Would a citizen's jury produce a better policy outcome than a focus group?

In an article published on his blog last Sunday Jim Belshaw argued that risk management by governments has come to focus too heavily on political risk avoidance because of concerns that a more balanced approach would be too difficult to sell to the public. As a generalization, I think the point is correct. It is possible to cite a few examples of recent Australian governments taking excessive risks (e.g. the infamous home insulation and school hall construction programs). In my view, however, the Hawke, Keating and Howard governments showed stronger leadership than those that have followed and were less prone to allow focus groups, polling and brainstorming on talk back radio and twitter to set the political agenda.

That is just a personal impression. It is difficult to cite hard evidence. Mike Steketee provided some examples in support of the view that poll-driven policies have become more common in an article in ‘The Australian’last year. In my view the strongest point he made, however, was to quote Rod Cameron, a veteran pollster, who has observed that politicians are now more inclined to accept the prejudice and narrow-minded bigotry coming out of focus groups as a basis for policy, rather than to seek to neutralize such views.

Irrespective of whether Australian governments have become more poll-driven in recent years, the temptation for governments to opt for politically safe options rather than those requiring courageous political leadership exists in all countries in which public opinion counts for anything. In many instances, of course, the politically safer option is much more risky in the longer term. In my view that makes it preferable to have a system of government in which it is clear which political parties are accountable for the decisions that are made or not made by governments, rather than proportional representation, in which responsibility is shared by the centre right and centre left - and the only parties that have clean hands are the extremists at either end of the political spectrum. I have in mind the situation in Greece, of course, but I am straying from the topic I want to write about.

Coming back to the importance of political leadership, I remember a conversation that I had with a wise person about 20 years ago. I made the point that Australia needed more courageous political leadership to pursue economic reforms. I expected the wise person to agree, but his response was that those who want governments to pursue economic reforms need to accept that governments don’t lead, they follow. The point he was making was that it is important to keep in mind that political leaders can never get far ahead of public opinion. The leader who prepares the ground for reform by attempting to raise the level of public discussion of an issue will often be more successful in promoting reform than the one who shows great courage in attempting to forge ahead ignoring ill-informed public opposition.

So, how should those who aspire to leadership seek to raise the level of public discussion of issues? One method that has had some success in Australia is the system of independent policy advice provided by the Productivity Commission and some of its predecessor organizations. The strength of that system - as Gary Banks, the chairman of the Commission, pointed out in a speech last year - has been the independence of the Commission, the process of public scrutiny of underlying research and analysis before the advice is submitted to government, and the educative role of the organization in helping to promote a broader understanding of issues and advocating initiatives to the public and parliament.

However, it has not been possible for the Productivity Commission to be as effective as it should be. In an interview with Alan Mitchell in the Australian Financial Review a couple of months ago (10 March) Bill Carmichael, member of the Tasman Transparency Group and former chairman of the Industries Assistance Commission, suggested that the Rudd and Gillard governments had sidelined the Productivity Commission as an independent advisor on microeconomic reform:

‘They have created a plethora of carefully selected inquiries and institutional arrangements designed to minimize bothersome critical analysis and produce outcomes more to their liking’.

The report of the interview ended with Bill Carmichael suggesting that political leadership is ‘a quality that has been missing from the present debate about economic reform’. An element of leadership is clearly required to move forward on difficult issues, even with the help of sensible public inquiry processes.

So, could citizen’s juries help to compensate for weak political leadership? According to Nick Gruen, in the transcript of an ABCbroadcast in which he spoke about ‘deepening democracy in the internet age’, a citizen’s jury or consensus conference is ‘a small jury-sized randomly selected group’ which ‘deliberates at length’ on policy issues. The body hears evidence from professional experts and advocates, and its conclusions are published.

It seems to me that the potential benefit of such a system would lie mainly in helping to lift the level of public debate on contentious issues, by providing members of the public with a point of view that they might consider more trustworthy than the partisan views of political leaders, or judgements of experts who might seem to be out of touch with the values of ordinary people. Citizen’s juries would certainly not be a substitute for sensible public inquiry processes, but they might help avoid policy development being placed at the mercy of focus groups and political point scoring. Citizen’s juries could perhaps be particularly helpful in development of policies that involve important value judgements e.g. deciding appropriate levels of immigration.

I will write more about citizen’s juries later.

Would a 'Modest Member' please take an interest in anti-dumping regulation?

It was good to see the return of ‘The Modest Member’ column in the Australian Financial Review a couple of weeks ago. The original column was written by Bert Kelly, who used his wit and wisdom to good effect in promoting free trade, much to the discomfort of many people on both sides of politics. The latter-day modest members will make a worthwhile contribution if they display half the wit, wisdom and courage of Bert Kelly.

It is not yet clear whether the latter-day modest members will have the courage to emulate Bert Kelly. The series started with a column by Jamie Briggs on 7 February about lifting the dead hand of government i.e. reducing government spending. Today’s column by Kelly O’Dwyer is about the high cost of regulation. This is not a bad start, but it is hardly a test of moral character. So far Briggs and O’Dwyer have written the sort of stuff conservative politicians usually write when they are not in government.

A useful test of character for the modest members would be to attempt to emulate Bert Kelly by writing something sensible about Australia’s anti-dumping system. The modest members could usefully begin their consideration with an article by Bert, published in March 1972 and reprinted in ‘Economics Made Easy’, in which he explained that export prices that are lower than domestic prices are quite common in Australia and elsewhere. He noted that when we do it the practice is known as ‘marginal pricing’ rather than dumping. If the modest members take up this issue they might note that Austrade actually encourages prospective Australian exporters to use this practice.

If the modest members look carefully at the Productivity Commission’s recent report on anti-dumping duties they will see that the Commission found that none of the economic arguments that had been advanced in support of the anti-dumping system ‘provide any justification for Australia to retain an anti-dumping system’. In looking at this report and subsequent responses by the government and opposition, they might ponder whether or not the Commission will turn out to have been correct in its judgement that the anti-dumping system should be retained - on the grounds that it is unlikely to do much harm and may continue to be helpful in dealing with aspects of protectionist sentiment within industry and the community.

The modest members should ask themselves what Bert Kelly would have thought of proposals by their political colleagues to require foreign producers to prove their conduct hasn’t hurt Australian industry. They should also ask themselves what consequences are likely to follow from the government’s plans to ‘streamline’ the anti-dumping system. In particular, they should ponder the appropriateness of proposals of the International Trade Remedies Forum – the high sounding title the government has given to an unholy alliance of industry, unions and bureaucrats who benefit from the anti-dumping system – to enlist the Australian Bureau of Statistics to help complainants make a case for anti-dumping assistance.

One of the great strengths of Bert Kelly’s writing was his use of particular examples to illustrate the points he was making. In that regard, the modest members might find plenty to interest them in the current anti-dumping inquiry relating to aluminium wheels from China. In the light of recent discussions concerning further budgetary assistance to the car industry, they might ask themselves whether there is not some irony in a situation where Australian taxpayers could end up having to pay for the additional cost of imported inputs if this anti-dumping case is successful.  If they read the submission by Ford Australia they might wonder about the potential for a firm that is involved in protracted and acrimonious legal proceedings against another firm to initiate anti-dumping action as a tactic in a legal battle. If they read the submission by GM Holden, which argues against anti-dumping action because of its adverse effects on down-stream users, they might wonder whether the government was wise to reject the Productivity Commission’s recommendation that a public interest test should be included in the anti-dumping system. They might wonder why GM and its advisors think that line of argument might be influential.

It would not surprise me, however, if the latter-day modest members decide not to accept the challenge of writing about anti-dumping. Their political careers might be at risk if they start questioning the views of SophieMirabella the shadow minister for industry protection. As they tell themselves that discretion is the better part of valour they may take comfort from the fact that Bert Kelly pretended not to be without fear. Bert ended his anti-dumping article by telling readers that he didn’t ‘feel like chasing after the anti-dumping hare’ because ‘Mavis says I am in enough trouble already without getting mixed up with this kind of nonsense’.

Will Australia remain a sweet spot?

‘Australia in 2010-11 offered the best conditions for human existence on planet earth, a sweet spot indeed.’

The quote is from Peter Hartcher’s book, ‘The Sweet Spot’, published in November last year. Hartcher bases his view that Australia is the sweet spot on well-being indexes such as the UN’s Human Development index and the OECD’s Better Life Index. That view seems to me to be soundly based. As I noted on this blog last year, Australia is ranked highly even when the weighting given to the criteria incorporated in the OECD index is changed to reflect differing priorities with respect to income, social and environmental objectives.

The great strength of ‘The Sweet Spot’, in my view, is that it provides historical perspective on how Australia came to be where it is now. This helps the author to get across the message of the sub-title: ‘Australia made its own luck and could now throw it away’.

Hartcher argues that Australia has become the sweet spot because it eventually found a good balance between opportunity and security, or between free markets and collectivism. A central focus of the book is the evolution and later dismantling of what Paul Kelly referred to as ‘the Australian settlement’, which led to what Donald Horne referred to as ‘the racket’. The Australian settlement, which was largely established around the time of federation, involved a consensus in favour of racially-based restrictions on immigration (the white Australia policy), trade protectionism, national wage regulation (the arbitration system) and government paternalism, underpinned by a belief that Australian prosperity was underwritten by the British Empire.

Donald Horne argued in his book, ‘The Lucky Country’, published in 1964, that Australia’s good fortune in terms of natural resources had become an excuse and perhaps even a licence for complacency. Hartcher reminds readers:

‘Horne had detected and foreshadowed Australia’s slide from the top ranks of the world’s richest countries, arguing that luck and complacency were poor substitutes for originality and investment. “Can the racket last?” he asked, immediately responding with a resounding “NO”. He was, of course, correct, and it was a slippage that gathered pace in the ‘70s and 80’s.’

The subsequent chapters tell the story of how Australia opened up to the rest of the world, moved away from a rent-seeking culture and reformed its economy. In my view the story has been told fairly, with appropriate acknowledgement of the immigration reforms introduced by Whitlam, the influx of refugees from Vietnam during the time of the Fraser government, the floating of the Australian dollar, industry assistance reforms and the beginning of wider ranging economic reforms during the Hawke-Keating years and the privatisations, tax reforms and labour market reforms (subsequently aborted) of the Howard-Costello period of government. Hartcher makes the point that while the general thrust of these reforms was to give markets a greater role in the Australian economy, they were achieved, for the most part, without the rancour that accompanied the reforms of Margaret Thatcher in Britain and Ronald Reagan in the United States. He attributes this to greater reliance on consultation and consensus-building in Australia, in contrast to more overtly ideological approaches adopted by the UK and US governments. I would have like to have seen more attention given to the role of the policy advice processes adopted in Australia (but my view about the importance of the role played by the IAC and Productivity Commission might not be objective).

Let us now jump to 2007, by which time the economic strength which is reflected in Australia’s current ranking in quality of life indexes would have been established. I don’t think Peter Hartcher actually mentions it, but in October 2007 Paul Kelly announced the arrival of a “new Australian settlement engineered by political leaders during the past generation and a half”. He noted that the policies of the major parties had converged. For example, economic policy had become more pro-market, foreign policy had converged on a strategic outlook of simultaneously deepening ties with East Asia and the US, and immigration policies had converged on acceptance of increased immigration accompanied by a deeper commitment to Australian citizenship. A few weeks later, former Labor leader Mark Latham observed that the policies that the major parties had put forward in the election campaign then being conducted were virtually indistinguishable. He suggested that the policies of the major parties had converged to address the concerns of the middle classes. I can remember this because in April 2008 I posted an article on this blog entitled: Do we now have a new Australiansettlement? I agreed with Kelly and Latham, but subsequent events suggest that we were all wrong. Rather than a sensible convergence on policies that build on the strong legacy left by Hawke, Keating, Howard and Costello we now seem to be drifting in the opposite direction.

I don’t agree entirely with Peter Hartcher’s assessment of the political sins of the main political players over the last few years. I think he is far too kind to Kevin Rudd and Wayne Swan. Nevertheless, that doesn’t prevent me from agreeing with him that neither Gillard nor Abbott ‘seems to be the leader to take Australia into its next golden era of national improvement’.  I also agree with Hartcher’s qualification to that judgement: ‘Leaders change, and perhaps one, or both, can develop the agenda and skills to lead the country in the national interest’.

In my view ‘The Sweet Spot’ is a fine example of big picture journalism. It deserves to be as widely read and influential as ‘The Lucky Country’. With a bit of luck this book might help prevent a return of the rent-seeking culture that saw Australia’s relative living standards slip so dramatically during the 1970s and 80s.

Where is Ross Gittins coming from?

A few days ago, Evan, a person who comments on Jim Belshaw’s blog, wrote: ‘I think Ross Gittins is a good model for how to write on economics’. That was in response to a discussion Jim and I were having about Robert Frank’s ‘The Darwin Economy’ and the difficulty that we were experiencing in communicating on the issue of whether the ideology of the market is having too much influence in modern society. At least, that is my take on what the discussion was about. Jim and I agreed with Evan that Ross does write well.

It occurred to me soon afterwards that I have been ignoring Ross Gittins’ views on happiness for too long. Ross is the economics editor of the Sydney Morning Herald (SMH) and the leading economic journalist in Australia writing about happiness. When people have asked me what I think of Ross’s views on happiness I have refrained from saying much on the grounds that I rarely buy the SMH and haven’t read many of Ross’s columns in recent years.  I can’t use the excuse any longer, however, because I have discovered that Ross has a web site on which he posts his columns. (I have recenly included a link to the site on this blog to encourage myself to read his columns more regularly.)

When I looked at Ross’s site it was clear that, as well as the happiness theme, he is sometimes still playing an old tune that I like about the benefits of free trade. For example, one of the articles I read warns of the dangers to the rest of the economy from attempts to shield manufacturing industries from the consequences of the boom in the resources sector. This is consistent with the contribution Ross has made throughout his journalistic career in bringing good sense to public discussion of many economic issues.  I have a particularly high regard for the contribution that Ross made in earlier years in helping to improve public understanding of the costs of high trade barriers that were supporting inefficient resources use and unproductive work practices in this country. He deserves a medal!

But, what about Ross’s views on happiness? It wasn’t hard to find his review of ‘The Darwin Economy’. While well written and informative, the review is totally uncritical. In concluding his review, Ross gives the author, Robert Frank, the last word: ‘Frank concludes that the real reason we regulate markets is to protect ourselves from the consequences of excessive competition’. I was left with the impression that Ross concurs with that view.

How does Ross reconcile the view that regulation is desirable to protect against competition with his knowledge of how regulation has worked in the past in Australia to protect privileged interests at the expense of the rest of the community? How does Ross reconcile his opposition to economic growth, with his apparent ongoing support for productivity growth? I decided to buy Ross’s book, ‘The Happy Economist’ to see whether I could understand where he is coming from. (Since Ross is a strong supporter of international competition I’m sure he will not mind if I let readers of this blog know that I purchased the Kindle edition from Amazon for $9.99, rather than paying Allen and Unwin $26.99.)

I enjoyed reading Part I of the book, which is a discussion about such things as the nature of happiness, the evolutionary purpose of happiness, who is happy, whether wealth makes people happy, whether work makes them happy. This part of the book ends with a discussion of 10 hints about how to be happy. Perhaps it is strange for an economic journalist to be offering such advice, but from my (fairly extensive) reading in this field I get the impression that the advice Ross offers is based on the best research available.

Part II is comprised largely of an attack on mainstream economics and a sermon on ecological economics, mixed up with a strong dose of paternalism and proposals for increased government regulation. Despite all that, Ross manages somehow to convey the impression that he is more concerned about adulation of ‘the market’ than the actual existence of markets and competition.

Ross seems to be particularly concerned about the tendency of humans to over-indulge. He notes that many of us are tempted ‘to eat too much, get too little exercise, smoke, drink too much, shop too much, save too little, put too much on our credit cards, and work too much at the expense of our family and other relationships’.  He suggests that ‘individuals know they have trouble controlling themselves and would appreciate government taking temptation out of their way’.

This reminds me of a comment by the late Roger Kerr, executive director of the New Zealand Business Roundtable, in a speech aboutthe concept of progress that he made in 2009. Roger suggested that one consequence of the ‘fashionable academic preoccupation with happiness’ might be for more people to adopt the view: “I’m bald, fat and grumpy. What’s the government going to do about it?” I don’t think that is a necessary consequence of happiness research, but it seems to me that Ross is encouraging that kind of attitude in his paternalistic proposals. Among other things, Ross apparently wants governments to re-regulate shopping hours, limit advertising and take action to discourage spending on positional goods.

Ross’s presentation of his views on productivity, economic efficiency, market preferences and regulation involve as many twists and turns as the road from Thimphu to Punakha. At the risk of making this post excessively long, an appropriate place to begin might be with Ross’s claim that the regard mainstream economists have for ‘revealed preference’ – the idea that the choices people make reveals their preferences - has somehow led them to become ‘the great facilitators and advocators of economic growth – the high priests in the temple of Mammon’ (p 164). Economists who respect revealed preference actually have a long tradition of opposition to proposals by economic planners to lift savings and investment rates or give people incentives to work longer and harder in order to raise economic growth rates. My attitude has always been that if individuals prefer to spend rather than save or to enjoy leisure rather that to work long hours, their choices should be respected. A substantial component of my work involved providing advice about how governments could facilitate economic growth, but facilitating is about removing obstacles rather than pushing people around.

Ross makes it clear that he doesn’t see economic growth as being able to continue indefinitely – and in this regard he sees himself as one of history’s hastening agents (if I may borrow a phrase much used by a former work colleague). His discussion about ecological limits to growth and the desirability of the stationary state had me wondering how he was proposing to stop technological progress – a major source of economic growth. Ross eventually acknowledges that improvements in the efficiency with which resources are used are desirable. He suggests: ‘its growth in the throughput of natural resources we should forswear, not the rise in gross domestic product that comes from the continued pursuit of productivity improvement’ (p 221).

However, a few pages on Ross tried to convince me that I shouldn’t fear the end of economic growth. He states:

‘Many of the things that reduce our happiness stem from the search for greater efficiency so as to contribute to economic growth. Easing the efficiency imperative would be hugely liberating’ (p 229).

So, we will have productivity growth without the ‘efficiency imperative’ of market disciplines?

Ross agonizes further about efficiency a few pages later:

‘My fear is that, were the goal of increased efficiency to be abandoned, the motive of rolling back areas of privilege would be lost. It would then be a matter of first in, best dressed. Workers in unprotected industries would be obliged to continue propping up protected industries in perpetuity, with a great likelihood that, should further difficult times emerge, the privileged industries would be first in line for additional assistance in the name of preserving the status quo’ (p 233).

Well put! I am glad that Ross is troubled by that thought.

The closing sentence of Ross’s book reads: ‘In the end we are what we feel’. I think that might contain the key to the problem Ross has in reconciling his belief that because individual humans are inherently fallible they can’t be trusted to pursue happiness as they wish, with his admiration for the efficiency of markets and his understanding that governments are neither angelic nor infallible .

Our feelings are important. We obviously make ourselves unhappy when we make bad choices. But they are our choices. The nature of humans is such that we cannot flourish unless we have responsibility for our own lives.  

Why occupy Sydney?

‘So, you think I am in favour of occupying Wall Street, do you? What makes you think that?’

I knew it was Jim as soon as he spoke, but it took me a moment to work out where his voice was coming from. When Jim wants to have a discussion with you, he seems to appear from nowhere and just start asking questions. I suppose he thinks that gives him some kind of advantage. It doesn’t work! Everyone I know just ignores his opening questions and goes through the usual preliminaries of saying hello and asking after his health while they compose a response.

Jim had obviously read a brief comment on my last post in which I had speculated that he might be in favour of occupying Wall Street, but not Sydney. I reminded Jim about our previous discussions about banking and limited liability. In our previous discussion about banking Jim had suggested that it was a scam for banks to promise to repay deposits on demand even though they knew that they would be unable to meet that promise if all depositors asked for their money at the same time. In our discussion about limited liability, Jim had suggested that it was wrong to allow owners of banks to gamble with borrowed money, secure in the knowledge that if their gambles do not pay off then the most they stand to lose is the value of their shares. I also mentioned that when banks have been declared by governments to be ‘too big to fail’, bankers have a strong incentive to take abnormal risks because they know that they will be bailed out by governments if they make large losses. I ended by telling Jim that I could picture him in Wall Street carrying a placard saying ‘Bankers are Wankers!’.

Jim seemed satisfied with my explanation, but when I had finished he asked: ‘So, doesn’t all that apply to Australia as well as the US? Don’t you think I should be in favour of occupying Sydney, too?’

I tried to explain that prudential regulation seems to have worked reasonably well in Australia, so there doesn’t seem to be much to protest about in terms of the way the financial system is working in this country.

Jim’s response was quite robust and is not quotable verbatim. After deleting expletives I think the message he was giving me was that although I tell people that I am a libertarian, he thinks I am actually a neo-socialist because I am in favour of some prudential regulation of the finance sector. (Jim can call me a neo-socialist if he likes – it makes a change from being called a neo-liberal. My views on banking regulation are actually fairly close to those of Adam Smith, so I am in good company.) Jim ended his outburst by telling me that while I was entitled to my own views, I should refrain from misrepresenting his views.

‘Well, does that means you actually support the Occupy Sydney movement?’, I asked.

Jim didn’t respond for a long time. Eventually, he asked, ‘What are the Occupy Sydney people actually on about?’ I wasn’t sure, but I suggested that the main theme of the Occupy movement all over the world seemed to be the injustice of unequal distribution of wealth and power – particularly the idea that the top 1% of the population in many countries tend to benefit disproportionately from economic growth.

‘And who do you think is responsible for that?’ Jim said. ‘It is the 99% who are responsible for making the 1% wealthy. We make a few film stars fabulously wealthy by going to the movies that they star in. We make a few sporting heroes fabulously wealthy by watching the games they play and buying the products they endorse. The same system applies in the business world. The CEO of a successful company develops a reputation as a star performer just like film stars and sporting heroes. Successful companies are only successful because the 99% buy the goods they produce’.

‘So’, I said, ‘you don’t think there is anything to protest about?’

Jim said, ‘No, that’s not what I mean. The Occupy Movement should be protesting about celebrity culture and the vacuousness of consumerism. They should be poking fun at the idea that a good is worth buying just because it is popular and that entertainment is worth watching just because the performer is a star. They should be asking people whether they actually get pleasure by helping Kim Kardashian to become wealthier’.

I was left wondering why Jim was picking on Kim Kardashian. One possibility that crossed my mind is that she might have green hair. Jim doesn’t like green hair.

Do commercial interests have excessive influence on people in modern societies?

Jeffrey Sachs makes it difficult for any libertarians who happen to look at his book, ‘The Price of Civilization’, to consider seriously his claim that powerful corporate interests have excessive influence in America. He claims that libertarians ‘hold that the only ethical value that matters is liberty, meaning the right of each individual to be left alone by others and by the government’.

There are a lot of other ethical values that matter to me – and probably to most others who view themselves as libertarians. In my view, liberty deserves primacy only because it makes it possible for people to live in peace – with minimal coercion of one person or group by another.

Perhaps I am excessively naïve, but it seems to me that anyone who is concerned that people are being manipulated by corporate propaganda might see libertarians as potential allies. Can a case for individuals to be protected from techniques of persuasion that undermine individual sovereignty be argued along similar lines as the case for laws to protect against force and fraud? If it could be, I imagine many libertarians would support additional action to protect individual sovereignty.

Why does Jeff Sachs think that corporate interests have too much influence in America? Dr Sachs, the clinical economist, identifies a range of symptoms. The media is privately owned and funded by advertising revenue. Corporate interests generate propaganda which the media disseminates. Corporate interests largely fund campaigns of candidates for political office. People spend a lot of time watching electronic media.

Sachs writes:

‘The relentless streams of images and media messages that confront us daily are professionally designed to distort our most important decision making processes. We are encouraged to act on fantasy instead of reason’.

Cartoon by Nicholson from “The Australian” newspaper: www.nicholsoncartoons.com.au

Sachs claims that America has become a corporatocracy – a political system in which powerful corporate interests dominate the political agenda. As he sees it:

‘The media, major corporate interests, and politicians now constitute a seamless web of interconnections and power designed to perpetuate itself through the manufacture of illusion’.

So, some readers may ask, does this explain why Americans no longer see much merit in equality of opportunity, don’t think governments should do more to help people in need and don’t think the rich should pay more tax? No! Dr Sachs actually cites evidence that a high proportion of Americans still want more equality of opportunity, favour more help for those in real need who are prepared to help themselves and favour taxing the rich more heavily.

Where does that leave Dr Sach’s diagnosis? I’m not sure. Perhaps the disease has not progressed very far at this stage. Sachs claims that the patient is suffering from a disconnection between shared values and national politics. He sees the disconnection as arising from various aspects of the political system that enhance the power of corporate interests – particularly the military industrial complex, Wall Street, big oil and transport, and health care.

Jeff Sachs has left me as confused as ever about the American political system. He has not persuaded me that America is a corporatocracy. Corporate interests are powerful in America, but so is religion, the teaching profession, environmentalists, etc., etc.

It seems to me to be the main problem in American politics, which is shared by other modern societies, is the trivialization of politics by media that is primarily in the business of selling entertainment. The media can’t be expected to evaluate the claims made by interest groups, but if journalists have access to such evaluations from respected sources they can hold politicians to account for the views they express (or fail to express). Think tanks perform the task of policy evaluation to some extent, but can be too easily dismissed because they are not seen to be above interest group politics. Paradoxically, the government itself is the only organization capable of creating sources of policy advice that are sufficiently above interest group politics to have some hope of commanding widespread respect in the community at large.

Despite the reservations I have about ‘The Price of Civilization’ (in an earlier post about taxation levels as well as here) I want to end this post on a positive note. I strongly endorse Jeff’s view that individuals can benefit themselves and the societies in which they live by making efforts to become more mindful. We will do less harm and may do a lot of good if we become more moderate in our habits, achieve more balance in our lives, improve our knowledge, exercise more compassion, have more regard for the effects of our actions on the environment and future generations, consider how we can promote more constructive political deliberations and be more accepting of diversity as the path to peace.

Has Australia's media dropped the ball in reporting on Asia and the Pacific?

I don’t normally write about the media, but there are times when it seems to be necessary for me to write about the things that are on my mind before I can think about much else.

I was prompted to begin thinking about this question on Sunday by a post by Jim Belshaw on his blog, Personal Reflections. Jim’s post was about the recent ASEAN Summit chaired by the Indonesian President, Susilo Bambang Yudhoyono (SYB). The President’s speech mentions that Indonesia is in the process of finishing the Master Plan Percepatan dan Perluasan Pembangunan Ekonomi Indonesia (Master Plan for Acceleration and Expanded Economic Growth of Indonesia/MP3EI), intended to boost the development of six economic corridors in Indonesia. The President claims that this initiative will awaken ASEAN’s economy and speed up the construction of ASEAN connectivity as well as boosting Indonesia’s national economy and intra-Indonesian connectivity.

Jim Belshaw mentioned that he didn’t know what the six economic corridors in Indonesia were and implied that the Australian media’s reporting and analysis of events in Indonesia and the region is deficient. He also notes that there seemed to be no coverage of the ASEAN conference in the Australian media.

I didn’t know what the six economic corridors were either. It turns out that each of the economic corridors corresponds to a region of Indonesia and its economic specialization; for example, as might be expected Java has a focus on industry and services and other islands focus more heavily on agriculture, mining etc. The planning has a strong emphasis of infrastructure development and connectivity.

The planned areas of economic specialization seem to make sense in terms of comparative advantage. That raises the question in my mind of why the Indonesian government thinks it needs a Master Plan. Perhaps it is best viewed as a political hand waving exercise rather than an exercise in constructivist rationalism. A few years ago, when Australian media seemed to report more thoroughly on Indonesia, there was a strong focus on whether the central government would be able to maintain legitimacy in a nation with such disparate elements located on different islands. Perhaps the Master Plan should be viewed in that context as a concept that might help to instil or maintain common purpose. But SBY is presenting the plan as also having implications for ASEAN connectivity. Connectivity suggests to me that fibre optic cable might play a large role in the plan. Who knows what it means? What we do know is that the success or otherwise of economic development in Indonesia has important implications for Australia.

Shortly after reading Jim Belshaw’s blog I visited the East Asia Forum and read a post by Peter Drysdale on why the Doha round of international trade negotiations matters to Asia and the Pacific. Drysdale writes:

“In Washington, the Trans Pacific Partnership (TPP) is all the rage. Does it matter if we get yet another pseudo ‘free trade’ agreement, between the US and group of eight partners who in the total scheme of things are pretty insignificant?
It certainly would matter, being absent from Doha.
A rum deal like the one that is shaping up might be of little economic consequence (of somewhat more economic consequence in the unlikely event that Japan signed on) but it would be of considerable political consequence.
In the context of an insecure global trading system it would be a bold statement taking the world in another direction. It would drive a wedge down the middle of the Pacific, not only or mainly economically but also politically — between the United States, its partners and China. It would entrench the adversarial political psychology that is developing in US-China relations in a way that would be very difficult to unravel for a long time. That might matter less if the WTO was not also in disarray. It matters a lot, as that prospect grows daily”.

I think Peter Drysdale has good reasons for concern, but I would also like to see discussion of the implications of Washington’s focus on TPP in the Financial Review and The Australian – to name a couple of papers that I read.

That got me thinking about media coverage of other issues in the region that have implications for Australia. The issue that is probably most important to us is the future of economic development in China and in particular how long China will be able to maintain the economic strategy adopted post-GFC of a very high level of investment in infrastructure. A lot depends on the quality of the infrastructure investment that is being undertaken. I have probably seen general discussions of the issues involved in the Australia media, but if the investment program begins to produce a lot of white elephants I am not confident that I will see that reported and discussed in the Australian media before it begins to impact out terms of trade.

What is going on in India? I was just starting to get used to the idea of India as a high-growth country and a rapidly expanding market for Australian exports, and then it hosted the Commonwealth Games. The games themselves seem to have been a success, but problems with their organization have raised questions about the quality of public administration in India. It is hardly news that the quality of public administration is poor anywhere in the world, but governments do tend to try to put their best feet forward when organizing major international events. Does the quality of public administration in India actually make much difference to India’s future growth prospects? That question might be a bit too profound for the media to tackle, but perhaps Australian journalists should be discussing evidence of whether poor quality of public administration in India is having any effect on foreign investment in that country.

Then there is New Zealand. A few years ago the NZ government set up a Taskforce to advise it on policies it could adopt to catch up to Australian living standards by 2025. This 2025 Taskforce submitted a couple of reports, but the NZ Prime Minister announced a few days ago that it will now be closed down. What does that mean? Has the NZ government abandoned all hope of catching up to Australia’s living standards? If so, what are the implications for Australia? Perhaps it just means that we will be able to look to NZ as a source of labour, the price of NZ sauvignon blanc will remain within our reach and even more of us will be able to afford to have holidays there beyond 2025. Is it too much to ask for a less frivolous discussion of the relevant issues in Australia’s news media?

Is the Australian media to blame for its poor coverage of the Asia and Pacific region or does this just reflect the ‘insular internationalist’ perspective of Australians? The term ‘insular internationalist’ is one coined by Michael Wesley, who observes that Australians have become wealthier and safer than ever before by enmeshing with the world – becoming more a part of the world economy than ever before. He says:

‘We travel more than we've ever travelled before; we have more people who were born outside of this country living among us than ever before, and yet you can see a steady trend of a withdrawal of interest about the outside world, a withdrawal of real skills for dealing with the outside world among the general population in Australia’.

I don’t think that Australians are as insular as Wesley suggests. It seems to me that a substantial and growing number of us will look elsewhere if we can’t find decent coverage of Asia and the Pacific in the conventional Australian news media.