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The Future Is Different! If That Seems Obvious Then Why Are So Many Acting As Though It Isn’t!


“Ironically, in an age of instant global connection, my certainty about anything has decreased. Rather than receiving truth from an authority, I am reduced to assembling my own certainty from the liquid stream of facts flowing through the web. Truth, with a capital T, becomes truths, plural. I have to sort the truths not just about things I care about, but about anything I touch, including areas about which I can’t possibly have any direct knowledge. That means that in general I have to constantly question what I think I know. We might consider this state perfect for the advancement of science, but it also means that I am more likely to have my mind changed for incorrect reasons.”



From “The Inevitable: Understanding the 12 Technological Forces That Will Shape Our Future” by Kevin Kelly

Now, while the media is asking us to look at the differences between Abbott and his former underlings, it’s interesting to look at exactly where the areas of difference between the current Liberal direction and what Abbott is saying. While Tony wants to slow immigration and to eliminate the Human Rights Commission in order to stop “official bullying” (ok, if he’s refering to the bullying of Gillian Triggs by government and other officials, it’s probably true, but I’m more worried that it seems he has no problem with unofficial bullying), they all basically agree on what a great thing coal is and all they have to do is get a STRONG economy and all the other problems will take care of themselves.

Actually, I wonder if Tony and Malcolm and Scott had been alive a hundred years ago whether we’d have heard something like this:

“The horse and cart will be part of our transport mix for a long time to come. Some states are putting unrealistic targets on the number of automobiles and are suggesting that by 1930 we’ll have as much as fifty percent of our goods moved by truck. Let’s be clear we need a baseload system and you can’t go past the horse for that. While some people are complaining about the horseshit, we think that it’s important to remember that it’s a naturally occuring thing and good for plants, so how could it be damaging to anyone’s health? The fact remains that automobiles are currently much, much more expensive to run than horses and they are nowhere near as reliable. The idea that they’ll ever be produced in the sort of numbers that would bring their price down to where they’d be able to compete with horses is just a silly dream. Besides, it’s all right for those in the city, but once you venture into the country, where will you get the petrol from? It’s not like they’ll ever have a way of providing petrol outside the major cities like Sydney and Melbourne. No, we in the Liberal Party are committed to the horse and cart, while Labor are pushing transport costs higher with their suggestion that the new, expensive invention can provide a reliable means of transport.”

Yep, they all seem to be ok with this idea that we need coal. Coal is beautiful. Coal is carbon. Coal is a diamond. Old King Coal was a merry old soul… Or as Tony told us, we should stop subsidising these renewables, let them stand or fall in the market, and just stick to subsidising coal like God meant us to.

But I suspect that – Donald Trump and the Coalition of the Lying notwithstanding – the market will fix coal sometime in the next decade. I don’t expect the market to fix everything, but this is one thing where it just might work.

No, I don’t agree with the current government’s strange idea that the Market solves all our problems. We’re constantly being told how when the economy gets back “to normal”, when we have stronger growth, when we fix the deficit, when we pay off debt, then it’ll all be ok. Unemployment will be fixed and housing will be more affordable. In Debt: The First 5,000 Year, Dave Graeber explains the appeal of Adam Smith’s writings:

‘This is actually why Smith’s work is so important. He created the vision of an imaginary world almost entirely free of debt and credit, and therefore, free of guilt and sin; a world where men and women were free to simply calculate their interests in full knowledge that everything had been prearranged by God to ensure that it will serve the greater good. Such imaginary constructs are of course what scientists refer to as “models,” and there’s nothing intrinsically wrong with them. Actually, I think a fair case can be made that we cannot think without them. The problem with such models—at least, it always seems to happen when we model something called “the market”—is that, once created, we have a tendency to treat them as objective realities, or even fall down before them and start worshipping them as gods. “We must obey the dictates of the market!”’

Now the big problem with treating the market as some sort of deity is that we expect deities to have a clear idea of what they’re doing. The very idea of “letting the market decide” implies an intelligence weighing up the consequences and coming to a sensible, rational conclusion. The Market makes no actual decisions; it’s the result of numerous decisions by flawed individuals. While the wisdom of the crowds has some merit, it’s also worth remembering that The Bay City Rollers were once very popular.

Unfortunately, while conservatives often preach less government intervention, they’re happy to have governments intervene to protect their own interests. For example, think copyright laws and patents that stop us simply manufacturing things that other people have invented. Yes, I think that such things should exist, but I’m neither a free marketeer, nor an anarchist. Pursued to its logical conclusion, laissez-faire economics would argue we have no need to stop companies from pouring poison into our water supply because when everyone’s dead, the company won’t have a market any more and the market will have solved the problem.

In abstract terms everyone understands the simple reality is that world is changing. While this fact is used by the Liberals to reduce the pay of workers on penalty rates, there’s no acknowledgement that even though improved growth may create some extra jobs, it certainly won’t be enough to help the long term unemployed or solving housing affordability. Improvements in growth and more manufacturing don’t necessary lead to more jobs. There’s every possibility that it will be a machine or robot doing the work. Yes, our GDP may have increased, but the idea that if you increase the profits of businesses it will trickle down to the workers is just so last century…

Actually it wasn’t even true then.

We need to acknowledge that economics frequently involves “wicked problems”. A wicked problem is where the unpredictability and interconnected nature of all the factors involved means that it’s very hard to predict the outcome of any course of action and any solution tried may lead to even worse problems.

At its most simple, we see the MP put in charge of doing something about housing affordability, Michael Sukkar who suggesting that getting a highly paid job was the solution to the problem, and he then using his own experience of getting a law degree and being elected to Parliament, enabling him to purchase a second property by the time he was 35. Most of the criticism of his comments was along the lines of how out of touch he was, and how his remarks echoed various other Liberals who seemed to think it was just a matter of having richer parents or earning more. Of course, there’s an element of truth in that, but probably the more frightening thing is when the person in charge of examining the system sees it in terms of what works for the individual. Housing affordability is a wicked problem. We could decide that we’d give all those saving for their first house the same pay rates as an MP and we’d do absolutely nothing to make houses more affordable because it would simply add to the price they could afford, pushing prices up even further.

Take penalty rates as an even more complicated example of a wicked problem. The Coalition look at it simply. Pay people less and we’ll have more employers willing to hire people to them to work on a Sunday. We’ll have more cafes, more shop open and those that are already open will employ more people for more hours because it’s cheaper. In some cases, this may happen, but one of the reasons that Sunday is the busiest day for some cafes is because their competition has decided it isn’t worth opening. Once it too decides to open, the takings of the busy shop may decrease. “Gee, I really don’t need to have two waiters on any more, half my customers are going down the road and another handful don’t come in any more because now they’re starting an hour earlier at their retail job!” Then, of course, you need to take into account the loss of business from people who can no longer afford as much because they’re penalty rates have been cut.

Now I’m not saying that’s what will happen with the decision to slash penalty rates; I’m simply pointing out that it’s a wicked problem and therefore unpredictable.

We need to begin to start talking about the future. But first we need to understand that it won’t be like the past, and while it’ll be unpredictable, we should start looking at what’s likely and not merely buying shares in the buggy whip company and telling everyone that they’re great value one day soon they’ll bounce back when people start using the horse and cart again.

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9 comments

  1. Keitha Granville

    always succint and to the point Rossleigh. Particularly the para about penalty rates. I want to see a chart of how many jobs have been created and how many more shops and eateries are open after this take effect. Sadly I suspect your scenario is more likely

  2. jim

    January 2017 and SA July 2016
    New research has drawn a comparison between very high wholesale prices in the National Energy Market in South Australia and Queensland.

    While high prices in South Australia have received much political and media attention, even higher prices endured by Queensland electricity consumers over the past five weeks have gone almost entirely unreported….clue

    South Australia has no coal generation but lots
    of wind, while Queensland has no wind but lots of coal. and the RWNJ’s are very angry.

    http://www.tai.org.au/sites/defualt/files/P350%20High%20price%20events%20in%20the%20NEM%20Qld%20and%20SA%20FINAL.0.pdf

  3. Matters Not

    jim, as you would be aware the coal industry provides significant funding to buy influence in the ‘political marketplace’.

    They expect – and get – a good return on their investment. Mike Seccombe wrote a good piece in The Saturday Paper about such developments and the ‘conversion’ of M Turnbull.

    Malcolm Turnbull, private citizen, understands that is true, which is why his mansion has battery storage. But Malcolm Turnbull, politician, prefers to obscure that truth in the hope of wedging his opponents. Just about everything the government is saying to that end is selective, misleading or straightout false. It is false to say their greenhouse reduction target is ambitious. It is not, given that Australia’s per capita emissions are twice the average of developed countries and four times those of the world as a whole. It is false to say Labor’s target of a 50 per cent reduction in greenhouse emissions by 2030 is “ideological”.
    Insincere and half-baked, yes. But not ideological.

  4. Blair

    I’m actually ok with not funding renewable energy, so long as we don’t subsidies fossil fuels energy, including mine repatriation back to the original environment and the price of dumping carbon into the atmosphere. I don’t think fossil fuels would be able to compete if there was a level playing field.

  5. kerri

    Letting the market decide is what has landed the world with Trump, Brexit, Duterte, Hanson.
    Politics like Economics is not successful when controlled by the ignorant and ill informed.

  6. kerri

    Another point about penalty rates is that the $80, $90, whatever amount penalty rate workers will lose, means they also will not be able to spend it, therefore driving more businesses under.
    My these Libs are good at managing an economy aren’t they?

  7. Christine Farmer

    This penalty rates argument can’t be just about how the amounts being paid for Sunday work are so terribly hard on employers. I fear it may be the thin end of some much nastier wedge. More staff will only be employed if they are needed; the idea that more will be taken on because penalty rates have been reduced is a nonsense.

    Say a waiter earns $24 per hour on a weekday, so 150% for Saturday is $36 per hour, and 175% for Sunday is $42. A difference of the price of one cup of coffee! But for a six-hour shift, for example, such a cut is worth $36. Not negligible if you are a student. On the other hand, the likelihood of such a small amount of money being put towards employing another staff member is zero.

    Just what is the point?

  8. Matters Not

    staff will only be employed if they are needed

    Yes! It’s ‘demand’ or the perceived likelihood of same (in the foreseeable future) that motivates an employer to ‘hire’. That an employer with more financial capacity to hire will then do so is just a nonsense.

    That the Fair Work Commission apparently bought the argument that ‘capacity’ to hire resulted in subsequent ‘action’, as advanced by employers, invites the MSM to request the release of the modelling undertaken. After all, the Commission delayed their decision for two years while they pondered their conclusion. Clearly, time was not a constraint. But maybe, the political considerations were?

    Presumably, they made their decisions on economic rather than ideological grounds? Or maybe not.

  9. Rossleigh

    In reality, the point isn’t about the small business. As people point out, the effect is hardly enough to employ an extra staff member. It’s possible that some may decide not to work themselves, but I haven’t seen any economic modelling or surveys that give actual numbers. It’s one of those ones where the simplistic explanation of the current clowns is taken as a likely outcome without much examination.
    The point is more for the big retailers, and while much was made of the Coles guy who stood beside Shorten being on an enterprise agreement and not losing any money, how long is it before there’s a flow through? Will the fact that certain workers have had their penalty rates reduced be used as an argument in the next enterprise agreement?
    As a side note, I read that it didn’t affect emergency workers, teachers or police. Given that teachers don’t get paid overtime, I was wondering how it could possbly affect teachers.

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