The knackery beckons

Ross Gittins, economics writer in the SMH, used his column space during the election campaign to debunk the economic nonsense sprouted by Howard & Co as to their success as economic managers. Again & again he pointed out that the boom had largely come about as a result of the fiscal reforms enacted by the Hawke-Keating governments, and the happy accident of a resources boom thanks largely to extraordinary growth in the Chinese economy.

Which did little to dampen conservative insistence as to their god-given right to hold the reins of the galloping stallion of relaxed & comfortable economic surety. Though that rather inconvenient interest rate rise in October was a little difficult to explain away. However Gittins & quite a few others are now beginning to point out that the economic mount may turn out to be a rather bad-tempered pony with a bad case of worms & a vicious bite.

It is becoming very apparent that Howard has not left Australia with an economic legacy to keep us in the style we have grown accustomed to. It appears that inflationary pressure is much greater than admitted by either Costello or Treasury, & there’s quite a few other significant problems brewing. Some of which are not of any government’s making, yet Costello & Howard certainly failed to put into place policies & initiatives that would have helped insulate the Australian economy.

Tax cuts given or offered by Howard & Costello are not in any way solely responsible for an economy now running with an underlining inflation rate of 3.1%. But they certainly did not & do not help. & I suspect it may turn out that it’s not so much the extra consumer spending that matters, but rather the failure to develop & improve capacity in an economy stretched to meet its own demands & export demands. Where Mr Howard & Mr Costello, were the policies & ideas to develop long term infrastructure projects sorely neglected by both major parties? Where were the innovative responses to climate change? Where were the commitments to improving productivity, other than through raising participation rates – a policy that will initially lower productivity as more unskilled workers are pulled into the labour markets. But where were the training & education policies that would develop these workers?

Tired old notions of technical high schools & colleges were a shabby revisiting of educational policies of an Australia 50 years ago. Tertiary education rates are still far too low in Australia, TAFE education is being hanged, drawn & neatly quartered by industry expectations that they should no longer be involved in training for their own skills needs, poor funding, high & inequitable fees, and an appalling lack of rigorous research based pedagogy. A poorly educated workforce in an economy heavily reliant upon resources is not going to be able to display the flexibility we must have to remain as the lucky country of Howard’s dreaming. Because we certainly are not the clever country.

Flexibility is not about Howard & Costello’s ideological agenda of driving down wages & conditions, casualising the workforce – this serves in the short term to artificially hold company profits at record levels but it effectively deskills the workforce. The flexibility that we should be fostering should be focused around infrastructure redevelopment, education & training that fosters & entrenches the notion of life-long learning, & a very fundamental change to management cultures that invests in research & development, both of its human capital & processes.

None of which Howard & Costello had any interest in doing. Instead they have left us with an economy exposed to shifts in resource markets, an education sector demoralised & burdened with managerial notions of outputs instead of outcomes, and an infrastructure that has neither a national planning base nor adequate investment from either government or private sources.

The response to telecommunications for example is a horrible case study of poor governance & corporate piracy. A lot of the fundamental problems stem from the manner in which Telstra was privatised – losing strategic control of infrastructure provision in the most fundamental area of communications was the height of stupidity. Hiving off retail sales may or may not have been workable, but losing the ability to respond to changing technologies & new demands from a changing world economy in a nation of this geography both physically & socially was & is the blunderings of the incompetent. As Matt O’Sullivan reports in today’s SMH, the roll out of a broadband network capable of delivering minimum speeds of 12 megabits per second is being priced at $150 per month. All in the name of shareholder profits. We already have the third highest charges among OECD nations – how quite Labor can unpick this mess remains to be seen. But one possibility would be for the Future Fund to effectively institute a majority buyback, & drive a devolution into two structures – one to research, develop & install infrastructure & the other to be a retail division, resold to the market. Well, its better than MacFarlane’s plans to play with the private equity markets for god’s sake.

But the main point remains – the historical revisionism that continues to fill the pages of the daily presses trumpeting Howard & Costello as economic managers par excellence will not help in any way for us or government to deal with the very real structural problems that Howard & Costello have left in their wake. The highest trade deficit on record, a 9% fall in building approvals, a slump in the last quarter’s company profit figures that no-one seems to be able to explain, an underlying inflationary figure that can only be managed by the very blunt tool of interest rate control, over-capacity & record levels of personal debt. As Gittins wrote in his first major piece after the election, the odds of a recession are now in the vicinity of 30%. Odds greatly increased by the fiscal illiteracy of 11 years of a Howard/Costello government.

Rudd & co are no doubt looking at figures indicating that the stable door is well & truly open, the wormy old pony of the Australian economy is half way down the paddock & heading for the creek, & some bastard stole the stable door bolt. & we get to muck out the stables. Shovels, anyone?

Cross posted at Bernice Balconey’s Baloney 

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27 comments on “The knackery beckons
  1. MikeM says:

    12 megabits/sec priced at $150 a month? What a joke.

    We currently have 12 Mb/s from iiNet with 10+10GB download peak/offpeak/month for $60 a month. If we bothered to upgrade the router we’d get 24Mb, but it’s not worth it since very few sites manage to supply much above 3 (downloading software and large pdfs is a joy though).

    This service is delivered over the plain old copper telephone lines from an iiNet DSLAM located in the local Telstra exchange. It is distance-limited to a few km from an exchange so not much use for outer metro and country subscribers, they need some other technology. But why would we want to pay Telstra two and a half times as much for a service no better than what we get now?

    Telstra has had the technical capacity for some time to deliver the same service as iiNet provides to us, but has refused to enable it.

  2. STT says:

    ‘Where were the innovative responses to climate change?’

    What does that have to do with inflation?

    As for broadband, why does everybody have to have fast broadband? And if it’s so important to them, why can’t they pay the full costs of the technology? I’m sure that if you live in a rural or remote area and you desparately need fast broadband, you can get it. Probably costs a bomb, but if you’re not prepared to pay what it costs, that probably means that you ‘want’ broadband, rather than ‘need’ it. I don’t see why the government should fund cheap broadband for everybody who wants to get on YouTube.

  3. Guido says:

    What I fear is that Labor is going to cop the blame for an economic downturn thus re-enforcing the myth that the Liberals are ‘good economic managers’, and that the Labor government may do the hard slog to “develop & improve capacity in an economy stretched to meet its own demands & export demands” as you say, then lose government and the next Liberal government taking all the credit, again.

  4. FDB says:

    STT – I can see you’ve given this a lot of thought.

    Broadband is a capacity-builder. Your idea of the internet might be limited to youtube clips and poorly thought out blog comments, but there’s a fair bit more to it than that.

  5. Mindy says:

    STT you can’t get broadband in some rural areas if you want it. My parents can’t even get dial up because of the way the wires are configured. They have been trying to get satellite for months now. I suspect you live in a city and don’t have the issues that rural and remote areas face getting connected.

  6. Paulus says:

    In (partial) defence of the Howard years,

    1) Deficiencies in physical infrastructure are largely the provenance of State governments (all run by that party which must not be criticised).

    2) The rising inflation and trade deficit are products, essentially, of low unemployment and rising wages. Don’t you think the ex-guv’mint deserves a teensy-weensy bit of thanks for that?

    3) “Tertiary education rates are still far too low in Australia.” Snort. Tell that to any grad still looking for work after putting in umpteen applications – I know quite a few. There’s certainly shortages in some niches, mining engineering for example, but the last thing we should be doing is shoveling more folks into uni across the board.

    (This may seem inconsistent with what I said about low unemployment earlier, but the explanation is that the new uni grad will have no problem at all getting a job in retail or a call centre. However, jobs that actually use what you’ve gained in higher ed are rather harder to come by.)

  7. STT says:

    FDB,

    Your jibe at me shows your superior intellect. Well done.

    You say in your post ‘Broadband is a capacity-builder’, as though that wins the argument about telecommunications policy. What you (and the original poster) completely fail to do is set out why government (rather than the private sector) should fund broadband access.

    Lots of things build ‘capacity’ (your term. Sufficiently vague to be meaningless, but we’ll stick with it). A new machine builds a factory’s ‘capacity’ to build gadgets. A line of credit increases a firm’s ‘capacity’ to invest in productivity improvements. An MBA increases my ‘capacity’ to earn income, and my firm’s ‘capacity’ to earn profits. That doesn’t mean government has to fund them. I can go and get an MBA off my own bat if I think that I’ll be better off in the long run (even after paying for the degree). Or my firm can fund me to do it, if they think they’ll benefit from my increased productivity. A company can buy their own machine to make more gadgets. A farmer can get a satellite dish to get broadband so she can follow the Chigago grain futures market in real time. No government money necessary.

    The basic point is that if people need broadband to ‘build capacity’ (i.e. to make money) they will pay what it costs, provided the cost of getting broadband is less than the benefits they think they will get out of it. Distorting people’s decisions through government intervention leaves us all worse off in the long run.

    If there are technological solutions, private providers will step in where there is a buck to be made. For example, my folks live on a farm, and they recently got wireless broadband, no government intervention necessary. Someone saw an opprtunity, set up a company, rolled out the technology and now my parents can get fast broadband at a cost that they see as being less than the benefits of broadband access. And the taxpayer gets to keep his/her money.

    Would a government-owned Telstra come up with a better or cheaper solution than what my parents recently got? I doubt it. They might have done some cross-subsidisation, so inner city folk are subsidising their country cousins through their internet subscription, but that’s not a good outcome (because it reduces broadband use in the inner city more than it increases broadband use in the country).

    And would a government provided cable network be better or cheaper? Again, I doubt it. The same kind of cross-subsidisation would go on, but that’s not a good outcome for economic efficiency or productivity.

    The best outcome is that people pay the full costs of the provision of the service, while entrepreneurs come up with ways to make it cheaper over time. Government intervention just distorts people’s decisions and in aggregate reduces net social welfare.

    STT

  8. joe2 says:

    “2) The rising inflation and trade deficit are products, essentially, of low unemployment and rising wages.”

    Complete myth Paulus on pretty much ALL counts if you are speaking of the whole population. It might work for W.A., but i doubt, it even there. You should be reminded of “lies, damned lies, and statistics”. Inflation may have something to do with tax cuts for instance.

    I suspect it might be time to drop Costello mantra. The spell no longer works.

  9. STT says:

    Mindy,

    I grew up in the country, live in the city now. I can get cheap broadband. Can’t get a cheap house, though. It’s a trade-off.

    Is it technically impossible for your parents to get a satellite dish, or is it just that the satellite dish installers are flat out? Maybe if they slipped them a few hundred bucks they would come out on a Sunday?

    If it is technically impossible, what can the government do about it? If not, it’s just a matter of price. And if your parents are not prepared to pay the full price of broadband (including a slab for the installer to get their names to the top of the queue), why should us city dwellers subsidise them? Broadband is great, but it’s not like it’s a human right. They can still live without internet access.

    STT

  10. STT says:

    joe2,

    Pretty ironic for you to call ‘myth’ on Paulus, and then pull out the old ‘tax cuts cause inflation’ line. While there is a kernel of truth in this line, it’s pretty marginal. Low unemployment and wage increases are much more responsible for higher demand (and therefore inflation) than the barely-keeping-up-with-bracket-creep tax cuts that Costello handed out every once in a while.

    Where do you think inflation comes from?

    STT

  11. FDB says:

    STT – spare me the lecture on the wonders of the market. Sorry if you were offended, but I’m sure if you re-read your original comment you’ll agree there was no indication you’d thought about the economic benefits of telco infrastructure at all. Now I see you’ve at least taken the time to shoe-horn it into your overarching free-market fundamentalist beliefs. Congratulations, you win a Ludwig Mises coffee mug and a year’s subscription to Quadrant.

    Is there any role in infrastructure for government? Do our country cousins need roads? Schools? Hospitals? They’d “survive” without them, at least until they die. Should they pay whatever the market prices these things at?

  12. Katz says:

    Much ahistorical error surrounds discussion of cross-subsidisation of rural Australia.

    Would a government-owned Telstra come up with a better or cheaper solution than what my parents recently got? I doubt it. They might have done some cross-subsidisation, so inner city folk are subsidising their country cousins through their internet subscription, but that’s not a good outcome (because it reduces broadband use in the inner city more than it increases broadband use in the country).

    If there hadn’t been a whole cartload of cross-subsidisation of rural Australia over the last century and three quarters, most of it would still be inhabited by Aborigines.

    1. Governments confiscated Aboriginal land and gave it to whites.
    2. Governments gave graziers slave labour, called convicts.
    3. Governments subsidised the importation of immigrant labour from great Britain.
    4. Governments have overseen huge transfer payments from populous states to sparcely-populated states.
    5. Governments ran bounty schemes and price support mechanisms for a wide range of farm products.
    6. Some industries, e.g., stud rams, sugar and bananas existed for a long time behind import embargoes.

    The Federal government’s messing around of Telstra in favour of “the Bush” is just a small, latterday example of a history of massive cross-subsidisation of rural economic interests.

    Perhaps, if cross-subsidisation ended, some private entrepreneurs might step in. More likely, however, there would be a severe depopulation of rural Australia.

    The question therefore arises, how much money should be spent to prop up a recognisable version of rural Australia?

    John Howard was quite happy to do it, or at least to appear to do it, for populist, political purposes.

  13. STT says:

    FDB,

    In my original post I said:

    ‘I’m sure that if you live in a rural or remote area and you desparately need fast broadband, you can get it. Probably costs a bomb, but if you’re not prepared to pay what it costs, that probably means that you ‘want’ broadband, rather than ‘need’ it.’

    That’s what the ‘economic benefits of telco infrastructure’ comes down to – are the beenfits greater than the costs. It may not sound like nation building, but that’s what policy economics is all about.

    To answer your question about government provision of infrastructure, there is a role for government in infrasturcture if:

    1) It’s a public good (that is, it’s impossible to stop people who don’t pay from using the good – streetlights and national defence are the classic examples).
    2) It’s a natural monopoly
    3) There are externalities associated with the provision of the good.
    4) There are information asymmetries.

    None of these holds for broadband. If copper wire was the only delivery technology, then there might be a natural monopoly argument, but with the evolution of wireless technologies (including satellite) the natural monopoly argument doesn’t fit.

    Of the examples you gave, clearly roads are a natural monopoly, although the private sector can get involved in building and operating roads in some cases. When it comes to small local roads, the role of government is basically to smooth consumption over the lifetime of the road (i.e. the government pays up front, and re-coups through rates). Although we are seeing these days in new estates that residents are required to pay an infrastructure charge to cover roads and sewers etc. Essentially they are paying the costs of providing the infrastructure they use (wich I think is a good thing).

    As for hospitals and schools, there is a role for government in health and education. I don’t personally believe that schools and hospitals and schools have to be exclusively provided by the government, but I see education (up to a point, say year 12) and health (again, up to a point that excludes cosmatic surgery) as basic human rights. As a society we should provide those things to everybody, regardless of ability to pay.

    Broadband is not a human rigt. And because there is no demonstrable market failure (of the four listed above), there is no special role for goernment in provision.

    STT

  14. STT says:

    Katz,

    You’ve nailed it. The Labor broadband policy is another transfer from the cities to the bush. If we are going to give handouts to the bush, I would prefer it to be explicit. Give them cash handouts, and let the internet companies fight for their money, instead of giving them all Trabant-style government broadband.

    STT

  15. Mindy says:

    STT, they are trying to get a sat dish, but the hurdles put up by the last govt. were enormous and changed monthly. Maybe now with the new show in town they might have a better chance. Yes, they can live without it, but why should people in the city get all the advantages? People living in the country do a hell of a lot to keep this country going and they deserve some slack.

  16. STT says:

    Mindy,

    What kind of barriers did the government put in their way? Are there regulations that stop people from getting satellite dishes? If so, the first course of action from the Rudd government on this should be to get rid of any unnecessary regulation that stops people from accessing the technology.

    As for ‘why should people in the city get all the advantages?’. As I alluded in my last post, country people do get advantages like low housing costs, fresh air, no traffic, good views. They miss out on other things (broadband, medical specialists, choice of schools). It’s a trade off. If they want cheap broadband, maybe they have to give up on the benefits of country life (or pay through the nose).

    STT

  17. FDB says:

    Sorry for being a bit of an arse before. I don’t see a particularly well-drawn line between private and public goods – over time, the former can tend to become the latter.

    For one example, the increasing and inexorable move towards greater IT involvement in education means that if you’re serious about high school being a human right (and presumably believe the quality of same is important) then you’ve gone and made a great argument for near-universal broadband access.

  18. Paulus says:

    “Inflation may have something to do with tax cuts for instance.”

    Depends, joe2, on what the government would otherwise do with the money. If, instead of a tax cut, the government puts the $ in some sort of saving vehicle a la the Future Fund, then, no, it is not inflationary.

    But if, on the other hand, the government spends the $ on, for example, public sector wages or Medicare or pensions, then it is just as inflationary as a tax cut. And that’s what would probably happen.

    It’s not a “myth”, it’s Economics 101.

  19. STT says:

    FDB,

    I can see where you’re coming from, but it sounds like a bit of a slippery slope argument to me. I could use the same formulation to argue that if high school is a human right (which I think it is), then every student should get $300 Nike running shoes from the government so they can participate in PE. And iPods so people don’t tease them for having no-name MP3 players.

    While I think every school should have decent internet access, I personally don’t think that you have to have broadband at home to succeed at high school. It is ten years since I was at school, and things must have changed a bit, but I was at uni until recently, never had broadband at home and still did well enough.

    But you raise an interesting point that dove-tails nicely with a Rudd policy. Rudd is giving $750 to every high school kid. Unfortunately it’s through yet another fiddle with the tax system. Insetad of a tax rebate, they should just give a voucher to every kid (well, their parents) to send on education-related costs. That way, you don’t miss out just because your parents can’t afford to spend the $1500 to get the $750 rebate.

    If every kid got a $750 voucher, they could use that to pay for broadband at home (if their parents thought that was the highest priority in educaiton spending). I reckon if you did that, you would have innovative little internet companies popping up in every rural hamlet providing high speed wireless broadband. No need for government to get involved in provision, just give a direct subsidy and let people purchase broadband through the market. Make sure that competitors can entr the broadband market and hey presto! cheap(er) broadband.

    Market fundamentalism at its finest.

    STT

  20. joe2 says:

    I note Paulus your lack of defense of dodgy stastics on “low unemployment and rising wages.” It is wise, because only grads of Economics 101 and Costello cultists would buy that nonsense.

  21. boredinHK says:

    “Again & again he pointed out that the boom had largely come about as a result of the fiscal reforms enacted by the Hawke-Keating governments, and the happy accident of a resources boom thanks largely to extraordinary growth in the Chinese economy”

    I can’t recall the last governemtn claiming they caused the boom – rather they didn’t stuff up it’s benefits.
    Club Troppo has long meaty discussions about economics and one recent thread was about unsatisfied demand being a significant driver of inflation.
    This demand currently has supply problems through inadequate infrastructure investments and for this the last administration can be considered to have not been sufficiently on the ball.
    Telecommunications investment – great idea , more ports and railways – another winner.
    Private / public deals to fund them – or incentives for private investment or even straight public investment will all be in the mix in future I think.
    Hasn’t the ALP also committed to a series of tax cuts though ? This would suggest they are effective politicians rather than any better as managers of the economy.
    Gittens has for a long time been explaining the limitations imposed on politicians in the role as managers of the economy so debunking this now seems a little partisan.
    I mean who believes what politicians say anyway?

  22. Graham Bell says:

    Mindy [on 5]:
    Spot on!

    STT:
    Try living in The Other Australia. People here have mobile phones …. for use when they go into the nearest regional city. Broadband? What’s that? It’s a great day when I can get up to 5KB/second.

  23. adam says:

    Here comes a necessary rant against neoliberalism, and a longish but pointed one at that. Nice people who prefer sweetness, light and poetry look away. Those who detest neoliberalism, please join me in a memorial raspberry for the market failure of the neoliberal idea of the unimpeachable free market. This is just some of what you need to know.

    In a nutshell, despite their preening, neoliberals are intellectual simpletons who take the easy way out at every opportunity. They also fail to understand the point that the ongoing death of the enlightenment project, and our increasing knowledge of human higher cognitive functions as being based solidly in our emotions, both make about the centrality of rationalism in human thinking.

    I’m going to do a hatchet job on STT to show this. No hard feelings, STT, this isn’t personal, you’re just the nearest one available.

    To quote STT, so that we can perform a little light fisking later on:

    “…if you’re not prepared to pay what it costs, that probably means that you ‘want’ broadband, rather than ‘need’ it.’”

    And elsewhere…

    “I see education (up to a point, say year 12) and health (again, up to a point that excludes cosmatic surgery) as basic human rights. As a society we should provide those things to everybody, regardless of ability to pay.”

    I could fisk all of STT posts, but this is long enough already. These two quotes really get to the nub of this twaddle’s pretence to being intellectual thought. “Up to a point”, and “needs versus wants”. Let me explain.

    Neoliberal economic thinking sounds really good on paper. To take one example: yes, I read Hayek, and he sounds very convincing – all very rational. On paper. So, if you spend your day pontificating on things which you aren’t directly involved in, such as the messy fabric of real people’s lives and thought and dreams and hopes and despair – thus avoiding complicated situations and difficult qualitative evidence – one might be convinced simply due to Hayek’s reasoned arguments.

    This is why the “fundamentalism” of the market comes into play – you can now stop thinking about difficult qualitative situations and evidence, and trust “teh theory” instead, because “teh rationalism” has “teh answer”. A vacuous theory, based on spurious assumptions, cranking out answers on a “garbage-in-garbage-out” principle. It’s all based on the assumption that the world is rational, and that therefore the rational answer is right.

    I hate to break it to you, neoliberals, but science has moved on from Newton. Neither the behaviour of the world nor of people is rational, nor will they behave predictably as described “on paper”. Human behaviour and environmental activity are complex and cannot be modelled in any manner except in broadly probabilistic terms. In other words, fair guesses only, folks.

    Our invention (yes, Aristotle, it’s an INVENTION, as later promoted by the enlightenment project) of rational thinking, was an attempt to build a tool able to model this complex world in a “more accurate” manner through logical rules. The trouble is that the way the world works is far more complex than simple rules will allow for – hence rationalism’s fundamental failure in all areas of knowledge but for really tightly constrained and defined problems where we can set the terms using controls and repeats eg in physical sciences.

    If you now begin to realize that the world itself is more graduated and messy than the binary black-n-white of rationalism, you will see why STT, using rational reasoning, has a real problem with policy issues such as: “where do you draw the line?”

    Questions like “where do you draw the line?” are not tightly constrained scientific problems. Therefore, despite drawing a line somewhere through rational process, STT still has no policy that solves the problem for everyone in any verifiable, qualitatively better way than any other methods we have for drawing a line. You could get a monkey to do it with a dart, really.

    But what STT does have that is more tempting to politicians is a simple, easy to implement rational answer – make ’em all pay. “Aha”, says the politican, “that’s easy to do, doesn’t take much thought, and we can avoid the tricky parts like ensuring equity”.

    As Sir Humphrey and Sir Frank once told Bernard:

    Sir Humphrey: There are four words you have to work into a proposal if you want a minister to accept it.

    Sir Frank: Quick, simple, popular, cheap.

    Neoliberal policy is all of the above (except maybe not popular, hence its decline today). But quick, simple and cheap – that doesn’t make it good. As the professor says, “you can have a choice of good, simple, quick and cheap for any solution, but normally you’ll only get three of them.”

    Now, let’s fisk some examples.

    Cosmetic surgery is not a right? – so, where do you draw the line between cosmetic surgery and cranio-facial reconstruction? Just how deformed do patients have to be to qualify for help?

    Simple policy answer – make ’em all pay.

    Broadband is not a right? – where do you draw the line? How limited does a child in the country have to be in social and learning opportunities before we have costly social inequity?

    Simple policy answer – make ’em all pay.

    Wants are not a right, but needs are? – where do you draw the line between needs and wants? Exactly what point is the crossover?

    Simple policy answer – make ’em all pay.

    And hence arises the overt drive to privatise everything. It’s an easy achievement. But as I argue elsewhere, they wouldn’t dream of privatizing the making of legislation, or the judiciary, or the actual House of Representatives… He he he, imagine competing Parliaments vying for my tax dollar. It’s really a drive to privatize everything BUT FOR the power base of the ministers these people influence. If they were for real, they’d argue to privatize parliament.

    As we can see, neoliberalism ignores reality. Nowhere in “the constitution of liberty” does Hayek talk of the developmental process of the child – nowhere do neoliberals acknowledge that their mythical rational economical agent had a childhood, where it was fed the wishes and desires of the market between slices of children’s television.

    And there it is. Neoliberalism – or as I will call it from here on, me-oliberalism – is, like most economics, an over-simplification of the difficult issue of public policy, reduced so as to minimize the policy thinking required and used to support the fascism of markets under the spurious guise of supporting “freedom”. It reduces freedom to a rump of theoretical ideals that are easy to consider but taken as given in any civilized society, and therefore facile to implement. Anything hard to quantify is simply not part of “freedom”, and can be discarded.

    It is therefore intellectual laziness of the worst kind, and a reminder that traumatised people (like Hayek under fascism) often become the next generation of instigators without even realizing it.

    If that weren’t enough, I will offer a challenge: I hereby dare any me-oliberal to make a solid prediction regarding the actual social outcome of a novel policy generated solely by their “scientific” economic theory, which is then implemented by a national government, and then verified in a controlled double blind experiment in the manner of other sciences and thus found to be an accurate prediction. That’s the nub of the offer, and we can negotiate exact terms later.

    If you can do this, i hereby swear that i will cook and eat my copy of Hayek’s “The Constitution of Liberty”, and then I’ll post the video of this in its entirety on Youtube and on any other website you like.

    I dare you.

    You won’t and you can’t, STT. Nor will any of you me-oliberals. I will take you all down with your own texts in the end. Go read page 48 of the above mentioned lunch item again. I will throw Horst Rittel and recent cognitive science in your face, you fools. Go learn about how policy is comprised entirely of wicked problems, and while you’re at it, get out in the real world for some fresh air and observations. Most of all, quit telling me you’re enslaving me to the market to ensure my “freedom” is assured. I choose freedom from your pernicious and lazy ideas.

    End of rant, folks. Enjoy the weekend. Life is more than tax invoices. I’m going to go walk in the bush with my daughter, looking at wild birds. Shove that in your market analysis, me-oliberals. With much unquantifiable love to all of you, even STT.

  24. derrida derider says:

    What a thoughtless feelgood rant, adam. I’m no neo-liberal, but they deserve better than that.

    It would take a post as long as yours to respond to each point – where you actually made any point. But as an illustration of how little hard thought you put into this piece of thread pollution, just explain to me how any social or economic policy could be “double blind”. The great bulk can’t be controlled at all – that is what makes knowledge in all of the social sciences much more uncertain than that in most natural sciences. I suspect you have only a vague idea of the meaning of the terms “controlled” or “double blind”.

  25. adam says:

    don’t let your sympathy get the better of you, derrida ;^)

    it seems we agree on one thing. the failed understanding of science: that’s the point. the problem that i identify is: economists who mistake the application of logic (and maths) for science, therefore believe logical economics is science, and that therefore things will work simply because logic suggests it. it’s a formalist error. as a result, poor policy is generated due to failure to recognise fundamental misapprehensions and the application of the wrong tools to poorly defined problems.

    economists often claim “science” status… when in actual fact, it’s more profitably understood as a design/engineering discipline, or failing that as a humanities discipline, than anything scientific. you can see i’m quite tight about my definition of sciences. hence also my advice to read rittel on wicked problems as a starting point.

    thanks for the comment btw.

  26. Graham Bell says:

    STT:
    Out in the bush, the internet is an essential – not just an amusement for bored bloggers. For instance, the internet saves driving hundreds of kilometers in round trips to town and so cuts down on unnecessary carbon emissions nd reduces the risks of vehicle accidents. Yet it is in the bush that we have to worst telecommunications. There are reasonably cheap and efficient ways of overcoming these third-world deficits but corporations don’t want to spend money on development, they want big profits right now, not next year, so we won’t get upgraded telecommunications out here.

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