Triumph of the iconoclast who sparked the history wars

"In his desire to restore the balance between white man and black man and to make up for our scandalous neglect of the Aboriginal heritage, he has at times swung too far the other way."

That is a reviewer for the The Sydney Morning Herald criticising Geoffrey Blainey for being too sympathetic to Australia's indigenous population.  Yes, you read that correctly:  a reviewer criticising Blainey for being too sympathetic to Aboriginal Australians.  Now, it should be pointed that these words were published in 1975 and were contained in a review of Blainey's landmark work, Triumph of the Nomads.

In the early 1970s, Blainey had been the first academic historian in the country to include Aboriginal history in a general Australian history subject.  Blainey had come to the then unusual view that Australia's history before European settlement was worth studying.

Triumph of the Nomads brought this radical premise to a much wider audience.  An integral part of Blainey's argument was rejecting the assumption that Aboriginal society had been static.  Blainey also believed that previous writers had underestimated Aboriginal economic success.

Blainey suggested that "by the standards of the year 1800 ... the Aboriginals' material life could be compared favourably with many parts of Europe".

For some, he went too far in redressing the historical imbalance, but most welcomed the fact radical thinking was a leading feature of the book.

As well as many positive aspects of pre-1788 Aboriginal life, Blainey also drew attention to some of the less pleasant characteristics of their society, such as infanticide and inter-tribal wars.

These aspects of his work were seized on by certain critics; however, a lot of this seizing did not occur until after March 17, 1984.  This was the day when, at the height of his prestige and influence, Blainey's life changed.  He concluded a talk to a Rotary conference in Warrnambool, Victoria, with some comments about Asian immigration, which sparked a furore.

Blainey had been involved in controversies before, but debates about whether flax and pine were factors in the British decision to colonise Australia, or whether the Literature Board head office should be based in Sydney or Melbourne, were hardly adequate preparation for this conflagration.

One does not have to have shared Blainey's position on Asian immigration to lament the vitriol that was poured on him.  Not content with just debating the actual issue of Asian immigration, many historians went back through Blainey's opus to find examples of poor practice they could use to undermine his authority.

It presaged a new era in the national discourse, one in which someone with a view with which one disagreed was not just wrong on that issue but was a bad person.

The attacks on Blainey probably mark the beginning of the so-called history wars in Australia, wars in which ideological correctness became more important than any other factor in assessing a historian's worth.

Apart from Blainey, the other key victim of the history wars was Manning Clark who, while obviously disagreeing with many of Blainey's views, nonetheless decried the attempts to silence him.

Perhaps it is now safer to discuss such matters following the official ending of Australia's history wars by prime ministerial edict on August 27 last year.  Given Kevin Rudd's attempts to rewrite modern political and economic history in a partisan manner, one may doubt his sincerity, but there is at least something appropriate in him making his declaration at the launch of Tom Keneally's book Australians:  Origins to Eureka.

This is because, at the height of the controversies of the 1980s, Keneally wrote to Blainey:  "I regret very much the impulse of some people to attempt to discredit your history in the simple-minded and intellectually fascist belief that this would somehow undermine your social and political arguments.  I don't care whether you accept this or not, but you are for me one of the very finest Australian writers and historians.  As for the rest, our disagreements are a matter of record."

There is much to be said for ending the history wars.  While history should be debated and interpreted in a multitude of ways, these discussions should be able to be conducted without every issue being used in a contemporary political debate.  And ending the wars may also provide an opportunity to evaluate Blainey's career in a more balanced manner.

By any measure it has been a remarkably productive career.  Blainey has written almost 40 books, been a highly regarded teacher and university administrator, a chairman of important government committees and a participant in some of the big debates of recent decades.  And he invented the perpetually busy phrase "the tyranny of distance".

Blainey will turn 80 on Wednesday next week, which also marks the 60th anniversary of his public debut as a historian.  It was in 1950 that Historical Studies published an article by the undergraduate Blainey dissecting the work of a well-known authority on Federation, R.S. Parker.

Blainey found that Parker's assertions about the economic interests of particular voters were not matched by the evidence.  As one observer put it, "Here was this young undergraduate applying departmental research techniques to confound an authority ... it was quite remarkable."

However, this was not the only example of the 20-year-old Blainey's preparedness to challenge authority and conventional wisdom.  He found theory and method of history classes at the University of Melbourne so abstract that he declined to participate and negotiated with the lecturer an alternative reading program.

More significantly, Blainey rejected the example of other successful history undergraduates by exhibiting no interest in pursuing postgraduate study at Oxford.

Instead, Blainey headed off to the isolated west coast of Tasmania to write the history of the Mt Lyell Mining & Railway Company, the start of an initial 10-year career as a freelance historian, making a living from writing books.

From late 1961 onwards, Blainey did follow the more conventional path for a historian of working in a university.  However, his early departure from Melbourne University, after the controversies of the 80s, means that he has spent a slight majority of his 60-year history-writing career outside the academy.

Blainey's work has clearly derived benefits from his time spent inside and outside the academic tent.  On becoming an academic in the early 60s, he learned a lot from students, their interests and questions, and more than one book began life as part of a subject he taught to undergraduates.

Between 1966 and 1980, he produced three works, sometimes considered a trilogy, that took his reputation to a new plane.

The Tyranny of Distance, Triumph of the Nomads and A Land Half Won took Blainey from being a writer in the niche of economic, business and mining history to a contributor with a distinctive vision of the important themes in Australia's history.

All three books challenged conventional views about their subjects and, by coining the phrase "tyranny of distance", Blainey contributed -- along with Donald Horne's "lucky country" and A.A. Phillips' "the cultural cringe" -- one of the three best-known, and often misunderstood, phrases of modern Australia.

The breadth of Blainey's work has been remarkable, but not everyone approves.  Perhaps the strangest criticism of Blainey's broadness came after the publication of A Short History of the World, when one critic decried a generalist having a shot at a task that, in his view, should be left to specialist world historians.

Just as the breadth of Blainey's work is remarkable, so is the longevity of his career.  Both are the product of his insatiable curiosity to find out about the past and to explain it to others by writing about it in beguiling prose.

Blainey shows few signs of slowing down.  Highlighting the continuing interest in his views, he was quoted in the Melbourne Herald Sun on the first day of the new year on whether we were likely to call this year "two thousand and ten" or "twenty-ten".  Based on historical precedent he favoured the latter.  At present he is writing a history of Christianity.

In each of the past six decades, Blainey has produced works of great interest and importance.  Odds are that the twenty-tens will be no different.

Let's hope they can be read on their merits and not through the prism of the history wars.

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Financially green behind the ears

With the latest state polls revealing a surge in Green support, it is appropriate to subject their election promises to analysis befitting of the major parties.

Since November last year, the Tasmanian Greens have announced a multitude of spending promises totalling almost $460 million.

The latest mid-year financial report released by the State Treasury projects a cumulative fiscal deficit of $242 million over four years.

For a State Government living beyond its means, the only feasible courses of repairing the Budget while maintaining business competitiveness are to reduce spending and sell assets.

Yet the Greens' spending promises, at almost double the four-year cumulative deficit, and lack of detail on offsetting Budget savings represents an attempt to defy financial gravity that would only worsen the budgetary outlook.

Many of the policies also appear hastily cobbled together, judging by the spelling errors in media releases such as the healthy school lunches policy (no, "nutricius" is not the name of a long-forgotten Roman emperor, either).

Smarting from the disastrous 2004 federal election campaign, Greens Leader Nick McKim has tried to paint the current suite of Tasmanian Green policies as a benign mix designed to deliver hope and opportunity to the Apple Isle.

However, the syrupy, feel-good political spin of delivering a new future for Tasmania overshadows the real damage likely to be caused by the implementation of Green policies, particularly on the economic front.

Positioning the state public sector as a catalysing agent to oversee the development of clean, green and clever industries would entail a significant, most likely unaffordable, expansion of government control over the economy.

Its plan for net zero greenhouse gas emissions as soon as is feasible, with a minimum of a 40 per cent reduction on the state's 1990 emissions levels in 10 years, implies a bevy of future regulations, levies and charges that would devastate Tasmania's existing industry bases.

In so doing, it would accelerate the migration of the state's most precious resource -- young people -- to job centres on the mainland.

Similarly, the Greens intend on the one hand to reverse energy demand growth through demand management practices (read: price hikes), while on the other subsidise renewable energies that presently lack the capacity to provide sufficient base load power.

The intent to pick energy winners includes a solar panel installation scheme for 10,000 homes and businesses that have all the markings of the failed Rudd-Garrett insulation batts subsidy.

To add to the energy policy confusion, the party's policy platform stresses the need to lower electricity and other utility bills for ordinary Tasmanians.

The Tasmanian Greens have also announced a hotchpotch of regulations that will raise business costs, in turn impairing economic growth and innovation in the long run.

For example, a proposal to introduce minimum energy performance standards for buildings will significantly increase home construction costs and therefore reduce housing affordability.

Proposed changes to occupational health and safety laws, including an industrial manslaughter criminal code, would take Tasmania down the disastrous and costly New South Wales approach in this area.

Meanwhile, a policy plan to convert farmers into price-setters is likely to violate existing intergovernmental agreements to promote open and competitive markets.

Many of the policies already announced by McKim and the Greens would merely expand a State Government bureaucracy already afflicted by lax cost controls.

The Greens plan to encourage the growth of small businesses by appointing a small business commissioner functionary, create new regulatory units within the EPA, and permanently appoint seven full-time equivalent public servants to cart food about primary and secondary schools.

An escalation of the climate change bureaucracy is firmly within the Greens' sights, with plans for a new ministry overseeing all legislation.

The Greens want their new climate change department to word all relevant legislation in a way that prepares citizens for the impact of climate change.  In other words, scare ordinary Tasmanians into climate change belief by a liberal use of flowery language such as "catastrophic", "dangerous", "runaway" and the like.

The next state government may also have to placate Green demands to enshrine bureaucratic pay parity with mainland public services.  Such a policy would dramatically escalate public sector employee costs, at the expense of taxpayers working in the private sector.

Tasmanians may also have to contend with a post-modern Treasury and finance policy, as the Greens seek to move away from a reliance on crude numerical growth indicators of economic success.

While enshrining Bhutan-style gross national happiness measures might give some a warm inner glow, they would remain a poor substitute for meaningful indicators such as gross state product, investment, employment and exports where Tasmania needs to improve.

A number of Green policies verge on exotic, if not downright bizarre.  These include public sector cheesemaking training centres, support for the craft industry, protection of skylines and hillsides, and creating a progressive traffic fine system encouraging low income earners to transgress on the states roads.

McKim has attempted to portray his party as a centrist and sensible outfit.  However, an assessment of their policies suggests the potential for great economic, social and fiscal damage if implemented.

With the state election date fast approaching, it is incumbent upon Tasmanians to choose carefully at the ballot box.

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GST sure to rise under Rudd's health takeover

Do we really want some Canberra bureaucrat determining how much should be spent on our wellbeing?

While Kevin Rudd acknowledged the "long-suffering Australian taxpayer" in his healthcare policy announcement at the National Press Club in Canberra yesterday, there was much more to dislike than like in his speech.

He is proposing that the commonwealth provide dominant funding of the health system, increasing its share from 35 per cent of the cost to 60 per cent.  The devil is in that detail.

There are, of course, aspects of the policy that are good.  Published performance standards should be welcomed.  Ideally they would be at a sufficient level of detail so league tables can be established, something yet to happen in education.  The pledge of "no net increase in bureaucracy" also should be welcomed, although I cannot see this being met.

At the least federal and state governments will have to establish a hospital inspectorate and auditors to ensure the national standards are being met.  Otherwise doctors and nurses will spend more time filling out forms for Canberra than treating patients.  Just look at the administrivia drowning universities.

The financing and governance aspects of the announcement are troubling;  on that basis it is poor policy.  Separating decision-making and financing creates what economists call "agency costs".  In this policy, decision-making is far removed from financing.

Rudd tells us that his plan will eliminate waste and duplication, but greater agency costs imply greater waste and duplication, not less.  It is difficult to see how clinical decisions will drive the system when the dominant funder will be dealing with a large number of small hospital networks.  This is the typical Canberra strategy of "divide and conquer".  It is cold comfort that an "independent umpire" will determine "efficient prices" for procedures.

Do we really want some Canberra bureaucrat (note the "no net increase in bureaucrats" promise) determining how much should be spent on our health?  Do we really want to have health spending allocated on the same basis that the Commonwealth Grants Commission divvies up the GST?

This policy is to be financed by one-third of the GST revenue.  People may think that to be sensible, but hang on to your wallets.  Rudd promised further ostensible reform.  He identified that the gap between expected GST revenue and demands on the health system is expected to increase.

That's code for a future increase in the GST rate.  No doubt, through time the commonwealth will find that it needs to spend more and more on health.  "GST up" will become the new perennial budget headline.

Unlike many other countries with a GST-type consumption tax, the 10 per cent rate has been very stable.  The long-suffering Australian taxpayer has been fairly confident that the rate wouldn't escalate to very high levels.  That was the genius of the Howard government's implementation.  The commonwealth bore all the political costs of the GST while deriving none of the benefit.

Once the commonwealth starts to derive benefit from the GST, we can expect the rate to escalate fairly quickly to European Union-type levels.  In the context of revenue-neutral tax cuts elsewhere in the system, that may be a valid policy choice.  Rudd, however, has spending plans.

Rudd points to Australia's high vertical fiscal imbalance as being part of the problem in health care.  It is true that the healthcare costs are expected to grow rapidly in future and that the states have poor fiscal bases to meet those costs.  It is not clear that greater centralisation is the solution to this problem.  It is especially unclear whether Canberra is up to the challenge.  The home insulation program was a locally managed, centrally funded program and that just didn't go well.

The solution to high vertical fiscal imbalance is not stripping authority and funding from the states but ensuring that the states have a sound fiscal basis for service delivery.  That means the commonwealth needs to collect less revenue and the states more revenue.  It looks like the Henry tax review won't be making that recommendation.

Effective service delivery requires that decision-making and funding be localised as much as possible.  That means greater powers to the states and less to the commonwealth.

Rudd also spoke of directly funding regional areas and bypassing the states.  That is a recipe for a huge boondoggle.  He will also need a constitutional amendment to do so.  Hopefully the states will refuse to co-operate and force a referendum.

This will be the largest healthcare reform in Australian history.  The electorate deserves an opportunity to express an opinion of this reform separately and over and above considerations that come bundled up at elections.  This policy isn't only about health;  it is about taxation and about the nature of our federation.

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The politics of climate change is changing

When I say the climate is changing, I do not mean, as many commentors to my site do, that anthropogenic global warming is destroying the planet.  I mean that the politics of climate change is changing rapidly across the globe -- most notably in Australia and the United States.

Whereas a few months ago, Ross Garnaut and Al Gore represented the conventional wisdom, today they're dissident voices in Canberra and Washington.  Whereas once Liberals and Republicans were kicking against the trend, today conservatives have stolen the march in both Australia and the US.

And whereas once polls showed high levels of public support for saving the planet, today public support for costly policies to curb greenhouse gas emissions is collapsing on both sides of the Pacific.

What's happening?  Why has the climate changed so dramatically in both nations that legislation to implement an emissions trading scheme -- or, as the Americans call it, cap and trade -- is doomed?

Several obvious reasons exist:  the Climategate and IPCC scandals, which raise more legitimate doubts about the "settled science" of global warming; the Copenhagen fiasco, which showed how the flawed UN-Kyoto process gives more states veto power over collective action to solve global problems; the freezing cold northern winters, which reflect a decade-long trend in the flat-lining of the Earth's surface temperatures; and the EU experience, which has seen carbon emissions rise, the carbon price collapse and the ETS a victim of fraudulent traders.

But I suggest another explanation for the changing climate:  opposition conservative politicians have had the gumption to question the Labor government in Australia and Democrat White House and Congress in the US over their proposals to legislate a flawed ETS.

By making the case against the Rudd and Obama climate agendas and spelling out the costs of a big new tax when rising polluters China and India won't follow our lead to reduce their carbon footprint, several principled Liberals and Republicans have changed the political atmosphere in Canberra and Washington to such an extent they now have a decent chance of making big inroads into Labor and Democrat legislative majorities this year.

Start with Australia.  When the Garnaut Report was released more than 18 months ago, the accepted wisdom was that an ETS was a sure thing.  It was deemed blasphemy for anyone, as my old boss Brendan Nelson quickly found out, to dare question Labor's grand ambitions.  Kevin Rudd claimed that climate change was "the great moral, economic and social challenge of our time" and even indulged in conspiracy theories when he linked "climate change deniers" to "vested interests".

Meanwhile, the Liberals vacillated over the right response.  When they finally established a policy under Malcolm Turnbull to back Labor's scheme, the party faithful revolted and the Liberal base crumbled.  Throughout the process, the Coalition was badly trailing in the polls and heading towards electoral oblivion.

With Tony Abbott's rise three months ago, however, everything has changed.  The new Liberal leader has not only subjected Labor's agenda to impose potentially crushing costs on business and consumers to some much needed scrutiny, he has also spelt out in the most forceful and coherent language the flaws of the ETS.

Today, the Coalition's direct-action strategy is far more popular than Labor's big tax that dare not speak its name, and government ministers are running away from a climate debate faster than Tiger Woods fled last week's press conference.

In early December, most commentators (not to mention Turnbull himself) predicted that Liberal opposition to the ETS would destroy the party at the next election.  Today, without missing a beat, the same commentators say it is Labor that is in trouble over the ETS.

On the eve of the by-elections in Bradfield and Higgins in early December, other pundits predicted big swings against a Liberal party that had just rejected Labor's climate bills.  Never mind that the Liberals had smashing victories in both seats.

The climate has also changed dramatically in the US.

Go back to 2008.  As presidential candidate, Barack Obama pledged to slash carbon emissions to 80 per cent below 1990 levels by 2050.  His position reflected the prevailing wisdom in Washington.  Al Gore's movie had been a box office smash and his book was a best seller.  Top US corporations gave strong financial and moral support to the green cause.

Even Obama's Republican opponent John McCain championed a green agenda.

Today, however, the circumstances are very different.  A climate bill which only caps carbon emissions at four-to-five per cent of 1990 levels by 2020, and with loads of subsidies and loopholes for the so-called big polluters, is stalled in legislative limbo, and there is every reason to believe the Senate will not pass it during this mid-term election year.

Wall Street is getting cold feet:  late last year, the Chamber of Commerce withdrew its support for cap and trade, and this month leading corporations BP America, Conoco Phillips and Caterpillar defected from the US Climate Action Partnership, a pro-green business lobby group.  The American people (and news media), moreover, rate climate change well below other pressing policy priorities, such as Afghanistan, health reform and reducing debt, deficits and double digit unemployment.

Although Obama this week made a last-ditch effort to link his climate agenda to incentives for nuclear power and the coal industry, the bill is dead.  The reason is clear among conservative Republicans (and even many Democrats from states heavily dependent on coal and heavy industry):  an ETS is economic pain for no environmental gain, especially when China and India keep chugging along the smoky path to prosperity.

It is precisely the same argument many conservatives here -- Alan Jones, Andrew Bolt, Miranda Devine, Yours Truly -- have been making over the past 18 months.

American faith in the science of man-made global warming is almost in the minority -- from 71 per cent a year ago to 51 per cent today, according to Gallup.  (Intriguingly, in Australia, no recent credible polling of the science exists, but in Britain, the mood is even more pessimistic:  according to a Guardian/Ipso Mori poll this week, the proportion of adults who believe climate change is a reality dropped by 30 per cent over the last year, from 44 per cent to 31 per cent.)

The point:  like Canberra, Washington will follow the national interest as well as the electoral mood, and it won't be intimidated by the Ross Garnaut's and Al Gore's of the world.

It is clear that Labor and Democrat strategists -- and indeed many political commentators -- naively thought climate change would transform the political landscape.

People assumed that because the issue hurt John Howard in 2007, it would also hurt the Liberals in 2010 because they failed to support Labor's ETS.

But politics is never fixed;  it is always in a state of flux.  The only certainty is that the political climate always changes.  And the wind, far from blowing conservative parties off the electoral map, threatens to turn into a perfect storm for both Kevin Rudd and Barack Obama.

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Libertarians spoke out when state began to meddle

Ross Gittins seems to think libertarians have quietly watched as the Rudd government has bungled its response to the north Atlantic banking crisis and massively, irresponsibly expanded public debt ("Libertarians silent on insulation bungle", Sydney Morning Herald, March 1).  Nothing could be further from the truth.

I gave this evidence to the Senate inquiry into the stimulus package in February last year:  "In my opinion, the package does not contain enough stimulus relative to the spending that it contains, and the spending that it does contain is of poor quality.  This kind of stimulus package has a very poor track record of success, and economically we cannot really expect it to succeed."

I gave evidence again in September:  "We have actually seen a very poorly implemented policy of a substantial amount of taxpayer money that has basically, to a large extent I believe, been wasted."

In December, I told a visiting OECD delegation that, in addition to wasteful spending, three people had died in connection with the insulation program and many houses had burned down due to poor insulation practices.

Individuals do not need the nanny state to look after them, but that does not absolve government from responsibility for its actions.  To ask the question, "And whatever happened to individuals accepting responsibility for their own affairs?" is simply astonishing.  The Rudd government established a policy that was poorly thought out and poorly executed.  Individuals responded to incentives created by that program.  Kevin Rudd has accepted responsibility on behalf of his government.

The claim that libertarians have not warned that the stimulus package was wasteful is simply ignorance.

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A turnaround on climate change

"Public loses faith in climate change" was the headline of a report in Britain's The Guardian newspaper last month.

According to a Mori poll, the proportion of British adults who believe climate change is "definitely" a reality has fallen from 44 to 31 per cent over the past year.  And while only six per cent said climate change was not happening at all, the pollster suggested that because those over 64 were not polled, the survey exaggerates the share of true believers.

In the US, a recent Pew Poll had global warming rating last out of 21 concerns put to respondents.

The Obama administration has shifted cap-and-trade legislation into the impossible category.  Meanwhile, the leading Republican on the Senate environment committee, James Inhofe, is seeking a Department of Justice investigation into research misconduct or criminal actions by the scientists including Dr Michael Mann of Pennsylvania State University and Dr James Hansen of Columbia University and the NASA Goddard Institute for Space Studies.

In Australia the latest Nielson Poll still has a majority in favour of an ETS.  But the majority has fallen by 10 percentage points over the past year, with respondents offering contradictory answers to questions on the respective schemes of the government and the Coalition.

And last week the Australian Industry Group whose CEO, Heather Ridout, has long been the chief industry cheerleader for the ETS, announced it was conducting a review of all climate change policy options.  The Business Council of Australia is also reconsidering its support for the government's ETS.

It is clear that in the space of the few months, since all the media attention was focused on green groups' Copenhagen street theatre, we have seen a marked turnaround in opinion.

So what has caused this?

There is certainly no new research into the costs of taking action on emission abatement, or the costs if no action is taken.  There is no new data about climate trends.  There are no new findings about species fragility, ocean levels, the frequency and intensity of hurricanes, or the likelihood of people in rich countries contracting heat induced dengue fever.

What we have seen is a slow drip of news that has punctured the deep faith that climate change is an urgent problem and the conviction, best expressed by alarmists like Professor Garnaut, that the world would arrive at a comprehensive agreement on how to tackle it.

The leaking of emails in October last year from the premier global centre of climatic panic, the Climate Research Unit (CRU) of the University of East Anglia, provided evidence that scientists leading the charge on climate change were keen to avoid scrutiny.  Even their most faithful journalistic mouthpieces at The Guardian and The New York Times could not avoid wagging fingers at their erstwhile sources of inside information.

Much of the rest of the media went on a feeding frenzy.

This was followed by a gradual puncturing of the sanctity of the IPCC data with its supposed endorsement by 3000 of the world's leading scientists.  A series of mistakes and exaggerations have been progressively uncovered.

These started back in 2003, when Canadian researchers McIntyre & McKitrick undertook statistical analysis of Professor Michael Mann's "hockey stick".  Representing a one thousand year temperature trend, the "hockey stick" with its upward trajectory in the 20th century appeared to refute previous thinking that temperature trends were like the zigzags of an extended accordion.

McIntyre & McKitrick deflated the statistics behind the "hockey stick" which had been the poster child of the IPCC third assessment report published in the year 2000.

The IPCC quietly downgraded the "hockey stick" in its 2007 report.

But the Climategate revelations energised a new questioning of the accuracy of the science as presented by the IPCC and even the integrity of the scientists themselves.

What we have seen over the past few months is scientific evidence that refutes or undermines key elements of the 2007 IPCC report on which all the political urgency for action on climate change has rested.

We have seen the evidence of imminent Himalayan glacier retreat refuted in spite of sneering attacks on the questioners by the IPCC head, Rajenda Pachauri.  We have seen evidence that the Amazon rain forests disappearance is exaggerated, that half of the Netherlands is not, after all, facing oceanic inundation, and that hurricanes are not increasing in intensity or frequency.

And those pesky polar bear populations are actually increasing, thereby defying the evocative pictures of marooned creatures drowning in a balmy Arctic Ocean.

Warming itself has appeared to have stopped, perhaps temporarily, a fact that even the defrocked high priest of the rising temperature trend, CRU's Professor Phil Jones, has been forced to concede.

And the IPCC estimated climate trend prior to 1980, which predates accurate satellite based records, is also under a new assault because crucial data has disappeared and many claim records are contaminated by local warming.

Copenhagen itself turned out to be far from the planned meeting, where the EU and US would have forced developing countries to join them in abating emissions.  The developing countries themselves recognised this as economic suicide, and Copenhagen demonstrated a shift in the balance of world power to China, rapidly assuming industrial dominance while at the same time becoming the mortgagee of the US economy.

China's muscle was demonstrated by their refusal to allow German Chancellor Merkel to announce Germany's own targets.

Where to from here?  It seems inconceivable that global warming as a scare will abruptly go the way of Y2K.

This is because the research grants, taxpayer subsidies to renewables, public statements by political leaders and long lags before there can be certainty about the degree of warming that might take place.  At the same time there will be no international emission restraint on the scale necessary to stabilise existing global levels of CO2.

But the vested interests promoting wasteful expenditures are well established.  The impetus created by over a decade of poor policy is too strong to allow the sort of "peace dividend" like that which came with the Fall of the Berlin Wall.

Instead we are likely to see only a gradual reversal of the wasteful abatement expenditures and investment risk measures set in train by the IPCC claims of catastrophic global warming.

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Not another transport plan

Every time New South Wales changes Premiers, it also changes Transport Plans.

The latest one, recently announced by Premier Kristina Keneally, has one key positive -- it kills off the Sydney Metro.

Despite the fact that it has already cost NSW taxpayers a whopping $271 million, and that there will also need to be compensation paid to the now redundant bidders, these are actually small prices to pay for avoiding further expenditure on a metro proposal that was destined to be a multi-billion dollar white elephant.

Of course, that should not in any way excuse NSW Labor from the responsibility for having invested in such a foolhardy plan in the first place.  Stage One of the metro alone had a price tag of $4.8 billion, and yet was largely duplicating other public transport services.

NSW taxpayers will have to cop the wasted expenditure and Sydney commuters will continue to suffer from the diversion of funds to the metro, rather than to funding realistic solutions to Sydney's transport problems.

Of course, there is also collateral damage from constantly changing plans.  In the case of the now abandoned metro it is highlighted by the plight of small business operators in CBD buildings purchased by the Sydney Metro.  Their businesses have already lost most of their customer base, due to office tenants vacating the buildings, but now remain in limbo with the buildings being held in government ownership in case a future government decides to reinstate the metro project.

When it comes to the actual proposals in the Keneally plan, debating their merits is pretty much an academic exercise, as one can safely assume the plan will never be implemented.  It is hard to see too much of it being locked in by the time the State Election comes around in March next year.  That is probably also why, as the State Opposition have pointed out, it is not fully funded.

There is no doubt that an incoming Liberal-National government will have its own plan.  Even in the unlikely event that Labor was re-elected, history tells us that a new plan would not be far away.  Certainly, anyone expecting to use the now reinstated north-west heavy rail link, a project originally announced in 1998, but deferred at least four times, to be delivered by the slated completion date of 2024 must possess an unusually trusting nature.

If scrapping the metro had been the only change to her predecessor, Nathan Rees' transport agenda in Keneally's first three months in the job, she might earn positive marks.  However, three days before Christmas, she seriously blotted her copybook by ditching the previous Rees policy of moving towards privatising Sydney Ferries.  This flip-flop was correctly seen by most observers as caving in to the maritime unions.
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Ferry privatisation was recommended by Bret Walker SC, who conducted an inquiry into Sydney Ferries in 2007.  The need for it was confirmed by a report by the NSW Auditor-General late last year which highlighted a failure to meet eight out of 12 operational and financial targets in the year to June, with on-time running, passenger complaints and sick days per employee all falling below target.  And in a startling admission of failure the latest plan actually predicts an ongoing decline in ferry patronage.

In fact, NSW desperately needs to not only privatise the ferries, but the rail and STA buses services as well.  Throughout the past decade Sydney has seen much lower public transport patronage growth than other Australian cities, in particular, market leader, Melbourne.  A key reason why Melbourne has outperformed Sydney in public transport has been the fact that its trains and trams have been privately operated since 1999.

While the Melbourne system has its share of problems, operators have often been victims of their own success as the patronage boom led to problems such as over-crowding.  The Victorian government was slow to respond to the boom and the biggest problems such as the new ticketing system, myki, have been government initiatives.

While the NSW government has almost moved to a point somewhere beyond ridicule, they are not alone in the constant reissuing of transport plans and changing policies.  Attending conferences of transport professionals in recent years, one would constantly hear the refrain that the city in question needed a comprehensive integrated plan.  The actual problem has not been a lack of plans, but an inability to choose the right elements of plans and to actually deliver them.

There is a tendency to include large sexy projects to capture the imagination of the media and the public.  Metros certainly fit that bill, and have been floated in cities other than Sydney.  There is a metro in the 2008 Victorian Transport Plan, but, thus far, it is considered long-term, attracting nothing other than study at the moment.  Queensland Premier, Anna Bligh, last November raised the concept of a metro for Brisbane saying that "the time to talk about it is now".

There is not much harm in studying and talking, but even that is a distraction from the practical requirements of getting the public transport basics, such as maintenance of existing rolling stock and infrastructure, right.  Hopefully, the scrapping of the Sydney Metro will make the Victorian and Queensland Governments have second thoughts about pursuing them for their capital cities.

So next time you hear about a "visionary" transport plan it is probably best not to get too excited.  The big projects will probably never happen but, before they are scrapped, they will probably eat up lots of resources and divert attention from the real problems.

What transport plans actually need, first and foremost, is the right structural model.  Thus, a decent transport plan for NSW would propose privatisation of ferries, trains and buses.  Beyond that, it needs practical capital projects which provide more capacity where it is most needed in the transport network.  And most of all it needs the political resolve to choose the right plan and to stay the course to actually implement it.

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Drinking in Australia: from the Rum Corps to the alcopop

Under the Influence:  A History of Alcohol in Australia
by Ross Fitzgerald & Trevor Jordan
(ABC Books, 2009, 336 pages)

In the special episode of ABC TV's Q&A in February this year, Kevin Rudd was asked whether he would like to raise the drinking age to 21:  "of course".  Rudd quickly backed away from that definitive statement when the audience responded negatively.  (The Q&A audience was limited to those between the ages of 16 to 25.  Raising the drinking age would no doubt have been a more tangible disenfranchisement than if he had taken away their right to vote.)

In Under the Influence:  A History of Alcohol in Australia, Ross Fitzgerald and Trevor L. Jordan explore Australia's long and stormy relationship with our drinks.  Australian culture reserves a prominent place for alcohol and where alcohol is consumed.  And Australian history has no lack of social reformers who opposed alcohol's cultural prominence.

Fitzgerald and Jordan nominate three moments where alcohol has played a part in three critical episodes in Australian history:  the Rum Rebellion (the attempt to shut down the spirits trade being the immediate cause of the revolt against Governor Bligh), the Eureka Stockade (where a fair number of the rebels were drunk on the last night of the stockade and probably underperformed in the battle at dawn the next day), and the Dismissal (John Kerr enjoyed his drinks, and Gough Whitlam claimed in 2002 that he never would have appointed him Governor General if he'd know just how much he enjoyed them).

But Fitzgerald and Jordan back away from saying alcohol was anything but proximate to these events.  They conclude that the Rum Rebellion wasn't really about rum at all, but more about the governing style of Bligh.  And if some miners were drunk at the Eureka Stockade, it probably wouldn't have made much difference.  Gerard Henderson has argued that the claim Kerr was a drunk is contradicted by no less an authority than his own physician, and to claim, as Whitlam has, that the Dismissal wouldn't have happened without Kerr's drinking is to ignore the rather significant political events that led it.

Nevertheless, if alcohol has had little direct impact on the big historical events, it has been a major part of Australian culture.  Fitzgerald and Jordan describe the economic and cultural development of domestic wine and beer industries.  They detail how what we drink has always been a marker of social status and cultural position, and the regional variations across the country.  The regulatory framework that governs alcohol has also governed its cultural place -- from the nineteenth century victories of the temperance movement, to the mid-twentieth century closing limits and gender discrimination laws in bars, to today's Nanny State campaigns.

Fitzgerald and Jordan describe an eighteenth century attitude towards alcohol that was similar to today's.  The twin characteristic virtues in this period were "usefulness and amiability".  Usefulness was, in the early industrial revolution, of obviously value.  But that usefulness had to be tempered by amiability.  This amiability was more than just the agreeableness of good manners it was, in the words of one historian quoted by Fitzgerald and Jordan, "a genuine loving regard for other people".

The authors argue that without understanding those twin virtues, we might mistake the eighteenth century attitude to alcohol as hypocrisy -- the men who, for instance, damned John Macarthur's role in the spirit trade, also enjoyed their fair share of alcohol.  Fitzgerald and Jordan point out that there is a substantial difference between drinking to be amiable and drunkenness, and this difference was well-recognised at the time.

But that distinction has never been without its own hypocrisies.  We see it today clearly -- what constitutes good drinking and bad drinking is often just as much about the class of the drinker than the volume they drink.  The alcopops furore of 2008 increased the tax on canned rum-and-cokes, which are consumed more in Frankston than Carlton North, where wine is drunk.  Wine remains a protected and coddled industry, part of an idea of what Australians ought to drink.

By providing a sociological history of alcohol consumption in Australia, Fitzgerald and Jordan allow us to unpack the origin of the Nanny State, and the ideology that supports it.

The 2008 Election as an expensive morality play

Race of a Lifetime:  How Obama won the White House
by Mark Halperin & John Heilemann
(Penguin Books, 2010, 320 pages)

The 2008 US Presidential Election was a fairly straight-forward contest.  The Democrat nominee was always likely to win, bar some sort of major stuff-up.  Any remaining chance of a Republican upset faded with the tanking of the US economy in the months leading up to the election.

So why was this contest the "race of a lifetime"?  The phrase forms the title of the Australian edition of John Heilemann and Mark Halperin's book, and appears in the subtitle in the American editions.  Not for the closeness of the general election.  Nor indeed for its one-sidedness;  there have been several bigger winners over the past half century.  Certainly, the Democratic primary battle was unusually close, but for many older readers the drama in choosing a Democrat candidate in 1968 may still come out on top.

What makes 2008 the race of a lifetime for the authors is the nature of the two main Democrat combatants, Barack Obama and Hillary Clinton.  Well over half the book is taken up with their primary battle, with 14 chapters on this contest, compared to just three on the Republican one, the results of which, at least at the start of 2008, were as unpredictable.  In fact, if not for Sarah Palin, the Republicans would hardly have appeared in the book at all.

Race of a Lifetime has many of the strengths and weaknesses that one would expect of a book written by a pair of political journalists, New York Magazine's John Heilemann and Time Magazine's Mark Halperin.  It is fast-paced and the authors range of sources give them access to a vast range of anecdotes, most of which relate to the various stuff ups in the different campaigns, some of which were public at the time, some of which are new revelations.  They gleaned material from more than 300 interviews with more than 200 individuals between July 2008 and September 2009.

The method of quoting used by the authors has raised many questions about the meaning of the "deep background" basis on which the interviews were conducted.  The main headline grabbers the authors saved for their book have been the unfortunate comments of House Leader Harry Reid on the advantages of Obama being a "light skinned" African American, and Bill Clinton's statement, as he was trying to woo Teddy Kennedy's endorsement for Hillary, that a few years ago Obama would have been getting them coffee.

Then there is Palin.  We learn how, when meant to be prepping for her debate, she reached a stage where "she would routinely shut down -- chin on her chest, arms folded, eyes cast to the floor, speechless and motionless, lost in what those around her described as a kind of catatonic stupor".  She ended up doing OK in the debate, as she had done in her other major set-piece, the convention speech.  It was what happened for much of the rest of the campaign that was not just directly damaging, but also enormously time-consuming for the McCain campaign.

The book reveals just how long McCain and his team spent working on the option of making Democrat Joe Lieberman his running mate.  Then, when that idea was finally canned, there was hardly any time to vet an alternative.  Being behind, they decided to roll the dice with a risky choice, rather than a safe one such as Minnesota Governor, Tim Pawlenty.  Of course, even now Palin has her staunch defenders, but surely not knowing why there are two Koreas should disqualify someone from becoming Vice President of the United States.

The problems of the McCain campaign are but one of numerous examples of campaign dysfunction.  In that way, the book will no doubt prove cathartic for any political operative who has ever worked on any campaign where everything seemed to go wrong.  If you think you saw dysfunction in some local campaign in Australia, it must surely pale beside what was happening in the race for die most powerful elected post on the planet.

Reflecting the book's major sources, staffers, it is often the candidates, and particularly their spouses, who cop the toughest rap, none more than John Edwards' wife, Elizabeth:

What the world saw in Elizabeth:  A valiant, determined, heroic everywoman.  What the Edwards insiders saw:  An abusive, intrusive, paranoid, condescending crazy-woman.

There are many reasons why John Edwards would have made a lousy President -- his wife is not the main one.  In fifty years, the media have moved from completely ignoring JFK's lively personal life to taking a prurient delight in focusing on every detail of candidates' private lives.  And journalists writing history seem to feel at greater liberty to record these sorts of details, than they would as working journalists at reputable publications.

The third Mrs Giuliani and Cindy McCain are other spouses who would not enjoy reading this book.  However, when it comes to spouses, one dominates -- William Jefferson Clinton.

Throughout the coverage of Hillary's campaign, there is always a perception that if Bill just was not around things would go better for Hillary.  This was certainly the view of the majority of her campaign organisation, Hillaryland, a group James Carville tagged as "joyless misanthropes who loved neither politics nor people".

Having kept Bill largely out of things throughout 2007, Hillary's Iowa caucus disaster forces her to use him in New Hampshire.  The reasons are clear:

She needed him for his doggedness, his buoyancy, and his trademark Houdini juju.  She needed him because, even on his worst day, he was a font of ideas about how to win -- as opposed to everyone else on the campaign, whom she increasingly saw as completely and maddeningly useless.

The vindication of Bill in New Hampshire does not last and, within weeks of having been given a bigger role in the campaign, he is forced to the sidelines again after having been seen to have embarrassed the campaign.  He certainly had a point when he constantly griped about how much harder the media were on the Clintons than on Obama.

Interestingly, one of the people to whom he complained about his travails was George W. Bush;  apparently the two talked surprisingly often.  This is one of Dubya's rare appearances, one of the few others coming when he attempted to assist McCain at the height of the financial crisis, but like most observers was bewildered by how badly McCain handled the politics surrounding it.

Bush is not the only absentee from the book.  There is little discussion of policy or psephology, nor is there any cultural analysis.  Instead, at times the story reads like a Greek morality play where the candidate who is nicest to his spouse, has the most likable spouse, and is the most reasonable to his staff wins.

The framing of the dominant narrative in the book as the battle of the two uber-celebrities, Obama and Hillary, is underscored by the fact that far more space is devoted to Obama's quest to get Clinton to become Secretary of State than is given to the events of election day.

And as Obama tries to convince Clinton to do her duty, the morality play reaches its climax when in "a strange and rare moment -- one of almost incomprehensible candor and vulnerability", the two characters "suddenly metamorphosed into different creatures with each other -- human beings".  And what prompted this epiphany -- Hillary admitting the damage Bill had done to her candidacy and the trouble he could cause in the future.

Bill often pointed out to Hillaryland that he had managed to get himself elected President twice.  The second time was because he had the commonsense to dash back to the political centre after the debacle of health care reform and the 1994 mid-term elections.  It remains to be seen if the hero of Heilemann and Halperin's morality play has the political nous of their story's anti-hero.

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A spluttering, stilted, stumbling revoluton

Australia's Education Revolution:  How Kevin Rudd won and lost the education wars
by Kevin Donnelly
(Connor Court Publishing, 2009, 777 pages)

When the federal government launched its My School website on 28 Januaty 2010, which rated the performance of schools according to the performance of their students in literacy and numeracy aptitude tests, the site experienced a meltdown due to the demand for this previously secret information.

Designed to cope with l.7 million simultaneous hits, the website was quickly overwhelmed.  Moreover, it had opened at 1:00 am, which meant that people stayed up or got up especially that night because they could not wait to gather this vital information at a more convenient time.  In its first thirteen hours, the website had a massive 4.5 million hits.  This extraordinary event indicates that there is widespread concern about the quality of our teachers and schools.  So much about the quality of the lives of individuals and families depends on it.  So much about the productivity of our economy depends on it.  And, so much about the quality of our culture depends on it.

For these reasons, Kevin Donnelly's new book, Australia's Education Revolution:  How Kevin Rudd Won and Lost the Education Wars, is indispensible.

The picture of the education revolution that emerges from this analysis is of a steady-as-she-goes financial boosting of already bloated education budgets and a reinforcement in "new" national curricula of intellectually stifling politically correct agendas that already plague the current state-based curricula.  Although some policies are likely to produce some improvements, this is primarily a reinforcement of the educational status quo dressed up in political spin.  Billions of dollars of additional public spending that will bolster the beneficiaries of the educational status quo is not a revolution.

Donnelly sounds the alarm:  "Ironically, in addition to being centrally mandated, Rudd's education revolution is being developed, implemented and managed by the very education bureaucrats and groups responsible for the last 30 years of educational failure."

Moreover, Donnelly is unimpressed by the Marxist arguments produced by the education establishment about the relationship between class, privilege, and educational success.  It is an argument that conveniently sidesteps the issue of teacher quality and the power of teacher unions:

Also ignored is the evidence that educational success or failure is not simply caused by a student's socio-economic background.  Whether a student achieves or not is also dependent on his or her motivation and ability, teacher expertise and dedication, effective classroom practice and the impact of the broader school environment.

When criticising education policy, Donnelly recognises that the system, flawed as it is, does have some value, and does provide benefits.  But it could provide so much more.

The current situation is unfortunate for many reasons, both economically and morally.  It represents a colossal waste of government resources.  However, spending more money on education is politically easy to sell.  It sounds responsible, expressing sensible priorities shared by many aspirational families.  However, there is no need for more spending, but rather a need for better value for the education dollars already spent.

Poorly-educated young people who stumble through their introduction to tertiary study or the workforce soon discover the limitations of what they thought was a good high school education.  These stumbles sap confidence, and can instil hang-ups and a sense of inadequacy that can poison their adult life.  Many of the teachers whose shortfalls in skills and knowledge produced these problems are themselves the products of an inadequate education, being former victims of the system who later became part of the problem.

Donnelly recommends the introduction of education vouchers, which means that governments would provide an agreed amount of funding for each school-age student that would be allocated to the school chosen by that student's family:  "Overseas experience proves that vouchers raise standards and better meet the needs and expectations of parents and communities."

Donnelly's measured language makes vouchers sound almost innocent but they pack a punch.  Their consequences could be revolutionary, the education reform equivalent of tearing down the Berlin Wall, since they could empower families to tear down decades of institutionalised ineffectiveness and enhance the pockets of excellence that remain in the system.  But to make vouchers work, additional complementary reforms are needed.

Because vouchers would see students stream away from underperforming schools, it would pressure suddenly fearful school administrations to change to survive.  But for this to happen, more power has to be given to principals to hire and fire teaching staff and better reward the best teachers.  To deal with underperforming principals, school communities need to be given the authority to hire and fire the principals.  He also wants schools to enter partnerships with businesses or philanthropic groups or tertiary institutions to break their isolation and link them to their communities and to extra educational and other resources.  Tn addition, the decentralisation of the curricula would also be necessary.

Gradually, school communities would demand curricula that reflect their values and this will put pressure on schools to introduce more intellectual diversity.

In the place of the cultural left using schools to implement its narrow political and social agenda, Donnelly advocates a liberal education with curricula encompassing "the best of what was thought and said", an approach that could accommodate great and worthy ideas from many sources.

For those on the Left who see socialist administration, union-dominated industrial relations, and political correctness as providing the solution to most problems, recognising their fundamental role in undermining the quality of the education system is virtually impossible.

The sources of the problems go deeper than can be fixed by re-jigging a few policies, the mass distribution of computers, or the adoption of conservative rhetoric in policy statements.  The Rudd government's education revolution will probably provide improvements but not solutions.

Donnelly finds that the education bureaucrats and the powerful and intrusive teachers unions are the main cause of the problem.  Marginalise them and the quality of education will improve.

Consequently, at the heart of Donnelly's argument is the recommendation that, in education, decentralisation is the path to world's best practice.

Disaster Capitalism

The Price of Everything:  A Parable of Possibility and Prosperity
by Russell Roberts
(Princeton University Press, 2008, 224 pages)

Imagine:  a natural disaster befalls a neighbourhood teeming with people in the middle of the night, and you and your partner make it out unscathed.  Your house has lost power and with no candles, matches or petrol fuelled generators at your disposal, you both decide to brave the treacherous conditions and visit your nearest convenience store in the hope of purchasing a few essentials, including a torch and batteries.

As you venture towards your destination, your partner crosses her fingers in the hope that not only is the store still standing but it has what you need.

The closest store is left intact after the disaster, but its supplies are bare after a rush by survivors to grab a hold of anything they could think of.

You decide, in your desperation, to go to the next store and test your economic fortunes amidst the wreckage left behind by nature's fury.  What happens next is portrayed by George Mason University Professor of Economics Russell Roberts in his latest novel, The Price of Everything:  A Parable of Possibility and Prosperity.

Roberts sets the scene for Ramon Ramirez, son of a Cuban immigrant, Stanford University political science student and emerging tennis player, and his partner Amy, an undergraduate enrolled in an economics class.

Ramirez becomes enraged by his first hand experience of inflated prices at the Big Box convenience store, just after a major earthquake.  With the CEO of the merchandise giant also a major benefactor of the university, Ramirez organises a protest at his campus with a disparate bunch of anti-capitalist radicals.

It is at this point that Ramirez meets Amy's lecturer in economics, professor Ruth Leibler.  What follows in The Price of Everything is a conversation between Leibler and Ramirez about the foundations of economics, including price formation, market innovation, competition and the profit and loss mechanism.

It is fair to suggest that Ramirez possesses deeply ingrained beliefs, sentiments and biases about how markets work, perhaps shared by many who lack a formal training in economics.  For Ramirez, selling products at higher than regular prices is an "injustice" wreaked by "greedy business owners and corporate moguls" who "worship money".

Using her experience of teaching thousands of students over many years, Leibler patiently and lucidly explains that the decision of Big Box to increase prices all round after a natural disaster is part and parcel of the coordinative function of the market:

When Big Box raises the price of flashlights, someone who had candles at home decided to do without the flashlight and left it there for you on the shelf.  No one had to interview either of you.  The higher price induced both of you to act as if you had been interviewed.  The person with the candles, by refusing to buy the flashlight at the higher price was saying, I'll pass on the flashlight.  I'll leave it for someone else who needs it more ... The higher price made sure you got the flashlight.  That seems pretty just to me.

The nub of The Price of Everything is that no central planner is involved in deciding what goods and services are produced, and how these products get allocated amongst the multitude of people wanting to be fed, clothed, housed, transported and entertained.

There are no czars involved in the production, distribution and exchange of bread, pencils, iPhone, home and contents insurance, let alone any other good or service provided by private sector economic agents.  Yet, our market-based economic system has had an unparalleled record of delivering astronomical increases in living standards for more people in Australia and around the globe.

It becomes quite clear almost from the outset that Leibler is not giving Ramirez a quick fire economics lecture as a way to discourage him from leading a protest against the Big Box franchise.  To the contrary, the protest goes ahead, albeit with catastrophic results that Ramon had not intended.

Rather, Ruth Leibler's conversations on economic theory are aimed to equip a young man, with an unquestionably bright, future, with a logical framework to understand the sheer complexities of the world of acting, yet fallible, people surrounding him.

Creative Commons 2.0 | flickr.com | galaygobi

Russell Roberts' latest literary effort has received many positive reviews on the basis of the quality of the storyline alone.  However, the hidden beauty of The Price of Everything is that it underlines the value of using fiction as an alternative medium to explain the basic concepts of economics.

The use of alternative media for the dissemination of economic ideas had been sorely underutilised by the economics profession for many years.

Until a few years ago the communication channel of choice for economists were through textbooks and formal journal articles, although Milton Friedman made a household name for himself with the help of regular Newsweek columns.

However, economists are beginning to use different media to diversify their messages to students and the general public.

The number of internet blogs used by economists has become its own growth industry.  Russell Roberts has gained a reputation as a world class economics educator through his use of blogs, podcasts and fiction writing.

Some economists, such as Nobel Prize winner Vernon Smith, even conduct "laboratory" sessions with students to illuminate some of the fundamentals of economic behaviour.

In many ways, associated intellectual travellers who regularly delve in economic concepts and applied public policy debate, such as free market think tanks, have led the way in the communication of economic concepts to the public.  My weekly email newsletter already has an extensive readership of 20,000 people, and its video podcasts are reaching out to people in ways considered unachievable a few short years ago.  The diversification of economic education reflects, in part, a growing acceptance of the notion that different individuals are receptive to different ways of receiving knowledge.

My mind is receptive to receiving messages about economic thought published in the journals Constitutional Political Economy or Review of Austrian Economics, but you might prefer to get your messages from the latest post on the blog Catallaxy (www.catallaxy.com).

Similarly, economists are coming to appreciate that communicating with the general public requires them to go one step beyond the dry academic language to which they are accustomed.

According to Nobel Prize winning economist and father of public choice theory, James M. Buchanan, "scientific evidence, on its own, cannot be made convincing;  it must be supplemented by persuasive argument that comes from the genuine conviction that only those who do understand the soul of classical liberalism can possess."

Finally, there is a growing school of thought emphasising that market economies are complex, dynamic institutional structures that unfold over time much like a text would.

As the Austrian economist Peter Boettke explains, "when we try to communicate economic ideas and economic history, we tell a story and this is as it should be because the economy really is an unfolding story and learning economics is ultimately how to read that unfolding story."

To be sure, the way in which economic education is changing is unlikely to displace the stock standard academic tools of economic teaching through the highly formulaic written text.  For example, Friedman and Savage's classic 1952 Journal of Political Economy article will possibly remain on microeconomics course reading lists for some time to come.

Nonetheless, the idea that the communication of economic concepts to undergraduates and the public requires at least a more narrative form of argument than just the formal academic standards is well and truly taking hold within the economics profession.

While there is plenty of scope for others to follow Russell Roberts and write fiction as a way to explain economics, it is well known that novels have already played a powerful role in propagating economic thought.

Showing how entrepreneurs often undergo years of self-sacrifice and toil to produce a dizzying array of goods and innovations making life easier and more enjoyable for the masses, The Price of Everything is a must read for anybody interested in how market capitalism works.

A foodies guide to the history of humanity

An Edible History of Humanity
by Tom Standage
(Walker & Company, 2008, 288 pages)

Tom Standage's book, An Edible History of Humanity, opens with a quote from the philosopher Karl Popper:  "There is no history of mankind, there are only many histories of all kinds of aspects of human life."  That is the outlook that has spawned a growth industry in quirky history books that take one, often trivial, element of our existence and look at how it has shaped, and been shaped by, society.

Standage himself has one or two examples of the genre under his belt, including The Victorian Internet, a history of the telegraph, and A History of the World in Six Glasses, which looked at the way six different beverages -- beer, wine, liquor, coffee, tea and Coca-Cola -- have influenced the world.  While these quirky histories are often entertaining and enlightening, they only capture one small element of the dynamics that drive society forward.

But An Edible History of Humanity is a little different, because this is not a book about just any old aspect of life.  Food is the very thing that allows us to exist.  Obtaining enough food is the most basic impulse that anyone has, and the changing ways in which we obtain food are central to shaping history.  Indeed, as another recent quirky history book, Catching Fire, argues, the mere act of cooking food may have been crucial to the very coming into being of Homo sapiens.

Standage argues, very plausibly, that food has been a major driver of historical change.  His first example is the shift from hunter-gathering to agriculture.  On the surface, this seems like a no-brainer:  why constantly go out in search of food when you can create your own?  But things are not so simple.  Far from making life easier, agriculture requires more work for a poorer reward.  While farmers toil day in, day out to scratch a living from the soil, even present-day hunter-gatherers may only spend a couple of days per week finding food, and when they do so, it is often of a far greater variety and quality than that produced by primitive farmers.

Human health declined after the development of agriculture.  For example, life expectancies in the Illinois River Valley would appear to have fallen from 26 years for hunter-gatherers to just 19 years for farmers.  Farmers suffered deficiency diseases like rickets, scurvy and anemia due to their limited diets.  Skeletal evidence from Greece and Turkey suggests that hunter-gatherers at the end of the last Ice Age, about 14,000 years ago, were taller than farmers in the same area 5,000 years ago.  Indeed, modern Greeks and Turks are still on average shorter than their post-Ice Age ancestors.

That doesn't mean, as the American author Jared Diamond has bizarrely argued, that the adoption of farming was "the worst mistake in the history of the human race", though Standage does note that farmers exchanged "a varied, leisurely existence ... for lives of drudgery and toil.  Agriculture would surely not be allowed if it were invented today."  Yet putting an end to nomadism and settling in particular places was "the basis of civilisation as we know it".  Hunter-gatherers may have no problem with food, but their societies were stuck in a rut, always moving but going nowhere.  Selective breeding (at first unconsciously) of particular crops and the development of agricultural techniques meant that, eventually, more food could be produced than was immediately needed for the survival of the group.  How this surplus has been increased and dealt with down the centuries is the essence of history.

For example, the first agricultural societies would have featured a "big man", the most influential figure in a village or tribe, who became the "clearinghouse for surplus food".  But while the role of the "big man" is useful, it was not until later that we saw the emergence first of chiefs (and chiefdoms) and then of monumental architecture as a statement of power enabled by an agricultural surplus, such as the pyramids of Egypt and the Aztec temples of Mexico.  "These great edifices stand as monuments to the rise of the first civilisations", writes Standage, "but also to the emergence of a new and unprecedented degree of inequality and social stratification that has persisted ever since".

If this sounds like a rotten deal, it merely reflects that life is tough and always has been.  Standage reminds us:  "The notion that hunter-gatherers lived in a perfect and peaceful world is beguiling but wrong."  If life expectancy is any measure of progress, then the current figure for the USA -- 78 years -- is clearly far greater than that for either hunter-gatherers or farmers in ancient Illinois.  It may have taken a few thousand years, bur farming paid off in the end -- mainly when the majority of us stopped doing it.

Yet the idea that there is something spiritually essential about the land, that we should have a "connection" with it, persists in a romantic, even decadent sense.  The symptoms are there, scattered through history from the Romans onwards.  For example, Standage notes, Marie-Antoinette had an idealised farm built for her at Versailles where she and her ladies-in-waiting would dress up as shepherdesses and milkmaids.  Californians prize peasant Italian food more than any other kind.  In India, a tourist village has been opened near the technology hotbed of Bangalore so that the new middle classes can sample an idealised version of their forebears' subsistence living.  As modern agriculture progressively frees us from the farm, so reactionary, anti-modern ideas come bubbling to the surface to draw us back again, to view the experience through rose-tinted lenses.

One of the most enlightening sections of the book is Standage's discussion of the spice trade.  From the Romans onwards, Europeans have been prepared to pay an enormous premium for these "special" goods.  They were not necessarily the spices we know today -- like cinnamon, ginger and cardamom -- but any luxury goods from the East, including lions, leopards, silk, ivory, even Indian eunuchs.  However, spices as we understand them today became extremely important because they were not only highly valuable but their value was also highly concentrated, making them easy to transport over long distances.

Though these products came from India, Indonesia and China, the spice trade had always been controlled by Arabs, who spun ludicrous tales about the origins of their wares to throw gullible Europeans off the scent as to the true source.  To some extent, this Arab monopoly was circumvented by a land route to the East, controlled by Mongols.  Once the Muslim powers cut off this route, marked by the fall of Constantinople in 1453, Europeans had either to accept the Muslim monopoly or find a new route to the East.  The result was an explosion of exploration.

Columbus believed that the world was far smaller than it really was (it was widely understood by this time that the world was round), and that India could be reached more quickly by sailing west, not east.  And for a long time, he convinced himself and the Spanish court that what he had struck were the "spice lands", not a new and completely unknown continent.  Disappointingly, he never managed to find the rich source of spices hoped for, but he did bring back the chilli pepper -- and planted the seed for the Spanish empire that devastated the native Americans with disease and repression and provided what would become one point of the slave-trade triangle.

Meanwhile, Portuguese explorers were finding a route east by rounding Africa.  It wasn't long before all the major seafaring powers were following them, making Asia the setting for a centuries-long power grab which displaced the Arab merchants with the might of European warships.

Standage describes the less-than-subtle approach of the Dutch in Indonesia's Banda Islands in the early seventeenth century.  Having attempted to negotiate with the locals, only to have their admiral and his party wiped out, "The Dutch retaliated by seizing the Bandas for themselves, building two forts and claiming another spice monopoly.  Villages were burned down and the inhabitants were killed, chased off, or sold into slavery."  After the village chiefs were tortured and beheaded by the Dutch East India Company's samurai mercenaries, the islands were turned into slave colonies where workers would be "executed in a variety of gruesome ways for the most minor transgressions".  Such behaviour seems to have been pretty typical of the conquering powers, with plenty of echoes in the imperialist epoch of the late nineteenth and twentieth centuries.

While we might think little of the little jars of spice in the supermarket today, it was the rarity and value of those products that inspired the launch of the first wave of colonialism.  In turn, it was the products that those explorers brought back -- gold, of course, but just as importantly the potato -- that fuelled and sustained the Industrial Revolution.  Trivial though it may seem now, the potato was (eventually) a major boon.  In The Wealth of Nations, Adam Smith observed that an acre of potatoes would produce three times the nourishment of an acre of wheat, while the English writer and researcher Sir Frederick Eden noted that potatoes had become a mainstay of the Lancashire diet by 1800:  "Potatoes are perhaps as strong an instance of the extension of human enjoyment as can be mentioned."

The potato, having offset starvation as a valuable alternative crop to wheat, was also blamed by Malthus for the looming population trap, whereby exponentially rising numbers of people could not be fed by slowly rising agricultural productivity.  As Standage points out, what Malthus failed to predict was the convergence of three great trends:  factories staffed by the workers freed from the land;  the growing use of fossil fuels;  and the ability to import food, enabled by Britain's new-found manufacturing wealth.

What Malthus did correctly warn against, however, was an over-reliance on the potato.  Britain used Ireland to produce enormous quantities of wheat, while the locals lived off potatoes.  When potato blight struck their staple crop, they had nothing to live off, a situation compounded by British unwillingness to provide wheat to the starving.  Millions of people died or emigrated.  It's still a shock to read that there were once nine million people in Ireland, a population never since matched in the Emerald Isle.  (The current total, north and south, is still only two thirds of that number.)

It's not just the long-standing industrialised countries that have seen a boom built on reliable food supplies.  Standage argues that for both China and India, modernisation was only enabled by first solving the problem of producing enough food.

The resurgence of Asia has many causes, but it would not have been possible without the dramatic increase in agricultural productivity triggered by the green revolution.  Between 1970 and 1995, cereal production in Asia doubled, the number of available calories per person increased by 30 per cent, and the prices of wheat and rice fell ... the proportion of Asia's population living in poverty fell from 50 per cent in 1975 to 25 per cent in 1995.

The combination of artificial fertilisers and pesticides, the development of more productive varieties of staple crops in the "green revolution" and the liberation of farmers from overweening state control has cranked up production and freed millions of young people to work in the cities.  Other developing nations will need to undergo a similar transition if they want to modernise in the same way.

History shows -- from the defeat of Napoleon in Russia to the collapse of the Soviet bloc in the late eighties -- that the availability of food plays a central role in defining the course of events.  Like Standage's previous books, An Edible History of Humanity is a highly readable combination of big themes and engaging stories that reminds us that if the problem of food has been solved in the past, it will still need to be solved again and again in the future.

Joachim Beuckelaer (1533-1574) The Well Stocked Kitchen

Entrepeneur and the economy

Heroic Misadventures Australia:  Four Decades -- Full Circle
by Ron Manners
(Quality Press, 2009, 392 pages)

Heroic Misadventures:  Four Decades -- Full Circle is a compelling autobiographical account of the life of a unique Australian, who rose up from the newspaper rounds as a child in Kalgoorlie, Western Australia, to make his mark in the lucrative gold mining industry.

But why do we so often ignore the entrepreneur?  Policymakers tend to overlook the motivations and actions of the people whose production and exchange activities actually make a difference to economic failure or success of the nation.

In their view, changes affecting the economic "organism" -- such as fluctuations in gross domestic product -- are more often than not seen as a problem that can only be rectified by a pull of a fiscal policy lever here or a flick of a monetary policy switch there.

This view overlooks the motivations and actions of living and breathing individuals whose production and exchange activities actually make the difference to economic failure or success.

Amongst the population of 22 million Australian economic agents live a unique set of enterprising people who, with a sense of bravado and a dash of entrepreneurial alertness, play a pivotal role in maintaining and growing competitive markets without the need for government "help" or hindrance -- often one and the same thing!

One of the leading figures who has shaped our economic fortunes is mining entrepreneur, philanthropist and advocate of economic liberalism Ron Manners, the author of Heroic Misadventures.  Australia.

As Ron Manners clearly illustrates in his book, he has tirelessly worked to use the opportunities accorded to him in order to benefit others.  From his role in establishing the Australian Mining Hall of Fame to sponsoring the economic education of young people through the Mannkal Economic Education Foundation, Heroic Misadventures amply dispels the erroneous caricature of the selfish capitalist.

By the same token it is clear from the very title of the book that wealth creation is necessarily an explorative process, with the very real prospect of ventures turning out to be unprofitable as they do not meet the exacting demands of the consuming public.

Manners chronicles the initial promise through to the ultimately dashed expectations of failed ventures in Indonesia's hotel industry, a South Pacific rock cruise ocean liner and his self described brief banking career with the Nugan Hand Bank that collapsed in 1980 amidst accusations of organised crime and international political intrigue.

That Manners was able to progress from, and in some senses thrive on, these "misadventures" shows that the market economy is ultimately redemptive by its nature.  Market failure provides an opportunity for individuals to learn from their errors, building an aptitude and capacity for economic self improvement.

This is a point not understood by critics of market capitalism who reflexively call for government taxing, spending and regulating to snuff out every instance (real or perceived) of economic discoordination.

Increasingly, economic discoordination is not merely attributable to the trial and error process that naturally comes with producers and consumers interacting over the production, distribution and exchange of economic resources.  Government bureaucrats and political representatives regrettably retain a habit of encroaching in on market activities, to the detriment of the long-term productive potential of Australia.

Heroic Misadventures outlines the often meddling tactics employed by public sector agents to expropriate the honestly attained wealth of market participants.  Indeed, the over-taxing appetites of public authorities forced Manners to leave Australia for a period of time.

Therefore it is with some authority that Manners warns in the closing passages of his book that "it seems that Australia could again miss out on many opportunities, due to the prevailing anti-business, anti-entrepreneurship political attitudes which are driving Australia's key people and investments to other more welcoming environments around the world."

One of the most important and useful parts of the book is Manners' history of the development of the Workers Party -- an explicitly libertarian political party formed in the early 1970s.  The Workers Party was one manifestation of the radicalisation of the free market right in Australia -- the party's role as a precursor to the ideas embodied in the New Right and a counterpoint to radical free marketeers within the Liberal Party has not received the attention it deserves.

Manners was introduced to the small libertarian fringe by a doctor, John Whiting, who described himself as the President of the Movement for Limited Government.  Whiting quickly introduced Manners into a group of people across the country who were working towards forming a political party.  The first name they chose for the new entity was the Independents Party, but the group settled on the Workers Party, a name which was to be controversial.  A subsequent election poster described the party with this tagline:

There is no longer a political void in Australia -- the workers party is the political alternative for the individual who does not consider himself represented by the socialist dominated political parties in Australia.

So why Workers Party?  The name described individuals who "work with their head, their hands, or the money they have come by previously."

The idea was to have as wide appeal as possible.  But as Manners' writes, "having to constantly explain the reason for choosing the name 'Workers Party' became fatiguing, leading to much internal debate about a name change."

They advocated privatisation and the floating of the dollar -- policies which were adopted by the major parties.  The platform was radical, but not absolutist.  Land titles and the legal system were described as "legitimate government activities".

Nevertheless, the Workers Party received the endorsement of the none other than Murray Rothbard.

While the Party did not win seats, it was judged by leading economic liberal John Hyde to have "succeeded in seeding ideas which, in time, bore fruit." One Western Australian Liberal member in 1977 defected to the Progress Party (the successor organisation to the Workers Party).

The Progress Party too eventually disbanded.  Manners argues that the election of the Malcolm Fraser's Liberal Government was a big factor in this.  Fraser was famously a fan of Ayn Rand, and Manners' writes that:

His election speeches were indeed refreshing and gave many of us the feeling we could "pull up our political tent and go back to work".

This initial enthusiasm for Fraser was not to last, and the New Right in the 1980s took up the mantle of the intellectual movement for free markets.

Ron Manners has produced a work that serves not only as a time capsule heralding the emergence of Australia's libertarian movement, but can serve as inspiration for future generations to show initiative and seek their own path in an increasingly competitive economy.

Written in a personable, direct style with many humorous anecdotes, Ron Manners' Heroic Misadventures is a compelling read on the importance of economic freedom and the individual.

In 1984, Manners and other libertarians distributed 57 cent notes,
in the style and shape of the $1 note of the time, to protest the
government's "destruction" of the value of the Australian dollar.

The minister as room-meat

Perhaps it takes comedy to expose the absurdities of modern government.

If you believe the recently released British comedy, In the Loop, modern government has nothing to do with governing.

In the Loop is a feature length spinoff of the cult BBC TV series The Thick of It.  The TV series follows the daily life of British MP and Minister for Social Affairs, Hugh Abbott, who spends most of his time ducking and weaving visits from the Prime Minister's Director of Communications, Malcolm Tucker.

But In the Loop is more than just an entertaining film.  In the Loop and The Thick of It are the rightful heirs to Yes Minister and Yes Prime Minister, delving into the nature of modern government and the absurdity of political decision making.

In the Loop follows the same basic theme of The Thick of It by providing a fly-on-the-wall account of the life of a British government minister and their staff but with different characters from the television series.  The only cross over characters are Tucker and his equally brutish and harsh offsider, Jamie, both whose sole objective is to intimidate as many people to their will through the use of cutting verbal abuse, and, in the case of Jamie, unrestrained physical violence against property.

In the Loop is set inside the inner workings of the British bureaucracy and the United States Department of State and their bilateral relationship in the lead up to a US-UK led invasion of an unnamed Middle Eastern country.

British Cabinet Minister, Simon Foster, is sent to Washington to sit in on a series of high level meetings with US Department of State Assistant Secretaries after a series of gaffe-prone interviews with the press makes it politically safer from him to be offshore.

But instead of playing the high level diplomatic role he seeks Foster finds himself used as a "meat" by American bureaucrats and an Army General to both support and oppose their cause for invasion.

While anti-war activists might shallowly interpret the script as a critique of the bumbling bilateral relationship that led to the War in Iraq, the genius of the film is a commentary on contemporary government.

As the size of government has increased, power has shifted from ministers and their departments to the new class of ministerial advisers who make many day-to-day decisions.

In the Loop parodies this shift, treating Ministers as nothing more than cannon fodder for the media.  Ministers limp along constantly in fear of being sacked for a bad decision that was made while they were unveiling a plaque on a school building in their constituency.

Malcolm Tucker, whose job it is to intimidate and control ministers at the behest of the prime minister, is a brilliant character whose lines seem to be built entirely around the rhythm of words beginning in "f" or "c".

But the success of the film comes from turning its camera on the American bureaucracy.  In the Loop brilliantly depicts the politically savvy, ambitious, character-driven American bureaucracy;  and differentiates it from its Westminster counterpart because of the political appointment of many of its senior Departmental officials.  We see their staff grovel looking for an advantage to climb up the next rung of the ladder.

Considering the seemingly unending creative capacity of American television stations it is surprising that it has taken a British film to dissect the absurdity of the behind-the-scenes operations of the American government.  A failed effort was already made to adapt The Thick of It for an American audience and hopefully this second effort succeeds.

And some of the most entertaining moments of the film come from when the two systems of government collide and the American senior bureaucrats and their underlings try to manipulate a British Minister and its government's unelected advisers, and vice versa.

But comedic brilliance is achieved when American Lieutenant General Miller and Assistant Secretary Linton Barwick independently seek to undermine and ridicule the authority of Tucker.

While the film only seeks to adapt a tried and tested formula used for television, In the Loop, is an intelligent parody and is hopefully only the first of many films that seek to entertainingly expose the folly of modern government.

Malcolm Tucker (played by Peter Capaldi) yells at Toby Wright
(played by Chris Addison) in the 2009 comedy, In The Loop