in a similarly laudatory their job. vein, Jamie Leonarder opines that, This is nothing more than typi- States military ‘in its totality, 9/11 transcends its cal left-wing avant-gardism in the flaws to deliver one of the most in- guise of a movie review. The subtext sightful documentaries ever made’. here is that the common people are because ‘he marshals the facts, all Yet, the most insightful thing about too stupid to realize that they are of which we already knew’. 9/11 is the facility with which a being bamboozled by those evil Yet, none of the reviewers from clever film maker can prevaricate. capitalists. Only members of the en- either network, each of whom gave If this film makes Michael Moore lightened Leftist elite can have any 9/11 at least a four-star rating, in any worthy of inclusion in an artistic chance of piercing the veil of cul- way addresses the non sequitur that pantheon, the most appropriate is tural hegemony foisted upon soci- lies at the heart of the movie. that inhabited by Leni Riefenstahl, ety by the pernicious practitioners Throughout it, Moore argues, in es- whose Triumph of the Will was also of free market economics. sence, that the Bush Administration initially acclaimed as a cinematic Pomerantz and Stratton have no is a wholly-owned subsidiary of the tour de force. One can only hope respect for the autonomy and free Saudi government. In one segment, that, over time, viewers of Fahren- will exercised by those who elect to Moore poses his thesis in particu- heit 9/11 will consign Moore and his enlist in the United States military. larly stark terms: ‘Is it rude to sug- flick to the same category of infamy From the exalted vantage point of gest that when the Bush family that befell both Riefenstahl and her the ABC, American soldiers, sail- wakes up in the morning they might work. ors, airmen and Marines are either be thinking about what’s best for the poor saps, or the poor who join ‘be- Saudis instead of what’s best for Ted Lapkin is the associate editor of The Review, a monthly journal of analysis and opinion published cause they can’t afford college in the you?’ by the Australia/Israel & Jewish Affairs Council. United States’. They utterly dismiss Yet, if Washington is really danc- the many who enlist because they ing to the tune played by the pup- I P A

R E V I E W SEPTEMBER 2004 17 The ‘R’ Files

ALAN MORAN

Funding the a more limited basis is also provided to other vocal anti-business zealots, in- Consumerist NGOs cluding the Communications Law ‘Regulatory capture’ is a notion that Centre. That said, telecommunica- has long shaped a good deal of think- tions funding is mainly directed at ing about the interaction of govern- niche groups such as those represent- ment agencies and businesses. Analysts ing people with disabilities rather than pointed to seemingly over-sympathetic in attacking Telstra as the main sup- decisions of regulators, for example in plier. favouring incumbent firms over new This is in marked contrast with entrants. Whether or not this accu- some other government funding. In rately describes yesterday’s regulatory this respect, the Advocacy Panel of the bodies, their contemporaries’ affinities national electricity market is far more are closer to anti-business groups. tive provides oxygen to organizations selective in its allocations. Appointed Australia’s regulatory agencies, the which have no representational cre- to represent State and Commonwealth most important of which is the ACCC, dentials, being elites rather like those governments, it offers over $1 million are highly energetic in pursuing busi- who used to claim they were the ‘van- per annum to provide patronage for nesses which they consider to have guard of the proletariat’. These anti- radical groups. Funded from a levy on acted improperly. Indeed, other pub- business groups propagate ideologically the electricity supply industry, its lat- lic bodies have criticized the ACCC soiled views that purport to demon- est report approved disbursements of: for doing so to excess. These criticisms strate the malevolence of the indus- • $42,000 for the Total Environment have been explicit in the case of the tries’ enterprises. They are splenetically Centre, Sydney, for projects cover- Australian Competition Tribunal, anti-privatization. ing the electricity code and restruc- which overturned ACCC pricing and Funding is also provided to business turing of the energy market. regulatory control decisions on pipe- lobby groups ever ready to recruit gov- • $104,000 to the South Australian lines, and the Productivity Commis- ernment muscle as an alternative to Centre for Economic Studies, for sion, in its Gas Access Report; they negotiating with their suppliers. advising on the appropriate market were implicit in the case of Energy In addition to providing funding to risk premium for equity invest- Minister Macfarlane, who overturned these two types of groups, governments ment, when setting prices. the ACCC’s aspirations to regulate the have, in some cases, also outsourced • $68,000 to three groups for review- Moomba to Sydney pipeline. the decisions on specific funding allo- ing additional electricity charges. The efforts of regulatory agencies cations to representatives of the same • $137,000 for two projects by the have, in recent years, been massively or affiliated groups. Energy Users Association of Aus- augmented by a considerable expan- tralia to examine issues under re- sion in their budgets and staffing lev- FEDERAL FUNDING view by the NSW and Queensland els. In addition, the regulatory thrust Telecommunications and energy are Governments. has been fortified by the phenomenal two prominent areas where specific • $34,000 for a report by Allen Con- growth of public funding for anti-busi- funding arrangements are in place. sulting on behalf of several consum- ness and anti-market non-government For telecommunications, the grant erist bodies into the Future of Con- organizations. The Consumers Federa- recipients are determined by the Com- sumer Advocacy. tion of Australia has 94 of these groups monwealth Minister. The sums in- No review of the quality of the ma- as members. Both the Commonwealth volved have been pared back in recent terial produced from these grants has and the Victorian Governments have years and totalled $700,000 for 2004– been published. It is safe to say, how- funding arrangements for these bodies 05. Much of this funding is allocated ever, that not one of the 70 grants and afford them privileged access to for sitting fees on advisory bodies. given to date have added one iota of the policy development process. Aside from consumerist bodies, the knowledge that would allow better de- This funding to groups with a main one being the Consumers’ Tele- cisions on market management to be highly militant anti-business perspec- communications Network, funding on made. What has been created is a body

R E V I E W 18 SEPTEMBER 2004 of publicity which places pressure on calculable damage that would follow breadth of issues: industrial relations, politicians to regulate the industry, from taxpayer-funded consumer advo- the environment and consumerist agi- thereby adding costs. cacy panels for cars, bread or clothing. tation. Funding is provided directly by The shameful abuse of these funds Most CUAC funding is assigned to governments to supporters such as the is well known to the electricity indus- its own research. In addition, grants of Total Environment Centre (NSW) try itself but, following a pattern ob- around $250,000 per annum are dis- and Environment Victoria. served all too frequently, it is tolerated tributed to anti-business agitator bod- Unfortunately, by establishing under the supposition that wiser heads ies (most of which are represented on these forms of pressure groups, govern- in government will recognize the poor its Board or ‘Reference Group’). In the ments are apparently acknowledging quality of the NGOs’ output. As is il- main, grants have gone to inveterate their inability to fulfil their prime func- lustrated below, this is not always the opponents of the free market, includ- tions of defending the weak through case. ing anti-privatization groups at Swin- an unbiased public service. This might In any case, opening the door to burne and Monash Universities, and have merit if the funding levels were this form of funding creates constant hardline consumerist organizations forms of outsourcing of policy analy- pressures for its expansion, often using such as the Consumer Law Centre and sis. The partisan nature of the NGOs the funding itself to promote this. One the Energy Action Group. and the quality of their advice, how- such example even outraged the hap- ever, shows that they cannot be relied less Chairman of the Advocacy Panel. THE NGOS REINFORCE on. The absence of corresponding re- He felt obliged to provide a lengthy THEIR INFLUENCE ductions in staffing of mainline agen- and scathing rebuttal of the findings Consumerist organizations lobbied cies demonstrates that governments, of one report, by Allen Consulting, hard to have the Australian Consum- too, regard such outsourcing as unwise. that his freeloading clients commis- ers Association’s Louise Sylvan ap- sioned. That report recommended that pointed as Deputy Head of the ACCC. SOME WELCOME ANTIDOTES the consumerists decide for themselves Previously they had—for favours ren- Though the trend to funding of NGOs which of them obtains how much dered to the Hawke Government— is creating these additional regulatory funding from the industry levy. The had Allan Asher appointed to this po- pressures, there are some welcome an- Advocacy Panel’s Chairman called the sition. A former Chairman of the tidotes. The more important of these report illogical and said it was ‘unpro- ACA, Asher was the architect of the include the greater rigour of regulatory fessional and unsophisticated … move to radicalize what was previously bulwarks that are being developed. alarmist in alleging market failure’ and a genteel organization. Having this po- The flagship among these is the it offered no support for its claims. sition filled by one of their own was Commonwealth’s Office of Regulation Yet, so powerful are the consumer- subsequently claimed by the consum- Review which has robust procedures ist bodies that, in August this year, the erists as ‘traditional’. that involve vetting new regulations Ministerial Council on Energy made With Louise Sylvan’s appointment, and public ‘shaming’ of those agencies the astounding finding that the Allen we have seen a predictable, renewed and departments that undertake less Consulting report ‘provides a useful push for consumer advocacy. The than adequate appraisal of the regula- starting point for considering the op- ACCC has revitalized the Consumer tions themselves. tions for a new advocacy structure’. Consultative Committee which she The Victorian Government has convenes. This has already commis- also recently beefed up its own regula- STATE GOVERNMENT sioned the ubiquitous Consumer Law tory scrutiny. It has established a high FUNDING Centre Victoria to undertake two level Efficiency Commission with, os- The Victorian Government has pro- projects dealing with various aspects tensibly, broad-ranging powers to vet vided funding to the ‘independent’ of the national electricity market. The new regulatory proposals and a brief to Consumer Utilities Advocacy Centre ACCC, which is typically secretive in review existing regulatory measures (CUAC). Focusing on energy, this is the nature of its expenditure alloca- that might impede efficient operations a company guaranteed by the govern- tions, does not identify the funding for in the economy. If, in practice, this ment itself. this body and its consultants. were to have the effect that the Gov- CUAC seeks to redress what it sees Both Canberra and State Govern- ernment announcement foreshadowed as an imbalance between monopoly ments also channel funding to NGOs of it, it would constitute a powerful supplier interests and individual users. through government departments. antidote to the NGO funding and Yet governments have not before With the Coalition in office, the other regulatory slippages that have needed to fund users in order to un- Commonwealth’s largesse has been de- prevailed in the State. derstand how to manage them. The clining. ALP Governments, in power funding is also said to be needed be- in all the States, however, have vote- Dr Alan Moran is Director, Deregulation Unit, cause consumers are fragmented and assisting constituencies to reward, at the Institute of Public Affairs. often ill-informed. Yet imagine the in- succour and re-energize across the I P A

R E V I E W SEPTEMBER 2004 19 Choosing and Reforming Schools

GEOFFREY PARTINGTON

EFORE the late 1970s, POSSIBLE REASONS FOR nominally adherent to them, but the the proportion of Austra- CHANGING ENROLMENTS Catholic Church is not far behind. lian children enrolled in Some proffered explanations for this Several evangelical and fundamen- B government and non-gov- significant drop in government talist churches have increased both ernment schools varied very little school enrolments have little foun- their congregations and their school from decade to decade. Most Catho- dation. First, some parents choose rolls, but ‘New Christian’ schools re- lic families sent their children to schools for what critics term ‘snob- main relatively small in total enrol- Catholic schools, even though it was bish’ motives. There is some circu- ments. only in 1963 that these first received larity here, however, since there is The overwhelming majority of government grants, from the Men- little evidence for increased snobbery parents who have transferred their zies Coalition Government. A few in Australia other than the increased children out of government schools wealthy Protestant families sent their patronage of non-government into non-government schools did children to independent schools but, schools the snobbery is supposed to not do so out of religious fervour. The unlike Catholics, Protestant families explain. movement against government were mostly happy with government Second, advocates of State schools would be far greater if it were schools. These were then based on schools often claim that non-govern- easier to open new non-government what the American historian Rob- ment schools are likely to prosper in schools of a non-religious character. ert Bellah called a ‘civil religion’: periods of economic expansion, be- By and large, non-profit independent Christian morality without theology. cause the fat cats are getting fatter, schools support the exclusion from The 1963 grants for non-govern- but during periods of comparative grants of entrepreneurial schools that ment schools had little immediate ef- hardship some argued that parents would compete with them rather fect on enrolments. In 1977, were more concerned than ever than with State schools. 2,356,190 (78.9 per cent) of Austra- about their children’s employment Fourth, overall, there has been lian school students were in govern- prospects and were therefore more and remains very little difference in ment schools, 501,857 in Catholic willing to pay school fees. Since student–teacher ratios and class sizes schools, 51,613 in Anglican schools, 1979, the rate of expansion of non- between government and non-gov- and 77,013 in other non-govern- government schools has usually been ernment sectors. In 2003, there were ment schools, making 630,483 non- only slightly greater during prosper- 154,872 full-time-equivalent teachers government school students in all. ous periods. in government schools and 74,704 in This distribution was little different Third, there have been some sig- non-government schools. In primary from that earlier in the century. From nificant changes in religious belief in schools, this worked out at a student– the late 1970s onwards, the percent- Australia during the last 30 years. teacher ratio of 16.6 in government age of students in government There have been notable increases schools and a slightly inferior 17.1 in schools fell year by year. By 2003, in adherents to Islam, and to a lesser non-government schools. In second- government schools retained only 66 extent to Hinduism and Buddhism. ary schools, the result was the other per cent of all school students. Be- Among the mainstream Christian way around: 12.5 in government tween 1993 and 2003 the total num- churches of Australia, however, a de- schools and 12.1 in non-government ber of students in government cline in church congregations has ac- schools. Catholic and New Christian schools throughout Australia in- companied increasing attendances in schools have, on average, slightly creased by only 1.2 per cent, whereas schools loosely or more tightly con- worse student–teacher ratios than those in non-government schools nected to the churches. The Angli- government and other non-govern- rose by 22.3 per cent. In several can and Uniting churches are most ment schools. All Australian school States in recent years, numbers in prominent in combining religious systems enjoy some of the most government schools actually fell. decline with expansion in schools favourable class sizes in the world.

R E V I E W 20 SEPTEMBER 2004 Although the overall difference in REAL CAUSES FOR PAREN- respective of family circumstances. student–teacher ratios is negligible, TAL REJECTION OF GOV- Ever since the reworking of their evi- the gap in class sizes is increased be- ERNMENT SCHOOLS dence by James S. Coleman and his cause of greater non-contact time for The lack of movement against govern- American research team, no serious teachers in non-government schools ment schools between 1963 and 1979 scholar has maintained that schools and their larger number of Principals, suggests that changes in funding are make little or no difference to educa- Deputy Principals and senior teachers not in themselves a clincher in family tional achievement, once family back- who do little teaching. Public percep- decisions about school choice. Better ground is factored in. It does seem to tions about class sizes are often very funding of non-government schools be true, however, that in Australia be- different from reality, because non- obviously makes them more available fore the 1960s, government schools government schools play up their ad- to a larger number of families than they overall performed at least as well as vantages and positive features, where- would otherwise be, but the relative their non-government rivals, all socio- as, as part of the politics of resentment, burden on family incomes resulting cultural factors being considered. At government schools exaggerate their from the cost of school fees and related that time, there was greater educa- difficulties and shortcomings. expenses incurred in attending non- tional transparency, especially in the Fifth, most non-government government schools has changed very literacy and numeracy testing carried schools have much wider powers to little. Usually, something given away out by the State education depart- select or expel students, and select and ments and in matriculation and other dismiss teachers and other staff, than externally conducted examinations. do government schools. The gap be- Between 1993 and From the 1970s onwards, education- tween the systems in respect of em- ists ensured a severe reduction in rel- ployment contracts has not, however, 2003 the total number evant information about educational widened much in recent years and standards in Australia, although there may even have narrowed. It has be- of students in has been some reversal over the last come more difficult for a non-govern- decade, mainly because of initiatives ment school to dismiss even teachers government schools of the Howard Coalition Government, who openly flout basic principles of together with both ALP and Liberal conduct and tenets of belief it was throughout Australia initiatives in several States. founded to defend and which parents Many parents are acutely aware of support. increased by only 1.2 the large increase in the percentage of School-based grant schemes give university places in prestigious facul- schools a powerful incentive to present per cent, whereas ties, such as medicine and law, secured themselves to governments as more by non-government schools. Although ‘needy’ than they are. The larger the those in non-govern- statistically significant, the overall number of financial categories, the change in the proportion of university greater the encouragement to some ment schools rose by places secured by government and non-government schools to allocate 22.3 per cent non-government students is not so staffing and capital expenditure in marked, since entrance standards have ways that maximize grants and subsi- declined and numbers admitted greatly dies. Governments naturally find it free has to be seriously flawed if people increased. In fact, many universities easier to deal with a few large groups reject it in favour of an apparent have vigorously publicized their affir- of schools, usually but not always of equivalent that is very expensive. mative action policies, whereby the the same religious denomination, A growing gap between educa- weaker the academic performance of rather than with a profusion of indi- tional standards in the two systems has a school, the lower the entrance marks vidual schools. Some schools wel- clearly been the main reason for required by its students. comed what seemed to be the relief changes in parental choice of schools. A second major consideration for from burdensome accounting chores On comparative educational stan- many families deserting government provided by bureaucracies skilled at in- dards, teacher unions breathe contra- schools is classroom disorder. It is in terpreting or influencing central gov- diction. On the one hand they assert the hope of a safe and tranquil atmo- ernment thinking, but they also lost that, once family and other external sphere for their children in work and some of their former flexibility. The influences are taken into account, play that families are most willing to comparative independence of non- non-government schools do not pro- pay fees. This is one of many issues on government schools remains an im- vide a better education than govern- which teacher unions blow hot and portant attraction for many parents, ment schools. On the other hand, they cold. Often they deny that there has but it is no greater than before the rolls claim that attendance at independent been any escalation of violence in gov- began their dramatic expansion. schools confers unfair advantages, ir- ernment schools, but they also com- ▲

R E V I E W SEPTEMBER 2004 21 plain of greater strain and stress than TOP-DOWN OR BOTTOM-UP tion of new ground, we should aim at in the past. Early retirements and REFORM? bottom-up reform that makes possible breakdowns among teachers are far Within pluralist and open societies a diverse school system that reflects the more frequent than half a century there are inevitably far-reaching con- diversity of the Australian people. This ago—that is, at a time of teacher short- tests about educational priorities, since would be a multiculturalism that lib- ages and large classes. educational values are inherently con- erals could take to their hearts. How During the 1980s, the radical Left testable. It is on the basis of this essen- much better it would be if the parents captured teacher education and the tial contestability that the fundamen- and teachers of each school could de- curriculum committees of nearly every tal case for choice in education, espe- termine whether or not they wished State. One key aim, substantially cially parental or family choice, is to fly and salute the Australian flag. achieved, was to undermine traditional founded. Well-informed and highly Voucher systems have the poten- patriotic loyalties and traditional mo- experienced persons rationally and de- tial to expand educational choice with- rality. Patriotism was undermined by fensibly adopt different, indeed incom- out much increase in the costs of portrayals of post-1788 Australia as patible, priorities in education. In this, schooling. Some versions may be re- unjust, racist and genocidal at home, education resembles politics. lated to family income and others not. and engaged abroad in wars on behalf In the best schemes, the value of of foreign imperialism. Mining and vouchers is likely to be higher for chil- economic development were lam- A growing gap between dren with physical or other learning pooned as degradation of the environ- handicaps, and for rural and isolated ment. Knowledge of modern Austra- educational standards children, because of the economies of lia’s roots in Western civilization was scale that work in favour of urban cen- reduced and distorted. Traditional in the two systems tres. Critical to the success of voucher families were denounced as an illegiti- schemes is that they should be based mate tool of social control: a con- has clearly been the on the needs of families, not of schools. spiracy by men to suppress women, by Several experiments are likely to be the rich to subjugate the poor, and the main reason for needed before the best solution is white to exploit the black. found, but it is hard to think that any A relatively small number of moral changes in parental voucher system could combine high saboteurs could exert immense influ- cost and poor outcomes to the extent ence, because large numbers of people choice of schools we have at present. began to regard moral values as merely Under any system, there seems personal and relative. As the former bound to be wider choice for families ‘civil religion’ faded, the values of the Many Australians are deeply dissat- in cities than in the countryside, and government schools were reduced to isfied with the current situation in our some groups will not be large enough the lowest common factors of toler- government schools. One possible so- to finance their own schools. However, ance, consideration of others and non- lution is to try to create a uniform sys- many thousands of Australian families violence. Although these are tem markedly better than the present should have wider effective choice important virtues and form essential one by top-down legislation or regula- than at present and this expansion of conditions for the rule of law, they can tions. This may not be impossible, and choice would enhance the quality of only be secured in the schools through should be part of an overall policy, but education as a whole. Many govern- properly enforced rules of conduct, and it is very difficult to accomplish. The ment schoolteachers would, with suit- through what may broadly be termed first reason is because diversities and able financial arrangements, be able to the moral curriculum. incompatibilities of belief make moral lease premises to open new schools. One ought not to exaggerate the vacuity an almost inevitable conse- Some schools would collapse, as do differences between the systems: in quence of attempted uniformity. The some restaurants, shops and other en- most Australian States the same insti- second is that many government terprises, but that is part of the price tutions train both government and schoolteachers will sabotage attempted of improvement. non-government teachers and propa- reforms with impunity. Just imagine gate current Political Correctness on the grimacing and adverse body lan- Geoffrey Partington’s books include The Australian a large range of issues with some suc- guage of many government school- Nation: Its British and Irish Roots, The Idea of an Historical Education, Teacher Education in England cess. In general, however, parental in- teachers as the flag of Australia is raised and Wales, and Teacher Education in New Zealand. terest and pressure is keener in at school assembly. Curriculum com- His Website is: http:www.geoffpartington.net non-government fee-paying schools, mittees will remain under the control References supporting the claims made in this article and this helps to curtail, although not of the very people whose influence has may be obtained from the IPA upon application. totally to stifle, radical antinomianism been so malignant in the past. Diffi- in them. cult as it would be, indeed an explora- I P A

R E V I E W 22 SEPTEMBER 2004 Good, Safe, Banned The HV McKay Lecture for 2004 Professor Richard T Roush

‘Ignorance ain’t what you don’t know, it’s what you do know that ain’t correct.’ [Will Rogers, late American humorist]

ERHAPS more than most discuss this history and then describe 1 billion kg, saved more than $1 bil- people, I have long been advances in GM crops that show po- lion in production costs, and reduced concerned with reducing tential to improve the sustainability the use of tillage in agriculture.2 Vi- P pesticide use. I decided to and reduce the environmental im- rus-resistant papaya cultivars have become an entomologist 30 years ago pacts of agriculture. The whole his- saved the papaya industry on the ‘Big when I happened upon a copy of tory of GM crops illustrates the Island’ of Hawaii. Rachel Carson’s Silent Spring in my innovation and imagination that China has benefited more from ag- local community library, and con- characterized the life of the man we ricultural biotech than any other sumed it in two days. In my earliest honour with the H.V. McKay lecture. country in the world, solely due to classes in entomology a few months reduced insecticide use in Bt cotton. later, I learned that cotton was the WHAT HAVE GM CROPS For at least several years until 1997, most important crop for insecticide DONE FOR US ALREADY? there were at least 10,000 insecticide use, accounting for about 50 per cent GM crops that are resistant to herbi- poisonings and about 400–1000 of world-wide applications in agri- cides, viruses and insecticides are now deaths per year in Chinese cotton- culture. I began working on cotton commercialized in 16 countries that growing areas. In 1998, insect resis- in 1975, and have remained actively include half the world’s population,1 tant Bt cotton was introduced into involved with the crop ever since. but first in China with virus-resistant Hebei Province and, by 2000, most When I first learned in the mid- tobacco by 1992. The overall impact of the crop was insect-resistant. The 1980s that scientists were trying to on pesticide use of just the GM crops use of insecticides on Bt cotton has express genes from the bacterium Ba- currently available has been enor- been reduced by more than 80 per cillus thuringiensis (Bt) in plants, es- mous. Reductions in pesticide use cent, greatly improving the health of pecially cotton, I thought that this from just 8 GM crops in the US have these farm workers. For conventional was a bad idea, probably like most been calculated at more than 21 mil- cotton, 22 per cent of cotton farm entomologists at the time. We were lion kg in the year 2001 alone. GM workers reported headaches, nausea, especially concerned that this would crops also increased yields by about skin pain or digestive problems. For ▲ lead to the rapid evolution of resis- tance to Bt, which many of us saw as having great potential to reduce the use of chemical insecticides. How- ever, scientists are trained to confront their opinions with new facts, and as I will discuss later in this short ar- ticle, the facts converted me to be- come a supporter of the genetically modified (GM) crops that are cur- rently registered around the world. In retrospect, the decision should have been simple: the evidence that these crops can contribute to sustain- able agriculture is overwhelming. GM crops and sustainable agriculture have already demonstrated that they Not only do GM crops in Australia produce a healthier environment for rivers and streams by reducing the use can be the best of friends. I’ll first of chemicals, they also have the potential to address major issues such as nitrogen fixation to help soil acidity.

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JUNESEPTEMBER 2004 2004 SI-11 those growing all Bt cotton, this was Further, there is no risk to the con- years, but due to its poor persistence, reduced to 4.7 per cent. Bt cotton is sumer. A key point about many ge- still accounts for less than 1 per cent now grown by at least five million of netically engineered crops is that the of the total insecticide market. Bt China’s 12 million cotton growers foods they produce are not genetically sprays were never at threat from the and has probably saved at least 200 engineered. In the case of cotton, the Bt crops already registered because lives per year. In addition to the im- foodstuff is cottonseed oil, and like the sprays are ineffective and almost proved health of workers, there are most oils and sugars, no detectable unused against insect pests of cotton economic benefits. The cost of pro- protein or DNA remains after pro- and corn, which feed extensively in- ducing cotton was reduced by 30 per cessing. That is, sugars and oils pro- side plant tissues where they can’t eat cent, the number of applications of duced from insect (or herbicide) the sprays. When produced inside the insecticide reduced from 20 per sea- resistant crops are the same as from plant, the persistence of Bt is much son to seven, and the quantity of in- standard crops. greater, and even pests that bore into secticide from 61 to 12 kilograms per the plant (and which might not eat a hectare, with a reduction in costs of spray) can be controlled.4 Further, 80 per cent. Some 97 per cent of the Bt cotton is now grown resistance-management strategies for financial benefits of Bt cotton go di- Bt cotton and corn have been imple- rectly to Chinese cotton farmers, and by at least five million mented around the world and are only 3 per cent to seed companies being improved with two gene cul- (Monsanto and an independent Chi- of China’s 12 million tivars.4,6 Contrary to the predictions nese company) 2,3. of critics, there is no resistance to Bt Because almost half of the insec- cotton growers and has crops, even after 7 years of their in- ticide used in agriculture is applied tensive use. to cotton, with roughly half of that probably saved at least Impacts on non-target species used against caterpillars, Bt cotton have been intensively investigated alone has the potential to wipe out 200 lives per year and published since 1994, but in 10–25 per cent of the world’s agri- spite of the publicity generated by a cultural insecticide use, and probably small laboratory study on Monarch an even greater proportion of the risks In a public letter, I initially op- butterflies (and the lack of publicity of the insecticide use. It seems ironic posed the registration of Bt corn in to several more extensive papers pub- in retrospect that Monsanto, with an the US. What changed my mind lished in 2001 in the Proceedings of the eye on profits (as all companies must about Bt corn was strong evidence US National Academy of Sciences in do), has probably done more in this that Bt corn was safer for humans and 2001), the effects of Bt crops on non- one development to reduce pesticide livestock than conventional corn. target species are clearly and consis- use than all of the rest of us in pest Fusarium ear rot is the most common tently much less than in conventional management, including devotees of ear rot disease in corn, and is encour- agriculture.4 organic farming. aged by insect damage to corn ker- The benefits from Bt cotton alone nels, which provides sites for the are enormous. Where grown in the fungi to grow.4 Fusarium produces USA, Bt cotton reduces insecticide mycotoxins, particularly the use by 70–90 per cent. In Australia, fumonisins, which can be fatal to the reductions have been about 50 per horses and pigs, and are human car- cent over the last 3 years,4 but based cinogens. Field studies have demon- on trials over the last two years, this strated that hybrids containing Bt should further improve toward 90 per genes experience significantly lower cent with the introduction of ‘two- incidence and severity of fumonisin gene’ cultivars expected in 2005. concentrations than their non-Bt Peter Raven and David Pimentel, counterparts.5 Throat and other can- both prominent ecologists in the US, cers due to fumonisin in insect-sus- have written that bird populations in ceptible corn are at epidemic levels the US have increased due to Bt corn. in southern Africa. Rachel Carson would surely have Environmental and agronomic been pleased. For at least several years until 1997, there were concerns about Bt included increased The more controversial class of ge- more than10,000 insecticide poisonings and about resistance in insects and effects on netically engineered crops, however, 400–1000 deaths per year in Chinese cotton growing areas. Reduction in their use, through GM, non-target species. What about the are those crops resistant to herbicides. will save thousands of lives worldwide. threats of resistance to Bt? Bt has Roundup-resistant soy alone accounts been used in sprays for more than 40 for some 60 per cent of all GM crops

IPAIPA REVIEWREVIEW SPECIALSPECIAL INSERTINSERT 2SI-2 SEPTEMBERJUNE 2004 planted by area. Much of the public the long term, GM crops still have clovers. Although rejected for politi- has apparently been convinced that potential to address major issues such cal grounds in the southern states, it there are alternatives to herbicides as nitrogen fixation, which can help has been independently estimated that can be used in broad-scale agri- soil acidity, worsened by the addition that the decision to reject GM canola culture. The hard facts are that there of the fertilizers agriculture needs to has cost Western Australian growers aren’t any with less environmental retain its productivity. alone about $170 million per year.7 impact. The environmental costs of the prime alternative to herbicides— FOOD SAFETY cultivation—are clearly much higher Some 70 per cent of The principal food safety concerns for than herbicides. Not only does reduc- GM plants are potential toxicity and tion in tillage reduce soil loss through British cheese is allergenicity of the newly introduced erosion by wind and water, it in- proteins, changes in nutrient compo- creases soil organic matter and re- made using enzymes sition of the plants, and the safety of duces loss of soil carbon to the air as antibiotic resistance marker-encoded CO2, thereby potentially reducing produced from proteins included in the transgenes. atmospheric warming. Some people are also concerned with A major concern of environmen- genetically modified the potential that DNA can be passed tal activists, that transgenic herbi- from GM feeds to livestock or meat. cide-tolerant crops will lead to bacteria, with A wide range of studies, however, increased herbicide use, is inconsis- no uproar or have shown that consumption of tent with grower practice to use the milk, meat and eggs produced from least amount of herbicide that they labelling required animals fed GM crops should be con- can without losing yields and con- sidered as safe as traditional prac- trary to the facts in eight years of use. tices.9 In particular, recognizable Even now, Australian growers don’t We don’t have to look that far into fragments of DNA are broken down use the full labelled rates of most her- the future, however, for traits that are in digestion and not taken up in ani- bicides just to save costs, so the mere useful to Australia. GM salt-tolerant mals.10 If this were not true, all ani- fact that a crop can tolerate a high canola and drought-tolerant wheat mals would have been overcome by a level of herbicide use has provided no are already in trials in the US and large amount of plant DNA over evo- incentive to growers to actually use Mexico,8 and entirely independent lution. Instead, mechanisms have that much herbicide. means of obtaining salt and drought evolved to make sure that that doesn’t tolerance have been developed in In- happen. WHAT CAN GM CROPS DO dia and South Africa, all by govern- In contrast to concerns about tox- FOR US NEXT? ment or university researchers. One icity and allergens from GM, there is Africa is likely to be the greatest ben- of the more important near-term ap- clear evidence for health benefits from eficiary of GM crops in the future. plications in Australia would be for Bt corn, due to reductions in

▲ Viruses, weeds, drought, and insects virus-resistant pasture crops such as fumonisins, as discussed above. take as much as 50 per cent of crop yields in Africa now, and crops that can address each of these problems already exist. Although there are problems with food distribution in Africa, the costs of improving the transportation system in Africa are enormous. Further, it is a key to the self-esteem and economic welfare of individual African farmers to be self- sufficient. Australian farming contributes enormously to our economy and the maintenance of rural infrastructure, but is under threat from a wide range of forces, including salinity, climate change (which will promote a climate Throat and other cancers due to fumonisin in insect susceptible corn are at epidemic levels in southern that is at least more variable and Africa. Hybrids containing Bt genes experience significantly lower incidence and severity of fumonisin probably drier), and soil acidity. In concentrations than their non-Bt counterparts

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JUNESEPTEMBER 2004 2004 SI-33 foods have not been rushed to mar- Reduced Pesticide Input in Australian Cotton ket and are much more extensively scrutinized than many potentially 7 risky conventional foods that are on Conventional (8 years) 6 the market and not receiving atten- Ingard (8 years) tion. 5 The public has every right to re- Bollgard II (2 years) 4 ject genetic modification of plants, but it also has the right to be well- 3 informed about its choices. For the 2 benefit of Australia’s environment and the sustainability of our agricul- 1 ture, we need to set aside myths and

Insecticide in kilogrammes per hectare 0 prejudices and make rational choices for the future of Australia and the The reduction in insecticide when using genetically modified in cotton is dramatic. The best results are with second generation [Bollgard II] GM cotton which has been used world. for the last two years. NOTES 1 http://www.isaaa.org/ FEARS ABOUT MARKET society organizations have also delib- 2 http://www.ncfap.org/whatwedo/ ACCESS FOR TRANSGENIC erately exploited the misconceptions 40casestudies.php, see also CROPS and prejudices that people have about www.ers.usda.gov/epubs/pdf/aer786/ science and multinational corpora- and www.ers.usda.gov/publications/ Consumers did not initially reject aer810/ Anti-GM activists like to GM crops, even in Europe. Before the tions. Some have been answered in quote Chuck Benbrook to the con- activist campaign against GM crops this article. Multinational corpora- trary, a consultant who works with picked up steam in the UK for ex- tions are neither in control of GM nor NGOs concerned with alternative ample, the supermarket chain the main beneficiaries of it. Food and agriculture, but Benbrook’s claims Sainsbury’s sold tomato paste from environmental safety of GM crops have been repeatedly rebutted by GM crops, and answered one of the have been studied for years, and even experts, including in Universities European scientists have concluded and the USDA. most consistent of consumer inter- 3Huang, et al. 2002. Science 295, 674- ests—more quantity for the same that they are as safe as conventional 11 677. price. Europe imports some 35 mil- crops. Although people love to hate 4 Shelton, et al. 2002. Annual Rev En- lion tonnes of soybeans, most of corporations, and Monsanto is often tomology 47, 845-881. which are GM. Some 70 per cent of depicted as a multinational giant, in 5 Munkvold, et al. 1999. Plant Dis. 83, British cheese is made using enzymes fact it is smaller than Qantas Airlines. 130-138. produced from genetically modified 6 Zhao, et al. 2003. Nature Biotechnol- ogy 21: 1493-97. bacteria, with no uproar or labelling CONCLUSIONS Activist groups often complain that 7. http://www.no-till.com.au/publica- required. tions/pressrelease.html Mark Twain once advised, ‘Get consumers never asked for genetically 8. Pellegrineschi et al. 2004. Genome 47, the facts first. You can distort them engineered crops and stand to gain 493-500; Zhang, et al. 2001. Proceed- later.’ Unfortunately, it’s probably little from them. Consumers, how- ings National Academy Sciences USA rare in modern times that Will ever, have consistently demanded a 98:12832-12836. Rogers’ comment at the start of this reduction in the health and environ- 9. www.fass.org/Factsheet2.htm, article has applied so aptly to the at- mental risks of agriculture. GM crops www.afaa.com.au click on ‘Agbio- have answered that demand. GM tech Resources’ and then ‘animal titude to GM crops. Never mind feed’, and http://www.ncga.com/ policy makers in developing coun- crops have already reduced the costs news/notd/2003/october/ tries, Westerners with excellent ac- of food production. More impor- 100903.htm). cess to reputable sources of tantly, the risks of pesticide exposure 10.Einspanier et al. 2001. Eur Food Res information continue to believe in are far greater to farm workers that Technol 212, 129-134 their ignorance the wildest tales to the general public, and we should 11.http://europa.eu.int/comm/research/ about GM crops. Due to fears about be mindful of their needs. quality-of-life/gmo/index.html market access, Africa has been reluc- There are potential risks attached Richard Roush is Director, Integrated Pest tant to adopt technologies that have to genetically modified crops, but Management, at the University of California, Davis. already saved lives in China and could many of those raised in the popular This is an edited version of his HV McKay Lecture, delivered in Melbourne on 24 August 2004. save even more lives in Africa, just press have achieved the status of ur- for fumonisins alone. So-called civil ban myths. Genetically modified I P A

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DAVID WARD

N NATIONAL Parks, diate fire effect, it is forced to live us that something is amiss in our Reserves, and on private on starch reserves until a new top bushland. property in south-west can grow. Complete replacement of The reason for grasstree decline I ern Australia, grasstrees the top can take a year, and the is, actually, concealed beneath the are under termite attack, rotting, plant may die in the meantime if charcoal on their stems. If this is breaking off, and toppling over, due its starch is exhausted. carefully cleaned off, annual growth to vast accumulations of thatch. If grasstrees are burnt every few rings and old fire marks are revealed. Had grasstrees been covered by years, when the thatch is small, they These show that, before European heavy thatch when Europeans first flower and seed profusely, the pro- settlement, and for some decades af- arrived, there would have been little tective mantle remains intact, the ter, even up to the First World War, reason to call them ‘blackboys’, green top remains largely unburnt, south-western Australian dry forest since the black stems would have nutrients in the thatch are recycled and woodlands were burnt regularly, been largely hidden. Only rarely at two to four year intervals. This would they have produced a flower frequent burning was due to a com- stalk, usually weak and twisted, Recent fierce, bination of lightning fires trickling quite unlike a spear. More likely over vast areas for months, deliber- popular names with British settlers destructive wildfires ate Noongar burning, and European would have been ‘greybeards’, or settlers mimicking Noongar burn- ‘haystack trees’. Early sketches and in long unburnt ing. It kept the bush green and paintings consistently show them, healthy. quite clearly, as recently burnt, with bush make it plain Over the past few decades, due black stems, little thatch, and a to a combination of poor scientific prominent flower stalk, like a spear. that indefinite fire advice and misinformed, urban- As a rule of thumb, a grasstree based opposition to prescribed thatch fire lasts as long in minutes exclusion is a foolish, burning, fire intervals on public as it has been unburnt in years. A land have stretched out to decades. three-year-old thatch will flare for unachievable idea The grasstrees, and the vegetation only a few minutes, doing little in general, are clearly suffering. Re- damage to the green crown. A cent fierce, destructive wildfires in thirty-year-old thatch will burn for as ash, and a host of small plants, long unburnt bush make it plain half an hour or more, reaching an such as sundews, germinate around that indefinite fire exclusion is a incandescent thousand degrees Cel- the base. The needles become ob- foolish, unachievable idea. Such sius. viously greener, longer, and thicker. fires have killed thousands of native Such fierce thatch fires often kill These things are well known to animals and leave a blackened the grasstree immediately, because people who work in the bush, but moonscape. the protective mantle of old leaf seemingly unknown to urban envi- The grasstree research has span- bases is rotted away. Where dead ronmentalists and some botanists. ned the last decade and, from the eucalypt leaves, or casuarina There is a serious conservation outset, has come under attack from needles have formed a ‘birds nest’ problem with these friendly old Greens and from some biologists in the green top, the rot is exacer- icons of the bush. Although still opposed to prescribed burning and bated, the green top is reduced in plentiful, the possibility of mass col- in favour of blanket fire exclusion. size and vigour, and the eventual fire lapses and local extinctions cannot Initially, it was suggested that the may completely burn the green top. be ruled out. Grasstrees are like the stem marks were not caused by fire If the grasstree survives the imme- Miner’s Canary—they are warning at all, but by drought, parrot attack, ▲ ▲

R E V I E W SEPTEMBER 2004 23 insects, fungi, stress, etc. I wondered pened. Within the jarrah forest (and mer fire every two years, and thrives when someone would suggest that other types) are thousands of fire ref- on such a fire regime. It declines if little green men, armed with ray uges, such as rock outcrops, swamps, burnt in spring, or at longer inter- guns, had been zapping the stems. moist shady creek banks, etc. The vals, because it smothers under its It is hard to see how drought, for frequent burning surrounded, but own thatch. There are only small example, would occur every two to did not enter, these refuges. In fact, remnant patches of kangaroo grass four years before European arrival, it protected them. Blanket fire ex- now. Under long-term fire exclu- at suddenly increased intervals af- clusion leads to fiercer fires, which sion, we are losing a beautiful na- ter two severe measles epidemics do burn out the refuges. This piece tive grass. among Noongars, be rare during the of fire behaviour seems beyond the Grasstree research offers a way two world wars, then occur only understanding of many Greens. to short-circuit the endless task of every few decades recently. If it did, They start shouting when attempts investigating the life cycle of every then the climate gurus have some are made to explain it to them. plant, animal, fungus, and microbe. serious repositioning to do. These In John Forrest National Park, Greens do not like this, as it spoils imaginative suggestions subsided near Perth, a three-year study of their game of invoking the Precau- when an intensive three-year re- grasstree fire-marks showed pre-Eu- tionary Principle. They say that we search project by a team at Curtin ropean fire frequency of three to should not burn until it can be University showed, beyond reason- four years on the gravelly ridges, two shown that burning does not harm able doubt, that the marks are to three years on the mid-slope, and biodiversity. If asked to define caused by fire. biodiversity, they have some In a remarkably co-ordinated trouble. They don’t realize that fashion, the Green attack then In a remarkably co- biodiversity is an immeasurable switched to saying that although concept, not a precise scientific pa- grasstrees may have burnt fre- ordinated fashion, the rameter. Are we supposed to wait quently, the rest of the bush did not. until biologists have finished inves- Noongar people lit only the Green attack then tigating the effects of fire on an grasstrees, without igniting the rest unmeasurable concept? Meanwhile, of the bush, for ‘cultural reasons’. It switched to saying the bush rots and devastating, un- is true that Noongar people hold the planned fires occur. balga, as they call it, in some rever- that although Correctly interpreted, the Pre- ence, and there were traditions and cautionary Principle says that we ceremonies associated with it. Yet grasstrees may have should not impose new-fangled, Noongar Elders, at three separate alien, muddle-headed fire-exclusion meetings, confirmed that the gen- burnt frequently, policies on vegetation that is, ob- eral fire frequency was two to four viously, adapted to renewal by fre- years in the dry woodlands and for- the rest of the quent, mild fire. We should restore ests. When I showed an old balga bush did not and maintain something like tradi- stem, with three-year fire marks, to tional Aboriginal burning. With a a woman Elder, she said ‘Why are mosaic of frequently burnt vegeta- you telling us what we already every two years on the clayey val- tion, unstoppable wildfires, like know?’ This was backed up by de- ley bottoms and scarp face. It is those in the eastern states two sum- scendants of early settler families, rather difficult to see how this can mers ago, cannot occur. Noongars and the journals and letters of early be explained by ‘cultural’ ignitions. know that. The balga is both Miner’s explorers or officials. Besides, A more sensible explanation is Canary and Rosetta Stone. We grasstrees are so inflammable that that gravelly ridges carry jarrah for- must wait for our urban environ- it is nearly impossible to light one est, which produces enough leaf lit- mentalists, and eco-babbling biolo- in dry weather without starting a ter to carry a fire every three to four gists, to grow a little, intellectually running fire. years. Marri trees, which grow on speaking. Until that happens, more Another line of attack is the the mid-slopes, produce rather more plants, animals, and even humans, hackneyed old debating trick of in- aerated litter, which will carry a fire will be incinerated. venting some preposterous proposi- every two to three years. Wandoo tion, then claiming it as your trees grow on the clayey bottoms David Ward is a former Senior Research Scientist with the WA Department of Conservation & Land opponent’s point of view. How could and scarp face, and produce little Management, and Visiting Fellow at Curtin every square metre of the jarrah for- litter. But, within living memory, University. He has thirty years’ experience of fire est burn every three or four years? the clay areas carried extensive kan- research and fire-fighting. That is not, of course, what hap- garoo grass, which will carry a sum- I P A

R E V I E W 24 SEPTEMBER 2004 There are Votes in the Murray

JENNIFER MAROHASY

HAT exactly is the water ted by the Prime Minister (500 the poem ‘My Country’, Dorothea problem in Australia?’ gigalitres). McKellar appropriately describes ’W asked the Prime Minister The Murray River has been a fo- Australia as a land ‘of drought and John Howard. ‘There is cus of ACF campaigning for over flooding rains’. Reflecting this vari- simply not enough,’ replied Peter 10 years. Why does it remain such ability, water allocation can be se- Garrett, then President of the Aus- a key national environmental issue? verely restricted in drought years tralian Conservation Foundation. The belief that irrigation along the like the present, even though wa- After consulting water expert Pro- Murray River is unsustainable and ter storage capacity in the Murray fessor Peter Cullen, Asa Wahlquist has resulted in a degraded and de- Darling Basin is approximately 25 reported the solution in The Aus- grading river system is the most per cent of annual average runoff. tralian newspaper the very next day: powerful force not only for taking Paradoxically, rice growers easily ‘Grow more wine and eat less rice.’ water off Murray River irrigators, cope with this by simply not plant- It is Cullen’s contention that we but also for regulating farming ing a crop. In contrast, South Aus- can save water in the Murray–Dar- across Australia. tralian wine grape growers bleat ling Basin by growing higher value For example, in the Northern loudly because their perennial crop crops, in particular wine grapes. Territory, Chief Minister Claire needs water every year. And there are those who insist that Martin recently reaffirmed that she There are those who believe rice growing should be banned al- will stand by her decision to ban the that, as inhabitants of the oldest, together. growing of cotton. In November driest and most fragile continent on While concerned greens may be last year, her government placed a Earth, we should ban European- keen to sip champagne for break- moratorium on irrigation develop- style agriculture altogether and pre- fast, rather than crunch rice ments in the Daly River Catchment sumably, along with much of the bubbles—all in the name of doing following intense lobbying from en- rest of the world, import our food. the right thing by the environ- vironmentalists who claimed that Australia contributed approxi- ment—is this really a sustainable watering thirsty crops had ‘devas- mately 14 per cent of the wheat approach? tated’ the Murray River in distant traded globally last financial year— On 3 August, Greenpeace, the South Eastern Australia. Another and this during a drought year. And Australian Conservation Founda- example is a new $22 million yes, we currently even export rice tion (ACF) and the Wilderness So- CSIRO research effort focused on to Asia. Rice production in the ciety launched their joint policy for saving our water resources, in part, Murray–Darling Basin over the last the Federal election—describing it by increasing agricultural water-use 10 years was enough to feed almost as the environmental issue that will efficiencies. Successful agriculture, 40 million people a meal each day, drive voting at the election. They however, is about much more than every day of the year. It is predicted are saving the Murray River, end- how much water a crop uses. that Asia’s demand for food—in- ing logging of old-growth forests in Centrally planned agriculture cluding wheat, beef and milk—will Tasmania and ‘tackling’ climate failed in Eastern Europe, yet it is be- grow by more than 20 per cent by change. ing tried on Australian farmers in 2010. These estimates are probably While there are substantial dif- the name of ‘saving water’. Farm- conservative. ferences between political parties ers, rather than the environmental- So, just how can Australia, the on the issues of climate change and ists, might just be the best placed driest inhabited continent on earth, Tasmania’s forests, the Coalition, to decide whether they grow rice or feed so much of the world? Can Labor Party and Greens are all com- wine grapes given available mar- there be any water left over for the mitted to saving the Murray River. kets, together with an individual environment? Remarkably, the only real policy dif- farm enterprise’s land and financial According to the World Re- ference is the amount of water to capability and water allocation. source Institute, Australia has be saved, with the Greens arguing One of the most defining char- 51,000 litres of available water per for six times the quantity of water acteristics of water in the Austra- capita per day. This is one of the (3,000 gigalitres) already commit- lian landscape is flow variability. In highest levels in the world, after ▲

R E V I E W SEPTEMBER 2004 25 Russia and Iceland, and well ahead as controlling salinity, should be tal issue since February 2001, pre- of countries such as Indonesia more widely acknowledged and rec- sumably on the basis that it has gen- (33,540), the United States ognized.’ eral appeal to the readership. (24,000), China (6,000) and the Unable to successfully push the All our political parties have United Kingdom (only 3,000 litres lie of declining water quality on all agreed to save the Murray River, per capita per day). Furthermore, governments in the lead-up to the with the amount of water to be according to the Federal Govern- last two Council of Australian Gov- saved the only distinguishing issue. ment’s Australian Water Resources ernment (COAG) meetings, Pro- Environmentalism is increasingly Assessment 2000, we divert only fessor Cullen and other members of about the perception of what is five per cent of the average annual the Wentworth Group of Scientists morally right and wrong—rather national runoff—most of the rain (funded by the World Wide Fund than solving real environmental falls across northern Australia. So, for Nature), recently changed tack problems. Hence the more righ- effectively, 95 per cent of the rain and are now telling us that climate teous the political party, the larger that falls is ‘for the environment’. change means there will now be the saving demanded. So we have Incredibly, nobody has an accu- much less water. In direct contra- 3,000 gigalitres (six Sydney rate fix on how much water is al- diction of these predictions, the Harbour equivalents) pledged by ready allocated for environmental the Greens, 1,500 from Labor, and flows in the Murray–Darling Basin. a puny one Sydney Harbour equiva- Wetland working groups and forest Environmentalism is lent (500 gigalitres) from the Coa- management committees already lition. control many hundreds of gigalitres increasingly about Might the national dialogue on of water, and this quantity will in- important water issues improve af- crease under the newly signed and the perception of ter the election? Could we ever much trumpeted National Water have informed discussion about the Initiative. This environmental wa- what is morally right global dilemma of how to best feed ter, however, doesn’t appear on any people while also protecting wild general ledger. The focus is always and wrong—rather rivers, including those in northern on how much water irrigators ex- Australia? tract. In wet years, there has been than solving real What if Labor wins the election? enough water for rice, wine and red environmental Prime Minister Mark Latham could gums. In dry years, there has been ask Environment Minister Peter less water for red gums and none for problems Garrett, ‘What exactly is the water rice in New South Wales. South problem in Australia?’ He is likely Australian farmers, however, are to again reply, ‘There is simply not assured of almost 100 per cent of June 2004 issue of Australasian Sci- enough.’ After consulting water ex- their allocation, even during the ence reported that, ‘A meeting of pert Professor Peter Cullen, Asa recent very dry years. This is how almost 100 Australian climatolo- Wahlquist could report the solution the water allocation system works. gists has concluded that the world in The Australian newspaper the The environmental lobby re- is getting wetter as it gets warmer’. very next day: ‘Let us start import- cently suffered a setback when the There is really no coherent picture ing all our cheeses’. Chair of the House of Representa- of regional climate change. Even The government may, or may tives Standing Committee on Ag- the Intergovernmental Panel on not, change at the upcoming Fed- riculture, Fisheries and Forestry Climate Change (IPCC) concedes eral election, but the media, the sci- explained in the Foreword to Get- this, and CSIRO Atmospheric Re- entists and the politicians are likely ting Water Right(s): The future of ru- search acknowledges that this is par- to remain largely compliant. They ral Australia, ‘The Committee is not ticularly the case for rainfall. all now feed off environmentalism swayed by the emotions of some Putting the facts of the matter at the expense of rational discus- commentators who portray the aside, the environmental lobby is sion, humanity and the environ- River Murray as dead or dying. In- clearly intent on exploiting the ment. The size of the feast, however, deed, the steady flows in the River concept of a dying Murray River— is likely to be much greater under Murray today are in stark contrast now so firmly a part of the national Labor. to the trickle reported by Sturt in psyche—as a campaign platform for his journals more than a century the upcoming election. The Austra- Dr Jennifer Marohasy is the Director of the IPA’s Environmental Unit. and a half ago … significant lian newspaper will run the stories. progress which has been achieved This newspaper has made ‘Saving in other areas of river health, such the Murray’ its official environmen- I P A

R E V I E W 26 SEPTEMBER 2004 Who Can Insure Against the Climate?

R.M. CARTER

NSURANCE companies pinned by science advice from govern- Michael Mann and his co-authors, has have been much in the ment agencies which, themselves, recently been shown to be based on news lately, and mostly not have a major conflict of interest in the flawed statistical analysis. The claims I for the quality of their man- matter of climate change research. by these authors—that the late 20th agement. They have taken to issuing Let us consider some of the key Century saw the highest rate of tem- alarmist warnings about global warm- planks of the alarmist case for climate perature increase and the highest peak ing and climate change. Although change. in temperature of the previous 1,000 from some perspectives these are in- years—lie in tatters. Plank one. The 0.60 C increase in glo- deed natural risks—and therefore of bal surface temperature measured over the Plank two. Some computer scenarios in- potential concern to insurance prac- 20th Century indicates global warming dicate a temperature rise of between 10 titioners—it will surprise many that is occurring, with a rate of change which and 60 C over the next 100 years, driven insurers actually believe that climate accelerated in the 1990s. mainly by an assumed doubling of atmo- processes take place on a time scale spheric carbon dioxide. which is relevant to their planning First, the 0.60 C increase does not oc- horizon. cur along a single trend line, but is First, it is important to understand that Led by large companies such as In- rather a fitted average. Temperature the effects of increasing atmospheric surance Australia Group (IAG) and indeed increased during the first part carbon dioxide content are uncertain, Swiss Re, insurers have been running of the 20th century, then declined and may be as much as an order of public seminars worldwide to parade equally strongly between about 1940 magnitude less than is assumed by the the belief that recent sharp rises in to 1970, to finally increase again there- computer models. The strength of claim payouts have been caused by an after. This curve does not match the various feedback effects is also uncer- increasing frequency and severity of smoothly rising curve of increasing at- tain. natural ‘climate’ events such as storms. mospheric carbon dioxide which is al- But the most important point is Efforts to convince the Australian leged to have caused the temperature that computer models of the state of public and politicians of the extent of increase. climate in 100 years’ time are viewed the problem peaked in late June, when Second, since about 1970, inde- by their creators as scenarios. That is IAG joined the World Wide Fund for pendent measures of atmospheric tem- to say, they are statements of what Nature (WWFN) in creating the Aus- perature have been available from ‘might’ happen, though in general tralian Climate Group and sponsoring weather balloons and satellites. These without any attendant probability es- a widely publicized marketing bro- measures agree with each other, and timate. Only scenarios which seem chure on the perils of climate change. disagree with the ground-based ther- ‘reasonable’ to their creators are ever Tony Coleman, IAG’s chief risk of- mometer record, in showing very little reported publicly. The path to this rea- ficer, went so far as to assert that it is a temperature increase over the last sonableness is littered with literally public responsibility to offer solutions three decades. This result contradicts thousands of discarded computer runs to problems triggered by climate virtually all the computer models, which produce answers deemed to lie change. which predict that greenhouse gas outside likely reality; for example, that About now, readers should be de- warming should be accentuated in the carbon dioxide might increase and tecting the whiff of rat. A special in- atmosphere compared with the surface then, due to negative feedbacks, tem- terest political lobby group, the record. perature decrease. WWFN, has joined forces with an in- Third, and last, the widely pub- This notwithstanding, the general dustry that has manifestly failed to lished graphs of an alleged dramatic public, and apparently also scientific manage its risks/claims balance skil- increase in temperature in the late advisors to insurance companies, of- fully. And, to boot, the recommenda- 20th century, used by the Intergovern- ten treat these scenarios as firm pre- tions for action from this combined mental Panel on Climate Change dictions. Great and unnecessary alarm lobby group turn out to be under- (IPCC) and based on papers by is thereby generated. As pointed out ▲

R E V I E W SEPTEMBER 2004 27 by the IPCC, the truth is rather that which human populations have always beyond our current or likely near-fu- ‘in climate research and modelling we managed reactively. No empirical re- ture modelling capabilities. should recognize that we are dealing lationship has yet been observed be- It is clear that the barque HMAS with a coupled non-linear chaotic sys- tween modest temperature changes of Alarmism, constructed by the insur- tem, and therefore that long-term pre- a degree or so and the frequency or ance industry from these and other diction of future climate states is not intensity of such events. timbers, is unseaworthy and doomed possible’. For instance, a recent study in to founder, even when sailed across a In Australian terms, one might southern North America found ‘no welcoming pre-election sea of politi- conclude that alarmist grass castles trends related to timing or duration of cal correctness. Indeed, she is taking built upon computer modelling are des- the hurricane season and geographic water so fast that I doubt that Alarm- tined to be consumed in the inevitable position of storms in the Caribbean ism will now survive even the next drought and bushfires which follow. Sea, Gulf of Mexico and tropical sec- small wave. In making common cause tor of the western North Atlantic with the WWF, the insurance indus- Plank three. Climate change is here and Ocean’ and also ‘no significant trend try is signalling that it sees being po- now. Warming is human-caused, and we in these variables and generally no as- litically correct as more important should act to prevent it. sociation with them and the local than being scientifically correct. This Of course ‘climate change is here and ocean, hemispheric, and global tem- is not a sound basis on which to plan now’. It always has been, always will peratures’. the future of an important industry be, and is overwhelmingly natural in And as for computer models which that, ultimately, stands or falls on the origin. predict such changes, they simply do accuracy of its risk-assessment analy- The question as to whether a hu- ses. man-caused signal can be detected In effect, global insurers appear to within Earth’s varying climate is The widely published have been caught unawares by the oc- deeply controversial. Though few sci- currence of a perhaps unusual num- entists doubt that a significant human graphs of an alleged ber of strong weather events which impact occurs at a local level, for ex- occurred in the late 20th Century. ample around cities or areas cleared dramatic increase in Probably even more important are the for intensive agriculture, any cumula- social changes which occurred over tive human signal is so far undetect- temperature in the late this same time span. For instance, a able at a global level and, if present, is 2003 study from India showed that ‘in- buried deeply in the noise of natural 20th century … has creasing damage due to tropical variation. cyclones over Andrha Pradesh is at- Considerable self-assurance is recently been shown to tributable mainly to economic and needed to argue that humans should demographic factors and not to any seek to manage climate change. To be based on flawed increase in frequency or intensity of argue for specific modifications in the statistical analysis cyclones’. absence of a measurable human sig- Trying to attribute individual nal, and in the face of vigorous scien- weather events to climate change is a tific disagreement about the major not have the skill, and nor will they vain and transparent stratagem which causes of climate change, amounts to soon acquire it, to predict accurately aims to shift the blame for the insur- overweening hubris. the recurrence periods for natural ance industry’s own previous lack of events such as floods, cyclones and careful research and planning. Gov- Plank four. Global warming is respon- hailstorms. As several of the world’s ernments and the public should firmly sible for more intense and/or more fre- leading climate modellers observed in resist self-interested industry attempts quent extreme weather events, and another recent paper, in Nature, ‘we to plunder their purses under the dis- caused an increase in the severity of the strongly agree that much more reliable guise of ‘good corporate citizenship’, 2002 drought in Australia. regional climate simulations and ‘sustainable development’ or ‘citizens Human-induced global climate analyses are needed’, and that ‘at against climate change’. And HMAS change has not yet been demonstrated present … such simulations are more Alarmism should be allowed to sink as a reality, as opposed to a computer- aspiration than reality’. quietly in peace. generated alarmist fear. To attribute re- Of course, with expensive super- Professor R.M. Carter is head of the Marine gional weather events, including the computer labs to fund into the future, Geophysical Laboratory (Node C) at the James current Australian drought, to global they would say that, wouldn’t they? Cook University, Townsville. He is a regular warming is therefore simply fanciful. But the bottom line remains that the contributor to the IPA Review. Droughts, floods, hailstorms and opinion of all expert modellers is that cyclones are natural weather events regional climate predictions remain I P A

R E V I E W 28 SEPTEMBER 2004 Education Agenda

KEVIN DONNELLY

Funding: a no-brainer tem. With government schools, the what parents expect, such schools have election issue average student government recurrent become a target of the Left in the forth- funding (2001–2002) is just under coming election. Should non-government schools re- $9,000. Why is this so? One reason is be- ceive taxpayers’ money? Judged by the On average, students attending cause teacher unions define non-gov- Australian Education Union’s (AEU) non-government schools receive ap- ernment schools as elitist and guilty of 1998 curriculum policy, the answer is proximately $5,000 in government re- promoting a ‘competitive and cultur- ‘no’. The union argues: ‘that the re- current funding—a saving to govern- ally-biased system of education’. Al- sources of Governments should be ment of $4,000 for each student. Not though the Berlin Wall may have wholly devoted to the public systems only are parents who make the choice collapsed, those running the AEU still which are open to all’. saving governments money; their taxes believe in the class war and non-gov- The belief is that education should also fund the government school sys- ernment schools are an easy target. be a state monopoly and parents choos- tem. Second, as evidenced by the nature ing the non-government system should Based on research carried out by the of the attack on so-called wealthy be financially penalized. Productivity Commission, it is esti- schools such as Geelong Grammar, Evidence of the AEU’s continued mated that the financial sacrifice made ALP strategists believe that there are antipathy to non-government schools by non-government school parents votes in fomenting the politics of envy is easy to find. The union has embarked amounts to a $4.2 billion annual sav- and class division. By attacking the ‘big on an extensive campaign, placing po- ing to governments across Australia. end of town’, they hope that many of litical signs on school property and As demonstrated in 1962 in Goul- the Howard battlers will return to the enlisting teachers to fight in marginal burn, NSW, when the local Catholic Labor fold. seats, based on the (mistaken) premise authorities closed the system and 2,200 What this overlooks is the fact that that private schools are over-funded additional students suddenly knocked parents are voting with their feet (32 (see http://aeu-vic.labor.net.au/cam- on the door of their overcrowded pub- per cent of students now attend non- paigns/). lic schools, the government system government schools, up from 22 per The Australian Labor Party (ALP) would collapse if not for the presence cent in 1980) and that the largest is also a critic of non-government of non-government schools. growth in enrolments is associated schools and, while acknowledging It should also be acknowledged that with low-fee-paying schools in mar- their right to receive some government non-government schools are funded on ginal electorates. funding, argues that many receive too a needs basis and the amount each Such are the failures of the govern- much money and that priority must be school receives depends on the school’s ment system, that aspirational voters given to government schools. socio-economic status. Thus, more are increasingly choosing the non-gov- To quote Mark Latham, when in- advantaged schools receive substan- ernment alternative. terviewed on ABC radio in Perth: tially lower funding than those schools Finally, by focusing the debate on ‘We’ll be taking money off the over- that are more disadvantaged. resources and levels of funding, the funded schools like the Kings School Students attending Scotch College AEU and the ALP are able to ignore and Trinity Grammar’. (Victoria) receive only $1,713 and the more pressing question of standards That such attacks on non-govern- those at The Kings School (NSW) re- and how well the system performs. As ment schools are erroneous, illogical ceive $1,905. Less well-off non-govern- a result, under-performing government and counter-productive is easy to ment schools receive something in the schools continue unchecked and fail- prove. The reality is that Federal fund- order of $5,500 per student. Obviously, ing teachers go unchallenged. ing to government schools (especially such figures are well below the $9,000 when compared to State funding lev- in funding given to government school Dr Kevin Donnelly, Chief of Staff to the Hon. Kevin Andrews MHR and a former Director of els) has increased since the election of students. Education Strategies, is author of Why Our the Howard Government. Notwithstanding the fact that non- Schools are Failing, published by Duffy and It is also true that every time a par- government schools save Australian Snellgrove and commissioned by The Menzies ent decides to send a child to a non- governments billions of dollars and, on Research Centre. government school, more money is the whole, perform better academically freed up for the government school sys- and promote values more in tune with I P A

R E V I E W SEPTEMBER 2004 29 A ROUND THE TANKS

Around the Tanks is sourced from a selection of publications detailed in The Heritage Foundation’s The Insider, a monthly compilation of publication abstracts, events and news from around the world’s think-tanks. (Back issues of The Insider can be viewed at www.heritage.org/insider)

GLOBALIZATION AND RELI- benefits of a labour policy responsive even when sovereignty fragments.’ GION to the constantly changing environ- When individuals are granted property by Radley Balko ment of world trade. rights, interest grows in the reliability AWorldConnected.org of the courts to defend those rights, and aworldconnected.org/article.php/ THE FATE OF BRITAIN’S as a result, in the reliability of the gov- 601.html NATIONAL INTEREST ernment that creates the courts as well. As trade and globalization reach into by Kenneth Minogue new corners of the world and touch The Bruges Group THE OFFICIAL HANDBOOK new cultures, many people of faith brugesgroup.com OF THE VAST RIGHT-WING worry about what effect this new com- For over 1000 years, the rulers of Brit- CONSPIRACY merce will have on religion and spiri- ain and of its component nations have by Mark W. Smith tuality. Some practitioners of Western pursued the national interest accord- Regnery Publishing, Inc. faiths worry that the pursuit of wealth ing to the circumstances of the time. regnery.com across international borders will lead Their record is mixed, but far from This book provides conservative talk- to a kind of society-wide pursuit of dishonourable. Thinking about ing points on virtually every issue, from material gain in lieu of spiritual Britain’s national interest is the essence taxes to the war on terror. It aims to fulfilment. Activists and free trade of what it means for Britain to be a free arm conservatives with facts for their opponents, meanwhile, fear that the and independent actor on the histori- next cocktail party or college class. The overpowering influence of Western cal stage. But recently, this vital ques- book also includes a list of inspirational ideas and commercialization will dilute tion has become, for many people, individuals, magazines and newspa- and ultimately corrupt non-western something the British cannot seriously pers, conservative think tanks, Web belief systems. This paper examines ask. The British are becoming depen- sites and important books. both arguments based on the history dent on the decisions of others—in of free markets and theocracies. particular, international and suprana- INDEX OF LEADING ENVI- tional bodies. Minogue examines this RONMENTAL INDICATORS JOB LOSSES AND TRADE: A change in mindset. by Steven F. Haywayrd REALITY CHECK Pacific Research Institute by Brink Lindsey BRINGING CAPITALISM TO pacificresearch.org/jump/enviro04/ Trade Briefing Paper No. 19, The Cato THE MASSES aw.html Institute by Hernando de Soto The ninth annual Index of Leading En- freetrade.org/pubs/briefs/tbp-019.pdf Cato Institute vironmental Indicators, released by the During this election year, the word www.cato.org Pacific Research Institute and the ‘outsourcing’ will most likely be used In this excerpt of his remarks delivered American Enterprise Institute, shows as a political tool to harness fear over upon receiving the Milton Friedman that the environment continues to be job losses in particular sectors. How- Prize for Advancing Liberty, de Soto an American policy success. Environ- ever, Cato’s Center for Trade Policy discusses the effort to promote capital- mental quality is improving steadily Studies sets the record straight based ism in developing countries, where the and in some cases dramatically in key on numbers from the Bureau of Labor greatest constituency for change, he areas. Average vehicle emissions are and Statistics. While the United States states, is poor businessmen and entre- dropping about 10 per cent per year, lost 309.9 million jobs from 1993– preneurs. The vast extralegal econo- 94 per cent of the population is served 2002, 327.7 million new jobs were cre- mies in countries such as Mexico and by water systems that have reported no ated. At the same time, manufactur- Egypt provide the potential to gener- violations of any health-based stan- ing has made tremendous gains in pro- ate wealth, but will do so only when dards, there has been a 55 per cent ductivity. While critics would offer the their strength is harnessed by capital- decline in toxic releases since 1988, critique that jobs are ‘safer’ under pro- ism. De Soto emphasizes the impor- even while total output of the indus- tectionist policymaking, this study pro- tance of property rights, ‘the result of tries covered by this measurement has vides a broad picture of the long-term a grassroots contract,’ which ‘stick increased 40 per cent, and despite most

R E V I E W 30 SEPTEMBER 2004 A ROUND THE TANKS popular assumptions, US air quality unbalanced and thus are psychologi- SOUTH AFRICA’S WAR trends are found to be at least equal, if cally and economically detrimental to AGAINST MALARIA: LESSONS not slightly better, than in Europe. the average person. When scare sto- FOR THE DEVELOPING WORLD ries are used to influence government by Richard Tren and Roger Bate SCHOOL CHOICE: A ‘SYSTEM regulations, the result is frequently eco- Policy Analysis No. 513, Cato Institute OF SCHOOLS’ FOR A MOD- nomic harm, a lack of prioritization cato.org/pubs/pas/pa513.pdf ERN WORLD with few or no benefits for people. Malaria has cost the developing world by Lil Tuttle countless lives and economic stagna- The Clare Boothe Luce Policy Institute WAR AGAINST THE MACHINES: tion. When South Africa agreed to end cblpolicyinstitute.org WHY ARE PROTECTIONISTS DDT usage in 1996, cases rose from While educational special interests ENDANGERING AMERICAN well under 10,000 to a peak of over such as the NEA, American Federation JOBS? 60,000 cases in 2000, subsiding once of Teachers, and the PTA all try to pre- by Ted Balaker again after its reintroduction. Tren and vent school choice, 60 per cent of The Reason Public Policy Institute Bate believe the case against DDT is Americans support full tuition vouch- reason.com/hod/tb031904.shtml simply a political one. While DDT has ers according to a 1999 Gallup poll. Contrary to current political rhetoric, been given a carcinogenical rate less ‘Opportunity for a good education the worst enemy of the low-skilled than coffee in humans by the Cancer should not be contingent upon family American worker is the machine. For Institute, the environmental lobby still wealth, private philanthropy, or co- example, the printing press put thou- screams for its ban in the developing erced government largess in the face sands of scriveners out of jobs and soon world. While it may be harmful to of abject public school failure,’ Tuttle automated checkout lines may destroy smaller organisms and certain forms of writes. This article summarizes the most thousands of jobs for cashiers. How- catfish according to laboratory studies critical aspects of the debate. ever, this is only half the story. While cited in the paper, South Africa clearly 70,000 computer programmers have represents the utility of DDT in elimi- ENVIRONMENT AND HEALTH: lost their jobs since 1999, 115,000 new nating mass human suffering. MYTHS AND REALITIES computer engineering jobs have been by Kendra Okonski and Julian Morris, created. Instead of praising a wide new GLOBALIZATION’S EFFECTS editors market of job choice, protectionists ON THE ENVIRONMENT— International Policy Network seek to exploit the sympathies of work- BOON OR BANE? www.policynetwork.net/main/ ers that are in the transition period be- by Jo Kwong article.php?article_id=622 tween jobs for political gain. Lindenwood University In this book, ten expert scientific con- lindenwood.edu/studentlife/isee/isee1.html tributors analyse key environment and WWW.TERROR.NET: HOW In recent years, globalization has be- health issues being discussed by the MODERN TERRORISM USES come a remarkably polarizing issue. In World Health Organization. The book THE INTERNET particular, discussions about globaliza- challenges the conventional wisdom Special Report No. 116, United States tion and its environmental impacts that human health problems (cancer, Institute of Peace generate ferocious debate. Is globaliza- disease and even death) are being usip.org/pubs/specialreports/sr116.html tion a solution to serious economic and caused and exacerbated by modern Policy experts have been very focused social problems of the world? Or is it a industrial society. The book offers an on how terrorists can attack the profit-motivated process that leads to overview by scientific experts of the Internet. However, this overlooks the oppression and exploitation of the available scientific evidence concern- danger of how terrorists can use the world’s less fortunate? This paper ex- ing the impact of pesticides, dioxin, ni- Internet as a tool to spread their ideol- amines alternative perspectives about trates, radiation, endocrine disruptors, ogy. Terrorists use the Internet for psy- globalization and the environment. It global warming and the precautionary chological warfare, publicity, propa- offers an explanation for the conflict- principle on human health. The con- ganda, fundraising, recruitment, net- ing visions that are frequently ex- tributors show that many environment working, planning, and co-ordination. pressed and suggests elements of insti- and health risks have been exagger- The challenge offered by this study is tutional framework that can align the ated, to the detriment of scientific re- how to meet that threat without sacri- benefits of globalization with the ob- search and public policy. Environmen- ficing the very liberties that make our jective of enhanced environmental tal scare stories in the media have been society worth defending. protection. I P A

R E V I E W SEPTEMBER 2004 31 The Capacity to Manage Index Report 5: The Australian Petrochemical Industry

The IPA Work Reform Unit launched national and international competi- they are simply employees, like the the Capacity to Manage studies in tiveness of the Australian economy. workers. Consequently, these manag- 2002 and this current study (Petro- Management performance issues are ers’ motivations may not be directed chemical Industry) is the fifth in the never considered or assessed in the to business performance, but rather to series. After detailed assessments of regulation systems processes because it career and self-advancement. 237 enterprise agreements, there is is always assumed that managers can The implications of reduced capac- evidence that, at long last, in at least manage. That assumption is chal- ity to manage can only be guessed at, one industry sector, the Australian lenged by the results of the combined but it is safe to assume that the effects enterprise agreement approach has Capacity to Manage studies. on economic performance, on firms’ delivered results that are benign in profitability and on worksite safety terms of their effects on managers’ ca- SYSTEMIC, INDUSTRIAL RELA- must be negative. If managers do not pacity to manage their businesses. TIONS REGULATION FAILURE have clear authority to manage, what The theory of the enterprise agreement happens to decision-making and ac- WHAT DOES THE CAPACITY system is that workers and manage- countability? TO MANAGE INDEX STUDY? ment work together for the mutual The Index looks at the individual, for- benefit of workers and the firm. Higher PETROCHEMICAL INDUSTRY mal, industrial agreements that busi- pay for workers is achieved with higher The petrochemical industry has long nesses enter into, known as enterprise performance for the firm. But between suffered from structural decline. Old agreements. These are registered with theory and practice something is go- infrastructure, poor profitability, reluc- industrial relations commissions and ing seriously wrong. tance to reinvest, a small domestic are publicly available on the Internet. Based on the foregoing results, it is market and the rise of highly efficient, The Index does not look at pay issues. becoming apparent that the current modern competitive processing facili- It looks at how each clause in an agree- industrial relations frameworks sys- ties in Asia have placed many of the ment affects the capacity of managers temically reduce the capacity of Aus- domestic businesses at risk. The more to manage their businesses in compari- tralian managers to manage their recent, dramatic increases in global oil son to management rights under businesses. prices have, however, assisted greater awards. For example, if a clause re- This conclusion is tempered by the profitability. moves the control of rostering from understanding that formal agreements Nevertheless, in this less secure managers, the clause is rated as -1. only reflect one aspect of managerial environment of the last decade or so, Generally, the public perception of performance. Direct relationships on it appears that most companies have industrial relations involves debate the ground are perhaps more important negotiated enterprise agreements over ‘workers rights’. But the key to than formal agreements. But it is le- which at least do not decrease their understanding Australia’s industrial gitimate to ask why managers would capacity to manage. Perhaps one mo- relations regulation systems is that the agree to reduce their formal capacity tivational factor is that petrochemical rights take two forms: remuneration to manage if this did not reflect the management has always involved a and who controls operations. Remu- informal worker–manager relation- high risk of catastrophic disaster, as neration is a cost issue. Operational ships. Perhaps one reason is that witnessed at Esso’s Longford plant in control, however, directly affects the middle, and even senior managers, do Victoria a few years ago. The Longford performance of firms and hence the not normally own the businesses— plant enterprise agreement, signed af- ter the plant explosion, rates only a Avge Score Industry Best score Worst score EBAs assessed minus 2. -8.1 Food +1 -20 51 Full details of the Petrochemical assess- -11.1 Construction +4 -21 36 ments and all Capacity to Manage In- -8.7 Automotive +3 -27 47 dex studies, including methodology, are -5.6 Transport +7 -16 53 available by subscription. Contact the -1.5 Petrochemical +3 -12 50 IPA office on 03 9600 4744.

R E V I E W 32 SEPTEMBER 2004 Capacity to Manage Index Overall Ratings, Petrochemical Industry

Company name Union/Party Year Applies Rating

Agility Services AWU 2003-2005 -1 Albright & Wilson AWU 2002-2004 -4 Australian Vinyls Corporation AWU 2002-2005 -2 BASF AWU 2001-2004 -1 BHP AWU 2003-2006 3 BOC Gases TWU, AWU, AMWU 2003-2005 -4 BP Oil AMWU, CEPU 2003-2006 -1 Caltex AWU 2002-2004 -8 Caltex/Linfox TWU 2003-2005 -1 Energy Developments AWU 2002-2004 3 Esso AMWU, CEPU, AWU 2003-2005 -7 Esso Various 2003-2005 -2 Gasnet AWU, TWU, APESMA 2003-2005 2 Henkel Adhesives AWU 2003-2005 -2 Huntsman Various 2001-2004 -2 Incitec Pivot AWU 2003-2004 0 Linfox -Shell distibution TWU 2002-2005 2 Mite Constructions AWU 2004-2005 2 Mobil AMWU, CEPU 2002-2004 0 Mobil NUW 2002-2004 2 Mobil NUW 2003-2004 2 National Starch & Chemical Company LHMU, AMWU 2002-2004 -3 Nuplex Industries AWU 2004-2005 -2 Nuplex Resins AWU 2003-2005 -2 Orica CFMEU 2002-2005 1 Orica Specialty Chemicals AWU 2003-2005 -3 Origin Energy NUW 2002-2004 0 Pacific Petroleum No Union 2003-2004 1 Pental a Division of Symex AMWU 2003-2005 -2 Pivot Various 2002-2004 1 Plaspak Contaplas NUW 2002-2005 0 Plaspak PET No Union 2003-2004 1 Power Petroleum TWU 2002-2004 1 Qenos AWU 2003-2006 -3 Qenos AWU, CFMEU 2001-2004 -2 Queensland Nitrates Management AWU 2002-2004 2 Santos AWU 2002-2004 -10 Shell NUW 2002-2004 -6 Shell TWU 2003-2005 -4 Shell Various 2003-2006 -12 Shell AFMEPKIU 2004-2006 -3 Shell AWU 2003-2004 -4 Thiess Nacap AWU 2003-2005 2 Ticor Chemical Company AMWU, CEPU, AWU 2002-2004 -1 Transfield Services AMWU, AWU 2004 -1 TXU AWU, APESMA 2002-2005 -1 Upstream Petroleum AWU 2002-2005 2 Wattyl Australia LMHU 2003-2005 -2 Woodside AIMPE 2001-2004 -4 Woodside AWU 2002-2004 0

Average rating -1.5

Note: Comments are made within the context that the IPA Capacity to Manage Index does not measure actual management performance.

R E V I E W SEPTEMBER 2004 33 Epstein on Epstein

ANDREW MCINTYRE

Richard A. Epstein, the James Parker Hall Distinguished Service Professor of Law at the University of Chicago, recently visited Australia to address some IPA functions. Here he discusses some of his formative experiences and his classical liberal outlook for a better world.

ICHARD Epstein is an cal agreement, he asks ‘Why add source effects is so clearly in favour unbridled optimist. He anything?’ It appears that there is a of competition unless there is some holds a firm belief that, selection effect going on which leads independent justification for a mo- R through patience and the him to choose those particular top- nopoly, as with intellectual property logical application of well con- ics where things appear wrong. and certain network industries’. structed arguments, social conditions Clearly, Epstein found a good deal Epstein believes that he has been will improve. wrong with cartels, on the one hand, very lucky, because in addition to But he is also a noted contrarian. and with limitless libertarianism on that insight, he was also able to fig- In an interview several years ago, the other. In a book just jointly pub- ure out what was wrong with his lib- Epstein once remarked, ‘My intellec- lished by the IPA and NZ Round- ertarian theories. ‘Historically, there tual style has always been that of a table, Free Markets Under Seige, to are no pure libertarians in the com- contrarian. If there’s a position ev- coincide with his Australian visit, mon law or in the Roman law. I re- erybody thinks is right and is happy Epstein made some very simple in- alized that the exceptions made to with, then they’re probably wrong. stitutional observations. When he libertarian principles on contract And the reason they are probably looked at the so-called reforms of the and property had an underlying pat- wrong is that they spend too much tern. And I found it. It became clear time on self-congratulation instead to me that the whole doctrine of of attacking each other.’ If there’s a position “privilege” was very well constructed. To put it another blunter way, his The basic proposition was that you attitude is, ‘talk is cheap, so let’s de- everybody thinks is can use coercion to override com- bate’. Although he attributes some mon law rights to the extent that it of this attitude to his liberal law edu- provides benefits to all the individu- cation when he studied at Oxford right and is happy als who are subject to the coercive back in 1966, when challenged that power of the state.’ this disposition had perhaps more to with, then they’re Epstein is known internationally do with basic personality than for his logical rigour. A very fast and coursework, he volunteered, ‘I wish probably wrong precise speaker, he seems to develop I knew where it came from. To some arguments that create seamless and extent it came in part from my par- completely watertight cases, in all ents, both of whom had strong 1930s and the New Deal period in circumstances. The notion of ab- contrarian instincts. Both were te- the US, he discovered that virtually straction is anathema to him. He is nacious in the way they thought every constitutional argument in understandably quite scathing about about certain problems. In part, it favour of legislative discretion was an the post-modernists. ‘The French was just spending my life in think- argument which allowed somebody modernists, the people who start ing about things. I recognized that to maintain or perpetuate some kind talking about language, Dada, Fou- people tend to go lax when there is of cartel. He explained: ‘When you cault and all the rest of that tradi- no competition, so I decided that I square that against Economics 101 tion, I regard as next to useless for was going to become the competi- on the relative effects of competition the business of making and interpret- tion! and monopoly, it becomes almost ing laws and agreements. Language But Epstein is not always a con- amazing that someone in the politi- is too powerful a tool for one to as- trarian. Where he sees a set of cal arena could be completely indif- sume that every time you make a manoeuvres, or set of arguments or ferent between the two systems, proposition, you are really inviting doctrines, with which he is in logi- when the social theory on their re- someone to write a poem about it.

R E V I E W 34 SEPTEMBER 2004 Lawyers do exactly the opposite road. And to figure out how you solve reducing the number of people they thing. Through constant trial and these transitions questions, you need will employ, or by making other fea- error, we identify ambiguities that to know more than the general tures of the work less attractive than matter and then try to eliminate theory. But if you don’t get the basic they should be’. Epstein is emphatic: them so we know where we stand. theories right, you will never be mov- ‘You can’t protect people by pretend- To celebrate the ambiguity rather to ing your transitions in the right di- ing that they are more productive than try to eliminate it is exactly the rection.’ than they really are. Because, with- opposite of the legal impulse. A com- Elsewhere, Epstein has written out protective restraints they would mitment to a high level of abstrac- extensively on discrimination law have worked at lower wages to be- tion doesn’t quite carry the day.’ and its perverse consequences. He gin with, and as productivity in- In his Free Markets Under Siege, claims that these laws create a dis- creased with their skills, the value of Epstein talks about easy cases and persal effect, benefiting the well off, their labour would increase and it hard cases, and suggests that we solve and hurting the poor. These argu- would then be bid up by somebody the easy ones first. He cites agricul- ments are very pertinent today in else if the original employer refused tural policy as a clear example of an Australia for Aborigines, the long- to make wage adjustments.’ easy case about which it is easy to term unemployed and other target His endorsement of the old make good decisions, that is, to see groups. He explains: ‘You have two theory of laissez-faire demonstrates the social superiority of the competi- issues here: one is affirmative action his view that optimism and patience tive system. Although he acknowl- and the other is the minimum wage. are virtuous qualities. ‘In an ordinary edges that huge variations in social life, it takes a bit of time to accumu- and cultural patterns exist amongst late human capital. If you don’t have nations, the suggestion that reform You can’t protect patience, because you don’t have of the agricultural sector in the Eu- confidence in the system, you’ll try rope, especially France, and Japan people by pretending to get the quick fix and you’ll only might be difficult to bring about, set the very people you are trying to brings out his infectious and over- that they are more help back another step.’ whelming optimism and confidence Epstein lives in America and re- in the future through logical argu- productive than they members race relations before 1954. ment about what is best. ‘But that’s He admits that there are still prob- true of every country. That’s also true really are. Because, lems today at the higher level of po- of the US. My argument about this litical discussion, but in terms of is not about the historical difficulty without protective day-to-day interactions, the transfor- in eliminating these practices, but mations have been ‘so total and so the weakness of the intellectual case restraints they would complete that anybody that was alive that has been used to keep it in then and alive now would have to place’. have worked at lower remark with some degree of amaze- Epstein saw, both in the US and ment just how far progress has come.’ in England, an increased willingness wages to begin with Although he appears to be an to crack down on agricultural subsi- unbridled optimist with a watertight dies, and it was one reason to have explanation for every situation, it is another go and write Free Markets… They work the same way. If you have nevertheless true that reform and ‘These kinds of protection are wholly a preferential programme, employers progress are happening all around us. illegitimate, but in France in particu- will, paradoxically, often be reluctant We must learn to work at them, lar, where you have a very mono- to hire targeted people because it make wise decisions and be patient. lithic state and no tradition of strong becomes difficult to get rid of them As for Epstein, he is clearly ahead of private rights, getting rid of these because it would be seen as a form of the field and is right so often about things is very difficult. And since the discrimination. There is no point so much that he tends to dazzle Common Market, the EU hasn’t giving protection to someone in a people with his logical solutions. done an enormous amount to pry job, if he doesn’t get the job in the This was certainly the impression he these markets open but has created, first place.’ made on several Australian audi- in part, fortress Europe, it is not at The minimum wage is a slightly ences. all clear that it is going to be a different issue but has exactly the countervailing influence. So, in the same outcome. ‘By requiring people Andrew McIntyre is Public Relations Manager at end, trade liberalization will come, with low productive skills, for what- the Institute of Public Affairs. even in the agricultural sector, but ever reason, to take a higher wage it’s going to be a long and bumpy base invites employers to respond by I P A

R E V I E W SEPTEMBER 2004 35 R E V I E W Free_Enterprise.com by Stephen Dawson File View Go Bookmarks Options Directory Window Help

PROTECTING YOUR RIGHTS? 1992. The Commission’s praise of iam Jonas, the Race Discrimination I am deeply ambivalent about the the amendments is fulsome, and Commissioner for HREOC, said: dozens of civil liberties organiza- quite devoid of any recognition that The government must stop tions that purport to protect the there are competing rights, some of obfuscating and shooting the rights of citizens. Most of those which have been reduced to make messenger. Australia’s inter- rights are, on the one hand, unex- way for the new ones. national reputation is better ceptional. Nearly everyone sup- Do you doubt this? Acting Dis- served by acknowledging that, ports the rights of people to be free ability Discrimination Commis- like every country of the world, from arbitrary arrest; if arrested, to sioner Dr Sev Ozdowski is quoted: we do have problems with be entitled to a fair trial upon These amendments, and the racism and by recommitting to known charges; in all cases to be Standards to follow, are an genuine efforts to address the treated with the dignity that merely important part of the move- issues. being a person should entail. ment towards equal oppor- That both the ‘messenger’ and But, on the other hand, viewed tunity in education for people the body to which the message was in the context of the broad sweep with disabilities in Australia … delivered (the UN Commission on of human history, those rights are As an essential part of the same Human Rights) may have deserved indeed quite exceptional. Most ex- goal, they provide greater to be figuratively shot is not con- tensively organized large-scale so- certainty for education sidered. Indeed, the Government of cial orders in which humans have providers about what they have Australia, and the people of Aus- lived have respected such rights to do. [emphasis added] little, or not at all. So the existence Australian society appears to of bodies seeking to preserve them, have decided that rights of access perhaps even extend them, should to various opportunities by those be welcome. suffering from disabilities are im- Except that many of those bod- portant enough to override other ies are afflicted by a tendency to rights. But it would be refreshing if overreach. Some descend into trivi- Australia’s premier rights-enforce- ality. Some fail to acknowledge that ment body were at least to ac- some of their preferred rights are in knowledge the concomitant loss of conflict with each other. Some are others’ rights—such as those of very confused about from whom the education providers who will now abuse of rights most needs to be have to know ‘what they have to tralia, are guilty of racism regardless feared. Indeed some are actual arms do’. of what they think since, according of the body from which abuses Perhaps it is merely a manifes- to the HREOC, its consultations on should be feared, and whose pur- tation of personal paranoia on my matters of racism have revealed that poses, disguised by wholesome part that those words trouble me. ‘denial of racism [is] one of the most names, are all too often designed It is clear that HREOC, despite its prevalent forms of racism in Aus- to reduce rights. creation by Australian Govern- tralia’. ment statute, and its responsibili- www.hreoc.gov.au/media_ ties to administer—and adjudicate HUMAN RIGHTS AND releases/2002/15_02.html EQUAL OPPORTUNITIES? complaints against individuals un- Consider the Australian Human der—several important pieces of HUMAN RIGHTS ELSE- Rights and Equal Opportunities legislation, is as much a political WHERE Commission (HREOC). As I write, advocacy body as any NGO. The most worrisome aspect of hu- the first ‘What’s New’ item on its When, in 2002, the United Na- man rights movements in the West- Website reports how HREOC wel- tions Special Rapporteur on ern world over recent years has been comes the passage of amendments Racism’s report was rejected by the the creation of the right not to be to the Disability Discrimination Act Australian Government, Dr Will- insulted. That right is highly selec-

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restricted in order to protect Chris- with administering, promoting and tians from hurt feelings, the free adjudicating on different bits and speech of some believers is restricted pieces of human rights treaties, in order to protect others from hurt agreements and proposals. The feelings. main one is the Office of the United It’s worth noting the list of per- Nations High Commissioner for sonal characteristics in the Saskat- Human Rights: chewan code around which one must tip-toe with exquisite polite- www.ohchr.org ness: Some of its pages have links to This screenshot edited for clarity No person shall publish or its ‘official site’ at another Web ad- tive, of course. You are legally en- display … any notice, sign, dress. That other address, though, titled to call me a right-wing mo- symbol, emblem, article, state- contains nothing other than a re- ron or a libertarian air-head. Or ment or other representation … direction to take you back to the even to argue that my atheism shall which exposes, or tends to original site. Kafka would have been consign me to eternal exile from the expose, to hatred, ridicules, proud. Kingdom of Heaven. belittles or otherwise affronts For the moment, anyway. But in the dignity of any person, any BACK HOME the Canadian province of Saskat- class of persons or a group of The Australian Civil Liberties chewan, one cannot make the ar- persons; because of his or their NGO scene is murky. The organi- gument that a homosexual is race, creed, religion, colour, sex, zation with the most official sound- consigned to eternal exile from the sexual orientation, family ing title, the Australian Civil Lib- Kingdom of Heaven, despite words status, marital status, disability, erties Union, has several documents to that effect in 1 Corinthians 6:9. age, nationality, ancestry, place that may be of use to people wor- A person took out an advertisement of origin or receipt of public ried about aspects of civil liberties, in a newspaper, offering bumper assistance. but also has a penchant for blam- stickers for sale. The stickers, which ing the problems of the world on were pictured, equated four biblical Jews. If you must, go to: references with a prohibition on ho- mosexual activity. The advertiser www.angelfire.com/folk/aclu/ was found to have breached the For a better sampling of what Human rights Code. As was the local civil liberties outfits stand for, newspaper which published the ad- visit the respective sites of the NSW vertisement. Council for Civil Liberties, Liberty This interpretation of the Bib- Victoria, and the Queensland lical verses (for example, Leviticus Council for Civil Liberties: 18:22: ‘Do not lie with a man as one lies with a woman; that is detest- www.nswccl.org.au able’) was held ‘as exposing homo- I can recall some current-affairs sexuals to hatred or ridicule’. shows in recent years potentially libertyvictoria.org.au getting into trouble over that final www.aloha.net/~mikesch/ protected group. www.qccl.org.au bible-ruled-hate-speech.htm HUMAN RIGHTS EVERY- FEEDBACK www.religioustolerance.org/ WHERE I would welcome advice from read- bibl_hate3.htm The United Nations is, of course, ers on any other sites of interest to It is striking that whereas once an organizational nightmare. There IPA Review readers. E-mail me on the free speech of non-believers was is a multitude of bodies charged [email protected].

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R E V I E W SEPTEMBER 2004 37 What’s A Job?

KEN PHILLIPS

NAIRU Bound induced inflation will be capped. response is to push its prices up, hop- When unemployment is low, the em- ing that it won’t lose market share. From the late 1950s until recent times, ployed will have greater bargaining When this distortion of market signals economists held to a theory called power and so can extract higher wages occurs systemically across all firms in NAIRU, the non-accelerating infla- from the capitalists. It’s a macro view an economy, they can ignore those sig- tion rate of unemployment. The that fits macro-models used by macro- nals, and push up prices while retain- theory was that there is a fixed level economists. ing some market share balance. of unemployment below which an But to understand wage-induced Inflation escalates and macroeco- economy could not go without caus- inflation it’s necessary to dig into nomic managers are forced to suppress ing wage-induced inflation. This, in microeconomics to understand beha- economic activity and to push up un- turn, meant that macroeconomic vioural patterns in the firm. employment, thus scaring labour into planners needed to use their power Every firm has a theoretical poten- curtailing their demands. NAIRU ap- over the setting of interest rates and tial to pay endlessly high incomes to plies, but it’s a pretty crude way of run- other instruments to ensure that the its staff and dividends to its sharehold- ning an economy! pace of economic growth avoided ers. But the prices a firm can charge What appears to have changed is reaching a level that would push the for its goods and services are dictated that labour has become more aware of, unemployment rate below NAIRU by markets, not by their costs. The and responsive to, the external mar- and result in wage-push inflation. The market will pay only a certain amount ket signals experienced by firms. This acceptance of NAIRU theory led to for goods and services, thus restrain- is happening for a number of reasons governments giving their central relating to both cultural and structural banks inflationary and unemployment issues. The alleged ‘deregulation’ of goals, and sometimes targets. Indeed, We may yet see the labour markets underway in many Australia did so until the late 1990s. economies is, in fact, a shift to a dif- It’s an unfortunate idea because it day when unemploy- ferent type of labour regulation—one implies that there must always be a that is more in sync with the regula- pool of unemployed people if inflation ment will be restricted tion applied to free markets. It’s most is to be kept in check. If this is cor- obviously witnessed in the shift to rect, it would appear to assign a cer- to the sick and those enterprise or individualized employ- tain percentage of the population to ment contract settings and in the unemployment—albeit for the public in job transition movement away from employment interest. contracts to commercial contracts in Through most of the later half of the engagement of people to do work. the twentieth century, the evidence ing the potential income of the firm These come in many shapes and forms. seemed to support NAIRU. But from and thus limiting the available money NAIRU has most relevance where the late 1990s and into 2004, the evi- a firm can pay either in wages or divi- labour processes ensure that market dence began to change. Excluding dends. Further, every firm competes in signals stop at the door of the firm. Germany and France, most OECD different market segments and so the Where labour regulation facilitates countries appear to be achieving low pool of money available to each firm internal response to market signals, inflation with unemployment rates for distribution will vary endlessly NAIRU diminishes in relevance. below the perceived NAIRU. The across an economy. Pretty obvious stuff If the current trend can be under- question is why? really! stood and encouraged, we may yet see NAIRU derives from traditional What happens with wage-induced the day when unemployment will be theories of labour economics, where inflation is that market signals at the restricted to the sick and those in job labour is seen to be in a constant battle individual level of the firm are pre- transition. with capital over who shares the spoils vented from penetrating inside the of the firm. When unemployment is firm. The dynamics and politics of Ken Phillips is a workplace reform practitioner who high, the fear of unemployment causes labour relations ignore market signals promotes the principles of ‘markets in the firm’. the employed to restrain their de- and push the price of labour beyond mands for higher wages and so wage- the firm’s market signals. The firm’s I P A

R E V I E W 38 SEPTEMBER 2004 S T R A N G E T I M E S

Compiled by IPA staff, columnists and consultants …

ANIMAL FARM 1 started filming. But they have made fleece growth’. Wouldn’t it be cruel, A new animal welfare law in the UK it up to planet Earth. They are spon- after thousands of years of breeding, offers slugs and snails the same pro- soring ‘a mix of energy conservation to stop cutting it? tection as cats and dogs. The legis- and tree planting’ to ‘offset the lation gives courts the power to im- greenhouse gases released during the POLITICAMENTE pose fines of up to $A50,000 and 12 making of the film’. CORRETTO months in jail on people found guilty A driver in Rome who told a park- of mistreating insects, worms, cater- BAD TASTE ing attendant ‘You are nobody!’ has pillars, slugs and snails, if scientific Clove cigarettes are soon to be felt the full weight of Italy’s legal sys- evidence proves they have suffered banned in the US. To protect chil- tem. A tiff over a parking space led pain and distress. The law also bans dren, the Senate has introduced a to Giulio C. being fined 300 euros anyone under the age of 16 from Family Smoking Prevention and ($370) plus 500 euros legal costs owning a pet, and goldfish will no Tobacco Control Act that will turn when a court in the northeast city longer be allowed to be given as the sweet, fragrant Indonesian clove of Trieste convicted him of damag- prizes at fairgrounds. cigarettes into contraband, presum- ing the dignity of the parking atten- ably making them even cooler for dant. The court reasoned that the DICKENSIAN LABOUR young people. Part of the bill states phrase ‘you are nobody’ ‘means pre- LAWS that ‘a cigarette or any of its compo- cisely “you are a nonentity” and to Former Australian Workers Union nent parts … shall not contain, as a state that a person is a nonentity is state secretary and now Victorian constituent (including a smoke con- offensive because it is damaging to Upper House member Bob Smith stituent) or additive, an artificial or the dignity of a person’. claims that farmers are using chil- natural flavour (other than tobacco dren as ‘slave labour’. Mr Smith said or menthol) or an herb or spice, in- IRON CURTAIN many children on farms were ‘terri- cluding strawberry, grape, orange, Just one month after the UN and EU bly oppressed’ by the tasks required clove, cinnamon, pineapple, vanilla, launched a furious campaign against of them, including handling animals coconut, liquorice, cocoa, chocolate, Israel’s security fence, culminating in ‘which at a moment’s notice could cherry, or coffee, that is a character- the International Court of Justice kill them’. He said this in defence of izing flavour of the tobacco product ruling that the fence is illegal, the new Victorian child employment or tobacco smoke.’ EU announced that it is planning to laws that require relatives to have build a separation fence of its own, permits to employ children. For all ANIMAL FARM 2 and has invited Israel to participate us exploited children of farms past, PETA, People for the Ethical Treat- in the construction, according to all that can be said is, Mr Smith, ment of Animals, is running an anti- WorldNetDaily.com. To separate re- where were you when we needed sheep farming campaign. A part of cently added EU members Poland you? the problem, as they see it, is that and Hungary from their new there are so many sheep in Austra- neighbours Russia, Belarus and SCIENCE FICTION lia, that giving ‘individual attention Ukraine, the EU said the fence is The new blockbuster, The Day Af- to their needs’ is impossible. On necessary to ‘prevent the free move- ter Tomorrow, created worries for the shearing, and quoting an ‘eyewit- ment of migrants seeking to enter producers. On their Website, the ness’ who was clearly not Tom Rob- EU territory’. As an Israeli govern- filmmakers admit that ‘at some point erts, ‘[T]he shearing shed must be ment spokesman says, ‘It’s incredible during the filming we looked around one of the worst places in the world the EU has no problem building a at all the lights, generators and for cruelty to animals …’ Explain- fence just to keep illegal immigrants trucks and we realised the very pro- ing that without human interfer- out, but when the Jewish State cess of making this picture is con- ence, sheep grow just enough wool builds a security fence as a last re- tributing to the problem of global to protect themselves from tempera- sort for the purpose of keeping ter- warming!’ Fortunately for the ture extremes, they forget that the rorists out and saving Israeli lives, we studio’s profits, this thought only modern sheep has been bred over are blasted by them and the UN’. occurred to them after they had thousands of years for ‘continuous I P A

R E V I E W SEPTEMBER 2004 39 Letter from London

JOHN NURICK

Walking Backwards •David Blunkett, the blind popu- list Home Secretary, continues To wards the Election trying to outdo the Conservatives with hard-line law and order. As Often, after years in power, a gov- well as ID cards, he wants to lower ernment runs out of ideas and is re- the burden of proof in terrorist duced to walking backwards in front cases to make it easier to convict of the opposition in the hope of stay- people when the actual evidence ing ahead. After seven years, New is weak. His latest idea is to give Labour has reached that stage, al- the police power to arrest anyone though it is still spewing a diversion- on the spot for even the most ary cloud of policy announcements, minor offence. He and the min- green and white papers, and draft ister supervising the lottery also bills. want to confiscate the jackpot Unfortunately, seven years in op- won by a convicted rapist. Forget position hasn’t been long enough for hoped-for efficiency gains are the law, let’s just have the order. the Conservatives to regain their predicated on bigger and better Meanwhile, the Conservatives sense of direction, so there’s noth- government computer systems— are getting nowhere. The govern- ing much for the government to walk an area in which the British pub- ment steals half their policies (not backwards in front of. All it can do lic sector has an almost unbroken always the best ones) and rubbishes is to steal as many policies as it can record of botches. the rest (some deserve it). Their and try to poison the others. Among •After seven years creating leader Michael Howard is more com- the signs of desperation: quangos left, right and centre, the petent than his predecessors, but he •Gordon Brown (who for seven government has decided that comes across in turn as an unprin- years has been Keating to Blair’s there are far too many of them cipled populist or an over-subtle law- Hawke and is determined to fol- and is abolishing and amalgam- yer—neither of which wins the party low him as PM) has been talking ating them left, right and centre. much support. about the importance of being Some are being abolished within Finally, there are rumours of a British, of national identity, of a year of being created. snap election this autumn. The lat- tradition, even of patriotism. •The latest National Health Ser- est straw in the wind is that Cherie Never mind that this government vice reforms will produce what is Blair has signed up for a US lecture has done more than any other to in effect an ‘internal market’ very tour. As wife of the PM, she com- devalue these things. similar to the one that the last mands a vastly larger fee than she •Tony Blair has denounced the Conservative government was would in her own right as a human 1960s as the root of modern setting up when Labour came to rights lawyer married to an ex-prime society’s ills, calling (though not power. The names will be differ- minister. So here’s a prediction: elec- in as many words) for a return to ent but the principle is the same: tion this autumn (Labour is a shoo- deference and family values. money follows patients. in); Cherie earns a little nest-egg; • Gordon Brown has announced • In education, the government is Tony retires in the spring as things huge savings that will supposedly implacably against letting schools in the Middle East get even worse; come from public service job cuts select students on ability. How- and Gordon Brown is left holding and ‘efficiency gains’. Only ever it’s all in favour of letting the baby. Who knows: it may even undeferential, unpatriotic people schools select students on apti- come true! drew attention to the fact that the tude. Not even education minis- John Nurick is a management consultant based in the number of jobs to be cut is a frac- ters can explain the difference. South of England. From 1985 to 1990, he was tion of the number of additional • Government departments have editorial director of the Australian Institute for Public public service positions that this been made to publish a series of Policy, and later edited newsletters reporting on the UK Parliament and European Union institutions. government has created and con- ‘five year plans’ (Stalin and Mao, tinues to create. Or that the anyone?) I P A

R E V I E W 40 SEPTEMBER 2004 Book Reviews

Life As Hazard anxieties that a kind of hypochon- recast as medical problems over driac society comes into being, where which people have little or no con- Patrick Morgan reviews fear is the dominant emotion, and trol’. Abused people are told that this risk avoidance the dominant mode will be a determining factor for the Culture of Fear: Risk- of action. We struggle to upgrade our rest of their lives from which they Taking and the Morality status from victim to survivor, from may never fully recover. Bad being ‘at risk’ to being ‘in recovery’. behaviour is now converted into of Low Expectation The writer Peter Kocan directed some identifiable medical syndrome, by Frank Furedi my attention to Frank Furedi’s book like attention deficit disorder: Culture of Fear (1997) as a seminal Uncertainty about issues, an (Cassell, London, 1997, 184 pages, $35) work analysing this new ‘avoidance inability to make decisions or the of risk’ syndrome. Furedi, a UK soci- disappointments associated with At the end of the peaceful nine- ologist and former revolutionary setbacks in life are now routinely teenth century, Nietszche reacted by Marxist, begins with the paradox diagnosed as symptoms of some exalting the via periculoso, living dan- that we have actually never been kind of anxiety disorder. Such a gerously. At the end of the traumatic safer, healthier and wealthier, but diagnosis helps make sense of the twentieth century, we observe a re- never so worried about ourselves and difficulty that people have in treat to a life of quiescence. Examples coping. The generic condition of of the world seemingly out of con- ‘can’t cope’ becomes naturalized. trol proliferate: AIDS, pollution, Furedi begins with From this perspective, the African genocide, global warming, attempt to assume a degree of embryo destruction, sexual abuse, the paradox that we control of one’s life becomes a Mad Cow disease, Gulf War syn- pathetic gesture, for we need help drome, urban violence, cancers, ter- have actually never and not independence. rorism … the list is so long it some- These conditions are then treated times seems that every form of hu- been safer, healthier by a legion of therapists, carers, coun- man activity nowadays brings with sellors and welfare workers, about it dreadful risks, that life itself is and wealthier, but whom Furedi comments: ‘Although toxic. such experts always claim to “em- Insecurity haunts many minds. never so worried power” their clients, their every ac- People withdraw into condominiums about ourselves tion has the effect of reinforcing where electronic gates keep others people’s lack of confidence in them- from entering, neighbourhoods with- and the future selves.’ out neighbours. AIDS causes fear of Fortunately, the world isn’t as intimacy. Every intimate transaction hazardous as it looks. Lobby groups, may contaminate us—true love the future. Today’s worries stem not NGOs and the media run scare cam- comes and goes, but herpes is forever. from ignorance, as in the past, but paigns in which they grossly exagger- Precautionary measures are taken from the explosion of knowledge, as ate the possibility of coming when embarking on any new enter- in the field of reproductive technolo- catastrophes unless we align our- prise. Trust is replaced by ‘stranger gies. Our worries are, as Furedi shows, selves to their preferred position. danger’. Worse than stranger danger free-floating, and unfocused. We feel Those who constantly watch TV is the claim that most crimes are vaguely and chronically in a state of believe violence is much more com- committed by someone close to you. anxiety, and cast around for dire fore- mon than it actually is. We have seen Some parents in the US buy teddy casts, such as global warming, to at- a bombing or a kidnapping every bears with hidden cameras to catch tach our worries to. night in Iraq for months now, but we violent babysitters. We are experiencing today an are rarely given the more optimistic These are primarily worries in our epidemic not of diseases but of anxi- overall picture. minds; reality isn’t half as bad. As a ety about them. Furedi points out Furedi reveals that scare cam- result of a failure of nerve, whole that ‘more and more social problems paigns on matters such as toxic shock communities can be so consumed by have become medicalized—that is, syndrome and low sperm counts were ▲

R E V I E W SEPTEMBER 2004 41 widely believed, but later studies and when we object, we are accused In life, accidents do happen, countering these extreme claims of ‘moral panic’. things go wrong, sicknesses occur, were barely mentioned. Mobile tele- Furedi takes the view that both every day has its up and downs, so phone use was linked to cancer and Right and Left are prone to panics it’s pointless to try to insulate our- low sperm counts—a double on topics that they abhor, but go selves beforehand against all ills. We whammy—in the absence of evi- quiet when they agree: ‘one person’s can’t litigate to ensure happiness. dence for either claim. The flesh- panic is another one’s rational reac- Some suffering and loss is inevitable, eating Ebola virus deaths in Zaire tion’. A crucial case in England was and it’s best to come to terms with shocked the world, but many more the Cleveland babies episode in these experiences rather than to people died of sleeping sickness and 1987, where social workers removed evade them at all costs. This is not malaria in Zaire during the same pe- over a hundred children from their to say that the world is a ‘vale of tears’ riod, which went unreported. parents, claiming on flimsy evidence to which we should be resigned, but Social workers make exaggerated they had been sexually abused. The that we aren’t fully in control of claims about abuse, such as that one public protested vigorously against things. As Professor Ken Minogue in four women have been raped. This the social workers’ actions, and an has pointed out: is done by expanding definitions of enquiry found their diagnoses wrong The technological spirit what constitutes sexual abuse (flirt- and returned almost all of the chil- challenges this position. Instead ing equals sexual harassment) or by of the acceptance preached by trawling for victims. Thus the ab- religion, it preaches resistance, sence of abuse in a particular place Having low defiance, problem solving. Its will be seen as evidence that the message is: Let us guarantee the abuse is hidden and secretive, so expectations and security of all people: food, more resources will be thrown in to medical help, shelter, consolation ramp up the numbers. As Furedi taking constant by counselling, compensatory comments: ‘The possibility that the payments whenever disaster low rate of detection corresponds to insurance against risks strikes—all of these things will the actual incidence of child abuse save people from bad luck, even is simply not entertained’. not only diminishes the bad luck of having a bad A vicious circle of false percep- character. tions can set in—we retreat to our community life, Furedi provides a convincing homes and experience much of life but involves high analysis of the fearful, risk-avoiding through watching TV, which falsely syndrome, which he sees as pessimis- reinforces the view that there’s a big, transactions costs tic, cynical and misanthropic. As a bad world out there which we best convert to classical liberalism, he ob- avoid. This is a closed-circuit life, jects to the coercive moralism of where everything has got out of pro- dren. As Furedi comments, the so- both the traditional Right and the portion. There is little way left of cial workers said they were the vic- trendy Left, both of which exhibit evaluating reality, or even getting in tims of a ‘moral panic’, but the puritanical strains. But he himself contact with it. children were plainly the real victims believes that death and suffering We have been faced by a barrage in this episode. have ‘no intrinsic meaning’. As a of propaganda campaigns in Austra- Having low expectations and tak- result, he is against restraint and an lia, the latest being on same sex mar- ing constant insurance against risks excess of precautionary measures, riages. In each case, an attempt is not only diminishes community life, and in favour of experiment, such as made to stampede us into taking up but involves high transactions costs. open-ended reproductive technology positions against our better judge- Terrorism is an example—enormous research. We can agree with him that ment. If we object, we are accused of sums of unproductive money now we should hold our nerve and go ‘moral panic’ or ‘backlash’. The con- have to be spent on making build- ahead and face modernity with equa- cept of ‘moral panic’ was devised in ings, travel and public figures safe. nimity. But once we are immersed in the 1970s by the left-wing UK soci- Rights-based liberalism adds to the it, perhaps we should exercise dis- ologist Stanley Cohen, and, though problem—when you venture outside crimination and not simply, as he now discredited, is still widely used your well-fortified home and slip seems to prefer, go along with every by progressives as a term of abuse. while shopping at Coles, you get the new enterprise. They put up an unlikely notion (such urge to sue. Obsession with precau- that it’s OK to create and destroy tionary measures ends up in a posi- Patrick Morgan is a Victorian writer who publishes embryos at will or that Australians tion of self-loathing—humanity itself on political and cultural issues. have recently committed genocide) is seen as the all-polluting villain. I P A

R E V I E W 42 SEPTEMBER 2004 Trade and Rage more technologically advanced pro- however, is surely compensated by ac- duction and distribution could be cess to other cultures, as marketing David Robertson reviews used by NGOs to increase their opportunities for all cultures expand. chances of achieving their goals. As his argument progresses, In Defense of The economic analysis in the Bhagwati modifies his views on Globalization early chapters makes telling points NGOs. In the early chapters, he ar- against the anti-globalization lobbies. gues that although environmental by Jagdish Bhagwati The long history of trade liberaliza- problems may be global, they are not (Oxford University Press, 2004, tion established that net economic necessarily the consequences of glo- 320 pages; $62.95) benefits are generated by trade. So balization. Later, he accepts the the policy question relates to distrib- Kyoto Protocol without demur, even This eminently readable book is a uting these gains within the commu- though the schedules for OECD synthesis of Professor Bhagwati’s nity. NGOs continue to argue that countries to reduce their CO2 emis- views on globalization as expressed interdependence among nations re- sions will achieve little if developing in his articles and speeches over the stricts their ability to provide social countries are free to expand their past few years. As the doyen of trade welfare programmes to their citizens. output. The CO2 reductions in the economists, these opinions presented Any social welfare shortcomings, Kyoto Protocol were designed to suit in one volume are a valuable addi- however, depend not on liberal trade EU interests, with no allowance for tion to the ever-growing library on policies but on domestic policy set- net energy exporters, such as Austra- globalization. Most of his views are tings. lia. Moreover, the effects of increased predictable for anyone who has fol- CO2 emissions on climate are uncer- lowed Professor Bhagwati’s distin- tain; after all, climate warming could guished career. In particular, the By focusing their increase agricultural productivity in reader’s attention will be drawn to the some regions. The IPCC modelling contradictions he identifies in many attacks on globaliz- of climate change has been seriously familiar anti-globalization argu- criticized because of its dubious as- ments. ation, left-wing sumptions (see Castles and Hender- International economic interde- son, among others). pendence (integration) has domi- activists, nationalists, NGOs’ opposition to genetically nated economic development for the modified crops is treated gently, too. past 50 years, as it did during ‘La Belle anarchists, environ- Bhagwati argues that Europeans’ fear Epoch’ before 1914. Only in the of GMOs persuaded their govern- 1990s was the term ‘globalization’ mental groups, ments and the EU Commission to in- fabricated, and its adoption has al- troduce a moratorium on GM crops. lowed all the world’s malcontents to communitarians, It has also generated support within unite against this single ‘cause’. By Europe for adoption of ‘the precau- focusing their attacks on globaliza- animal liberationists, tionary principle’, which would give tion, left-wing activists, nationalists, church charities, etc., blanket protection to EU farmers, anarchists, environmental groups, and could be extended to almost any communitarians, animal liberation- do not need to discuss import (GM or not). On this, ists, church charities, etc., do not Bhagwati comments, ‘…[this is] an need to discuss their differences. their differences open-ended approach to safety regu- In the early stages of this volume, lation, denying science the decisive Bhagwati acknowledges that NGOs role it ought to have’ (page 152). have captured the media-sensitive This kind of reasoning is evident Similarly, he criticizes ‘eco-labelling’ and sympathetic subjects of social in much of the criticism of globaliza- as another form of anti-GM protec- justice and human rights as their ter- tion (that is, any residual ‘bads’ are tion. ritory. It is a simple step from there enough to reject a policy). For ex- Multinational corporations’ ac- to establish that since poverty and ample, cultural damage has little to tivities are analysed (chapter 12) to social injustices still exist under ‘capi- do with economic globalization, and show that the alleged exploitation of talism’, an alternative system of di- much more to do with advances in workers and resources, and the cor- rect controls, regulations and communications, travel and migra- ruption of governments in develop- planning must be tried. History is ir- tion (in other words, enabling tech- ing countries, are less widespread relevant to NGOs! However, nology) that expand consumer than NGOs claim and that, on bal- Bhagwati explains how increasing choice (films, Internet, TV, books, ance, they contribute to economic prosperity from more efficient and etc.). Any ‘loss’ of indigenous culture, development. The benefits from this ▲

R E V I E W SEPTEMBER 2004 43 private investment are often greater other gods. Bhagwati analyses the NGOs, and conflicts with his own than benefits from aid flows, which evils of trade sanctions, trade rem- views in earlier chapters. Demand- bring onerous terms for capital repay- edies (safeguards, antidumping, etc.), ing changes to the constitutions and ment and interest charges. By estab- agricultural protection, dispute- governance of international institu- lishing standards for corporate settlement procedures and protection tions is fraught with difficulties. Ar- responsibility (CSR), Bhagwati be- of intellectual property as impedi- guments over the WTO and the lieves these benefits should be en- ments to growth in developing coun- Bretton Woods’ institutions have hanced. However, he makes no tries. Like the Bretton Woods’ shown that any amendments to a mention of the hectoring ‘blame and institutions, the WTO is also facing founding agreement or changes to shame’ campaigns by some NGOs demands for reforms. the governing bodies are difficult to that infringe shareholders’ rights. In the final section, Bhagwati negotiate. And although he mentions favour- seems complaisant about NGOs and One proposal to elicit more sup- ably the UN’s Global Compact sees their attitude to globalization as port for economic globalization from (2001), which sets out standards for benign, despite his earlier scepticism. developing countries and NGOs corporate behaviour, there is no sug- He is optimistic that NGOs would would be to provide outside financial gestion that a similar concordance assistance to facilitate economic ad- should be proposed to set standards justments to external shocks, such as for NGOs’ statutes and reporting. Bhagwati’s com- tariff reductions or falling export The Bretton Woods’ twins prices. Bhagwati suggests that World (World Bank and IMF) have been prehensive survey of Bank and IMF resources should pro- under the lash from Bhagwati for vide such finance (page 223). This some years for deregulating short- economic globaliz- was proposed also in the Declaration term capital flows too quickly, for fail- on Greater Coherence in Global ing to predict incipient problems and ation leads to an Economic Policy-Making in the Uru- for reacting inappropriately and guay Round Final Act. International slowly. He blames the IMF for the unlikely proposal— institutions guard their territory severity of the Asian financial crisis fiercely, however, so no progress was (1997) because Fund staff had en- accommodate made towards institutional policy co- couraged de-regulation of short-term ordination. capital flows, but did not give any dissenting voices in After reading this volume, one is warning when short-term debt accu- order to promote left wondering whether globalization mulated. That financial disruption is in retreat. Bhagwati’s comprehen- was painful, but it became a crisis globalization sive survey leads him to seek to ac- because Asian governments had in- commodate dissenting voices. This adequate financial regulations and no can only offer opportunities to the prudential requirements for their fi- be willing to compromise to draw up anti-globalization lobbies. Already nancial institutions. They were also new policies, new institutions and international political tensions, as committed to fixed exchange rates ‘appropriate governance’ to promote well as NGOs’ activities, are weak- against the US dollar. When the IMF ‘the human face’ of globalization; ‘… ening the forces of global integration. assistance package was offered, it was none of these difficulties is beyond As terrorism raises security concerns, immediately criticized and quickly resolution by compromise and good and increases communication and amended. However, it was the Fund sense’. Since most NGOs make open- transport costs, international co-op- board that approved the package. As ended demands and have developed eration may be weakening. Ulti- with other international institutions, a life of their own, this is not a con- mately, globalization depends on World Bank and IMF policies are vincing line of argument. domestic economic policies and gov- determined by their articles of asso- Bhagwati concludes that global- ernments’ commitments to policies ciation (agreements) and by their ization is ‘a force for advancing sev- that support the market economy: governing councils, drawn from eral social agendas’, that he believes property rights, the rule of law and member governments. ‘will yield better results if it is man- free competition. This makes some As one would expect, given the aged’ (page 221). To achieve what he of the concessions offered in this vol- author’s knowledge, the WTO is a calls ‘appropriate governance’, based ume worrying. recurring topic in this volume. The on new policies and institutions, he WTO has been a major target for wants to incorporate NGOs into the David Robertson is a former Professor of Inter- national Trade at the University of Melbourne and NGOs seeking to influence trade lib- negotiations, and to use them to former Commissioner with the Productivity eralization as a key component of glo- monitor international co-operation. Commission, Canberra. balization, and to sacrifice trade to This ignores recent experience with I P A

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