Club Troppo

It was an innocent age where the major threats to freedom were mustachioed men with hydrogen bombs and the monopolistic tendencies of big business. In the paradoxical world of Clive Hamilton, the free market liberals of the 1950s never realised that the most serious threat to freedom would turn out to be people trying to sell things. Today marketers are probing our brains, gathering data on our buying habits and targeting our pre-teen children with manipulative campaigns they are ill prepared to resist.

But then again, it’s possible that a liberal like Hayek might have picked up a copy of Vance Packard’s 1957 best seller, The Hidden Persuaders. If he had he might have read about how advertisers and public relations experts were drawing on the emerging sciences of the mind to probe our hidden weaknesses and shape our behaviour according to their wills.

I can’t help wondering what Clive would make of Burger King’s Subservient Chicken — a website where visitors can issue instructions to man in a chicken suit and see them executed on screen. (Of course the chicken won’t comply with every request. If you tell him to ‘Go Vegan‘ he’ll march up to the camera and give you the finger.) According to the ad’s humble creators it was: "Quite possibly the most successful marketing website of all time. Over a billion hits. One hundred million unique visitors. Sales of Burger King’s chicken sandwiches doubled in a matter of weeks."

So if Clive, Vance and the creators of Subservient Chicken are right, what hidden weakness did American consumers succumb to when their attempts to dominate a virtual chicken-man ended with a burger purchase? Did the chicken violate their inner freedom?

(Continued)

Last weekend I went to see Guys and Dolls.  I had no idea it was such a good show.  I remember it was on when I was a kid, so I figured it might have been written in the late fifties or early sixties - definitely pre-Beatles or Buddy Holly even if it chronologically coincided with either if you know what I mean.  In fact it premiered in 1950 (if my memory from last week’s trip to Wikipedia doesn’t desert me).

My guess is that the show couldn’t be staged from around 1969 till sometime around now because the sexual politics are sufficiently traditional that their representation would not have been tolerated by a sufficiently large number of people that it would have ruined the show for enough people that it would have been a commercial failure.

Now we’re a bit more mature, I think that people can accept the representation of those sexual politics without contesting it - as a representation of another era even if most people in the audience would also know that things are different today.

Anyway, perhaps others disagree.

To quote from Wikipedia “The show stars Lisa McCune, Marina Prior, Garry McDonald, Ian Stenlake, Shane Jacobson and Magda Szubanski, and is playing at the Princess Theatre.”

Magda was good fun, but not as great as she can be, Garry McD was enjoyable but I’m not much of a fan, Ian Stenlake was very good. Lisa McCune - well I like Lisa McCune (I think I should have added that to Tim Watt’s ‘guilty pleasures’ challenge from a few weeks ago - I think she’s not supposed to be cool, but I think she is.)  She has a nice voice - so long as it’s amplified as it’s quite sweet and true, but not strong.  Marina Prior was a standout.Great fun as a comedy actress and damn good, strong singing.

Go and see it if you can.  It’s very well put together, very enjoyable, and a great look at a world which is now a full sixty years ago, about a time which is eighty years ago.  They did things differently there.

On at the Princess Theatre till it stops.  Well worth it.

Postcript - Leslie Katz has just sent this great YouTube of the duet Sue Me, which was well sung by Gary McDonald and Marina Prior, but not as brilliantly as this pair.

There have been a bunch of things I’ve wanted to post about, but have simply not had the time.  I still don’t have the time, but I with a bit of enthusiasm and not much time, I thought I’d mention some good things.

The first is that I listened to this podcast of Dan Pink talking about his new book on Econ Talk. The interviewer almost invariably annoys me with the way in which he labours all the ideological points he wants to make about how ‘economics’ shows that markets are great. I don’t need persuading of many of these points, though it’s all argued with such repetitive vigour that my only instinct is to look for grounds to disagree because I hate that style of discussion where we all smugly congratulate ourselves about how we know and how silly all those people who don’t agree with us are.

But the interviewee can’t be blamed for that, and the interviewee comes up with lots of interesting thoughts on the (now not particularly original) theme that the jobs that will survive the next great wave of globalisation the ‘offshoring’ of services will be those things that use the right side of the brain or rather use both sides of the brain.

Like any self respecting aspirant for the job of writing a bestseller, Pink has got his lines down to acronystic (sorry about that) lists. The forces driving offshoring are

• Abundance;
• Asia; and
• Automation.

And the things us normies in the West ought to be developing if we want to be on the right (economic) side of the tectonic shifts that will take place are to emphasise

• Design;
• story;
• symphony;
• empathy;
• play; and
• meaning.

Anyway, I often find this kind of thing a bit of a bore, but I liked it, so go listen if you want to, and try not to be annoyed by the interviewer.  You have to put up with him on all the Econ Talk podcasts which are often very interesting.  At least for those of us interested in this stuff.

When Margaret Thatcher said that there was no such thing as society, her enemies were delighted. Here, in a single phrase, was her heartless philosophy of individualism — a philosophy which abandoned vulnerable people to the competitive violence of the marketplace and celebrated an ethos of selfishness. Of course that wasn’t what she meant, but that hardly matters now.

The idea is often traced back to Friedrich Hayek. He argued that society could not be held morally responsible for the distribution of wealth and income. It was not possible to reorganise society to make the distribution of income more socially just. As he put it, "We are not, in this sense, members of an organization called society, because the society which produces the means for the satisfaction of most our needs is not an organisation directed by a conscious will, and could not produce what it does if it were."

Surprisingly, one of the earliest uses of the phrase: "There is no such thing as society" was by by a thinker who believed something quite different. In a 1942 paper titled ‘The Individual and Society: An Emerging Philosophy‘ Harold Saxe Tuttle argued that the apparent conflict between the collective and the individual was an illusion:

There is no such thing as society; there are only persons. There is no such thing as the state; there is only a set of machinery through which persons exercise control of other persons.

What appeared to be a conflict the state and the individual, he wrote, inevitably turned out to be a conflict between individuals with conflicting desires. And these desires, he argued, were the key to the problem — "If we could but find some fairy’s wand by which to change interests and desires so that all would be compatible the causes of conflict would virtually vanish."

(Continued)

I just clicked on Amazon’s ‘add to my shopping cart’ and got told that four books had changed price.  Usually they have gone up.  Or that’s been my experience.  But things are a-changing as you can see from the excerpt below.  Is this deflation, increasing copying, competition from free content on the net.  Who knows.  But it - and the fact that some of the prices are such odd numbers - are perhaps signs of the times. (Continued)

From Glen Dyer in today’s Crikey.  I agree.

If you — or ASIC or the ASX — are looking for another example of well-informed trading affecting stock prices ahead of stockmarket announcements, look at yesterday’s 5.3% drop in the price of construction giant, Leighton Holdings to $42.36 ahead of its 2008 profit announcement and a share issue rumoured at $800 million.

Another example is CSL’s profit announcement yesterday and its $3.6 billion acquisition of US based company Talecris Biotherapeutics Holdings, which has been preceded by a 10% rise in the CSL share price from last Friday. It now sits at $39, within 90 cents of its all-time high (adjusted for last year’s 3 for 1 share split). The company revealed a solid rise in earnings and an equally upbeat outlook for the coming year.

The rise in the value of the company added more than $1.9 billion to the company’s market cap and enabled the $1.5 billion share issue now being placed with big shareholders to be done at a more attractive price.

And then there’s the questionable trading in ports and rail group Asciano ahead of the equally surprising $2.9 billion offer from TPG and a partner. That trading over about a week pushed the share price up 20% ahead of TPG revealing its offer. The offer was $4.40 a share, the share price pushed through that in pre-trading and then jumped to $4.83 or thereabouts the day it was announced.

The pre-trading in Leighton came despite the market being confident in the company’s forecasts of a 30% rise in profit for the 2008 year. This morning Leighton shares went into what could be a four day trading halt. The details of the issue, its probable size and the brokers involved were in the pages of the AFR this morning — why wasn’t it released to the market as a whole last night?

Why do we see this sort of “informed” trading? Because market security is not up to scratch bad when someone wants to alter share prices to someone’s benefit. And those doing it, leaking the information to mates, or doing a spot of quiet trading on their own, know they have a better than average chance of avoiding any action.

These are just three of examples of questionable price movements in trading ahead of announcements, or the dumping of shares (or buying) by insiders around announcements. It’s more dangerous to market integrity than the activities of hedge funds and short sellers.

This started out as a comment on Don’s recent post on Hamilton (for which I second – or third — the praise). Totting up the word count when I finally lifted my head, I realised it was an absurdly long piece to tack onto a comments thread. In any case, the points I wanted to take up were quite different to those on which Don focused. All of which is to explain (or possibly apologise) to Troppodillians for burdening you with another thread on The Freedom Paradox.

My interest was prompted by Pete Hay’s review of the book (which I haven’t yet read, by the way) in the latest Monthly. He found much to admire (I’ll come back to that) but was, if anything, even less impressed than Don with Hamilton’s journey into German metaphysics.

All very confusing, and more trouble, I think, than it’s worth. In the middle of the book, Hamilton establishes “compassion” and “the will to justice” as the touchstones of his practical ethics, and these thread prominently through the subsequent sections of the work. But we do not need German metaphysics to establish a basis for such principles as informants of a moral life. Indeed, it is hard to see how any necessary connection can be made between the practical prescriptions of a moral life and an elusive and insubstantial universal essence.

Like Hay, I have no trouble with Hamilton’s view that neither inner freedom nor happiness are likely be found in shopping, or materialism more generally. That instead, in Hamilton’s words (via Hay’s review): ” . . . we are free only when we act according to goals and principles that we have given ourselves.” Mind you, these are hardly controversial notions. Everyone from Buddha to Christ to the author of “Chicken Soup for the Soul” would endorse them. What did raise an eyebrow, though, is Hay’s readiness (and, to judge from the quotes in the review, Hamilton’s) to lay the blame for our unenlightened state on the market, or capitalism, or even liberal philosophy. (Continued)

Here is today’s column for the Financial Review.

Patently there’s a problem

As Mark Twain said, “It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so”.

Our biggest mistakes often come when we’re most untroubled by our logic – even when it’s wrong! For decades we’ve been applying this syllogism: Intellectual property (IP) stimulates innovation and creativity. Therefore stronger IP generates more.

We might know it for sure, but surprisingly often, it just ain’t so.

Given its costs to consumers’, stronger intellectual property protection is only worthwhile where it encourages IP production that would not otherwise have occurred.

Yet we’ve often strengthened protection for IP that’s already in existence. For instance we’ve lengthened the period of protection retrospectively.

• Like when we agreed with all the other intellectual property importers in the world – that’s pretty much everyone except the US – to retrospectively extend patent terms from sixteen to twenty years.
• Like when we negotiated the Australia U.S. Free Trade Agreement to extent copyright protection for an additional 20 years. The pre-WWI song “Happy Birthday” finally escaped Australian copyright in 1997 – but back it went. Happy birthday indeed.

This lurch towards IP mercantilism hasn’t just been driven by the US’s trade negotiating muscle. From the early eighties, judges around the world somehow caught the zeitgeist. Intellectual property came to be seen as such a Good Thing that well reasoned judicial taboos on patenting software and business methods and various doctrines which stood in the way of patenting the obvious were whittled away.

The result? Today we have people successfully patenting garden swings and toast! Litigation on software patents is four times more likely than chemical patents; business methods patents twelve times more likely; finance patents 49 times.

But what’s ultimately much more serious are road blocks preventing further innovation. And massive uncertainty as software developers must now use lawyers as minesweepers as they negotiate the patent thicket before them – at hundreds of dollars an hour.

Last week the lawyers struck again! (Continued)

Brian Fitzgerald drew my attention to this sad valedictory post at The Patry Copyright Blog.

2. The Current State of Copyright Law is too depressing

This leads me to my final reason for closing the blog which is independent of the first reason: my fear that the blog was becoming too negative in tone. I regard myself as a centrist. I believe very much that in proper doses copyright is essential for certain classes of works, especially commercial movies, commercial sound recordings, and commercial books, the core copyright industries. I accept that the level of proper doses will vary from person to person and that my recommended dose may be lower (or higher) than others. But in my view, and that of my cherished brother Sir Hugh Laddie, we are well past the healthy dose stage and into the serious illness stage. Much like the U.S. economy, things are getting worse, not better. Copyright law has abandoned its reason for being: to encourage learning and the creation of new works. Instead, its principal functions now are to preserve existing failed business models, to suppress new business models and technologies, and to obtain, if possible, enormous windfall profits from activity that not only causes no harm, but which is beneficial to copyright owners. Like Humpty-Dumpty, the copyright law we used to know can never be put back together again: multilateral and trade agreements have ensured that, and quite deliberately.

It is profoundly depressing, after 26 years full-time in a field I love, to be a constant voice of dissent. (Continued)

Is the New York Philharmonic just a cover band? After all, rather than writing and performing their own material, aren’t they just rehashing old tunes by Mozart, Stravinsky and Beethoven? One of the conceits of underground music scenes, is that the performers are genuine creators. While they might lack technical proficiency, they write and perform their own material. However rough it sounds, at least the audience is getting something original.

Or maybe not.

(Continued)

Matthew Bonson and the long-tongued Len Kiely in happier times on elevation to the Ministry in November last year

The day before Saturday’s unexpectedly knife-edge NT election, Chief Minister Paul Henderson gave a politically prudent and factually correct assessment of Labor’s chances: ”A handful of votes in a handful of seats will determine the outcome of this election and I’m fighting very hard to hold each and every of the 19 seats we have.”

Yet at the same time his predecessor Clare Martin was scoffing at predictions of pundits (including yours truly) that Labor was likely to lose 3 or 4 seats to the CLP. She didn’t think they’d lose any at all, while other ALP insiders were arrogantly dismissing leaked CLP polling showing its candidate narrowly in front in Fannie Bay, and simultaneously backgrounding the media on the alleged possibility that Opposition leader Terry Mills could even lose his seat as Denis Burke had done in 2005.

This palpable arrogance, hubris and complacency was typical of the Labor campaign. Moreover, it may well have been the decisive factor in generating a photo-finish outcome when both parties’ private polling had indicated a decisive ALP victory. By conveying the message that Labor would win by a country mile, and that the CLP was a joke and not remotely competitive, the ALP was giving voters who didn’t want a CLP government, but had a range of individual gripes with the Henderson government, permission to register a protest vote in the assurance that Labor would win anyway. It was also implicitly (if unintentionally) telling typical disengaged voters that they might as well enjoy a beautiful dry season day and not bother to vote at all. Quite a few took precisely that message, resulting in low voter turnout figures in several Darwin electorates. Most of those absent apathetic voters think life is pretty good in the boomtime Territory and a majority would probably have voted Labor out of sheer inertia and familiarity had they bothered to turn up at all.

Update - The latest counting appears to have Labor’s lead in Fannie Bay closing very slightly from 57 votes to just 52.  If that represents postal votes it may suggest that my assumption that postal votes will favour Labor will need revisiting. 

Further update - Both Labor and CLP scrutineers now say that Labor is 92 votes ahead in Fannie Bay after today’s counting, with just 150 postal votes still to come in.  Hence, barring a miracle/disaster (depending on one’s viewpoint) Labor will form government with 13 members to the CLP’s 11 with one Independent in Gerry Wood.  Wood yesterday said he would refuse offers of the Speakership, which means he would still have a position of considerable influence despite a hung parliament no longer being a real possibility.  

(Continued)

Nothing seems to excite conservatives as much as the spectre of moral relativism. For conservatives, relativism is one of the great errors of the postmodernist left. If it is allowed to spread through the classrooms, lecture theatres and legal system, Western civilization will surely collapse. But what few conservatives seem to have noticed (or choose not to mention), is that some of the most revered figures on the right were also moral relativists. One of these is the Austrian economist Friedrich Hayek.

(Continued)

When the philosopher Arthur Schopenhauer threw his neighbour down a flight of stairs he said it was because she was making too much noise. He couldn’t stand noise and once wrote that "when a great mind is interrupted, disturbed and distracted it is capable of no more than a commonplace mind". He especially loathed the sound of cracking whips, and suggested that corporal punishment was an appropriate response:

A fellow who rides through the narrow alleys of a populous town with unemployed post-horses or cart-horses, and keeps on cracking a whip several yards long with all his might, deserves there and then to stand down and receive five really good blows with a stick.

Given this sensitivity, the sound of women chattering outside his rooms must have been intolerable. In his essay ‘On Women‘ he claimed that women were incapable of abstract reasoning, had no sense of justice and were habitual liars. The idea of such frivolous creatures interfering with serious intellectual work must have seemed an extreme provocation.

His neighbour, Caroline Luise Marguet sued him. She claimed that when the great mind interrupted her conversation by pushing her down the stairs, he injured her so badly that she could no longer work. The case dragged on for five years and was only settled when Schopenhauer’s goods and property were seized. In the end, the court demanded that he pay her 60 talers a year for the rest of her life. Although he resented the judgment, there is no evidence that he felt any regret about his actions. When the woman finally died in 1852, he wrote across the death certificate, ‘Obit anus, abit onus‘ (the old woman dies, the debt departs).

Given this, it might be surprising to discover that Schopenhauer’s moral philosophy is a philosophy of compassion. But experience with philosophers shows that there’s no necessary connection between studying philosophy and living a moral life.

(Continued)

I found this brief excerpt (courtesy 3 Quarks Daily) hard to resist:

If you want to go where people are reading Hannah Arendt and Karl Popper, Nafisi has admonished, “go to Iran”. Go to Iran, I would add, if you want to discover where people are reading Jürgen Habermas, Isaiah Berlin, Leszek Kolakowski and Immanuel Kant. “There have been more translations of Kant into Persian in the past decade than into any other language”, reports Vali Nasr , “and these have gone into multiple printings”. Abdollah Momeni, the leader of Iran’s most prominent student-activist group (Daftar-e Tahkim-e Vahdat), claims Habermas as his chief inspiration. The speeches and writings of Akbar Ganji, Iran’s leading dissident, are peppered with references to Kant, John Stuart Mill and Albert Camus.

Indeed, there are often “more vibrant resonances of ‘Continental’ thought” in countries like Iran, notes the political philosopher Fred Dallmayr, “than can be found in Europe today”.

It’s from an essay by Danny Postel in which he which examines some of the intellectual currents in Iran. Somewhat surprisingly, to me at least, it seems among intellectuals and students liberalism tops the list. Postel acknowledges the complex ongoing debate around liberalism but notes that its meaning in Iran is fairly straightforward. “Broadly speaking, it signifies the struggle for human rights, women’s rights, civil liberties, pluralism, religious toleration, freedom of expression and multi-party democracy.”

In a theocratic state, such issues are of course hardly academic. As he says, “For Iranians, liberalism is a fighting faith.” The glimpses of their struggles remind us of how much we tend to take for granted while the essay as a whole is a stark illustration of how narrow, indeed almost cartoonish, the debate about Iran has become.

In any case, I was glad I didn’t resist and suspect you will be too.