Monday, April 30, 2007

Climate Change and the Precautionary Principle

With apologies to Crikey I want to quote in full one comment from last Friday's edition.

Cameron Bray writes: Re. "Liar: Howard backs Bracks into a corner" (yesterday, item 8). There has been some talk about the precautionary principle at play in working out what to do about climate change -- on the basis consequences of doing something and being wrong about climate change are way less than doing nothing and being right. Taking this one step further, Australia is vulnerable if other countries decide to pursue the precautionary principle, regardless of what we do. John Howard's endless wittering about how he won't risk jobs to address climate change is dependent on other countries pursuing his blithe “she'll be right” approach as well. If the international community decides to take it seriously then some of our key industries may be in big trouble. To grab a few examples: There is already some evidence of a global downturn in long distance tourism. If other countries decide to tackle air travel as a way of reducing CO2, then the Australian tourist industry is stuffed, no matter if warmer water destroys the reef or not. As for the coal industry, if the rest of the world decides to pursue drastic change in power generation towards greener options, then our fat dirty brown coal mines will have no markets. And as for the logging industry, if international agreements pursue serious carbon sequestering and make agreements on the purchase of old-growth timber or products that industry is cactus too. So the Howard government’s approach is a double-ostrich stupidity; not only does the climate not have to change, but the structure of trade and markets have to remain as they are now as well.

What Bray is - rightly - saying is that Howard's line about any action being designed not to harm the Australian economy is just that, a line. It is inaction that will harm the Australian economy.

Monday, April 23, 2007

Corporate Social Responsibility

In response to a post on Crikey I had something to say on the topic.

The original post appeared under the heading "Corporate Social Responsibility: Milton Friedman right again" and pursued the typical line that if corporate execs wanted to give money to good causes they should give their own money, not that of their shareholders - a position advanced by the late Milton Friedman.

Corporate Social Responsibility is about one heck of a lot more than just good works and donations to the poor. It is, primarily, a recognition that everybody is a stakeholder in the business - customers, its neighbours, the communities in which it trades, the environment it possibly pollutes, its employees, their families - not just the shareholders (are you listening Sol Trujillo).

Individual charity largesse by the rich managers is not a substitute for the genuine concern for the sustainability of the business versus the desire to achieve this quarter's targets to get paid the bonuses that got constructed because Milton Friedman wanted to align the supposed interests of managers with the supposed interests of shareholders.

Perhaps someone has noticed the conundrum - the goal of managers is supposed to be to maximise profit which requires minimising all input costs, which must include shareholders returns, but the goal of management is to maximise shareholders returns. If the conclusion is both P and not P, then the premise is false.

As to the original post - the heading should have been "Milton Friedman wrong again" as he WAS with monetarism - no one targets money supply these days.

Sunday, April 22, 2007

It's About Us not Them

In his Fitz Files yesterday morning Peter FitzSimons told a great tale under the heading Hooray for Simon.

It tells the tale of how a local cricket comp introduced modified rules to enable a kid with dwarfism to not just play but also compete.

Unfortunately he ruined the good news story by starting his conclusion with, "There are, happily, a lot of these kind of stories out there, but there could be more if our State Government could make the inclusion of disabled kids in sport, where possible, part of official policy."

The pity is that as the story itself showed the outcome sought can and was achieved directly at theclevel of community action - which is really where the exhortation should be directed. Every community sporting group should be taking action like this - like the Eastwood Ryde Netball Association who for years had a deaf team playing (what whistle ump?) or games modified so that individual disabled players are allowed a little shuffle.

Good stuff happens by us deciding to do it, not by waiting for "them" to.

Saturday, April 21, 2007

A Win in the History Wars

William McInnes writing in Saturday's SMH scores (as far as I'm concerned) a small win in the history wars.

Not, of course, that I think calling it the history wars is particularly useful, because at one level only one side is trying to win. That is, those who shout at the other side "relativist" as a form of abuse are trying to win because they think there is "one true history", while the other side is simply saying history is richer than that.

McInnes concludes, after recounting a tale of a caged cockie that says "Hello" to his daughter;

History is many things. For every listener it can be a different tale, just told with the same characters. But it mustn't be bent and shaped to serve the purpose of those who decide that history must be taught.

It can be like a caged bird. Taught to mimic words as a trick. But my daughter is right. History, like that bird, will always try to talk to you. The least we can do is listen.

The piece about history being bent is relevant to both sides of the debate.

For my part I went off to re-read E.H.Carr's What is History? as I got immersed in the history wars (as one does if one is foolish enough to read Quadrant). While the book itself is criticised for its relativism, and hence would be deemed an invalid source by the Quadrant crowd, there are a few points from it that I think are compellingly relevant. These are;

What is a historical fact? There are lots of facts, there is the fact that Adolf Hitler was born on April 20 1889 and the fact that my father was born on 26 December 1921. The former is generally regarded as a historical fact, the latter is not. What makes a "fact" a "historical fact" is that it plays a role in the chosen explanation of the ultimate event - in this case usually something to do with the origins of World War II.

What is historical narrative? A narrative can just be a description of events in order, or it can be a description of events in relation to what caused what. So we have the fact of Hitler's birth and the fact that the Treaty of Versailles was signed in 1919. The historical narrative exists to weigh the relative importance of these (and other) events as causal bases for another event - WWII.

Which narratives are worth telling? There are an endless series of historical narratives that could be constructed. The ones that are worth telling are those that (like science) are useful, that might help us with the decisions we make today. This is the twin of the aphorism about the need to study history to avoid remaking the errors of the past.

These three together explain why history is a relative not an absolute concept, why there is not "One true history" as Federal Education Minister Julie Bishop would have us believe, nor is it just a collection of "facts."

Most importantly, history will always try to talk to you - the least we can do is listen.

Setting National Goals

The Business Council of Australia has published a brochure titled Policy that Counts which sets out reform standards for public policy.

While much in the brochure is laudable, I was struck by its inclusion of a table comparing Australia's ranking on a league table of GDP per capita in 1990 and 2005. This is published because, evidently, "The Business Council has set an aspirational goal for Australia to move into the top-five band of those countries with the world’s highest living standards by 2012."

I have two fundamental difficulties with establishing this as a national goal.

Equity The first difficulty is that I look around the world and I continue to see the horrors of poverty, war and pestilence in other countries. Against that reality I genuinely wonder whether increased relative prosperity for Australians is a worthwhile goal.

I don't want to make a standard "redistributional" argument, that we should be aiming to make others better by making us worse, but I certainly don't think that being in the top five rather than top ten or twenty on this measure is anywhere near as important as raising the absolute level of well being of some of our nearest neighbours. Especially so when the consequence of the latter could well be to advance our own national security. So making the South Pacific a region of prosperity is certainly more important than increasing the GDP/capita in Australia to the top five.

More than GDP Every first year economics student gets taught that GDP is just a measure of output, that it doesn't include some outputs and it certainly doesn't measure happiness in any meaningful way. Discussing this with my wife Marg she told me of a line Little Pattie had used in a recent episode of Talking Heads.

I like it when I feel we're living in a society, rather than in an economy.

Marg I think said it better - when did Australia stop being a society and become an economy.

People actually like "society" - they actually like the sense of belonging, the sense of jointly created stories that is culture and most like family, friends and kinship. And these are things that don't get measured by the GDP, and in fact are things that many feel are under assault from economic policies like a view of the labour market that employeees should treat Sunday as any other work day.

I think if you asked the average bloke in the street which would they prefer - that Australia got moved another notch up in the GDP/capita stakes or that they got to watch their kid play sport on the weekend that they would rightly go for the latter.

Tuesday, April 17, 2007

Prius and Prima Donna

On the basis that I should publish here everything I write I draw attention to another Crikey comment.

This one started as simple praise for Lyn Allison in her determination to obtain a Prius as her parliamentary car, but ended defending her against a ministerial staffer who seemed to completely miss the point.

Credibility Mr Howard

Buying into the whole Sunrise debacle, John Howard has said, "The Australian people will make a judgement about Mr Rudd's credibility in the same way they'll make a judgement about mine," he said.

It is to be sincerely hoped the Australian people will make a decision about Mr Howard's credibility. This is the PM who told us about children thrown overboard and who told us about weapons of mass destruction when neither the act occurred or the weapons existed.

And while Kevin Rudd has shown the poor judgement to deny things occurring in his office without realising how stupid the people are in his office, at least it is far less significant than ignoring 46 suggestions that we should inquire into our wheat trade, as Mr Downer did.

Bring on the "credibility election" - I know who I'll back to win.