Zero comfort

Your degree of disquiet over the week’s revelations probably depends on how comfortable you are with being bullshitted by those in authority.

That’s Mick Ellis talking about the Essendon v ASADA case.

Magnificent – we need more people with that attitude.

Posted in AFLgate | 7 Comments

Deirdre McCloskey on Equality

“Making men and women all equal. That I take to be the gist of our political theory.” This rejoinder to rightwingers who delight in rank and privilege is due to the free-spirited Liberal heroine of Trollope’s Phineas Finn, Lady Glencora. It encapsulates the cardinal error of much of the left.

Joshua Monk, one of the novel’s Radicals, sees through it. “Equality is an ugly word…and frightens,” he says. The aim of the true Liberal should not be equality but “lifting up those below him.” It is to be achieved not by redistribution but by free trade and compulsory education and women’s rights.

And it came to pass. In the UK since 1800, or Italy since 1900, or Hong Kong since 1950, real income per head has increased by a factor of anywhere from 15 to 100, depending on how one allows for the improved quality of steel girders and plate glass, medicine and economics.

In relative terms, the poorest people in the developed economies and billions in the poor countries have been the biggest beneficiaries. The rich became richer, true. But the poor have gas heating, cars, smallpox vaccinations, indoor plumbing, cheap travel, rights for women, low child mortality, adequate nutrition, taller bodies, doubled life expectancy, schooling for their kids, newspapers, a vote, a shot at university and respect.

Never had anything similar happened, not in the glory of Greece or the grandeur of Rome, not in ancient Egypt or medieval China. What I call The Great Enrichment is the main fact and finding of economic history.

Yet you will have heard that our big problem is inequality, and that we must make men and women all equal. No, we should not—at least, not if we want to lift up the poor.

Ethically speaking, the true liberal should care only about whether the poorest among us are moving closer to having enough to live with dignity and to participate in a democracy. They are. Even in already rich countries, such as the UK and the US, the real income of the poor has recently risen, not stagnated—if, that is, income is correctly measured to include better healthcare, better working conditions, more years of education, longer retirements and, above all, the rising quality of goods. Admittedly, it is rising at a slower pace than in the 1950s; but that era of rising prosperity followed the wretched setbacks of the Great Depression and the war.

It matters ethically, of course, how the rich obtained their wealth—whether from stealing or from choosing the right womb (as the billionaire investor Warren Buffett puts it); or from voluntary exchanges for the cheap cement or the cheap air travel the now-rich had the good sense to provide the once-poor. We should prosecute theft and reintroduce heavy inheritance taxes. But we should not kill the goose that laid the golden eggs.

What does not matter ethically are the routine historical ups and downs of the Gini coefficient, a measure of inequality, or the excesses of the 1 per cent of the 1 per cent, of a sort one could have seen three centuries ago in Versailles. There are not enough really rich people. If we seized the assets of the 85 wealthiest people in the world to make a fund to give annually to the poorest half, it would raise their spending power by less than 4p a day.
All the foreign aid to Africa or South and Central America, for example, is dwarfed by the amount that nations in these areas would gain if the rich world abandoned tariffs and other protections for their agriculture industries. There are ways to help the poor—let the Great Enrichment proceed, as it has in China and India—but charity or expropriation are not the ways.

The Great Enrichment came from innovation, not from accumulating capital or exploiting the working class or lording it over the colonies. Capital had little to do with it, despite the unhappy fact that we call the system “capitalism.” Capital is necessary. But so is water, labour, oxygen and pencils. The path to prosperity involves betterment, not piling brick on brick.

Taxing the rich, or capital, does not help the poor. It can throw a spanner into the mightiest engine for lifting up those below us, arising from a new equality, not of material worth but of liberty and dignity. Gini coefficients are not what matter; the Great Enrichment is.

Source. HT: Pyrmonter

Posted in Libertarians don't live by argument alone | 43 Comments

We already have a Tax Commission – it’s called the Parliament

John Hewson over at The Drum:

… let us go to the other extreme and pose the question of whether it is inconceivable that the Abbott White Paper might consider, given the overwhelming importance of the tax and transfer system and the likely fierce, negative politics against whatever will be proposed, that it would make more sense to consider the establishment of an independent, permanent, Tax Commission, an institution designed to be “beyond politics”.

So this is how it would work: We’d have a ‘government’ and a Tax Commission. The ‘government’ would spend its days working out how to spend money and then hunting and wenching and fighting foreign wars and generally hanging out with its mates. Every now and then when the ‘government’ needed more money it would have to approach the Tax Commission. The Tax Commission would then assess the need for the money, and work out how best to raise the money, and then hand it over. But only if it deemed the money would be well spent. From time to time the Tax Commission might also require the ‘government’ to spend less time fighting foreign wars and the like in return for new money.

One day the ‘government’ might decide to raise revenue without the Tax Commission’s permission. What then? Well the Tax Commission might spend some of its own money to raise an army, hunt down the ‘government’, try it for tyranny, and then execute it. At this point the Tax Commission might decide that only its own members can be the ‘government’.

You get the idea.

Hewson’s real complaint is that the Parliament doesn’t work well in constraining the executive.

Posted in Uncategorized | 59 Comments

How’s that Team Australia idea going?

For this we had to give up freedom of speech:

Example 1: The Islamic Council of Victoria has boycotted today’s meeting with Abbott, accusing him of being divisive and inflammatory.

Example 2: Sydney Muslim leaders yesterday gave Abbott more criticism than help: …

Example 3: Sydney Muslim leaders also played the victim card and released a statement hinting that their cooperation might have a price – the abandonment of Israel: …

Example 4: The Sydney attendees included Keysar Trad, whose past associations include a pro-jihadist publication and a pro-Hezbollah Mufti.

Example 5: The Grand Mufti boycotted an end-of-Ramadan dinner hosted by the Australian Federal Police to signal his opposition to the new anti-terrorism plans.

Of course, I understand that criticism of Team Australia is bad for public morale and at this time not being a Team player endangers us all and opens up the community to increased risks and blah, blah, blah.

Every embarrassment that befalls the Abbott government has been well earned – they have worked hard for it – and they should get to enjoy the full benefit of that embarrassment.

Posted in Freedom of speech | 375 Comments

If only we had laws against hate speech …

If you listen carefully, however, it sounds like Palmer is ranting against the Chinese government not Chinese people per se. Penny Wong must have thought that too, she didn’t seem to want to get involved.

Posted in Freedom of speech, Hypocrisy of progressives | 52 Comments

Renewable target is not sustainable

I have an article in the AFR today which argues that two studies of the RET have independently placed its net present value cost at $29-$37 billion.  Even if it were closed today its costs would be $6-$16 depending on the assumptions.  Addressing the latest piece of self-serving research the renewable industry and its stalking horses have commissioned I add

An analysis for the Climate Institute estimates the abolition of the RET would bring gains to coal-fired generators of $25 billion by 2030. Although coal would regain market share from not facing subsidised renewables, electricity supply is highly competitive and increased revenues to coal-fired generators would not involve any form of super-profit.

In terms of the direct impact on electricity consumers, the burden of renewable requirements this year is estimated by the energy regulator to add 12 per cent to the average household’s electricity costs. That’s about $260 per year.

The cost of renewable programs for typical households could rise as much as fourfold. The article continues,

In research IPA commissioned last week from Galaxy, people were asked whether they favoured retaining the present level of support, increasing support in line with current policy or scrapping all assistance to renewable energy. Only 14 per cent favoured increasing support along the lines of current policy. Twenty-three per cent favoured scrapping the scheme entirely.

While 62 per cent said they would be content to see the subsidy costs kept at present levels, people are rarely as profligate as they say they would be when it comes to their actual spending decisions. This is readily seen in the small take-up of consumers’ voluntary top-up sales of green energy at premium prices, which amount to only 0.7 per cent of the annual sales of electricity.

Moreover, the direct costs of renewable energy through electricity prices is only half of the costs that consumers bear – the rest come about through consequent higher costs of goods and services. And for businesses, the renewable requirements are much greater, as a share of total energy costs, than they are for consumers.

The renewable energy subsidies fail all tests. Consumers resent paying for them and they represent a dead weight on industry competitiveness and economic growth.

Restoring consumer sovereignty and allowing people and firms to make their own choices about trading off their sources of energy and price preferences is the appropriate course.

The AFR itself has a well-reasoned editorial that unfortunately stops short of the logical conclusion of immediate abolition. New MP Matt Canavan has a very good piece in The Australian calling for abolition with similar shortcomings. 

Unfortunately too many people are spooked by the ridiculous notion that if we don’t continue paying three times its worth for a product for the next 15 years nobody will ever invest here again.  Those of this view are oblivious of the outcome from retrospective wind-backs of Spain’s renewable subsidies, or indeed of the regulatory measures taken in the UK and elsewhere that have retrospectively devalued coal based generators.

Waste is waste and investors should be wary of putting money into unviable projects that are dependent on ongoing government favours.

Posted in Global warming and climate change policy | 22 Comments

Melbourne – world’s best place to live and to visit

melbourne

Conde Nast in the US has designated Melbourne as “the friendliest city in the world”. Tied with Auckland for first place, this is what they said:

Readers called Melbourne “one of the classiest cities in the world” with the locals “a friendly bunch” with a “wonderful sense of humour”.

Melbourne’s abundance of national parks and public art are given special mention by readers, and the magazine itself calls it the “capital of cool” for its cuisine, its happening night-life and its world-class arts scene.

I’m more of a world heritage type myself so it’s Paris and London that I head for. But for just cruising through life, who can argue with the results of a survey? The science is settled.

Posted in Australian Story | 82 Comments

Q&A Forum: August 18, 2014

Posted in Open Forum | 341 Comments

Monday Forum: August 18, 2014

Posted in Open Forum | 930 Comments

Who dodged a bullet?

Andrew Leigh tweets quoting Tanya Plibersek:

That seems very heartless: The 177,500 people who lost their jobs between November 2007 and June 2009 didn’t dodge any bullets. Neither did the 201,200 who lost their jobs between November 2007 and September 2013.

Posted in Economics and economy, Hypocrisy of progressives | 37 Comments