Sunday, 20 March 2016 - 4:25pm

Published by Matthew Davidson on Sun, 20/03/2016 - 7:25pm in

This week, I have been mostly reading:

  • Tools — xkcd: Tools
  • Impossible possibilities for Keynes’s grandchildren — David F. Ruccio: [W]hat Keynes did not understand is that workers don’t just produce wealth, which they can then enjoy by reducing the amount of work they do. They produce wealth that stands opposed to them, wealth in the form of capital, which is then used to render part of the working population superfluous, thus dragging down the wages of other workers, who are then employed to boost the profits of their employers. The workweek of the employed population doesn’t decrease, even as they are joined to new technologies and are transferred to new sectors of the economy.
  • Shortly after her death, Harper Lee's heirs kill cheap paperback edition of To Kill a Mockingbird — Cory Doctorow, Boing Boing: A court upheld the sealing away of Lee's will from public view, so it's impossible to say for sure what prompted the move, but this much is clear: schools that assign "To Kill a Mockingbird" -- one of the most commonly assigned books in US classrooms -- will have to pay a lot more for their books, and that money will not, and cannot, benefit the author.
  • The Story of Our Economy in 2015: A cocktail of household consumption, household consumption, and more household consumption — Frank Van Lerven at Positive Money: The OBR forecasts that real GDP growth will average 2.3-2.5% a year between 2016 and 2020. This growth is meant to take place despite the reduction in government expenditure. As we have suggested before, considering that the UK is not a net exporter, if the government decides to reduce its level of debt then the domestic private sector has to take on more debt for there to be any growth. Increasing levels of private sector debt, (business and household borrowing), will be called upon to drive growth in the years to come.
  • The co-option of government by transnational organisations — Bill Mitchell: The process of privatisation clearly transferred resources from the public sector to the private sector and reduced the public bureaucratic control of the organisations in question. Those processes are reversible. If we want a demonstration of that reversibility, then we need not look further than what happened to the banking sector in the early days of the GFC when many national governments effectively socialised the losses from the failed corporate strategies, protected depositors and nationalised the organisations. There was no hint then that the nation-state had lost its power or discretion to act to advance the national interest and largely disregard the interests of the private shareholders of these large transnational, financial entities.
  • Despair Fatigue — David Graeber in The Baffler: True, most mainstream economists are capable of seeing through obvious nonsense, like the justifications proposed for fiscal austerity. But the discipline is still trying to solve what is essentially a nineteenth-century problem: how to allocate scarce resources in such a way as to optimize productivity to meet rising consumer demand. Twenty-first century problems are likely to be entirely different: How, in a world of potentially skyrocketing productivity and decreasing demand for labor, will it be possible to maintain equitable distribution without at the same time destroying the earth? Might the United Kingdom become a pioneer for such a new economic dispensation?
  • A thought experiment for Tony Abbott and Malcolm Turnbull — Steve Keen in Business Spectator: Imagine that there is an economy where the money supply consists of a single dollar, which is exchanged 100 times per year among this economy’s inhabitants — thus generating a GDP of $100 per year. Then imagine that the government in this economy sets itself the target of running a surplus equivalent to 1 per cent of GDP. If the government achieves its objective, what will GDP be the following year? Zero. And, if the government debt ratio was more than 1 per cent beforehand, it will be infinite afterwards. Why? Because the economy had only one dollar of money in existence, and the government’s surplus took that $1 out of circulation, leaving the economy with precisely zero dollars for commerce the following year. The government budget affects GDP by changing the amount of money in circulation in the economy, and a government surplus effectively destroys money.
  • Are luxury condo purchases hiding dirty money? — Husna Haq at the Christian Science Monitor: In fact, using shell companies, or limited liability companies, to hide a buyer's identity is actually relatively common, and legal. But the practice could drive up real estate prices in some markets, and contribute to real estate booms. Federal authorities are also concerned that the practice enables foreign buyers to easily find a safe haven for illicit money in American real estate.
  • How does the 1 percent capture the surplus? — David Ruccio: The basic idea is that “pass-throughs”—businesses whose annual income is taxed at the owner-level (such as partnerships and S-corporations)—now account for more than half of all U.S. business income, thus passing traditional (so-called C) corporations. […] 54.2 percent of U.S. business income in 2011 was earned in the pass-through sectors, compared to only 20.7 percent in 1980.
  • "Neoliberalism" is it? — Jeremy Fox takes on Will Davies' challenge of a week earlier in openDemocracy: Compared with some other candidates, ‘neoliberalism’ does not seem to be an especially elusive abstraction. I take it to mean marketisation of the public realm as a political project. Its current popularity among political leaders of a certain hue is that it has the appearance of offering value-free decision-making because it allows market competition rather than ideological bias to determine value. They are thereby absolved, at least in theory, from responsibility for the provision of important public services.
  • Why you shouldn’t let your smartphone be the boss of you — Peter Fleming in the Guardian: According to an influential group of neoliberal economists working in the 1970s, people ought to see themselves as “human capital” rather than human beings. This sort of capital is a never-ending investment, continuously enhanced in relation to skills, attitude and even physical appearance. Work is crucial for building this capital, perhaps its defining source. This is where employment and life more generally slowly merge and become indistinguishable from each other. A job is no longer something we do to achieve socially productive goals in society. An activity among other pursuits. No, a job today is something we are … preferably 24/7. Working unpaid overtime therefore seems natural. Self-exploitation looks like personal freedom.
  • The return of public investment — Dani Rodrik: If one looks at the countries that, despite strengthening global economic headwinds, are still growing very rapidly, one will find public investment is doing a lot of the work.
  • Diane Coyle finds Minsky, but misses Keynes — Geoff Tily, Prime Economics: Now Keynes was no trivial figure. How can it not be “interesting” that one of the greatest economists of the twentieth century was misrepresented by the academic economics profession, and this misrepresentation has been denied ever since? How can what he actually said not be interesting, once we recognise that what we thought he said was wrong? How can his work not be interesting if it treats finance and the shortcoming of conventional macroeconomics is that it doesn’t treat finance?
  • Ultra-Rich 'Philanthrocapitalist' Class Undermining Global Democracy: Report — Sarah Lazare at Common Dreams: A study just out from the Global Policy Forum, an international watchdog group, makes the case that powerful philanthropic foundations—under the control of wealthy individuals—are actively undermining governments and inappropriately setting the agenda for international bodies like the United Nations. The top 27 largest foundations together possess assets of over $360 billion, notes the study, authored by Jens Martens and Karolin Seitz. Nineteen of those foundations are based in the United States and, across the board, they are expanding their influence over the global south. And in so doing, they are undermining democracy and local sovereignty.
  • 5 outrageous things educators can’t do because of copyright — Lisette Kalshoven in Medium: The current patchwork of copyright exceptions for education at the member state level can lead to absurd situations for teachers that want to utilize creative works. We asked friends from across Europe to submit examples showing where copyright and education do not mix. You can cry (or laugh) with us.

Sunday, 13 March 2016 - 5:11pm

Published by Matthew Davidson on Sun, 13/03/2016 - 5:11pm in

This week, (actually posted a day late, but back-dated) I have been mostly reading:

  • Older Students Learn for the Sake of Learning — Harriet Edleson at the "Well, d'uh!" desk of the New York Times: For lifelong learners the focus is outward. At Osher, classes are not specifically skill-based, like learning a language or weaving. Instead, students generally delve into subjects they may have been interested in for years but simply didn’t have time to study.
  • Report From the Student Privacy Frontlines: 2015 in Review — Annelyse Gelman, Electronic Frontier Foundation: This year the fight to protect student privacy hit a boiling point with our Spying on Students campaign, an effort to help students, parents, teachers, and school administrators learn more about the privacy issues surrounding school-issued devices and cloud services. We're also working to push vendors like Google to put students and their parents back in control of students’ private information.
  • Japanification Revisited — Ian Welsh: In choosing the method we chose to do the bailouts, we also made the choice to have a shitty economy. Employment has never recovered, in terms of the percentage of the population, and will not (we’re about to hit a recession), wages are down for much of the population, and all the gains of the last economic cycle have gone to the top three to five percent. Mind you, there was an historic stock bubble. The rich are even richer than they were in 2007. Obama and Bernanke’s policy has done what it was intended to: It has preserved, and then increased, the wealth of the rich.
  • The corporate university and its threat to academic freedom — Sean Phelan in openDemocracy: It would be simplistic to suggest that the corporate university represents an ideological vision spontaneously brought into being by a managerial class. As recent changes to the governance of New Zealand university councils – rescinding the guaranteed representation of both students and staff – suggests, the desire for a corporate university is often a state-led political project, pushed by governments who want to reduce public funding to universities, and reconfigure the university as little more than an engine of economic growth.
  • Neoliberalism and its forgotten alternative — David Ridley, openDemocracy: Sociologists and social scientists need to be a part of an active process of giving back social inquiry to the public, emancipating this deeply human and social activity first and foremost from the elitism, specialisation and instrumentalism of academia. We may need to reduce the working week even further to enable people to have time for community activities and public research. We certainly need to prevent education from being turned towards a class-based, narrowly vocational process of training people to be profit-making machines.
  • Because you can never have too many charts on the economics of credit cards — Harold Pollack in The Reality-Based Community: [P]rofit margins are really high for the small group of borrowers with low FICO scores in the range of about 550. Amazingly, the industry made about $0 in cumulative profits on the top 80% of accounts that have FICO scores exceeding 630. The bottom 10% of accounts account for the majority of total industry profits. It’s also striking that the industry actually seems to lose money on consumers near the median of the distribution with FICO scores around 700, and then makes profit again on the best credit risks.
  • Why Minsky Matters: An Introduction to the Work of a Maverick Economist — Victoria Bateman reviews Randy Wray's new book about the work of his mentor: As 2008 so clearly showed, we simply cannot have our cake and eat it. Financial crises are not just events that happened a long time ago in history – or far, far away in distant and much poorer lands. They are hard-wired into the capitalist system. Minsky was one of the valiant few who tried to draw attention to this fact, and one of the few to predict the global financial crisis decades before it actually hit. Unfortunately, his warnings fell on deaf ears. Like many a great artist, his popularity soared only after his death and only once the crisis hit – in what came to be known as a “Minsky moment”.
  • #ResistCapitalism — Cameron K. Murray: [S]ome kind of welfare state is essential for maintaining the dynamism of the capitalist part of the economy. Without this cushion against failure, who would risk their life savings on inventing and investing in new products and innovations? Essentially we all want a mixed economy, a level of safety net that reflects the wealth of the country, and basic services provided in an equitable manner. […] But when the political power of a select few capitalists overwhelms the system to the extent that the other non-capitalist parts of the mixed economic suffer, there are obvious and genuinely satisfying moral grounds for protest.
  • Facebook is no charity, and the ‘free’ in Free Basics comes at a price — Mark Graham in The Conversation isn't keen on Zuckerberg's reboot of Compuserve: In much the same way that Nestlé offered free baby formula in the 1970s as development assistance to low-income countries – leaving nursing mothers unable to produce sufficient milk themselves – Free Basics is likely to impede commercial alternatives.
  • The Procrustean Economy — Neil Wilson: The data collected from [neoliberal] economies will resemble the data you would expect from the [neoliberal] model. It really can't do much else - since the policies are there to prevent deviation from the norm. Therefore when you do empirical studies what you are actually using as data is the output from a system rammed into an inappropriate model. The data is tainted and what the taint means has to be understood.
  • The Fed Doesn’t Work For You — J. W. Mason in Jacobin: A rising wage share supposedly indicates an overheating economy — a macroeconomic problem that requires a central bank response. But a falling wage share is the result of deep structural forces — unrelated to aggregate demand and certainly not something with which the central bank should be concerned. An increasing wage share is viewed by elites as a sign that policy is too loose, but no one ever blames a declining wage share on policy that is too tight. Instead we’re told it’s the result of technological change, Chinese competition, etc. Logically, central bankers shouldn’t be able to have it both ways. In practice they can and do.
  • Globalisation and currency arrangements — Bill Mitchell: The thesis advanced by many analysts is that globalisation has reduced the capacity of the nation-state and forced governments to adopt free market policies at the microeconomic level and austerity at the macroeconomic level, for fear that capital flight will destroy their economies. It is a neatly packaged thesis that the political Left has imbibed, and, in doing so, has undermined the progressive basis of these institutions and left voters with little choice between right-wing parties and the social democratic parties who formally represented the interests of workers and acted as mediators in the class conflict between labour and capital. The major distinguishing feature these days between these two types of parties, who were previously poles apart in approach and mandate sought, is that the so-called progressive side of politics now claims it will implement austerity in a fairer way. These austerity-lite parties, buying into the myth that globalisation has undermined the capacity of the state to pursue full employment policies with equitable income distribution, do not challenge the basis of austerity, but just quibble over who should pay for it.
  • In 2016, let's hope for better trade agreements - and the death of TPP — Joe Stiglitz via the Guardian: In place of global trade talks, the US and Europe have mounted a divide-and-conquer strategy, based on overlapping trade blocs and agreements. As a result, what was intended to be a global free trade regime has given way to a discordant managed trade regime. Trade for much of the Pacific and Atlantic regions will be governed by agreements, thousands of pages in length and replete with complex rules of origin that contradict basic principles of efficiency and the free flow of goods. […] Obama has sought to perpetuate business as usual, whereby the rules governing global trade and investment are written by US corporations for US corporations. This should be unacceptable to anyone committed to democratic principles.
  • ObamaCare’s Neoliberal Intellectual Foundations Continue to Crumble — Lambert Strether via Naked Capitalism: Obama gives an operational definition of a functioning [health insurance] market that assumes two things: (1) That health insurance, as a product, is like flat-screen TVs, and (2) as when buying flat-screen TVs, people will comparison shop for health insurance, and that will drive health insurers to compete to satisfy them. As it turns out, scholars have been studying both assumptions, and both assumptions are false. […] the population studied reduces costs, not by comparison shopping, but by self-denial of care. […] it looks like ObamaCare has replaced a system where insurance companies deny people needed care with a system where people deny themselves needed care; which is genius, in a way.
  • Mainstream macro and Minsky the maverick — Diane Coyle reviews, perhaps too briefly, Randy Wray's new book: The second chapter was to me the most interesting. It’s called ‘The Road Not taken’ and sets out the broad mainstream approach against which Minsky developed his arguments. This is the neoclassical synthesis, whose foundations were laid by John Hicks and Alvin ‘Secular Stagnation’ Hansen in the early years after Keynes’s death, then by both ‘Keynesians’ like Patinkin and Tobin and ‘Monetarists’ such as Friedman. Wray argues that these camps disagreed largely over parameter values, and that they essentially bowdlerised Keynes by ignoring his emphasis on investment, finance and uncertainty. [I admit to some satisfaction, bordering on relief, at finding somebody confirming that new Keynesians and neoliberals "disagreed largely over parameter values", having just this morning confidently asserted on a uni discussion board that there has long been "broad agreement within mainstream economics over what the appropriate policy levers are, but disagreement about where these levers should be set".]

Wednesday, 9 March 2016 - 10:42pm

Published by Matthew Davidson on Wed, 09/03/2016 - 10:42pm in

Lord knows I don't like to upset anybody, but I have to say that, going by the artist's impression (they always seem to highlight the presence of women in jeans, have you noticed that?), I can't really see any difference.

Granted, there is a green band-aid plastered over the grotty laneway and multi-story carpark at the far end of the square, but if the Advocate and its key stakeholders are to be believed, our carparks are particularly dazzling jewels in Coffs Harbour's exceptionally jewel-heavy crown, so shouldn't we be making these a feature? At least give the car park equal weight to the women in jeans. This is all at ratepayers' expense, so those women in jeans will be coming out of our pockets. They should at the very least be polishing our jewels.

Also, I've been in a number of city squares, but I'm not sure whether I could say how "active and alive", or at which "level of occupation", they were. Will the committee be issuing portable meters, so that the key stakeholder or ratepayer can independently verify that the committee has delivered on its deliverables?

Sunday, 6 March 2016 - 5:38pm

Published by Matthew Davidson on Sun, 06/03/2016 - 5:38pm in

This week, I have been mostly driving between home and the hospital as my dear lady wife waited (and waited, and waited…) for surgery, so the few most interesting things I've read are:

  • Intellectual property and the decline of the U.S. labor share — Nick Bunker, Wahington Center for Equitable Growth: According to the paper, the decline [in the US labor share] starts in 1947, which would mean the labor share was declining throughout the period it was famously stated to be constant. But not only does the decline start earlier than previously thought—it’s also much larger. It’s actually twice as large. And the increase in intellectual property products explains the entirety of the decline.
  • George Obsorne says its austerity, whether it busts us or not — Richard Murphy: At the precise moment when the economy needs investment more than anything else, in flood defences and onwards, and at a time when we do as a nation not only have the capacity to deliver that investment because there is a shortfall in demand for other goods and services, but also have the means to fund that investment because borrowing costs are, for the government, little above zero per cent in real terms right now, George Osborne is saying he will not make any effort to help the UK economy by undertaking that essential investment programme. He is instead saying that when demand is weak he will make it weaker. And that when investment is needed he will not undertake it.
  • The mass consumption era and the rise of neo-liberalism — Bill Mitchell: The research I have been doing in the last few days continues the theme that globalisation has not rendered the nation state impotent. The thesis, as outlined in the introduction, is that the nation state has just changed its role and now uses its power to advance more narrow interests than previously.
  • The Best Paid People in Our Societies Are the Worst People — Ian Welsh: Private bankers and financial execs make almost all of the investment decisions in our society. They decide what will be built, what jobs will be created, etc. They are the people who decide if something will happen and they make terrible decisions–even based on their own valuation system. […] Do not speak of “salary” and “merit” in the same sentence except with scorn. When the CEO doesn’t show up, so what? When the janitor doesn’t show up, though, hey! We find out who really matters.
  • Who Are The Prominent Academics Who Advocate A Different Type of QE? — Frank Van Lerven, Positive Money: In a recent post Positive Money showed that there is a strong intellectual body of history behind the various alternative proposals for QE. Both John Maynard Keynes and Milton Friedman proposed a style of Quantitative Easing (QE) that was aimed at the real economy. Today, these types of proposals are commonly referred to as “QE for People”, “Sovereign Money Creation”, “Strategic QE” and “Helicopter Money” amongst others.

Wednesday, 2 March 2016 - 10:07pm

Published by Matthew Davidson on Wed, 02/03/2016 - 10:07pm in

I don't know. I've been in cities before, and I think I'd know one if I saw one.

A core of vacant shops with "Vote Rhodes/Fraser/Hartsuyker" posters in the window, in the middle of a network of carparks separated by Colorbond open air prisons, does not constitute a city. But we don't need to be formally recognised as a city, because we have, as Andrew Fraser says, the Coffs Harbour Unique Character (TM).

We don't need greater housing choice. Who on earth would want anything other than a concrete slab prefab brick veneer on a subdivided half-a-quarter-acre? Nor do we need new jobs; we are happy with the two we've already got. For men, it's wearing steel toe boots and a high viz shirt and doing what you're told. For women it's wearing high heel shoes and padded bras, and doing what you're told. And access to open spaces? There are plenty of carparks close enough to the shoreline for you to open the doors and windows of your ute and, along with everyone around you, appreciate both the timeless beauty of nature and the timeless beauty of your extensive collection of Cold Chisel and Meatloaf CDs.

Wednesday, 2 March 2016 - 8:33pm

Published by Matthew Davidson on Wed, 02/03/2016 - 8:33pm in

I'm assuming the new sign says "Pioneer Park" because there wasn't room for one that says "Pioneer Roadside Verge". I can't say I know what steel history pods are, but I'm glad they're "vandal proof". The last thing you want when you've taken the trouble — through the sheer goodness of your heart, not because there's any demonstrable need for it — to plough a bloody great road through a very small park, is for vandals to come in and wreck it all.

I fondly remember shopping at Gowings when I used to live in Sydney, so I'm very pleased that Gowings Bros. Investments has chipped in to partially fund this expensive elective park-ectomy operation. It appears the brothers Gowing consider the welfare of the Coffs Harbour community a vital part of their business. And they would never let a vital part of their business go bust, would they?

What? Have I missed something?


Excellent he-said-she-said reporting, by the way. A master class in the art of non-investigative journalism. It's like I was there in the room, yet curiously unable to ask a question, or subsequently fact-check or seek expert opinion. I take my hat off to you! Or at least I say I do. You don't need to confirm this.

Sunday, 28 February 2016 - 8:35am

Published by Matthew Davidson on Sun, 28/02/2016 - 8:35am in

This week, I have been mostly reading:

  • The Helicopters already exist. If you know where to look — Neil Wilson braves the slippery slope from advocating for central bank independence to…: And then you move onto the question of war. If parliament can't be trusted with money, or social security, why should it be trusted in sending people to their deaths. […] Of course if the generals are in charge and are able to deploy troops independently of parliament, then we would rightly call that a military dictatorship. Therefore the notion of an independent central bank should be called out for what it is - an economic dictatorship ruled over by a class of individuals who look after the interests of the bankers and creditors and want to prevent government having first access to the resources of the country. Those supporting the idea are excuse makers for that destructive regime.
  • The difficulty of ‘neoliberalism’ — Will Davies, Political Economy Research Centre: The reason ‘neoliberalism’ appears to defy easy definition (especially to those with an orthodox training in economics or policy science) is that it refers to a necessarily interdisciplinary, colonising process. It is not about the use of markets or competition to solve narrowly economic problems, but about extending them to address fundamental problems of modernity – a sociological concept if ever there was one. For the same reasons, it remains endlessly incomplete, pushing the boundaries of economic rationality into more and more new territories. […] The dramatic rise of student indebtedness in the UK makes little economic sense for anyone (even the government) but it succeeds in placing higher education in a quantitative framework, linking past, present and future.
  • Keywords for the Age of Austerity 24: Sullen — John Patrick Leary: The problem is not just that education is vocational here, because there’s nothing wrong with vocational education per se, nor is “critical thinking” or moral education or whatever you want to call it necessarily un-vocational anyway. Rather, it is the way “academic entrepreneurship” encourages students and others to see education, a public service subsidized to great extent by the people, as a publicly-funded adjunct of private business, useful for research, development, and employee training. Lesson number 1 of entrepreneurship class: Why take a financial risk when you can just outsource it to someone else?
  • The Great Malaise Continues — Joseph Stiglitz: The obstacles the global economy faces are not rooted in economics, but in politics and ideology. The private sector created the inequality and environmental degradation with which we must now reckon. Markets won’t be able to solve these and other critical problems that they have created, or restore prosperity, on their own. Active government policies are needed. That means overcoming deficit fetishism.
  • New Research. Inequality of Wealth Makes Us Short and Dead — Peter Turchin in Evonomics: So, the life expectancy of white middle-aged males has declined, and the average height of black women has also declined. Is this the beginning of a more broadly based trend, in which the biological well-being of the “other half”—the 50 percent of the poorer Americans—will decline?
  • ‘Helicopter tax credits’ to accelerate economic recovery in Italy (and other Eurozone countries) — Biagio Bossone and Marco Cattaneo at VoxEU.org: Tax Credit Certificates (TCCs) […] are assigned to households in inverse proportion to their income, both for social equity purposes and to incentivise consumption. TCC allocations to enterprises are proportional to their labour costs, and act as labour-cost cutting devices, immediately improving their competitiveness, as any internal or external devaluation would do. Greater export and import substitution following price reductions not only create more output and employment, they also offset the impact of increased demand on the external trade balance. Smaller amounts of TCCs can also be issued and used by the government to pay for public infrastructure initiatives and social welfare programs.
  • The DWP is trying to psychologically 'reprogramme' the unemployed, study finds — Jon Stone, The Independent: A study backed by the Wellcome Trust found that people without jobs were subject to humiliating “reprogramming” by authorities designed to change their mental states. The researchers said the new approach, which forced upon the unemployed a “requirement to demonstrate certain attitudes or attributes in order to receive benefits or other support, notably food” raised major ethical issues.
  • Economists Don't Know Much About the Economy, #46,523: The Story of the Robots — Dean Baker in HuffPostBiz: Patent and copyright protection are not laws of nature, they come from the government. And in recent years we have been making them stronger and longer. […] In the absence of these protections, we might all look forward to paying a few dollars for the robots that will clean our houses, cook our food, and drive us wherever we want to go. Low cost robots would make almost all of us richer. Only if the government imposes patent monopolies that keep robots expensive do we have to worry about a redistribution from the rest of us to those who "own" the technology.
  • Huge currency zones don’t work – we need one per city — Mark Griffith in Aeon: In the 1970s, the American/Canadian economist Jane Jacobs reached a radically simple insight. Her lifelong interest in urban history convinced her that cities, not countries, drive economics. Cities are messy, unplanned places where people who otherwise would never meet devise joint projects. Hence, Jacobs argued, all innovation happens in cities. It made sense, then, that each city’s currency should follow its business cycle. Forcing two or more cities to share one currency slowly pumps up one city and sickens the others.
  • Designer nights out: good urban planning can reduce drunken violence — Kees Dorst in The Conversation: It is easier said than done, but we need to think away from knee-jerk reactions - where branding an incident as “alcohol-related violence” naturally puts the focus on policies around alcohol service restriction. There is so much more that can be done to keep young people safe at night.
  • Why bullshit is no laughing matter — Gordon Pennycook in Aeon: It is now very common for proponents of alternative medicine to emphasise ‘open-mindedness’. Unfortunately, this can entail disregarding empirical evidence. For example, many anti-vaxxers do not appear to care that Andrew Wakefield’s infamous article in the Lancet in 1998 drawing a link between the MMR vaccine and autism has long been discredited and retracted. Indeed, straight-up explanations of this fact do little to dissuade those who have fallen prey to anti-vaxxer bullshit. Diseases such as measles and mumps are making a comeback in the US and, according to at least one website, there have been more than 9,000 preventable deaths due to failures to vaccinate in the US since 2007. Bullshit is indeed no laughing matter.
  • Saturday Morning Breakfast Cereal by Zach Weinersmith [Yes, education really works like this]:

Wednesday, 24 February 2016 - 6:57pm

Published by Matthew Davidson on Wed, 24/02/2016 - 6:57pm in

At the Campaign for America's Future, Dave Johnson has a comprehensive roundup of the Sanders “Economic Plan” Controversy. The controversy is practically non-existant outside of the left wing of the Republican Party, i.e. the Clinton/Obama/Clinton Democrats. The plan is pretty much what you'd expect from a New Dealer, as Chomsky characterises Sanders. It's a welcome change from policies that have created the post-GFC malaise, but hardly radical or historically unprecedented.

As you'd expect, economists with intelligence and integrity like Bill Black and Jamie Galbraith did their best to introduce some reason to public discourse, while journalists on the economics beat largely ignored tham and scrambled to stake out a position that they could defend as balanced. As you'd also expect, but nonetheless disappointingly, Paul Krugman lined up with those he would usually deride as Very Serious People (VSPs). I generally enjoy Krugman. He's witty and articulate, and performs a useful service against Republican politicians beloved of VSPs such as Ron Paul, Paul Ryan, Rand Paul, and Ryan Rand. (Hang on; I think one of those isn't a real person. Maybe more than one.)

Sadly, Krugman is not inclined to entertain ideas outside the range of opinions between Clinton and Bush, or if you prefer, Clinton and Bush (or Bush). And those issues upon which "moderate" Republicans and Democrats agree do not for Krugman count as contestable issues; they are part of the built-in political furniture. In this sense, he's as much a VSP as anybody. If he wasn't, he wouldn't be doing his job.

The New York Times' readership is the one percent. It makes sense therefore to maintain that real economic injustice is the work of the one-tenth of one percent. "It's not you, dear reader, it's those cads who buy the TImes but don't read my column who are to blame." Magnifying marginal distinctions, dismissing the significant, and excluding the challenging comes with the territory.

As a commentator, Krugman is a Jerry Seinfeld at a time which requires a Bill Hicks. In the second term of the Sanders presidency, I will be happy to read his wry observations about airline food and the latest crazy things Senator Ivanka Trump has been saying. In the meantime…

The Ivy League and the Lantana League

Published by Matthew Davidson on Tue, 23/02/2016 - 1:56pm in

[I'm archiving for posterity a few articles I wrote for a now-defunct website. This is the third, from June 2014; here is the first, and the second.]


Good afternoon everyone, and welcome to our external students who are tuning in via the Internet. To those external students I would like to ask that you put some pants on for the duration of this lecture, and to refrain from playing Angry Birds. I have no idea what it is to "play Angry Birds"; I assume it's a euphemism for something quite distasteful.

This afternoon we are considering the current state of university education in Australia. I therefore recommend following this lecture with a generous measure of the intoxicating substance of your choice. First, let us consider those characteristics of any conceivable higher education system which are universally considered uncontroversial, indeed axiomatic.

The first axiom is that the primary purpose of the Australian university system is to produce a skilled workforce to meet the needs of industry. This has been the case ever since the alleged expansion of the university system with the "Dawkins revolution" of the late 1980s. As former education minister John Dawkins himself declares, failure to take the focus of higher education away from the intellectual development of students, and reposition it towards the needs of business, would have left the Thatcherite economic reforms of the Hawke/Keating era incomplete. The trade and technical colleges that subsequently merged to nominally join the university system have largely carried on in practice as vocational training institutions. Wherever they have ventured into disciplines traditionally considered academic, the "new universities" of the last quarter of a century still, indeed increasingly, stress vocational outcomes. For example, in it's 2015 prospectus, Southern Cross University (the rebranded Northern Rivers College of Advanced Education) provides, for each of their courses, a list of the professions for which that course provides "work-ready skills", with even the School of Arts and Social Sciences promising "degrees which put you in the workplace".

The second axiom is that the benefits of having a higher education system overwhelmingly accrue to the student. To reconcile this belief with the demand that universities must primarily serve the needs of business requires sturdy ideological blinkers, or at least the ability to maintain a logical contradiction whenever it is in your interest to do so.

A necessary corollary of the first two axioms is that the public purse has next to no business contributing to the funding of higher eduction, and that public funding of public higher education can only decrease over time. The consensus on this is quite striking, across all institutions and both major political parties. Indeed, out on the lunatic fringe, some vice chancellors have been pleading for less government funding in exchange for more market-based deregulation.

So if everybody, or at least anybody who matters, agrees on the fundamental characteristics of the Australian higher education system, why such fuss about the latest wave of incremental change enshrined in the latest federal budget? Well, there is one fundamental difference of opinion among university administrators and between the Coalition and the ALP; that is, whether it is worth preserving the role of traditional, pre-Dawkins univerities in any form.

The current government is keen to push our higher education system from neoliberalism to full-blown neoconservatism, with (small "l") liberal education confined to Abbott's bunyip aristocracy, professional training for the managerial class, and tough love for the proles. The Labor party differs only in that it sees no point in liberal education at all. If one wants to participate in civic discourse, and needs to learn the finer points of politicking and rhetoric, one goes about it the traditional way: get a job at the ACTU and work your way up the ranks until you reach preselection for a safe seat.

The older, more prestigious universities which make up the Group of Eight (Go8) have never been particularly happy about the Dawkins revolution and subsequent aftershocks. While the far greater number of new universities have staked their futures on a mass market in higher education, the Go8 have nothing to gain, in a commercialised system, by any implied equivalence between themselves and the former polytechnics. On the other hand the new universities have flourished under the "demand driven system", introduced in 2012, where they are free to accept as many publicly-subsidised students as they can bear, on the premise that the resulting degree is as solid a guarantee of a well-paid career as a degree from any institution in the country.

While much fun has been had from the revelation that federal treasurer Joe Hockey was, in his own student days, a protestor against student fees, the prime minister can at least boast of more ideological constistency. In contrast to the later, largely phony expansion of university student numbers resulting from the Dawkins annexation of non-university institutions, there was a real, almost tenfold, increase in student numbers between 1955 and 1975. The young Tony Abbott, as a vigorous student reactionary at Sydney University in the 1970s, found to his horror that the wrong sort of people were attending his university and actively engaging with the wrong sort of ideas.

It should therefore hardly come as a shock that the Jesuit-and-sandstone-educated Prime Minister and his Jesuit-and-sandstone-educated education minister might seek a compromise that would restore some of the pre-war elitism to the prestige end of the market, while also accommodating the wish list of the mass market providers of vocational "learning outcomes". However when even Fred Hilmer, vice chancellor of Go8 member the University of NSW, and previously a lukewarm critic of deregulation, welcomed the government's vision of a US-style "diversity" between an Australian Ivy League and what we might call a "Lantana League" of second-rate institutions, the administrators of the latter seemed oblivious to the evidence that a deal had been done to explicitly segment the higher education market into a prestige line of products, and a low-margin, no-frills brand.

The trick to being a successful free market advocate lies in knowing which markets, when deregulated, will naturally deliver your desired outcomes, and which regulations should be left well alone. The demand driven system, which uncapped the number of students a university could accept in each course, has served the vocational universities well, allowing them to drop those courses that were difficult to sell and focus on the mass marketing of degrees as future employment vouchers. Further expansion of the demand driven system to sub-bachelor two-year courses was merely expected to add proportionally more cars to the gravy train. So when the government's Commission of Audit (a.k.a. the razor gang) also recommended tuition fee deregulation, Peter Lee, Chair of the Regional Universities Network and vice chancellor of Southern Cross University, greeted the recommendation as "no surprise" and welcomed a "robust discussion". For the benefit of the millenial generation, this can be translated as: "WTF??? OMG!!!"

Fee deregulation would mean that the Ivy League would be free to charge what the market would bear, prompting speculation of five-figure annual tuition fees, while the Lantana League would be forced to admit that their credentials were worth perhaps a tenth of the Ivy's, or else simply lose customers, or perhaps both. In the face of these prospects, Professor Lee appealed to the notion of the university as a "public good", a notion conspicuously absent just weeks earlier, when yet more of the less vocational units of study were mercilessly cut from his own campuses for the second term of 2014.

I must admit to some degree of schadenfreude at the thought of my own university's vice chancellor in the character of Wile E. Coyote, strapping on his ACME-brand, market-driven roller skates, and so enthused by the initial accelleration that he's unaware that he's shot off a cliff, then blinking with confusion at his sudden loss of forward motion, looking down, and finally holding aloft a little sign saying "FOR THE LOVE OF THE PUBLIC GOOD, HELP!" before plummeting to the canyon floor and vanishing in a tiny "poof" of dust. Sadly, this is poor consolation. Regardless of the outcome of the proposed robust debate, the Lantana League already exists, independant of the prospects for an Ivy League, and is the only available option for students in much of the country outside the major capital cities. I can testify to this from first hand experience here in Coffs Harbour.

The first thing you will notice as a Lantana League undergraduate is that your study options are somewhat constrained. Each Lantana League campus will have a business school, a few other vocational disciplines, and perhaps a prestige vanity school (in the case of SCU Coffs, psychology) whose presence is tolerated as long as it is able to generate fine-sounding press releases and revenue-raising partnerships with industry. Rare exceptions notwithstanding, you will not find many of the traditional subjects of a liberal education available to study.

In fact the "study of" a subject is eschewed in favour of the "study for" a career. The Lantana League is steeped in a culture of instrumentalism. Nobody here attends university because they want to attend university; they are working/paying for the award of an employment voucher. TV advertisements for Lantana League institutions repeatedly hit the word "career" as if it were a punctuation mark, while the word "education" is never heard. The idea that there might be intrinsic value in what you study or the work you do while at university is anathema.

Lectures are discouraged in the Lantana League, in favour of the verbatim recitation of administratively-approved bullet points from Powerpoint slides. External students recieve these as an audio or video file download. Often, so do internal students; lectures nominally scheduled as on-campus are frequently teleconferenced in from another campus to save money. Even when a recitation is given in-person, that person must stand rooted to the spot behind a Star-Trek-like panel of technology (which they don't really know how to operate), because the camera trained on them is unmanned and stationary, and the majority of their audience is out in cyberspace. Engagement with the audience in the room is physically near-impossible under these conditions and, in any case, there is an unspoken pact between lecturer and students to maintain an imaginary partition between them in order to preserve equity with remote students. It would be unfair to take the opportunity to ask a question when the majority of your fellow students have no such opportunity.

These recitations are literally audiovisual crib notes. Indeed prior to an exam, your unit assessor (you are unlikely to meet anybody with the title of "professor" during your time in the Lantana League) will refer you to the appropriate Powerpoint slides for revision. Lantana League vice chancellors, in touting technology as a replacement for academic staff and campus facilities, are fond of noting that their students overwhelmingly prefer downloading lectures to attending them. This is approvingly dubbed "voting with their feet". There may be some truth to that, but it is also true that by their second year many students have realised that there is not a lot of point in downloading lectures, either. I know of some who record and listen to their own crib notes, in preference to the university-supplied recordings. You might call this "voting with their brains".

[I'm archiving for posterity a few articles I wrote for a now-defunct website. This is the second; here is the first.]

The typical recitation will involve someone who evidently intensely dislikes public speaking "umm"-ing and "err"-ing their way through slides which may have been hastily reviewed that morning in preparation, occasionally losing their place, or stopping to apologise for how boring the subject matter is. This is not to criticise these members of staff. This style of presentation is entirely in line with the institutional agenda, and is what is expected of them. The subject matter should be dismissed as boring, and each activity in the course of one's studies must be a bitter pill to swallow, otherwise the credential would not count as an accurate measure of dedication to one's career aspirations. To enjoy your time at university, or find your chosen discipline interesting, would be positively perverse.

Each assessment task is accompanied by a detailed marking rubric, examples of past work, a generous quantity of notes, tips, reference material, and so on. The marking rubric ensures that academic staff have no latitude to exercise their own judgement in grading, thus reducing the act of assessment to a mindless box-ticking exercise, and reducing the staff to interchangeable (and disposable) work units. For the student, it also reduces the task of doing the work to a similarly mindless process of reverse engineering from the material dropped in the student's lap.

Most courses can thereby be reduced to an empty charade of going through the motions; a pantomime education.

This is not to say there are no avenues for dissent. There are multiple administrative branches of any Lantana League university that are most eager to hear you rat out an individual member of the academic staff for providing insufficient "student satisfaction". However, if your criticism bears on the shallow, commercialised nature of the institution, there is an artificial mosquito breeding pond conveniently located on campus for you to go jump in.

This spoon-feeding of weak and enfeebling learning outcomes is justified by recourse to the increased socioeconomic equity of a system that is able to welcome "less academically-prepared students". In principle, I am one of those students who can boast of being the first in their family to attend university. However I have no desire to go to university merely for the purpose of vocational training.

My father received a great deal of vocational training in his progression from apprentice to tradesperson to management, and every cent (well, every penny initially) of the cost of that training was paid for by his employer. While on paper university enrollments have increased dramatically over the last 25 years, the real aim of that expansion, and the corresponding employment "credential creep", has been the imposition of a sadistically regressive tax, known as the Higher Education Loan Programme (HELP), which shifts a substantial portion of the cost of business (i.e. training, not to mention R&D) from employer to employee. As a side effect, unscrupulously entrepreneurial university administrators, and soon perhaps private for-profit training providers, do very well for themselves. Access to the kind of university education recognisable from the prime minister's student days remains as remote as ever for most Australians.

So for the foreseeable future of the Lantana League system, now that the eradication of "study of" in favour of "study for" is nearly complete, students outside the elite institutions have no hope of acquiring through university study a clear understanding of the world around them, nor the ability to actively participate in that world, or - heaven forbid - the will and means to consciously change it. Cheers.

An Introduction to the Self-Hating University

Published by Matthew Davidson on Tue, 23/02/2016 - 1:52pm in

[I'm archiving for posterity a few articles I wrote for a now-defunct website. This is the second, from February 2014; here is the first, and the third.]


Distance learning just isn’t worth as much as on-campus tuition. That’s the opinion of Professor Jim Barber, vice-chancellor of the University of New England and self-satirist of note; or at least that’s what his opinion appears to be if one engages in a little speculative reading between the lines. He has just announced his intention to charge significantly less for online than on-campus courses. Moreover, in a stroke of breathtaking audacity, the money foregone will not be lost from the UNE administrative budget, and certainly not from executive salaries; Professor Barber is taking it from his students. From 2014, external students undertaking distance education will be exempt from the Students Services and Amenities Fees (SSAF). As for the subsequent defunding of student services, well tough luck.

“University students around the country are increasingly voting with their feet and not showing up to class,” says Barber, while making the very cuts that will make showing up to class even less desirable, “yet we continue to slug them for our services whether they use them or not. This is a pretty inefficient way to run any enterprise let alone a service industry.” (University of New England, 2013).

Barber proclaimed at a conference last year that “unbundling” is “where best practice is heading pedagogically. MOOCs [Massively Open Online Courses] are an extreme example in a bigger movement towards unbundling of services. Excellence in the business of higher education will increasingly mean individualised levels of service delivery, so pay for what you want and as you go.” (Streak, 2013).

Even before one begins to speculate over the prospect of pay-as-you-go lavatories for the recklessly profligate micturators on campus, it may seem extraordinary that a v-c would explicitly boast that his own institution deliberately aims to be the no-frills Ryanair of the higher education “service industry”. Nevertheless he maintains that “while most traditional universities around the world continue to press their governments for more funding, UNE is trying to move in the other direction.” (University of New England, 2013). UNE's staff and students just aren't worth the money, according to Professor Barber, and such naked contempt for students and staff alike is not as rare among university administrators as you might think.

In the US, San Jose State University has been leading this allegedly inexorable unbundling by outsourcing course delivery to proprietary MOOC providers. When asked whether this might lead to a decline in the quality of the education his students receive, SJSU's president merely deadpanned “It could not be worse than what we do face to face.” (Bady, 2013).

Such disdain for the practices of “traditional universities” is common throughout the world wherever Thatcherite principles of governance have taken hold. The “self-hating state”, to use George Monbiot's incisive term, “renounces its powers. Governments anathematise governance. They declare their role redundant and illegitimate. They launch furious assaults upon their own branches, seeking wherever possible to lop them off.” (Monbiot, 2013). It is therefore hardly surprising that when the self-hating state determines the regulatory environment in which universities operate, the state's attributes are reproduced in the self-hating university.

As Simon Marginson (2013) observes, the self-hating Australian government “prefers automatic economic mechanisms that remove the need to make and defend arguable policy positions”. In its turn the self-hating Australian university disavows any intrinsic purpose or values, and therefore any responsibility for the social consequences of its operations. It is merely a commercial service provider - shapeless clay to be moulded by the economically rational student-customer to suit their interests.

Two policy pumps maintain this pedagogical vacuum: Income-Contingent Loans (ICLs), and the Demand Driven Model (DDM). These and/or similar mechanisms pertain to an increasing number of other countries; the differences between them are interesting, but arguably increasingly marginal, so for simplicity the Australian example will be taken as broadly representative.

The pioneering implementation of Income Contingent Loans was Australia’s Higher Education Contribution Scheme (HECS). It was adopted in 1989 as a resolution to the tension between greater participation in higher education (spurred in part by the abolition of tuition fees in the 1970s), and the Hawke/Keating Labor government’s “considerable fiscal parsimony”, to quote the charmingly diplomatic chief architect of HECS, Bruce Chapman (1997).

To be politically palatable, HECS necessitated a reframing of public education as an individual good rather than a social good. In this way it could be argued that public funding of higher education is a form of progressive taxation: If, broadly speaking, the better educated are the better paid, it is unfair to tax the poor to fund the rich. To the counter-argument that higher education is an important way for the poor to improve their lot in life, “HECS' defining feature - income contingent repayment” (Chapman, 1997) appeared to be the perfect have-your-cake-and-eat-it rejoinder.

Indeed many commentators have marvelled at the “elasticity” of tuition pricing wherever income contingent loans are available, particularly in the wake of the unprecedented tuition hikes of 2010 in the United Kingdom. But in the Australian Universities’ Review, Emory McLendon (1997) posited a persuasive explanation for the ease with which students transitioning from high school to university accept the prospect of deferred fees: “The key word is deferred and the key factor is being 18 years old. […] A young student would tend to view the deferred payment of HECS in a similar light as a superannuation payout. It is simply too far into the future to be of great concern.”

Rachel Wenstone, vice-president of the UK National Union of Students suggests another explanation for demand-side price elasticity and “increased participation”, even in the face of the 2010 tripling of tuition fees: “With more than a million young people unemployed in the UK, some may feel like their options are somewhat limited and that choosing a situation which involves huge debt is the only way to enhance their employment options.” (Garner, 2013).

Nonetheless, consensus on tuition price elasticity is far from universal. In response to sectoral labour market shortages in the mid-nineties, the incoming Howard government introduced a tiered fee structure, with the intention that the price differential between disciplines would offer an incentive for students to enter those professions with the greatest demand for new skilled labour. Bruce Chapman was appalled. Recall that his scheme was designed to recoup the cost of higher education along economically rational, user-pays, free market lines. In his eyes, these changes were “not coherent, nor […] based on a well-defined set of economic principles” and charging inexpensively-trained lawyers more than expensively-trained nurses was “arguably poor economics” (Chapman & Nicholls, 2013). A genuine free market ideologue would sit back and allow the wages of nurses to rise in response to demand. Of course, to the nominal free market ideologues in government, the overriding principle is that free markets are fine for the plebs, but when the interests of employers are threatened, the free market can go fly a kite. Chapman clearly missed the memo.

While proponents of a commercialised higher education system point to growing participation rates in recent decades as a measure of its beneficial effects (at least on employment prospects), it is far from clear whether and to what degree this is the case. Longitudinal studies of the long-term effects of university study on either the individual or society are virtually impossible to use as a basis for policy prescription when the university is in a state of constant crisis and reinvention. The benefits that have accrued to the graduate of a generation ago cannot reasonably be assumed to apply to the graduate of today’s radically changed system.

To anybody involved in higher education prior to the reintroduction of tuition fees, the suggestion that one might attain a Bachelor of Business in Convention and Event Management, that economics would be taught as a component of business studies rather than vice versa, or that publicly funded universities would be teaching rank pseudoscience, would be considered laughable. However vocationalism and a business-centric view of the world is a logical consequence of user-pays tuition with a primary focus on financial return on a student’s “investment”.

Outside the small number of elite institutions that carry on the task of educating a privileged few, the majority of universities have embraced the pursuit of the “three Ms” of New Public Management (NPM): markets, management, and measurement. Lee Parker (2013) identifies this as “a clear example of goal displacement, whereby the financial resourcing of university missions and operations has become the end in itself.” Far from freeing each university to develop a unique character, and providing incentives for higher education to diversify and specialise, the result of commercialisation is quite the opposite. “Operating in a global marketplace and reflecting NPM, universities inevitably converge, presenting often-times homogeneous brands, missions, product and service offerings, and general organisational profiles.” (Parker, 2013)

Even so, you may ask, isn’t it undeniable that student-consumers are indeed “voting with their feet”, and that there must be some degree of declining demand behind the oft-repeated claim that there is a “crisis in the humanities”? As noted above, the apples vs. oranges obstacle to meaningful comparison of today’s universities to those of a generation ago makes quantifying any such effect problematic, and formal research with the aim of critically evaluating this contention is thin on the ground. American statistician Nate Silver recently dipped his toe into the quagmire and has tentatively concluded that “the relative decline of majors like English is modest when accounting for the increased propensity of Americans to go to college. In fact, the number of new degrees in English is fairly similar to what it has been for most of the last 20 years as a share of the college-age population.” (Silver, 2013). While this may be seen as some comfort to proponents of traditional academia, the more troubling corollary of this observation is that it seems quite likely that the liberal (indeed liberating) education that one would have expected to receive at university a generation ago remains just as much the preserve of elites as ever.

That the much-lauded increased participation in higher education, and avowed concern for students of “low socioeconomic status” (SES), is principally directed towards addressing the skilled labour requirements of industry brings to mind an adage from Earl Shorris, founder of the Clemente Course in the Humanities: “the poor are so often mobilized and so rarely politicized.” (Shorris, 1997). As Noam Chomsky notes, self-funded education is “one important way to implement the policy of indoctrination of the young. People who are in a debt trap have very few options.” (Chomsky, 2011). The combination of tuition fees and student loans effectively serves as a sin tax on the kind of education that produces politically empowered human beings rather than docile employees.

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