Saturday, September 07, 2002

Zipf's Law

Some blogwatchers may have noticed that I have been having something of a running skirmish with Rob Schaap over Australian housing prices. Rob thinks they have become hugely more expensive since the early 1970s, and that this is symptomatic of the tendency of neo-liberal capitalism to deliver grossly unequal economic outcomes.

I, on the other hand, while sharing some of Rob's concerns about aspects of neo-liberalism, dispute that housing prices have in fact risen in the way Rob asserts. I suggested that in reality it is only in Sydney (and to a lesser extent Melbourne) where housing prices have risen astronomically relative to average earnings, and that this is due to the effects of relatively benign aspects of market forces. I provided evidence for my hypothesis by quoting Darwin housing prices and average incomes, which showed that at least here (where I live) housing is not more expensive relative to incomes than it was three decades ago (when housing prices averaged about 4 times average annual income).

I didn't, however, go through the exercise of quoting the figures for all capital cities, nor did I cite my sources, so I guess Rob was entitled to disbelieve me. And disbelieve me he did, as a comment he posted on The Parish Pump yesterday shows:

"Nice to see you now don't necessarily disagree with what I took you to deem 'silly' and typical lefty miserabilism a few days ago, Ken.

Er, which statistics did I misuse, btw? It does take twice the working hours than it did in 1973 to buy a house; many who rely solely on income to pay for things are not better off than they were thirty years ago, and residential debt is (at least partially as a consequence) at unprecedented, quite possibly irredeemable and therefore potentially economically (and socially) disastrous levels. Debt may not start economic crises, but it certainly has a conceivable role to play in turning crises into disasters.

Obviously, I thought, I won't convince Rob without something more than mere assertion (even though that is all he is going on). Fortunately, it wasn't difficult to locate research which essentially confirms exactly what I claimed. Here is the abstract of a Reserve Bank paper by Luci Ellis and Dan Andrews, titled "City Sizes, Housing Costs, and Wealth":

"Australia’s household sector appears to hold a greater proportion of its wealth in dwellings than do households in other countries. Average dwelling prices in Australia also appear to be high relative to household income, but dwellings in Australia are not noticeably higher in quality than those in comparable countries. This concentration of wealth in housing also does not seem attributable to government policies that encourage dwelling investment in Australia to a greater extent than is true overseas. A possible reconciliation of this pattern may be the unusual concentration of Australia’s population in two large cities. Average housing prices tend to be higher in larger cities than smaller ones. Therefore, the expensive cities in Australia drag up the average level of dwelling prices more than in other countries, resulting in a higher share of wealth concentrated in housing. The increasing importance of dwelling wealth in Australia over recent years largely reflects the consequences of disinflation and financial deregulation. This is most likely a transitional effect, and the ratio of dwelling wealth to income should stabilise, or begin to grow more slowly, in the future."

If you read the paper itself (see link above), you will find that my hypothesis on the distorting effect of Sydney and Melbourne housing prices is precisely correct. See Table 5 on page 12. Housing prices have essentially not risen at all relative to incomes (i.e. they still cost around 4 times average annual income) anywhere else except Sydney, and to a much lesser extent Melbourne. In Sydney, housing prices were 8 times average annual income in 1998, and have risen further since then.

However, even in Sydney, the authors have a much more benign explanation for the increase than Rob Schaap. The explanation arises from Zipf's Law. What is Zipf's Law? I'm not going to tell you. You'll have to read the article to find out (it's actually quite interesting).
Belated welcomes

Being a fairly new blogger myself, I hadn't realised that ANU economist Alex Robson fell into the same category. I have already crossed swords with Alex over the proposed negligence law reforms, and I look forward to future discussions on this and other topics ( although I am a bit less negative about the revised reforms now proposed by the Ipp Committee). In any event, Alex, I wish you a belated welcome to Ozblogistan.

Also an equally late welcome to another relatively new blogger Bargarz. I generally try to ignore colourful blogging nicknames and call people by their real monickers. But Bargarz has cunningly failed to supply his, and I can't ignore him because his stuff is too good. As Gareth Parker somewhat cryptically reminded us, Bargarz was a fat, repulsive comic detective on the late, lamented D-Generation (which spawned The Panel, and movies like The Castle and The Dish). Bargarz actually bore more than a passing resemblance to the Pommie detective Dalziell in the excellent British series Dalziell and Pascoe. So much for the Trivial Pursuit game.

I have also added a link (in the Lawblogs section) to Professor David M. Wagner's blog "Ninomania". Professor Wagner teaches at Regent University School of Law. From memory, Regent is an extremely right wing and somewhat christian fundamentalist institution, so I imagine I will find lots to disagree with. That is confirmed by Wagner's paean of praise to US Supreme Court Justice Antonin Scalia, who would not rank high my list of admired judicial figures. Nevertheless, Professor Wagner is the only other blogging public law teacher I have so managed to find, so we should stick together at least to some extent.

I certainly agree with David Wagner's view that the Senate Democrats' refusal to confirm President Dubbya's nomination of Texas Supreme Court Justice Priscilla R. Owen to serve on the U.S. Court of Appeals for the 5th Circuit is inappropriate. The US Constitution requires Senate ratification of all federal judicial appointments and, at least until the early 1990s, there was a convention that qualified nominees would be endorsed on a reasonably apolitical basis. However, as the Washington Post points out (but David Wagner ignores), the Republicans were just as bad as the current Democrat majority when they controlled the Senate during the Clinton Presidency. Australia's Constitution, of course, vests judicial appointments solely in the Executive government, so there is not even a pretence of liberal democratic checks and balances.

Friday, September 06, 2002

Commenting saga

I am sticking with the newly installed Enetation commenting function at the moment, having just tried unsuccessfully to implement both Enetation and Haloscan together. At this stage I have decided to keep Enetation in place for a few days at least. It seems to be available more than 50% of the time, and comments are reliably posted. By contrast, at the moment Haloscan fails to upload completed comments more often than not. At least with Enentation you know that your comment will be posted if the comment link is visible.
Crime and punishment revisited

Adele Horin has a rather more thoughtful than usual coverage (for a journalist) of issues surrounding crime and punishment (i.e. not just sentencing) in today's SMH. Worth a browse..
Privatisation comments

Tim Dunlop has a short piece about privatisation of water. power etc utilites. I have been trying to append my own comments to it, but his Haloscan commenting facility keeps dumping them into that dreaded cyberspace black hole. So I am forced to post them here instead:

Most discussions about privatisation (including this one) ignore or understate the critical distinction between areas of natural monopoly and those where competitive markets exist or can feasibly be created.

Thus, in areas like power, water, gas and telecommunications, the "pipes" that deliver the "stuff" need to be controlled publicly, so that equitable access for both suppliers and consumers can be ensured. A competitive market between suppliers (which needs to be carefully regulated to ensure real and effective ongoing competition) will then ensure "sensible pricing".

The botched privatisations in both the US and Australia were botched precisely BECAUSE they ignored these basic design principles. Thus Telstra has been able to rig the telecommunications market to ensure that no effective competitition emerges, because of its control of the "pipes". I actually think that competition policy can deliver generally beneficial outcomes provided that these design principles are kept in mind.
Rob's sharp figures

Rob Schaap has posted an interesting extract in the comments section to one of my pieces. It carries on the theme of whether living standards are falling (or at least becoming grossly unequal) under neo-liberal economic prescriptions. Because the commenting function seems to be so dodgy, I thought it was worthwhile reproducing Rob's extract in a more durable form. Note that the extract deals only with the US, whereas I was dealing only with Australia:

"The wealthiest 1% of households now control nearly 40% of total wealth. By contrast, the bottom 40% of households control a pitiful two-tenths of a percent of total wealth. If housing (a necessity rather than a liquid asset) is subtracted from the calculations, **the bottom 40% of families have more debt than assets**. Moreover, from 1983-1995, the poorest 40% of households lost 80% of their wealth, while the wealthiest 1% of households gained 17%". (Edward Wolff of New York University in New York Times 4 January 1999)"

I don't deny that the US system generates gross inequality (see "A veritable herd of goats"). Thurow makes the same point in The Future of Capitalism. He adds figures showing that the bottom portion of the American population had falling living standards and incomes in real terms (not just as a share of the whole). Note, however, that the picture is slightly different over the period 1995-2000 (the biggest boom in American history although, as we now know, it was built on foundations of sand). During that period inequality continued to increase, but the incomes of the bottom portion of the population rose ever so slightly, and unemployment dropped quite spectacularly. It seems, therefore, that American feral neo-liberal capitalism delivers a very slight "trickle down effect" during extreme boom periods. But that isn't saying very much really.

However, the Australian picture is rather different. During the period of the Hawke and Keating Labor governments, when most of the current globalising policies were introduced, individual incomes of the lower and lower middle classes dropped slightly (while national wealth increased spectacularly, in contrast to our poor performance during the preceding period), but family incomes remained steady and even rose slightly. Over the last 7 years, real incomes have risen and, it seems (judging by revised ABS figures) that inequality has not increased. The maintenance of family incomes during a period of rapid deregulation and globalisation in the 80s and early 90s was a direct result of the Labor/ACTU Accord social wage policies. Clearly they were successful in mitigating the excessive inequality engendered by raw American feral neo-liberal prescriptions. The last 7 years are essentially explained by the same phenomenon as the US: neo-liberal policy prescriptions are capable of delivering a modest "trickle down" of wealth during extreme boom periods, but the rest of the time the picture is bleak, except for those at the top of the heap.

Given that the history of capitalism tells us that booms don't continue indefinitely (and the boom of the late 90s has now manifestly ended), I think we can certainly conclude that the American neo-liberal prescription is much less desirable in every way than the (slightly) more benign social policy mix Australia continues to pursue. I also think that Finland, Sweden and Denmark demonstrate that there is a far more equitable and socially just model that is equally consistent with delivering high levels of growth and prosperity. You see, I don't necessarily disagree with Rob as such, I just think one needs to be careful not to overstate the case, or to misuse statistics to make a point that can be demonstrated without doing so.
Tim on East Timor

Tim Dunlop has an interesting piece ruminating on Chomsky, Znet discussion forums, and Australia's role in East Timor. An unlikely mix, you might think, but Tim makes it work. In the course of his rumination (I can't call it a rant because it is too balanced and reflective), Tim ever so gently endorses at least part of the point I was making in my rant Nattering Nabobs of Negativism, about the relentless negativity of some on the left. I'm beginning to see that Tim is a rather more moderate, sensible, warm and fuzzy kind of leftie than many of us may have realised. That includes me. I have tended to typecast Tim a little as a result of some slightly excessive pieces he wrote for a discussion group to which we both belonged until recently. I suspect, though, that this impression was partly created by the fact that he was effectively forced into continually defending his moderate leftist position by a relentlessly neo-liberal barrage of criticism from a couple of dominant group members. The dynamics of Ozblogistan are clearly more conducive to presenting nuanced, considered arguments, without sacrificing the interactive element (at least when the bloody commenting function is working).

Tim's piece also links an excellent article by Kevin Carson, which contains a moderate, balanced critique of Noam Chomsky (by contrast with the loonie denunciations we often see from the lunar right), as well as a devastating dissection of the triumphalism of American "neoconservatives". These latter creatures appear to have much in common with quite a few of Ozblogistan's Warbloggers. Some of the latter might benefit by reading Carson's article, but on reflection probably not. Pearls before swine.

Thursday, September 05, 2002

The Lying Nun (with apologies to Sally Field)

This story in today's Australian is the final nail in the coffin of religious faith as far as I'm concerned. Apparently an order of Catholic nuns filed a false affidavit in Queensland Supreme Court proceedings, claiming that a 60 year old member of their order, accused of serious child sexual abuse, was dead. In fact at the time (July last year) she was very much alive, and based in London as the order's world-wide leader. So it could hardly have been an innocent mistake. The nun in question is now living in Christchurch, New Zealand, as head of the order in that country.

I have another confession to make. It must be the day for it. Even though I no longer believe in any version of God that the Catholic Church would recognise, I still regarded myself as a Catholic until now, and I still sometimes went to Mass, even despite the appalling Archbishop George Pell. But this revelation is the last straw as far as I am concerned. I am no longer a Catholic. Where do I submit my resignation? What an appalling disgrace. I thought I didn't have any illusions left, but I was wrong. I don't wish JPII dead, but I wish he would get out of the way soon, so someone capable of sorting out the mess can get started on it.
A veritable herd of goats

I have to confess that Tim Dunlop probably got my goat, as well as my getting his. I also got Rob Schaap's goat as well, it seems, because he thinks I was mighty unfair and played fast and loose (and cheap) with his arguments in my reply to Tim.

I guess one of the reasons why Tim's piece irritated me (apart from the fact that he ignored what I actually said and simply created a straw man to rant against), is that I really DON'T think I merit the right wing label. I have serious reservations about numerous aspects of the current version of global capitalism, as Tim knows well from discussions in other forums. However, I don't think you can usefully critique the western/liberal/democratic/global capitalist system, without having an accurate understanding of its real strengths and weaknesses. That is why I originally objected to Rob's piece. It argued from the false premise that global capitalism was making Australians poorer, less able to afford a house, and less able to choose to have one parent engaged in full-time parenting.

Now, Rob makes the valid point that he wasn't raising his "back to the 70s" argument in order to engage in a bit of nostalgia, but to make the serious point that "what could be afforded by the average worker with a family in 1973 is less easily afforded now". But the point is, that just isn't true. Australians are MORE wealthy now in real terms and on any measure than they were in 1973. It just isn't possible to read the figures any other way. Recent ABS figures also suggest that inequality is not increasing, although previous studies showed the opposite, so I don't think we should draw any final conclusions on that just yet. However, even the figures showing increased inequality show that just about everyone's net wealth and income is increasing in real terms, it's just that the top (say) 10% is going up much faster. Personally, I don't have a real problem with that, although it may be that really gross and conspicuously displayed wealth could potentially be conducive to social instability.

Rob also makes the useful point that, while total wealth and incomes have risen, actual hourly rates of pay haven't:

"I'm talking about the tendency for that wealth to head upwards - to such an extent the US wage-per-hour has gone practically nowhere in thirty years, while national wealth has climbed by 72%. If we're gonna talk statistical constructs, we're talking gini coefficient, not PPP."

In answer to that point, I suggested that American economist Lester Thurow had claimed that a similar phenomenon in the US was explained by a net wealth transfer in favour of the aged, rather than being an example of the corporate world getting richer and richer at the expense of the rest of us. I don't know whether that claim is correct or not, and I was rather hoping one of our economist bloggers might tell us, but so far none has.

The ultimate point I am making is that global market capitalism has demonstrated its capacity to deliver the goods in material terms, and you don't help your understanding of the nature of the beast by trying to sustain false arguments to the contrary. That having been said, the model of global corporate capitalism need not be the feral neo-liberal American version. The social democratic version has proven itself every bit as effective at delivering growth and wealth. Sweden, Denmark and Finland all rank in the 12 most wealthy nations in the world and the 12 fastest growing economies, according to OECD figures. Indeed, Finland is no. 1 in the growth stakes at the moment (although almost entirely due to the phenomenal success of Nokia), with the US at no. 2.

The Scandinavian social democracies trade off slightly higher unemployment and significantly higher tax rates, for the benefit of greater social equality and a more comprehensive social welfare, education and public health system than the neo-liberal blueprint dictates. To put it another way, they place greater stress on social capital than the American ethos of arch-individualism. I think their trade-off is a more desirable one than the American version that Australia has been moving towards since at least 1983. Maybe Tim and Rob's right wing labelling exercise flowed in part from my not having made clear that this was my position. However, it is also critical to understand that the Scandinavian recipe is equally based on engagement with global markets, and largely rejects both protectionism and State ownership of production. It is a variant of the global capitalist liberal democratic model, albeit one that I think is more humane and attractive than the American version.

Finally, I think that the principal deficiency of global capitalism, especially its American neo-liberal variant, lies in its excessive emphasis on material acquisitiveness at the expense of other (at least) equally important values like community, family, spirituality, concern for the environment, and concern about gross third world poverty. Thus, my reservations about ratifying the Kyoto Protocol flow from concerns about the dubious nature of some of the factual/scientific assertions being made, rather than from a neo-liberal perspective, as some may have assumed. There is a hollowness at the core of market capitalism. But we distract ourselves from what is important if we react to our unhappiness with these aspects by trying to create mythologies of increasing poverty in the developed world that simply aren't true (I just noticed, that's a tautology, isn't it, but it's nice and emphatic so I'll leave it in). The seductive genius of modern market capitalism lies in its (to date) unparalleled ability to generate mass prosperity for the first world. The challenge for those, like me (and Tim, Rob etc) who think that there has to be something better and that there is no cause for complacent self-congratulation, lies in trying to find ways to humanise the capitalist beast without destroying either its wealth-creating engine or the individual freedoms (at least for the winners in the first world) that are its great virtues. I don't have any magic answers to that challenge, but I reckon I know the questions, and I am certainly not a complacent apologist for neo-liberal capitalism. There we are, now I can start copping abuse from Tim Blair, Paul Wright and co. as well.

That, brothers and sisters, was the sermon for today. Now we will sing Psalm 23.
Getting Tim's goat

Tim Dunlop has decided I'm a nasty little right wing bovver boy for daring to point out (in a piece called Nattering Nabobs of Negativism) that Rob Schaap had his facts all wrong when he launched into a kneejerk whinge about how Australians were getting poorer as a result of neo-liberal globalisation, and could no longer afford to buy a triple-fronted brick veneer house, or for that matter keep the missus at home barefoot and pregnant as Rob's dad managed to achieve back in the 70s.

Tim didn't even mention the inconvenient facts i.e. that this just isn't true. He just used my rant as a springboard to launch into a diatribe against all manner of right wing thuggery. Right wingers won't allow lefties to be miserable any more, Tim says. But I don't have a problem if Tim (or Rob) prefer to be miserable. Be my guest.

Interestingly, the real right wingers in Ozblogistan seem to have decided that I'm a "social democrat". I tend to subscribe to the Alan Fels view of things: if the corporate world and the trade unions both think you're a bastard, you're probably doing a pretty good job. Then again, as that immortal fracturer of the English language Joh Bjelke-Peterson once observed, a man with one foot either side of a barbed wire fence will probably get hurt.
Bakhtiyari's revenge?

An interesting little story in today's Australian reports some heated exchanges during argument in the High Court in judicial review proceedings brought by the wife of the now famous Pakistani/Afghan Ali Bakhtiyari.

It appears that at least 3 High Court Justices (and arguably more on my reading of the transcript) are seriously considering interpreting the Howard government's post-Tampa attempt to severely restrict judicial review of migration decisions ( by use of a 'privative' or ouster clause) in a way which would effectively rob it of most of its intended effect and, as Phillip Ruddock put it not so long ago, "deal [the courts] back in" to the judicial review game. Of course, the High Court could never be "dealt out" of the judicial review game, because its judicial review jurisdiction is constitutionally protected. However, the Court has mostly taken a relatively restrained and respectful view of 'privative' clauses (the approach being first laid out in Hickman's case), recognising that there can be legitimate policy reasons why Parliament might want to reduce the reviewability of some types of decision. However, the exchanges during the Bakhtiyari case yesterday suggest that the Court is likely to take a much less respectful approach towards the one inserted in the Migration Act in the wake of the Howard government's Tampa stunt.

Justice McHugh at one stage acidly observed: "This is the Constitution we are dealing with . . . it's not a Dog Act". To give a slightly more extensive flavour of the exchanges, here is a short extract of yesterday's entertainment (David Bennett QC appears for Minister Ruddock):

GAUDRON J: You have to say that notwithstanding that that is not what was said as to the operation of a privative clause in Hickman, that this clause has reworked the statute in its entirety and did not simply, as the Minister said, strengthen the decision-making process; it reworked the Act.

MR BENNETT: Yes, your Honour, and that is effectively what the Minister says it does.

GAUDRON J: No, he said it strengthened the decision-making process.

MR BENNETT: Well, your Honour, that is a different way of putting it.

GAUDRON J: Well I, for my part, am used to dealing with words according to their natural and ordinary meaning and not in accordance with subliminal subtext.

MR BENNETT: That is what the words mean, with respect, your Honour. If one talks about strengthening the decision-maker's powers, that is what is done by superimposing on each empowering provision of the Act the Hickman exceptions as the sole limitations. That is strengthening the powers of the decision-makers. It is exactly what it is doing.

KIRBY J: But it is varying them really. It is not strengthening them. It is really writing them out. Only George Orwell could think that you strengthen powers given by the Parliament to the Executive by, in a sense, overriding those powers.

If Howard and Ruddock had been in possession of a better sense of history, they might have anticipated that vilifying the judiciary as part of a cynical electorally-driven "wedge politics" campaign would have just such an effect, even on Howard government appointees like Chief Justice Murray Gleeson and Justice Ken Hayne. The entire Hickman formula for dealing with 'privative' clauses was conceived by Justice Owen Dixon as a thinly disguised political compromise afyer years of acrimonious wrangling between the High Court and the political arms of government over legislative attempts to restrict High Court review of federal industrial arbitration decisions. Thirty-one years previously, after the Court had interpreted an earlier version of that 'privative' clause in a way that gave it almost zero practical effect, Labor Prime Minister Billy Hughes fulminated:

"... There is about the High Court in some of its aspects an air almost sublime. It will not tolerate the suggestion that there can be within the domain of law, under the Constitution, anything it may not only inquire into or review, but that it may not quash or veto.... The idea in our minds at that time was that we were clothing the Arbitration Court with power to make an award which could not be the subject of prohibition. But the High Court regarded this attempt of the national legislature merely as a stimulus to further efforts. Its latest achievement has been truly magnificent."

I suspect Phillip Ruddock's reaction will be even less restrained when, as appears likely, the present High Court does something very similar to the 'privative' clause he inserted into the Migration Act in the post-Tampa hysteria. Privately, however, both he and John Howard will view a High Court loss as an acceptable price to pay for winning an election that might otherwise have been very close.
Class actions - the Esso case

Teresa Fels enquires about my attitude (and Jason Soon's) to the Esso case (a class action seeking damages for indirect economic loss flowing from the Longford gas explosion in Victoria. Jason has so far begged off replying (even though it raises obvious economic analysis questions). John Quiggin has also taken up the invitation to comment on the issue, and his comments are obviously much more economically literate than my own. Here is my response to Teresa (I haven't considered John's material yet):

As I mentioned previously, I am not really a specialist tort lawyer, although obviously I have looked pretty closely at the negligence law reforms because that was an issue that particularly interested me. I don't have any earth-shatteringly profound views on the Esso litigation. I agree with Teresa's observation that there are very significant issues relating to foreseeability, proximity etc. for recovery of indirect economic loss flowing from something like the Longford gas explosion. I have always liked Justice Brennan's poetic observation that "[a]cross the pool of sundry interests, the ripples of affection may widely extend". He went on to observe that this didn't mean the ripples could be allowed to extend indefinitely; the law has to draw a dividing line somewhere between losses that are recoverable and those that are not (unless we all want to be tied up in endless litigation).

The court will no doubt try to resolve the case in terms of those traditional concepts (i.e. foreseeability etc), while actually (and no doubt quite consciously) asking itself questions about where the risk should fall etc. It is one of those types of case where I think a public choice theory or Coase-type analysis might actually be rather helpful to a judge trying to decide a case which will ultimately set general principles for such litigation in the future. If we accept that competition policy is a good thing (which presumably the ACCC does), then what are the implications for private sector providers of large scale reticulated services like, gas, water and electricity, if the common law is developed to impose extended liability for indirect economic losses from outages? Telstra would be in real trouble with its ADSL broadband service - I have been off the air all day until about 30 minutes ago (although I can't claim I suffered any economic loss). Presumably it means that their insurance premiums will rise astronomically, and they will pass the cost on to customers i.e. the price of gas etc will rise for everyone. On the other hand, if liability is denied, then (leaving aside the immediate effect on the unsuccesssful litigants), presumably the effect will be that rational businesspeople will assess the level of risk they face from outages and, if their business is peculiarly sensitive to them, make emergency provision (as hospitals do for power outages). Of course, whether it is feasible to make provision against the risk of an outage lasting a couple of weeks (which I think Longford resulted in) is another question. What really happens is that larger businesses tend to have their own insurance cover against loss of profit from a range of causes (although whether standard business cover includes indemnity against this sort of risk I don't know), while smaller ones may not be able to afford it. Where the affected business is insured, it becomes a contest between Esso's insurer and the individual business's insurer as to which wears the loss. In many respects it really IS a question of economic analysis, which someone like you, Jason, is much better qualified to muse about than I am.

BTW, there is a quite good forum issue of the Duke Journal of Comparative and International Law titled "Debates over Group Litigation in Comparative Perspective - What Can We Learn from Each Other?". It has lots of useful papers on various aspects of class actions/group litigation, but I can't see anything on a quick glance specifically on indirect economic loss. Hope the above might prove of some use to Teresa.

Update - John Quiggin reasonably points out:

"The case for corporatisation and privatisation is based on the assumption that the profit motive is the best guide to efficient outcomes. If this is the case, then we will get as much safety and reliability as is profitable. ... Absolute liability is the criterion that prevails, for practical purposes, in the United States, which is the model for private provision of infrastructure services. If we import US institutions like private electricity companies, we must also import the legal institutions, such as aggressive litigation, that keep those companies honest."

John's observations prompt a couple of points. First, I would have thought that it was primarily the existence of competition that allows market capitalism to deliver efficient outcomes, rather than the profit motive alone. A private sector monopoly is likely to be every bit as inefficient as the worst government bureaucracy, and much less accountable. That is why natural monopolies should not be privatised. Creating strict liability in a situation of monopoly is essentially pointless, because the costs will simply be passed on to the consumer without the inhibiting factor of competition, and no incentive is created to achieve greater safety.

I don't know whether American law creates strict liability in such situations. However, Australian law never has. In fact until not all that long ago the general rule was against recovery for indirect pure economic loss. The situation is no longer so clear-cut, and the current law is now set out in the High Court's decision in Perre v Apand in 1999. For anyone interested in this area, most of the judgments are clear and easy to read. Moreover, they do discuss most of the relevant policy issues in a refreshingly frank manner. The strength of the decision is such that it would be very unlikely that the Court would now move to judicially legislating strict liability. Indeed it would arguably be a usurpation of Parliament's role for it to do so. The dividing line between political and judicial power is not always crystal clear, but a decisive step of that sort would have to be taken by Parliament. Personally, I think imposing strict liability would be a fairly blunt instrument. A more rigorous regulatory regime might be a preferable way of achieving greater safety, perhaps with individual criminal sanctions for breach (measures which I understand have recently been considered in Victoria).

Returning to Teresa's initial question, on reflection I don't really think the fact that the Esso case is a class action raises any fundamentally different issues in relation to recovery for pure economic loss than would be raised by a case involving just a single litigant (although obviously the potential damages amount is multiplied). That is, as long as the established commonality tests for group/class actions have been satisfied, the case will simply be decided by application of the principles set out in Perre v Apand. They involve, as does negligence generally, some elements of flexibility/indeterminacy, which is one reason why courts remain cautious about imposing tort liability for pure economic loss.

Finally, although I am not familiar with the pleadings or detail of legal issues in the Esso case, I would imagine that at least some of them are contract rather than tort law questions, because of the supplier relationship between Esso and its gas customers. To that extent, recovery of pure economic loss is normal and uncontroversial. It is only where there is no contractual relationship that the difficult issue arises of where to draw the line in the "pool of sundry interests", between affected persons who may recover damages and those where the "ripples" are deemed to have become too small and widespread. Chief Justice Gleeson explained some of the difficulties in Perre v Apand:

"There are at least three considerations which have been, and will remain, influential in restraining acceptance of such a duty of care in particular cases, or categories of case. First, bearing in mind the expansive application which has been given to the concept of reasonable foreseeability in relation to physical injury to person or property, a duty to avoid any reasonably foreseeable financial harm needs to be constrained by "some intelligible limits to keep the law of negligence within the bounds of common sense and practicality". Secondly, to permit recovery of foreseeable economic loss, which may or may not occur in a commercial setting, for any negligent conduct, may interfere with freedoms, controls and limitations established both by common law and statute in many legal contexts. Thirdly, in those cases where the loss occurs in a commercial setting, a third party, C, may suffer financial harm as a result of conduct which is regulated by a contract between A and B. It may be that the consequences of such conduct, as between A and B, are governed and limited by the contract. ... In many jurisdictions there are statutory provisions which govern entitlement to compensation. However, if the matter were at large, how would a court set about identifying, and estimating, the kinds of financial loss which might sound in damages? What kinds of detriment, harm, or disadvantage, would be treated as "financial loss"? The law of tort is a blunt instrument for providing a remedy for many kinds of harm which may be suffered as a consequence of someone else's carelessness, and which are capable of being described as financial."
Commenting glitches?

I was wondering whether Parish Pump readers are still having problems using the commenting function. Jason Soon emailed me this morning to tell me that it was non-functional then. However, it SEEMS to be working now. I notice, though, that no comments at all have been added today, which might indicate that it isn't working. Then again, it might be because Telstra had a major outage today for its broadband users (I was a victim of it). Then again, maybe no-one had anything they wanted to say! May I humbly request that, if anyone experiences difficulties again, please email me (see email link at left). I have found an alternative system and I will switch over to it if necessary (although obviously I would prefer not to if I can avoid it - apart from anything else, it would mean losing the accumulared comments to date, some of which are quite interesting).

I actually think commenting is a potentially important part of the blogging world: it allows a level of interactivity and genuine "civic discourse" that wouldn't otherwise be possible. You can also clarify minor points that someone raises without the need to post an entire piece on the blog itself. For those reasons, I am prepared to go to a certain amount of trouble to ensure a reliable commenting function. I just need your feedback so I know when it isn't working. BTW, there is a long term stable alternative in using Moveable Type software and shifting the blog to a separate (non-Blogger) server. Gareth Parker uses that system and says it is very reliable. However, I am not likely to get time to do that before November (while students are being tortured with final exams).

Wednesday, September 04, 2002

Too stupid to be President

Here is a link to a truly inspired shockwave animation.
More on negligence law reform

Jason Soon has responded to my post on negligence law reform. Here is a short reflection on his response. Jason says:

"Tort law, especially its recent developments may make it more difficult for insurers to calculate reserves, thus adding to the volatility of the insurance pricing cycle - but insofar as this is the main cause of current problems rather than levels of litigation (though the Australian Plaintiff Lawyers Association obviously has a vested interest in this, this is what its own research seems to suggest also), then it is a problem of information collection and risk management - problems better addressed by measures such as pooling of insurance purchases and certification measures for buyers (e.g. community organisations)."

However, why is it just a problem of "information collection and risk management"? And how is it curable by pooling purchases? If the criteria applied by courts in determining negligence are becoming progressively more and more indeterminate and less and less predictable (although I'm not sure that is the case), making it more and more difficult for insurers to predict outcomes and therefore to make adequate reserve provision and fix premiums with adequate confidence levels, why should governments respond to this only by saying "It's the insurance industry's problem"? Surely courts and judges are ultimately accountable for the decisions they make, insofar as Parliament can properly legislate to reverse common law trends where it assesses that judicial developments have been on balance undesirable. If it is left solely to insurers, and the legal criteria really are too indeterminate, then the rational response by a prudent insurer (depending on market forces) will be to over-price premiums and over-provide reserves. This will result in an excessive and unnecessary cost burden on business, which might arguably optimally be dealt with by Parliament restoring more determinate judging criteria for negligence liability (which is arguably what they are doing). I'm partly playing the devil's advocate here, but I think it's a valid point.
Tort law reform recommendations aren't so bad

Jason Soon is very unimpressed with the Ipp Report on negligence law reform. I thought I would probably have the same reaction, but on reading the report carefully I have concluded that it isn't quite as bad as Jason thinks. On the other hand, there are some significant deficiencies in the report. In my view, it is an expedient and overly hasty response to difficult and complex problems. More ...
Carbon tax is a dumb idea

Apart from the fact that I think (on very strong evidence, mind you) that greenhouse "scenarios" suggesting a temperature rise of any more than around 1 degree C over the next century are arrant nonsense concocted in bad faith by the greenhouse scare industry, the only major disagreement I think I have with John Quiggin is over the desirability or otherwise of a carbon tax. John seems to think it's a good idea, while I say such a tax would seriously harm Australia's economy and probably have adverse environmental consequences as well. By the way, I expect that this will be my last blog about global warming for some time (which will probablu be a relief to many). More ...

Tuesday, September 03, 2002

Class warfare comes to blogland

What a sad, angry little person Peter Kerr seems to be. He took mighty offence at my shameless rugby union boosterism. His rant is worth reading if only to see just how far over the top someone can go in all apparent seriousness. The fact that I was being just a tad tongue in cheek about rugby union seems to have escaped our Pete entirely (even though I really do think it's a better game than either AFL or league - but I guess it's what you grow up with).

Peter, I really don't think all the tired cliches about class warfare, fibro houses etc have much to do with it. You sound like Roy Masters during a 'roid rage. And as for the proposition that Western Samoa is the 4th best rugby nation, what planet do you live on? Let's count off the nations that would beat Western Samoa nine times out of ten: Australia, New Zealand, South Africa, Fiji, France, England, Scotland, Wales, Ireland, Argentina at the very least. The Samoans aren't bad at Sevens though.

Finally, the proposition that rugby league is the dominant code in NSW and Queensland was certainly true before the Super League war caused most of the fans to walk away in disgust. But have a look at the crowd figures now, for almost any rugby union test or Super Twelve match, and then compare them to any league match you like, including State of Origin. The reason there's not much in the papers at the moment about union is that there's not much union on, a subject I deal with in another rant today.

League is a dying game, and the Bulldogs salary cap fiasco will only drive the nails further into the coffin. Even Australian Sports Commission figures tell the story. The latest adult participation figures show that 58,000 people play rugby league, while 46,000 play union. A few years ago league had a huge lead. Mind you, aussie rules is played by around 180,000 people from memory, so there's really no contest in that regard. I guess Peter wouldn't be so aggrssive/defensive if he didn't know in his heart of hearts that I'm right. And the comparison isn't really between Ford and Holden. It's more like Holden and the Leyland P76, with rugby league being the latter. So there! Nah nah nah!
Another Wugby Want

Nathan Blacklock is a supremely talented footballer and a consummate entertainer. Until not long ago, he regularly delighted the dwindling crowds at St George-Illawarra rugby league matches with sparkling tries down the right wing, always followed by a series of aerial backflips. A little earlier than that, he was often joined in the backflips by the equally talented Anthony Mundine, until the latter decided to squander his talents and destroy his braincells in the boxing ring.

Recently Blacklock, after some unspecified personal problems, decided (not without reason) that rugby league was too boring and decided to make the switch to rugby union, a path already blazed by his wing brethren Wendell Sailor and Matt Rogers, and soon to be trodden by Brisbane's Lote Tuqiri. Now, however, Blacklock is trotting around dispiritedly in Sydney grade rugby, in front of crowds usually consisting of 7 old men and a stray afghan hound. Understandably, Nathan isn't happy and is said to be canvassing a switch back to rugby league. Can't the ARU think of some more productive use for this sublime rugby entertainer? I mean, you wouldn't put Ella Fitzgerald or Elton John on as the half-time entertainment at the local strip and prawn night (well, you wouldn't put Ella on anyway, except stuffed and mounted, because she's dead).

The ARU has one decisive advantage over its Australian football code rivals. It has complete control of rugby at the top level, not only the national Wallabies squad but also each of the three current Super 12 teams: ACT Brumbies, NSW Waratahs and Queensland Reds. By contrast, the national administrators of AFL, NRL and that sad joke soccer have relatively limited powers, because they are all saddled with an archaic, parochial club-based structure, where narrow-minded troglodytes can (and often do) torpedo positive national changes because they're too stupid to see beyond short-term club interest.

At the moment, however, the ARU is failing to capitalise on this potentially decisive edge over its competitors. Maybe it's because they haven't yet realised that top-level professional sports (like rugby) are not sports at all any more; they're entertainment businesses, and potentially very profitable ones at that. Wayne Wood pointed this out to me the other day, actually, and I've been thinking about the implications of it on and off ever since (shows what a truly disturbed person I am, I guess). If you're in the entertainment business, you need to generate more and more habituated consumers, and keep them watching by providing a first-rate product week in-week out.

Rugby is a first-rate product, alright, but its appearances are far too intermittent. It's fine while the Super Twelve is in progress (up until about late May), but then rugby just disappears off the TV radar screens, apart from relatively infrequent Tri-Nations and other test matches. It just isn't good enough. As Roy and HG might have said, TOO MUCH RUGBY IS BARELY ENOUGH. What we need is a half-season national competition to follow hard on the heels of the Super Twelve. That way, fans will have top rugby matches to watch on TV every weekend, and a game to attend live every 2 or 3 weeks.

I propose a national Super Five competition, with 2 extra provincial teams being created (in addition to the Brumbies, Waratahs and Reds), in a 3 round competition over 15 weeks starting in early June, and culminating in a final between the top 2 teams in late September (just after the AFL and NRL grand finals). This would mean finding 52 additional top class rugby players and putting them on ARU contracts, to flesh out such an expanded national competition. Some of the talent will be found running around in club rugby, but further raids on the NRL will also be needed. And we could use next year's World Cup to "cherry pick" the best players from minor rugby nations like Fiji, Tonga, Canada etc. The World Cup cash cow should ensure that there's plenty of money for such a recruitment campaign.

I reckon the 2 extra teams should be (1) Victoria; and (2) Northern Australia (NT and north Queensland). Victorians have proved repeatedly that they will turn out in big numbers to watch first class rugby. North Queensland and NT both have relatively strong local rugby unions (i.e it isn't hostile, virgin territory), but more importantly both regions are starved for top class football. North Queensland has an undistinguished NRL team but that's about it. Neither region has a presence in the AFL, and AFL teams only occasionally visit for picnic matches that aren't taken seriously by either the players or spectators. In the Top End, aussie rules is actually played in the wet season (i.e. summer), so Super Five rugby games wouldn't even have to compete with local aerial ping pong games.

The ARU should aim to have the new comp up and ready to go in June 2004. We don't need it next year because of the World Cup.

You know I'm right. This isn't Sam Kekovic.
Understanding capitalism the bovine way

A brilliantly funny take on how capitalism functions in various countries. Courtesy Tim Blair. I cacked myself. Thanks Tim.
The selective free trade scam

Tim Dunlop has an excellent riposte to Teresa Fels' rather naive paean to global free trade. As Tim points out, the current version is only "free" in the sectors that benefit the US and Europe. I hope Teresa's dad has a more sophisticated understanding of these issues. Some NGOs might have a primitive view about economics, but a lot have a far more sophisticated and nuanced understanding of the issues than some of the more tunnel-visioned neo-liberal inhabitants of Blogistan.
Quiggin's response

John Quiggin has provided a constructive response to my most recent greenhouse rant. I had intended posting a short reply via his commenting function, but it doesn't seem to be working properly. On the other hand, mine seems to be OK at least on a short test. If anyone has trouble with it would they please email me. If Haloscan can't egt their act together today I am going to look for an alternative commenting provider (suggestions welcome). BTW, I hope soon to post a rather longer piece dealing with John Quiggin's economic arguments for a carbon tax. In the meantime, here is my short reply to John Quiggin:

The precautionary principle only mandates measures that are proportional to the extent of the risk. You assert that 1.4 - 3.5 degrees C is the "mainstream" IPCC view. But you have completely ignored all the facts outlined in my most recent post, as if they didn't exist or I was simply making them up or something. In fact, they are clearly correct and can be verified by reading the IPCC reports themselves. In summary, I pointed out that the IPCC (and the computer models) can ONLY manufacture a result higher than 1 degree C by 2100 by:

(a) assuming positive feedback from clouds; and
(b) assuming patently absurd levels of third world growth, as Ian Castles demonstrates.

Thus it is not the "mainstream" view, but a deliberate distortion or exaggeration of the facts designed to achieve a political outcome desired by the protagonists. The precautionary principle does not presently mandate any measures that would cause serious damage to a national economy. Whether a Kyoto-style carbon tax which you advocate, is such a measure is a topic I will deal with in a post hopefully later today.

BTW, I now have a full copy of Castles' material, and will email it to you shortly.

Monday, September 02, 2002

Margo's crystal ball

Well, yes, she probably is dubiously literate, and Tim Dunlop's theory that Tim Blair has a secret (and almost certainly unrequited) passion for her may be uncannily accurate, but Margo Kingston is certainly right about one thing. It's about time Meg Lees and the gang of four pulled their collective fingers out and started a new party. Margo reckons that Lees, Murray and Ridgeway are keen on the new party option, but Allyson and Cherry want to try internal reform first. Hopefully it won't take them too long to work out that the only sort of internal reform that would have any chance of doing the Democrats any good is a strychnine enema.
Nabobs keep nattering ...

Rob Schaap has responded to my blog about his persistent pessimism. There are only 3 points I want to pick up on. The first is that I had actually heard of the Kinks, I just missed Rob's seamless transition from school shoes to pop records. I thought your favourite song would surely be 'Lola'.

Second, I dispute your comment that "Anyway, if it's a serious debate you want, you're gonna have to go somewhere for interlocutors, eh?" . In my rather short time in blogland, I have been pleasantly surprised by the standard of debate and the general intellectual thought content. Of course, there's the occasional idiot, but you get that anywhere. I agree with Tim Dunlop that bloggers are the new 'public intellectuals'. The engagement and real inter-disciplinary intellectual interaction is something that just doesn't happen anywhere else.

Lastly, I thought this passage of Rob's was worth a mention:

"My whole point was that the former was coming along just fine; absent some really serious shit, wealth typically accumulates with time, after all (eg. when the generations that built our roads or telecommunications infrastructure die out,they don't take it with 'em; ideally, we then add to that stock). I'm talking about the tendency for that wealth to head upwards - to such an extent the US wage-per-hour has gone practically nowhere in thirty years, while national wealth has climbed by 72%. If we're gonna talk statistical constructs, we're talking gini coefficient, not PPP."

I infer that Rob is assuming that all the additional national wealth has flowed to the corporate sector. Well, at least according to economist Lester Thurow in The Future of Capitalism(1996) (well worth reading even if slightly dated now), the author claims that the largest share of the net wealth increase (in America at least) has actually gone to the elderly rather than corporations. That is, with more and more retired people and more of them being relatively wealthy than ever before, there has been a net transfer of wealth from the working population to retirees. Hence the phenomenon of wealth increasing without real hourly wages showing a similar increase. I don't know whether Thurow is right, or whether the same trend is evident in Australia, but maybe one of our economist bloggers can tell us.
Global warming goes to the circus

Here is my response to John Quiggin's global warming "challenge"

Some of you may have noticed that the commenting function has disappeared from this and other blogs using it. I feared that the provider Haloscan might have followed a trajectory by going rapidly broke and disappearing (like NetComments, the previous comment provider used by most of us). However, it seems I might have been doing Haloscan an injustice by my uncharitable thoughts. Their website contains the following message:

"The main server began experiencing a Denial of Service attack a while ago. After, the main server went down, the backup server on another connection was automatically activated but that also experienced the same attack and we have now taken both servers down till the attack stops and connections become stable. We apologize for the downtime and are working hard to resolve the problem."

I suppose we should just be patient for a while. Pity, because I think the commenting function would have been extremely useful in my current blog-debate with John Quiggin.
Quiggin's response

John Quiggin has now responded to the principal point of my blog on "argumentum ad hominem". I have also responded on his "comment" function. Here is what I said:

John, I don't have any significant problem with anything you say in this latest post, just as you have indicated you don't have any problem with my latest offering regarding definitions of conflict of interest/bias. I also don't intend spending several hours boring slog checking qualifications of signatories to the Oregon Petition (I don't place stress on the Leipzig one for the reasons you mention). I don't really need to go any further, however, because of your concession that there are around/at least 50 eminent climate scientists who may reasonably be described as climate sceptics. You have earlier conceded that the fact that 2,000 scientists were involved in the various working groups leading to the IPCC Third Assessment Report cannot be cited as evidence that those scientists support the broad conclusions of that report (other than the chapter or section on which they worked - and even that is perhaps dubious). As you acknowledge, the 2,000 scientists include noted climate sceptics like Richard Lindzen (a lead author on one of the chapters). The most that can be asserted with any force at all is that the lead authors could be expected to agree with the conclusions of the chapters they actually wrote. However, let's be generous and assume that the lead authors actually mostly agree with all the major conclusions of the whole report (even though clearly some don't - Lindzen at least certainly doesn't).

Only the First Report (of four in total) actually deals with the science of global warming. It has 14 chapters. Each has 8-10 lead authors. Thus, at the very most, the Third Assessment Report provides some basis (albeit very qualified) for saying that perhaps 140 relevantly qualified scientists clearly support the global warming thesis in any strong sense. Given your concession that at least 50 eminent scientists have an opposed view, clearly THERE IS NO MEANINGFUL SCIENTIFIC CONSENSUS. That is all I am saying, and you have now conceded it (albeit in a piecemeal fashion).
Postscript to argumentum ad hominem

John Quiggin has indicated he will pen a response to the principal issue I raised in "Argumentum ad hominem" (below). To save him having to respond twice, I thought I should just develop the point a little more fully so that John can deal with the entire argument in one hit.

I assume that John will be able to demonstrate that a few of the 2,660 physicists, geophysicists, climatologists, meteorologists, oceanographers, and environmental scientists who signed the Oregon Petition had at some time had a research grant from a company involved in some way in the fossil fuel industry. I would be surprised if it were otherwise in such a large group of scientists. Like any academic discipline, I am sure scientists find research funding hard to come by, and a research grant from an oil company is hardly likely to be rejected as tainted money.

However, I would not regard the fact of having received such a research grant at some time in the past as disqualifying a scientist from expressing an opinion on global warming, nor should it be seen as rendering their opinion suspect or of lesser weight. I would have precisely the same view if scientists supporting the global warming theory were shown to have received past research funding from Greenpeace or the World Wildlife Fund (or whoever).

Of course, I would accept John's point as valid to the extent that any scientist may currently be directly employed by a fossil fuel company, or have an ongoing professional retainer. However, I would be very surprised if that is true of more than a tiny number of the 2,660 signatories.

Now, just in case John suggests that I am applying unusually lax standards to judging scientists' conflicts of interest, I should stress that the test I have laid out is exactly the same one that applies to judges. It is accepted practice that judges should not be regarded as having a bias or conflict of interest solely because of a past professional association with a party which comes before them. The principle was explained by Justice Brennan, Gaudron and McHugh in the following passage from Re Polites; Ex parte Hoyts Corporation Pty Ltd:

"A prior relationship of legal adviser and client does not generally disqualify the former adviser, on becoming a member of a tribunal (or of a court, for that matter), from sitting in proceedings before that tribunal (or court) to which the former client is a party. Of course, if the correctness or appropriateness of advice given to the client is a live issue for determination by the tribunal (or court), the erstwhile legal adviser should not sit. A fortiori, if the advice has gone beyond an exposition of the law and advises the adoption of a course of conduct to advance the client's interests, the erstwhile legal adviser should not sit in a proceeding in which it is necessary to decide whether the course of conduct taken by the client was legally effective or was wise, reasonable or appropriate. If the erstwhile legal adviser were to sit in a proceeding in which the quality of his or her advice is in issue, there would be reasonable grounds for apprehending that he or she might not bring an impartial and unprejudiced mind to the resolution of the issue. Much depends on the nature of his or her relationship with the client, the ambit of the advice given and the issues falling for determination."

Somewhat similar criteria are also applied to politicians in assessing conflicts of interest. It is accepted that judges and politicians are capable of exercising sufficient integrity and professional judgment to distinguish between their public or professional duty and past personal interests or relationships. I don't really think that scientists should be assumed to have lower standards of personal and professional integrity than either judges or politicians. if John Quiggin has a different view, I would be most interested in his reasons.

Sunday, September 01, 2002

Argumentum ad hominem

Argumentum ad hominem is a commonly used tactic in parliamentary debating. It is also both a logical fallacy and a base rhetorical "skill", usually viewed with disfavour in more serious discourse. In rugby its more physical equivalent is usually termed "attacking the man instead of the ball", and if you're caught doing it your team is penalised.

Don Arthur and John Quiggin are both masters of serious discourse, whose blogs are always worth reading and who seldom descend into argumentum ad hominem. Except, that is, when they are discussing global warming. Then the gloves come off and almost anything goes. I can only guess that's what happens when someone challenges a person's religious faith, even when that faith is a secular one like environmentalism. More ...
Return of the nabobs!

Just about the only useful thing Richard Nixon's equally corrupt Vice-President Spiro P. Agnew ever did was give the world the delightful expression "nattering nabobs of negativism". I was reminded of it this morning when I read Rob Schaap's blog titled Lose, Lose Scenariorrheoa. Now, Rob seems like a lovely bloke, and his pieces are always thoughtful and worth reading. But he seems to share that typical leftist psychic compulsion to always look on the worst side of everything. For Rob, the glass is eternally half-empty, and what's more the water in it is probably polluted by toxic chemicals emitted by evil multi-national corporations.

His latest musing is a perfect example of the genre. Rob observes that US consumer spending was up in July. Good news? No!! Wages haven't gone up, so all it means is an increasingly desperate cycle of corporate-manipulated consumer debt! Then Rob seques mysteriously into a reverie about his blissful Aussie childhood, but only to compare it unfavourably with the evil current era of neo-liberal corporate greed:

"Well, when I was a lad, I had one parent to look after me full-time, and one parent earning a wage sufficient to service a mortgage, keep a Kombi on the road, and keep me and my three siblings in Bata Scouts and Kinks singles. And that was the norm in this country, not only in the boom-sixties, but also in the more sombre seventies.

It ain't any more. Not least because a house will set you back eight times the average annual wage now, as opposed to four back then

But hang on, are any of Rob's underlying assumptions actually true? Well, er, no. Australians have become steadily wealthier through the 1990s and early "noughties", not only in Aussie dollars but on "purchasing power parity" comparative to all other countries. Australia is, from memory, around the 11th or 12th wealthiest country in the world and the fifth fastest growing economy, according to OECD figures. Moreover, recent ABS data corrections indicate that we are getting richer without increasing inequality (contrary to standard leftist rhetoric). So how can Rob's theory about Bata Scouts and Kinks singles (whatever they are) be true? Well, it isn't.

What about the point on house prices and multiples of income? Well, it's true at the moment in Sydney and Melbourne, because both cities are at the peak of a price bubble. But it isn't true across the rest of Australia. In Darwin, for instance, the average income is $36,000 per year and the average house price is around $190,000. That is, 5.2 times the average income; not much more than the historical average Rob cites. In Adelaide, incomes are a bit lower and so are house prices, and in Hobart both are lower again. The reason prices are so high in Sydney and Melbourne at the moment is simple supply and demand. People have high incomes, they want to live in the 2 biggest capitals, and are prepared to pay the price.

Secondly, is it really true that families are forced to have both spouses working in order to make ends meet? Well, yes and no. For a start, does anyone (except maybe John Howard) really want to go back to the days when dad was the sole breadwinner and mum stayed at home, did the housework, and cooked sausages and 3 veg for dinner (and Streets ice cream and canned peaches if you were lucky)? I think not. There are several reasons why the social norm today is for both spouses to work. First, social expectations have changed. Second, women mostly want to work rather than stay at home slaving over a hot vacuum cleaner and watching Days of Our Lives. Third, to the extent that there is an element of necessity, it is relative to vastly elevated expectations of living standards, compared with the supposedly halcyon days of the 1960s. When I was a kid in the 1960s (see, I can go into Happy Days mode too), my dad was a modestly paid middle ranking public servant, and my mum didn't work. As a result, we couldn't afford a car until I was about 11 nor a TV until about the same time. We lived in a 2 bedroom house financed by a War Service home loan, and all four of us kids slept in the same bedroom until my parents hit on the idea of subdividing the block and selling the back half to finance additions to the house. You know, shoebox in the middle of the road, Monty Python etc etc. The point is, the wonderful advantage of having mum at home full time came at a price in those days too, just as it does today. I suspect that most families could live on a single wage today too, provided they were prepared to make the sacrifices my parents did. But most people are not prepared to make those choices. I should note, of course, that most people nowadays don't qualify for War Service loans, so one of the big reasons why both parents work is to save a deposit to buy a house. But this has nothing to do with falling living standards, because they're not falling at all, they're rising.

Now, I am far from being an uncritical admirer of every aspect of neo-liberal feral corporate capitalism. The triumphalist nonsense spouted by some of the more rightist bloggers is every bit as silly as Rob's "we'll all be rooned, said Hanrahan" lament. By all means let's debate real issues, but a bit of balance would help. The OECD and UN figures showing Australia's excellent economic performance are neither a myth nor a fraud.
Footie controversy corner!

With aerial pingpong currently beginning to infest blogland faster than AIDS in Southern Africa, the time has come for sensible codes of football to fight back. I mean, fair go, Scott Wickstein and others, I can appreciate a high mark as well as the next bloke. But when you see so many Aussie Rules players seemingly incapable of kicking even a behind from 20 metres out when the total target is the width of Sydney Heads, well, all you can do is shake your head.

I can't be bothered starting a rugby blog, so I'll just inflict my views here. So if you hate football of any code, you'd better bugger off right now. Now, Scott, pay attention. "Rugby" means rugby union, it doesn't mean rugby league. If you want to refer to the latter you call it "league" or "rugby league" or "NRL" or something. As for the half-wit you linked who equated rugby with toffy private schools, well it certainly contains a germ of truth, but rugby has long outgrown its "ra-ra" roots. Even when I went to school (a state school in NSW) the CHS competition was already stronger than the GPS one. If you want a good basic definition of the difference between rugby union and league, I can't go past the one I was told by a wise old rugby prop (Wayne Wood, actually). "Rugby league," he said, "is a bit like masturbation. It might be alright if you're really desperate, but it just isn't the same as the real thing."

Well, since the super-league war and the Bulldogs salary cap fiasco, I reckon league is lagging well behind even a very ordinary wank. It's time to put rugby league out of its misery and merge the 2 rugby codes. Here's a constructive rule change proposal. (1) Make it 13 men a side. That will open up the game and make it even faster, and possibly make it slightly easier for thick-headed rugby league forwards to make the adaptation to the game they play in heaven (rugby union forwards are no smarter, but they've been practising the techniques for a lot longer). You've probably worked out by now that I am a back. At least I was before I got old, slow and fat (not necessarily in that order). Actually I still play in the backline, but only in over 35s rugby where being old and slow and fat doesn't matter. (2) Reduce the points awarded for penalty and field goals from three to two. We don't want to cut out kicking, it can be an attractive part of the game, but it would be better to increase the incentive for running with ball in hand or kicking to set up a try.

These relatively minor rule changes would consolidate rugby's already overwhelming claim to be the world's greatest body contact football code. Rugby, as I pointed out in a previous rant, is truly a world game, as the East Coast will discover during next year's World Cup. Neither league (which is a minority sport played only in small parts of just 2 or 3 countries other than Australia) nor aussie rules (which is played nowhere else at all in any serious way) can make any such claim. Nor can American football/gridiron, which is also essentially confined to the USA. A couple of results from today's World Cup qualifiers, to give you the idea. Uruguay defeated the USA in an upset, effectively ending the Americans' chances of making the World Cup finals, and Canada defeated Chile in a game that meant nothing because the Canadians had already qualified. You see what I mean. Forget the parochial prancing of aussie rules and the stodgy, unimaginative bash and barge of rugby league. Rugby has it won hands down. No contest. Honestly, there's just no argument, and I'm a totally unbiased judge. Honestly. Trust me, I'm a lawyer. Why does everyone smile knowingly whenever I say that?