Wednesday, April 14, 2010


In his latest offering, conservative Australian cartoonist ZEG says Rudd is another Gough Whitlam

Distortions about markets from a Leftist ignoramus

By Greg Lindsay

In the introduction to the 1982 publication The New Conservatism in Australia edited by Robert Manne, the editor admits ‘to having no competence in economics whatsoever’. That has not stopped him from inserting himself into various debates about economic issues ever since.

His dismal record was highlighted in the book Shutdown from 1992 that he co-edited, which declared that economic reform had failed in Australia and that ‘the most important contemporary example of economic success is Japan’, and, well you can guess the rest.

The fact that Australia is now the strongest OECD economy and on the various scales of economic freedom, quality of life and prosperity, pretty much leads the way, seems to have escaped this academic Nostradamus. Sure, there is room for improvement and our modern democracy exhibits the usual tussles over how this might be done, but no serious observer challenges the moral and economic power of the market.

Well, I’m mostly right. An outbreak of less serious commentary began with the setting up of a straw man some years back called 'neo-liberalism'. It’s a term that started to appear in its latest manifestation in Australia more than a decade ago. We at CIS decided that it was essentially being used as a term of abuse and we would not succumb to the intentions of its promoters. We couldn’t quite work out what it really meant anyway.

In the lead up to the 2007 election, then opposition leader Kevin Rudd added his five cents worth and, with some other essays since then,’ neo-liberalism’ and ‘market fundamentalism’ marched hand in hand. ‘Economic conservatism’ seems to have been trampled in the parade. My colleague Oliver Hartwich tried his best to clarify the issue and in fact showed that the now Prime Minister was in fact a 'neo-liberal' (see here).

Of course the Global Financial Crisis gave neo-socialists of all kinds a whole new field to play on, and so they have. Professor Manne, highlighting his lack of expertise in economics once again, is back in print, this time in The Weekend Australian recently with an extract of a chapter in a new book he has edited with David McKnight. What’s regrettable about this piece is the tone Manne’s chapter exhibits.

We at the CIS admire greatly the work of F.A. Hayek. That’s no great surprise. Indeed there’s a long list of thinkers we admire stretching right back to the founding decades of the Enlightenment. The ideas of such people have taught us much and have laid the groundwork for the prosperity and freedom we see today, especially in the West.

In his recent essay, Manne attacked Hayek personally. He held Hayek responsible for everything from the collapse of the derivatives market to some colourful rhetoric of Sarah Palin and Rush Limbaugh. It probably needs the analytical skills of an historian to make sense of all this.

Manne’s tasteless remarks about Hayek and his philosophy of liberty, however, show to some extent what liberals are up against these days. The financial crisis is eagerly interpreted by the opponents of liberty as ‘evidence’ that free markets don’t work. The troubles in financial markets serve them as a new justification for more government control, whether it is in US health care or Australia’s new broadband network.

The mistake Manne and his neo-socialist friends are making is twofold. First, they are ignoring the role that state institutions like government-owned enterprises, regulatory regimes and central banks played in the build-up of the crisis. Governments failed at least as much as markets may have.

Second, liberals have never argued that their philosophy would create heaven on earth. With free markets it’s a little bit like with democracy, to paraphrase Winston Churchill’s famous dictum: They are the worst form to coordinate human activity bar all others. Markets can be a messy business with ups and downs. Yet given the right institutions, they generally work rather well.

Markets are not perfect and few economists would argue that they are, but then again nothing on earth is. Even though utopian dreamers may believe in the omnipotence and benevolence of government, history teaches us that such belief has often led to disaster. Or, as Hayek has argued, they lead us down the slippery road to serfdom.

The current neo-liberal straw man is just that, a straw man, and should be given no credence. Markets are not going away. Yes, some institutions in some countries may have been inadequate and can be improved. Many might learn from Australia in that regard and I hope they do. And that of course is not to say that institutional arrangements here are beyond consideration for improvement to the benefit of all.

Just one last word on Hayek. One of his lasting legacies was the founding in 1947 of the Mont Pelerin Society, an international organisation of economists, political scientists and others interested in furthering the ideals of a free society. It has had in its membership some of the world’s foremost intellectuals, including eight Nobel Laureates in economics, Hayek himself being one. Details can be found here. Its 2010 General Meeting is being held in Sydney in October, only the second time a General Meeting has been held in the southern hemisphere.

The MPS conference will bring to Australia some of the world’s leading scholars of liberty and will be a symbolic and cogent reminder to those who still forget so many lessons from history.

The above is a press release from the Centre for Independent Studies, dated 13 April. Enquiries to Snail mail: PO Box 92, St Leonards, NSW, Australia 1590.

How the West was lost: a lack of faith in civilisation

There is a growing belief among Australia's most formidable conservative thinkers that the foundations of Western civilisation in this country are being eroded. As a consequence, the grounding that Western civilisation has given everyday society - especially the behavioural and moral influences of Christianity - is disappearing and needs to be reaffirmed.

Such views are not new; they have been espoused from time to time. Now, however, the viewpoint has become organised and it has some serious firepower behind it.

Just over a fortnight ago 84 prominent Australians gathered for a dinner at Stonington Mansion in Melbourne - the home of the art dealer Rod Menzies - to launch a program to "confront these disturbing trends".

The Foundations of Western Civilisation Program had John Howard and Cardinal George Pell as guest speakers. Geoffrey Blainey gave the vote of thanks and the columnist Andrew Bolt was the MC.

The program's chairman is former Liberal minister, Rod Kemp, and the event was organised by the conservative think tank the Institute of Public Affairs.

The event was over-subscribed and more than 50 had to be turned away. Those there included Dame Elisabeth Murdoch, as well as such corporate luminaries as Hugh Morgan, Donald McGauchie, Rick Allert, Steve Skala and Brian Loton.

"Sometimes Western civilisation is treated with outright hostility," read the invitation letter. "Cultural relativism has led to our education system often undervaluing the achievements of Western civilisation. "The rise of the nanny state is undermining our freedoms of association, of speech, of liberal democracy."

John Roskam, from the institute, said the evening tapped into a debate about values, where they come from and what they are grounded in - Western civilisation. "It's rounder than the concept of a threat, it's under challenge," he said.

Howard spoke off the cuff. According to those present, he argued that Australia has a secular tradition with no established church. But, while that tradition must be respected, it was his personal belief the Judaeo-Christian ethic has been the most profound moral and cultural influence in this country and it should be preserved. Other religions could be embraced and welcomed without in any way diminishing the Judaeo-Christian influence.

Howard, who never wore his faith on his sleeve, gave examples of where he saw erosion caused by a combination of factors such as post-modernism and people who think the values of Western civilisation are not worth preserving.

He contrasted the 2003 memorial service for victims of the Bali bombings with the memorial service held after the Black Saturday bushfires in Victoria last year. Both were secular services with religious components. At the latter, Howard noted, the religious element was downplayed, to the extent the Anglican and Catholic bishops were referred to as leaders of significant community groups.

Howard said he found the bushfire memorial "very hollow". "I feel Australian society is losing something when we don't recognise the important role of religion," he was quoted as saying.

Howard recounted the faith and values youth forums he attended as prime minister and how he was struck by young people openly discussing suicide. It used to be taboo to talk about the taking of one's own life and Howard believes "there are no absolute taboos any more". Ultimately, he saw it as an increasing lack of meaning in young people's lives due to the waning influences of Western civilisation.

Pell went further, saying he felt suicide today was being "celebrated". Faith and values, he said, meant you're living for some reason other than yourself. He lamented that a secular view is legitimate but a religious view should not be heard in a public place, and that it was deemed permissible to speak openly of a green god but not a religious God.

Beyond religion, Julia Gillard's proposed national history curriculum was singled out for a belting, because it supposedly does not place enough emphasis on British and European influences.

Howard cited the recent push for a human rights charter in Australia as a consequence of a lack of understanding of our system of parliamentary democracy and an independent judiciary.

Both he and Pell acknowledged the flaws and blemishes of Western civilisation and the "black spots" these had left in Australian history.

But Pell referred to China, where he said an erosion of values was also occurring as capitalism took hold. "This radically different culture is now searching for the secrets of Western vitality to provide a code for decency and social cohesion compatible with sustainable economic development."

He quoted the Chinese economist Zhao Xiao's "fascinating comparison with the selfism of Western radical secularism". "These days, Chinese people do not believe in anything," Zhao asserted. "A person who believes in nothing can only believe in himself. And self-belief implies anything is possible - what do lies, cheating, harm and swindling matter?"


Treating Aussie internet users like a bunch of dodos

Attention Senator Conroy: Forget about filtering the internet. Instead please pour your energy, time and (our) money into providing Australia with an internet – and a phone system for that matter – that works, is accessible and affordable.

Many Australians are likely oblivious to the communications dark ages in which we live. In the USA I can connect my home or office to a variety of internet providers, all offering great, low-priced deals. In Australia I am given a choice of a couple of providers with a few extra resellers offering outrageous prices and slow service.

In the USA almost all internet plans provide unlimited downloads and usage. In Australia I am offered plans limiting the hours I can spend on the internet; if I exceed this I am hit with exorbitant hourly rates or a slower internet.

In the USA I can choose a cell (mobile) phone from a myriad of companies and obtain good reception most of the time. Drop outs are rare. In Australia I have to go into my bedroom and sit in a certain place with my left leg elevated at a particular angle to get any reception and even then my phone regularly drops out.

In the USA I can wander into any Starbucks and most other cafes and get free wi-fi. Furthermore, wall to wall power outlets are provided so I can spend as much time as I need doing my work and sipping my lattes. I can also get free wi-fi at shopping centres, hotels and even some airports. Those larger airports that charge are still not expensive – it costs about $6 for the day. I can even access the internet – albeit again for a nominal charge - on domestic flights!

In Australia I am flat out finding a cafe or coffee shop that even provides wi-fi and the few that do almost always charge. McDonalds have finally started to offer their customers free wi-fi but their brochures state that “power is not provided”. Some McDonalds stores have signs banning customers from connecting to power outlets.

I’m not a “techie” – I still text using complete words - yet I remain in techno-shock after arriving back in Australia a year ago following almost 7 years abroad. While I immediately fell in love with my new iPhone I found that my network dropped out quite often and that I can’t use the phone throughout my own house without the continual “hello…hello….can you hear me now?”

Yet my phone problems were relatively minor compared to my quest for a home internet service. I had assumed that connecting a fast broadband service would be a simple procedure only to be told that there were no lines available at the exchange. This fact alone should alert Senator Conroy and everyone else in Canberra that we have serious problems with our communications infrastructure. That in the year 2010 we cannot connect a phone line to a home in a suburb of one of our major cities is a testimony to years of government apathy.

It got worse. Other internet providers told me that while they could find an exchange line (allocated to another network), our home phone line was “paired” and could not handle a broadband service. They explained that when the phone line was originally being installed, it was shared with another home to save money. The only option was to pay $300 for a new line but they still couldn’t guarantee a line at the exchange until this new line was installed!

So I turned to wireless broadband however upon instillation found that it was so slow I could cook dinner between refreshing pages. I called the provider who told me I was in their “black spot’, though could not explain why this – rather important (to me at least) - point was not revealed when I ordered the service. With my options for internet service all but gone, I was forced to take wireless broadband with another – naturally the most expensive – provider.

Being now the proud owner of the highest price internet plan I could find for the lowest service quality available – plus a mobile phone that only works in the bedroom - I find myself regularly setting up office at my local McDonalds where I consume countless toasted sandwiches and flat whites and wait for the battery life on my computer to expire (remember they don’t include power).

I live in a modern, mid priced suburb, 25 minutes from the city centre of Brisbane and therefore wonder what my communications options would be if I lived in rural Australia, far from exchanges and internet technicians. I may be starting to understand just why those that live outside our cities react with such cynicism each time governments announce big plans to revolutionise our communications industry.

We live in one of the world’s great nations – with one of the western world’s most backward technology. Senator Conroy, Mr Rudd - I don’t want my internet filtered. I want an internet that is affordable, accessible and effective. A phone that I can use anywhere without dropping out would also be nice. Please just bring us into the 21st century and we’ll be happy


Proof that wine-talk is complete bulldust

Not a single wine-commentator or judge detected the difference between wine made from sultana and Chardonnay grapes. Eventually, however, a grape buyer tasted one of the grapes. In a separate scandal Californian wine buffs were recently shown to be just as hopeless

It has taken seven years, but the largest case of wine deception in Australian history has finally reached a conclusion. A former winery boss has been found guilty of passing off sultana grapes as the more prized chardonnay variety.

One-time managing director of Riverland-based Rivers Wines, Andrew Hashim has been convicted in the Magistrates Court on 34 counts of falsifying records, following the company having earlier pleaded guilty to 97 similar counts.

The court found that large quantities of grape juice and wine were sold as chardonnay during the 2003 vintage to more than 10 companies including Hardy's, now known as Constellation Australia, and Orlando, now owned by Pernod Ricard.

But after one buyer raised doubts about the variety, the Australian Wine and Brandy Corporation conducted a "painstaking" paper trail search and discovered the wine was mostly sultana based. "We discovered what the court called an `enormous' amount of documents proving Rivers Wines' records had been falsified," AWBC compliance manager Steve Guy said yesterday.

Further evidence from grape growers who supplied Rivers Wines revealed many had supplied sultana grapes in good faith but the winery had recorded their receipt as chardonnay. The price for chardonnay fruit at the time was about $1000 a tonne and sultanas about $250 a tonne, with wines subsequently produced reflecting the price differences.

The finding has been hailed as proof the wine industry is committed to protecting its reputation in the wake of a huge wine substitution racket between French suppliers of so-called pinot noir to US wineries. That wine was proved to be from a range of other varieties, leaving both countries' industries scandalised by the findings.

Mr Guy said the Rivers Wines case was "the most significant deception ever" in Australia's wine industry. "It shows we're committed to enforcing our truth in labelling laws," he said.

The maximum penalty on each count is $15,000 for a company and $3000 for individuals. Sentencing is expected by the end of the month.


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