2 EditorialEconomic freedom offers the greatest hope for thepoor, the disenfranchised and the wealth of nations...Mike Nahan

3 The Ideological War Within the WestHas Western liberal democracy really triumphed? Orare we witnessing the rise of an alternative ideology—‘transnational progressivism’—which is fundamentallyopposed to liberal democratic values? John Fonte

7 Take the Candle to the Darkest Dark FirstAn Amnesty International insider reflects on the needfor the organization to focus on international priorities.Jack Robertson

8 Thoughts on the Practice of Bagging JudgesServing it up to judges is as much a public duty asdishing it out to politicians. John Hyde

10 The Four Corners of the ReefMaking a lot of noise on behalf of the WWF is not whattaxpayers expect for their ‘eight cents a day’. Worse, itobscures the science surrounding the issue. Gary Johns

12 The French MalaiseThe French have moved to the Right, but in France Rightis Left and Left is conservative—and both hate themarket. Andrew McIntyre

13 Peter Bauer: A Third World HeroIt’s not often that an orthodox economist with agenuine feel for the Third World gains attention. ButBauer’s long-standing objection to foreign aid made himdifferent. Vale Peter! James Shikwati

14 The Blair FilesOne thing the UN is very good at and that’s talking.Unfortunately, most times that’s all it does.Tim Blair

15 Regulating Telecommunications The growing burden of telecommunications regulationhas created delays, inequities, excessive costs and youguessed it ... yet more regulation. Jim Hoggett

17 Food Police Are At It Again in VictoriaAn array of clumsy and ill-considered regulations arethreatening our small food businesses. Steve Clancy

19 The ‘R’ FilesAlthough they might appeal for all sorts of reasons, itremains true that ‘Green’ sources of energy are bothunreliable and comparatively costly. Alan Moran

21 Education AgendaThere is no comfort to be taken from benchmarks andstandards used in testing Australian schoolchildren.Kevin Donnelly

23 Letter from LondonFoot-in-Mouth disease still haunts the Tories. By contrast,what fun it is for those politicians, who know how to, er… um … get that story right....!John Nurick

24 Free_Enterprise.comCopyright. COPY right? Can anyone tell who owns whatthese days? And if we can, what sort of property rightsare they? Stephen Dawson

26 What’s A Job?The ACCC has a powerful armoury at its beck and call.Pity it can’t focus on those who really need their helpmost. Ken Phillips

27 Letter from AmericaOn the question of free trade, President Bush shouldhave known better. Strange thing is—he was advised so!Nigel Ashford

28 Strange TimesThe weird, the wacky and the wonderful from aroundthe world. Compiled by IPA staff and columnists

29 Immigration vs DemocracyNow this is odd—most of us agree that, sometimes, ourpolitical masters need not consult us on matters of themost sensitive ‘national interest’ sort. But do Australia’spost-War migration efforts fall into that category?James Franklin

30 Further AfieldRussian tax reform; the benefits of marriage; the brain-drain works both ways; biotech crops still flourishing;capitalism and virtue.

32 Globalization Is Not An IdeologyAn interview with Father Piero Gheddo on themeaning of, and prospects for, globalization.

ARTICLES & REGULAR FEATURES

Inside This IssueVolume 54 • Number 2 • June 2002

Editor: Mike Nahan. Publisher & Executive Director: Mike Nahan. Production: Chris Ulyatt Consulting Services Pty Ltd.Designed by: Colin Norris, Kingdom Artroom. Printed by: Print Hotline, 47 Milligan Street, Perth WA 6000.

Published by: The Institute of Public Affairs Ltd (Incorporated in the ACT) ACN 008 627 727.Level 2, 410 Collins Street, Melbourne Victoria 3000. Phone: (03) 9600 4744. Fax: (03) 9602 4989. E-mail: ipa@ipa.org.au Website: www.ipa.org.au

Inside cartoons by Peter Foster [(03) 9813 3160]

Unsolicited manuscripts welcomed. However, potential contributors are advised to discuss proposals for articles with the Editor.

Views expressed in this publication are those of the authors and do not necessarily reflect the views of the IPA.

Reproduction: The IPA welcomes reproduction of written material from the Review,but for copyright reasons the Editor’s permission must first be sought.

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In August this year, 40,000 NGOactivists will descend upon Johannesburgto attend the World Conference onSustainable Development, ostensibly todiscuss how to advance the wellbeing ofpeople in developing nations.

Unfortunately, the Conference plansto condemn the very thing that offersthe greatest hope: economic freedom.

As the Economic Freedom of the World:2002 Annual Report* and the growingbody of associated research show,economic freedom—free trade, soundmoney, protection of property rights,limited government, and neutral andlimited regulation—provides the mosteffective route from poverty andhopelessness.

The Report finds a strong andpositive relationship between economicfreedom and income, and between eco-nomic freedom and economic growth.

In 2000, the most economically freecountries had an average per capitaincome of $23,450 which is nearly twicethe per capita income of the nexthighest group of countries. In contrast,the bottom group of countries in termsof economic freedom had an averageper capita income of just $2,556.

Economically-free countries alsotend to grow faster. Over the 1990s, thefreest group of countries grew at anaverage rate of 2.56 per cent per annum,while the least free nations—most ofwhich were in Africa—were mired indepression with their economiesshrinking by 0.85 per cent per year.

The relationship between economicfreedom and economic growth is not astatistical illusion or spurious correla-tion. Indeed, it statistically significant androbust.

The relationship between growthand economic freedom is not restrictedto rich countries. Although developedcountries dominate the ranks of ‘themost free’ countries, the largest gains interms of growth have been achieved bycountries which started poor such as

From the EditorMIKE NAHAN

Hong Kong (now ranked 1st), Singapore(now ranked 2nd) and Chile (nowranked 15th). Ireland (ranked 7th thisyear) also started the 1990s as one ofthe poorest countries of Europe, butbecame the continent’s tiger economyand ended the decade with a higher percapita income than France and the UK,thanks, in large part, to its adoption offree-market policies.

The message is also positive forpoverty alleviation. First, research hasfound a significant negative statisticalrelationship between economic freedomand poverty. That is, the proportion ofthe population in poverty within acountry is smaller the greater the levelof economic freedom. Second, theReport finds that poor people are farbetter-off in countries with higher levelsof freedom. For example, in 2000, thepoorest people in the freest countriesreceived, on average, US$7,017 whichwas 70 per cent higher than the nextfreest group of countries and nearly 10times the level of the least-free group ofcountries.

And it is not just about money.Economic freedom also has a strongpositive impact on human development,with the levels of education, health andlife expectancy rising strongly with morefreedom. Interestingly, a recent studyfound that a 15 per cent increase ineconomic freedom (which was achievedacross Africa in 2000) is expected to

yield a 16 per cent increase in access tosafe drinking water—a key target fordiscussion in Johannesburg.

Importantly, economic freedom isalso shown to be a powerful antidote tocorruption, with levels of corruptionfalling sharply with an increased level ofeconomic freedom. This really is nosurprise, as economic freedom actsdirectly against the main source ofcorruption, which is the ability ofbureaucrats and politicians to sell theirunrestrained influence over government.

The poorest nations of the worldhave long accepted the Johannesburgmantra and have shunned economicfreedom.

The Economic Freedom Report,however, finds evidence of a sea change,even in Africa. Since 1980, economicfreedom has been on the rise world-wide. Since 1995, the average level offreedom across Africa has increasedsignificantly, albeit from a low level.Indeed, Nigeria and Zambia—two ofAfrica’s largest nations—displayed thelargest increases in economic freedomacross the world in 2000.

The importance of economicfreedom is not being overlooked whereit counts. President Bush recentlycommitted the US to a large increase inforeign aid, with the caveat that it willonly go to countries that are committedto economic freedom. This themereceived additional support at the G8meeting in Canada and from PresidentMbeki of South Africa.

The hordes in Johannesburg willdemand to be heard, but 40,000 activistson taxpayer-funded junkets should countfor little against the future of 4 billionpeople.

NOTE *Available at [www.freetheworld.com]or contact the IPA at [www.ipa.org.au]

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EARLY a year before theSeptember 11 attacks,news stories provided apreview of the trans-

national politics of the future. In Oc-tober 2000, in preparation for the UNConference Against Racism, about 50American nongovernmental organiza-tions (NGOs) called on the UN ‘tohold the United States accountable forthe intractable and persistent problemof discrimination’.

The NGOs included Amnesty In-ternational-USA (AI-USA), HumanRights Watch (HRW), the Arab-American Institute, National Councilof Churches, the NAACP, the Mexi-can-American Legal Defense and Edu-cational Fund, and others. Theirspokesman stated that their demands‘had been repeatedly raised with Fed-eral and State officials [in the US] butto little effect. In frustration we nowturn to the United Nations’. In otherwords, the NGOs, unable to enact thepolicies they favoured through the nor-mal processes of American constitu-tional democracy—the Congress, stategovernments, even the federalcourts—appealed to authority outsideof American democracy and its Con-stitution.

At the UN Conference againstRacism, which was held in Durban twoweeks before September 11, AmericanNGOs supported ‘reparations’ fromWestern nations for the historic trans-atlantic slave trade and developedresolutions that condemned only theWest, without mentioning the largertraffic in African slaves sent to Islamiclands. The NGOs even endorsed aresolution denouncing free marketcapitalism as a ‘fundamentally flawedsystem’.

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The Ideological WarWithin the West

JOHN FONTE

The NGOs also insisted that theUS ratify all major UN human rightstreaties and drop legal reservations totreaties already ratified. For example,in 1994 the US ratified the UN Con-vention on the Elimination of RacialDiscrimination (CERD), but attachedreservations on treaty requirements re-stricting free speech that were ‘incom-patible with the Constitution’. Yetleading NGOs demanded that the USdrop all reservations and ‘comply’ withthe CERD treaty by accepting UNdefinitions of ‘free speech’ and elimi-nating the ‘vast racial disparities in ev-ery aspect of American life’ (housing,health, welfare, justice, etc.).

HRW complained that the US of-fered ‘no remedies’ for these dispari-ties but ‘simply supported equality ofopportunity’ and indicated ‘no willing-ness to comply’ with CERD. Of course,to ‘comply’ with the NGO interpreta-tion of the CERD treaty, the US wouldhave to abandon the Constitution’sfree speech guarantees, bypass federal-ism, and ignore the concept of major-ity rule—since practically nothing inthe NGO agenda is supported by theAmerican electorate.

All of this suggests that we have notreached the final triumph of liberaldemocracy proclaimed by FrancisFukuyama in his groundbreaking 1989essay.

POST-SEPTEMBER 11In October 2001, Fukuyama stated thathis ‘end of history’ thesis remainedvalid: that after the defeat of commu-nism and fascism, no serious ideologi-cal competitor to Western-style liberaldemocracy was likely to emerge in thefuture. Thus, in terms of political phi-losophy, liberal democracy is the end

of the evolutionary process. There willbe wars and terrorism, but no alterna-tive ideology with a universal appealwill seriously challenge the principlesof Western liberal democracy on a glo-bal scale.

The September 11 attacks notwith-standing, there is nothing beyond lib-eral democracy ‘towards which wecould expect to evolve’. Fukuyamaconcluded that there will be challengesfrom those who resist progress, ‘buttime and resources are on the side ofmodernity’.

Indeed, but is ‘modernity’ on theside of liberal democracy? Fukuyama isvery likely right that the current crisiswith radical Islam will be overcome andthat there will be no serious ideologi-cal challenge originating outside ofWestern civilization. However, the ac-tivities of the NGOs suggest that thereis already an alternative ideology to lib-eral democracy within the West thathas been steadily evolving for years.

Thus, it is entirely possible thatmodernity—30 or 40 years hence—will witness not the final triumph ofliberal democracy, but the emergenceof a new transnational hybrid régimethat is post-liberal democratic, and inthe American context, post-Constitu-tional and post-American. This alter-native ideology, ‘transnational progres-sivism’, constitutes a universal andmodern worldview that challengesboth the liberal democratic nation-state in general and the Americanrégime in particular.

TRANSNATIONAL PROGRES-SIVISMThe following could be considered thecore propositions that define trans-national progressivism: ▲

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‘Identity’ group more important thanthe individual citizen. For transnationalprogressivism the key political unit isnot the individual citizen, who formsvoluntary associations and works withfellow citizens regardless of race, sex,or national origin, but the ascriptivegroup (racial, ethnic, or gender) intowhich one is born.

A dichotomy of groups. Trans-national ideologists have incorporatedthe essentially Hegelian Marxist ‘privi-leged vs marginalized’ dichotomy:oppressor vs victim groups, with im-migrant groups designated as victims.

Group proportionalism as the goal of‘fairness’. Transnational progressiv-ism assumes that ‘victim’ groupsshould be represented in all profes-sions roughly proportionate to theirpercentage of the population. If not,there is a problem of ‘under-represen-tation’.

The values of all dominant institutionsto be changed to reflect the perspectives ofthe victim groups. Transnationalprogressives insist that it is not enoughto have proportional representation ofminorities in major institutions if theseinstitutions continue to reflect theworldview of the ‘dominant’ culture.Instead, the distinct world views of eth-nic, gender, and linguistic minoritiesmust be represented within these in-stitutions.

The ‘demographic imperative’. Thedemographic imperative tells us thatmajor demographic changes are occur-ring throughout the world. The tradi-tional paradigm based on the assimila-tion of immigrants into an existingcivic culture is obsolete and must bechanged to a framework that promotes‘diversity’, defined as group propor-tionalism.

The redefinition of democracy and‘democratic ideals’. Transnational pro-gressives have been altering the defi-nition of ‘democracy’ from that of asystem of majority rules among equalcitizens to one of power sharing amongethnic groups composed of both citi-zens and non-citizens. Real democracywill come when the different ‘peoples’that live within the society ‘sharepower’ as groups.

Deconstruction of national narratives.Transnational ideologues attack na-tional symbols and identity in demo-cratic nation-states in the West. InOctober 2000, a UK government reportdenounced the concept of ‘Britishness’.In the US, the proposed ‘National His-tory Standards’, recommended alteringthe traditional historical narrative. InIsrael, a ‘post-Zionist’ intelligentsia hasproposed that Israel consider itselfmulticultural and deconstruct its iden-tity as a Jewish state.

Promotion of the concept of post-national citizenship. In an importantacademic paper, Rutgers Law Profes-sor Linda Bosniak asks hopefully ‘Canadvocates of postnational citizenship

ultimately succeed in decoupling theconcept of citizenship from the nation-state in prevailing political thought?’

CONCEPTUAL TOOLTransnationalism is the next stage ofmulticultural ideology. Like multicul-turalism, transnationalism is a conceptthat provides élites with both an em-pirical tool (a plausible analysis of whatis) and an ideological framework (a vi-sion of what should be). Transnationaladvocates argue that globalization re-quires some form of ‘global governance’because they believe that the nation-state and the idea of national citizen-ship are ill-suited to deal with the glo-bal problems of the future.

The promotion of transnationalismis an attempt to shape this crucial in-

tellectual struggle over globalization.Its adherents imply that one is eitherin step with globalization, and thus for-ward-looking, or one is a backwardanti-globalist. Liberal democrats (whoare internationalists and support freetrade and market economics) must re-ply that this is a false dichotomy—thatthe critical argument is not betweenglobalists and anti-globalists, but in-stead over the form global engagementshould take in the coming decades: willit be transnationalist or international-ist?

The social base of transnationalprogressivism constitutes a risingpostnational intelligentsia (interna-tional law professors, NGO activists,foundation officers, UN bureaucrats,EU administrators, corporate execu-tives, and politicians.) When socialmovements such as ‘transnationalism’and ‘global governance’ are depictedas the result of social forces or themovement of history, a certain imper-sonal inevitability is implied. In the20th century, however, the BolshevikRevolution, the National Socialistrevolution, the New Deal, the ReaganRevolution, the Gaullist national re-construction in France, and the cre-ation of the EU were not inevitable,but were the result of the exercise ofpolitical will by élites. Similarly,transnationalism, multiculturalism,and global governance, like ‘diversity’,are ideological tools championed byactivist élites, not impersonal forces ofhistory. The success or failure of thesevalues-laden concepts will ultimatelydepend upon the political will and ef-fectiveness of these élites.

HUMAN RIGHTS ACTIVISTSA good part of the energy for transna-tional progressivism is provided byhuman rights activists, who consis-tently evoke ‘evolving norms of inter-national law’. The main legal conflictbetween traditional liberal democratsand transnational progressives is ulti-mately the question of whether thesovereign national constitutions trumpinternational law or vice versa.

Before the mid-20th century, tra-ditional international law referred to

The activities of theNGOs suggest thatthere is already an

alternative ideology toliberal democracy

within the West thathas been steadilyevolving for years

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relations among nation-states. The‘new international law’ has increas-ingly penetrated the sovereignty ofdemocratic nation-states. It is in real-ity ‘transnational law’. Human rightsactivists work to establish norms forthis ‘new international [i.e. trans-national] law’ and then attempt tobring nations into conformity with alegal régime whose reach often extendsbeyond democratic politics.

Transnational progressives excori-ate American political and legal prac-tices in virulent language, as if theAmerican liberal democratic nation-state was an illegitimate authoritarianrégime. Thus, AI-USA charged theUS in a 1998 report with ‘a persistentand widespread pattern of humanrights violations’, naming the US the‘world leader in high-tech repression’.Meanwhile, HRW issued a 450-pagereport excoriating the US for all typesof ‘human rights violations’, even com-plaining that ‘the US Border Patrolcontinued to grow at an alarmingpace’.

ANTI-ASSIMILATION ON THEHOME FRONTMany of the same lawyers who advo-cate transnational legal concepts areactive in immigration law. Louis Hen-kin, one of the most prominent schol-ars of international law, calls for largelyeliminating ‘the difference between acitizen and a non-citizen permanentresident’. Washington University in-ternational law professor StephenLegomsky argues that people who holddual nationalities should not be re-quired to give ‘greater weight to USinterests, in the event of a conflict’between the US and the other coun-try in which the American citizen isalso a dual national.

Two leading law professors (PeterSpiro from Hofstra and Peter Schuckfrom Yale) question the requirementthat immigrants seeking Americancitizenship ‘renounce all allegiance’ totheir old nations. Spiro and Schuckalso question the concept of the hy-phenated American and offer themodel of what they call the ‘amper-sand’ American. Thus, instead of tra-

ditional ‘Mexican-Americans’ who areloyal citizens but proud of their ethnicroots, they do not object to post-national citizens, who are both ‘Mexi-can & American’, who retain ‘loyal-ties’ to their ‘original homelands’ andvote in both countries

University professor Robert Bachauthored a major Ford Foundation re-port that advocated the ‘maintenance’of ethnic immigrant identities and at-tacked assimilation as the ‘problem in

America’. The financial backing forthis anti-assimilationist campaign hascome primarily from the Ford Foun-dation, which made a conscious deci-sion to fund a Latino rights movementbased on advocacy-litigation andgroup rights. The global progressiveshave been aided—if not always con-sciously, certainly in objective terms—by a ‘transnational Right’. It was a de-termined Right–Left coalition led bylibertarian Stuart Anderson, who cur-rently holds Bach’s old position at theUS Immigration and NaturalizationService, that killed a high-tech track-ing system for foreign students thatmight have saved lives on September11. Whatever their ideological orcommercial motives, the demand for‘open borders’ (not simply free trade,which is a different matter altogether)by the libertarian Right has strength-ened the Left’s anti-assimilationistagenda.

THE EU AS A STRONGHOLDOF TRANSNATIONALPROGRESSIVISMThe EU is a large supranational macro-organization that embodies trans-national progressivism. Its governmen-tal structure is post-democratic. Powerin the EU principally resides in theEuropean Commission (EC) and to alesser extent the European Court ofJustice (ECJ). The EC, the EU’s ex-ecutive body, initiates legislative ac-tion, implements common policy, andcontrols a large bureaucracy. It is com-posed of a rotating presidency and 19commissioners chosen by the member-states and approved by the EuropeanParliament. It is unelected and, for themost part, unaccountable. This ‘de-mocracy deficit’ represents a moralchallenge to EU legitimacy.

The substantive polices advancedby EU leaders on issues such as ‘hatespeech’, ‘hate crimes’, ‘comparableworth’ for women’s pay, and group pref-erences are considerably more ‘progres-sive’ in the EU than in the US. Euro-pean courts have overruled nationalparliaments and public opinion innation-states by compelling the Brit-ish to incorporate gays and the Ger-mans to incorporate women in com-bat units in their respective militaryservices.

In international politics, in the pe-riod immediately prior to September11, the EU opposed the US on someof the most important global issues,including the ICC, the Comprehen-sive Test Ban Treaty, the Land MineTreaty, the Kyoto Global WarmingTreaty, and policy towards missile de-fence, Iran, Iraq, Israel, China, Cuba,North Korea, and the death penalty.On most of these issues, transnationalprogressives in the US—includingpoliticians—supported the EU posi-tion and attempted to leverage thistransnational influence in the domes-tic debate. Nevertheless, the BushAdministration on some of these is-sues has support in Europe, particularlyfrom parts of the British political classand public, and elements of Europeanpopular opinion (e.g., on the deathpenalty).

AI-USA charged theUS in a 1998 report

with ‘a persistent andwidespread pattern of

human rights viola-tions’, naming the USthe ‘world leader inhigh-tech repression’

▲

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After September 11, while someEuropean nation-states sent forces tosupport the US in Afghanistan, manyEuropean leaders have continued tosnipe at American policies and ham-per American interests in the war onterrorism. In December 2001 the Eu-ropean Parliament condemned the USPatriot Act (the bipartisan anti-terror-ist legislation that passed the US Con-gress overwhelmingly) as ‘contrary tothe principles’ of human rights becausethe legislation ‘discriminates’ againstnon-citizens.

Both realists and neoconservativeshave argued that some EU, UN, andNGO thinking threatens to limit bothAmerican democracy at home andAmerican power overseas. As JeanneKirkpatrick puts it, ‘foreign govern-ments and their leaders, and morethan a few activists here at home, seekto constrain and control Americanpower by means of elaborate multilat-eral processes, global arrangements,and UN treaties that limit both ourcapacity to govern ourselves and actabroad’.

CONCLUSIONTalk in the West of a ‘culture war’ issomewhat misleading, because the ar-guments over transnational vs na-tional citizenship, multiculturalism vsassimilation, and global governancevs national sovereignty are not sim-ply cultural, but ideological andphilosophical. They pose Aristotle’squestion: ‘What kind of governmentis best?’

The challenge from transnationalprogressivism to traditional Americanconcepts of citizenship, patriotism, as-similation, and the meaning of de-mocracy itself is fundamental. If oursystem is based not on individualrights but on group consciousness; noton equality of citizenship but ongroup preferences for non-citizens(including illegal immigrants) and forcertain categories of citizens; not onmajority rule within constitutionallimits but on power-sharing by differ-ent ethnic, racial, gender, and linguis-tic groups; not on constitutional law,but on transnational law; not on im-

migrants becoming citizens, but onmigrants linked between trans-national communities; then the ré-gime will cease to be ‘constitutional’,‘liberal’, ‘democratic’, and ‘Ameri-can’, in the understood sense of thoseterms, but will become in reality anew hybrid system that is ‘post-con-stitutional’, ‘post-liberal’, ‘post-demo-cratic’, and ‘post-American’.

From the fall of the Berlin Walluntil the attacks of September 11, thetransnational progressives were on theoffensive. Since September 11, how-ever, the forces supporting the liberal-democratic nation state have ralliedthroughout the West. In the post-Sep-tember-11 milieu, there is a windowof opportunity for those who favour areaffirmation of the traditional normsof liberal-democratic patriotism. It isunclear whether that segment of theAmerican intelligentsia committed to

liberal democracy as it has been prac-ticed on these shores has the politicalwill to seize this opportunity. In Eu-rope, given élite opinion, the case forliberal democracy will be harder tomake. Key areas to watch in the US,Europe and Australia include immi-gration-assimilation policy; argumentsover international law; and the influ-ence of a civic-patriotic narrative inpublic schools and popular culture.

FOURTH DIMENSION?I suggest that we add a fourth dimen-sion to a conceptual framework of in-ternational politics. Three dimen-sions are currently recognizable. First,there is traditional realpolitik, thecompetition and conflict among na-tion-states (and supranational statessuch as the EU). Second is the com-petition of civilizations, conceptual-ized by Samuel Huntington. Third,there is the conflict between thedemocratic world and the undemo-cratic world. My suggested fourth di-mension is the conflict within thedemocratic world between the forcesof liberal democracy and the forcesof transnational progressivism, be-tween democrats and post-democrats.

The conflicts and tensions withineach of these four dimensions of in-ternational politics are unfolding si-multaneously and affected by eachother, and so they all belong in a com-prehensive understanding of theworld of the twenty-first century. Inhindsight, Fukuyama is wrong to sug-gest that liberal democracy is inevi-tably the final form of political gov-ernance, the evolutionary endpointof political philosophy, because it hasbecome unclear that liberal democ-racy will defeat transnational progres-sivism. During the 20th century,Western liberal democracy finally tri-umphed militarily and ideologicallyover National Socialism and Com-munism, powerful anti-democraticforces, that were, in a sense, Westernideological heresies. After defeatingits current anti-democratic, non-Western enemy in what will essen-tially be a material-physical struggle,it will continue to face an ideologi-cal-metaphysical challenge from pow-erful post-liberal democratic forces,whose origins are Western, but, whichcould be in the words of James Kurth,called ‘post-Western’.

John Fonte is a senior fellow at the Hudson Institute.This piece is adapted from his article, ‘Liberal

Democracy vs Transnational Progressivism’, whichwill appear in the Summer 2002 issue of Orbis.

It is produced here with the permission of the ForeignPolicy Research Institute [www.fpri.org].

API

The challenge fromtransnational

progressivism totraditional American

concepts ofcitizenship, patriotism,assimilation, and the

meaning of democracyitself is fundamental

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S hatchet jobs go, it wasn’ta bad effort, if belligerentbitchiness impresses you.In the March IPA Review,

Adrian Karatnycky and ArchPuddington took a cerebral baseballbat to Amnesty International (AI),arguing that its response to Septem-ber 11 has been at best inadequate andat worst, poisoned by some mysteri-ous ideological agenda. They accusedAI of a disproportionate obsessionwith Human Rights (HR) abuses inWestern democracies, and particularlyof asserting a ‘moral equivalence’ be-tween America and genuinely oppres-sive regimes. The cover grab put itbluntly: ‘According to Amnesty In-ternational, on human rights,America is no better than Tibet orRwanda’. Leaving aside such mischie-vous hyperbole, their article was, inmy personal view, not without merit,and AI would do well to consider itseriously.

Last year, 400 delegates gatheredat the International Council Meetingin Senegal to determine AI’s futureagenda; the resulting ‘New Directions’document envisions ‘a world in whichevery person enjoys all of the humanrights enshrined in the UniversalDeclaration of Human Rights andother international human rightsstandards.’ So far, so focused. A fuzziertone creeps in, however, in AI’s newMission Statement: ‘to undertakeresearch and action focussed onpreventing and ending grave abusesof the rights to physical and mentalintegrity, freedom of conscience andexpression, and freedom fromdiscrimination, within the context ofits work to promote all human rights.’Corporate aims get softer still: a new

A

Take the Candle to theDarkest Dark First

JACK ROBERTSON

one will be the defence of ‘economic,social and cultural’ rights, for example.Here I feel AI is in danger of strayinginto murky territory, because from thisthorny shrub springs the perennial HRparadox: one man’s ‘cultural rights’ areanother man’s abuses. Most of us agreethat clitoral mutilation is a brutalcrime; those who enforce it simplydon’t see it that way. The risk is thatAI will dilute its raison d’être to thepoint of impotence. Trying to beeverything to everyone may see theorganization become little more thana forum for the expression of

admirable abstract principles, perhapseven as real abuse thrives under suchguises as ‘mental integrity’ and‘cultural rights’. It’s important to re-affirm that AI’s success to date has, infact, been based on precisely theopposite methodology: ‘bottom-up’activism by grass-roots groups, forspecific victims.

To foster this practical focus, AIhas traditionally barred national

subgroups from working on domesticHR issues—an important safeguardagainst accusations of partisanagendas of precisely the kind in thelast IPA Review. Yet last year’s ICMamended this rule, too, clearing theway, for example, for explicit AIAustralia (AIA) participation in ourasylum-seeker debate.

While I oppose the existence ofdetention centres, I would regard anyincrease in AIA activity relating tothem as a damaging strategic error; asdamaging, perhaps, as has been AI’sdissembling over Phillip Ruddock’sinsistence on wearing the organiz-ation’s badge while publicly defendinggovernment activity of precisely thekind which AI is obliged, by itscommitment to international stand-ards, to challenge. The Minister’swilful interfusion of private mem-bership and public, HR-related policy-making has already severely com-promised AI in this debate, yet for itslocal representatives to adopt a moreaggressive role now can only politi-cize, and thus neutralize, it evenfurther. By becoming progressivelyenmeshed in domestic politicking,AIA may starve HR issues overseas ofresources; worse, sections of the publicmight develop a skewed perception ofwhat the organization represents, andbecome inured against supporting‘human rights’ more generally.Combine the new ‘inward-looking’freedom with the more ‘abstract’agenda, and I believe AI risks preciselythe self-inflicted ‘credibility erosion’that is asserted, in exaggerated form,by Karatnycky and Puddington.

Economic, social and culturalissues are all very well, but I don’tvolunteer my time for AI to enter a

As global citizens, is ittruly more morally

urgent to focus on athousand desperateasylum-seekers here

than on tens of thous-ands of desperateKurds overseas?

▲

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OWER is seldom sharedwillingly and that thereshould be some competi-tive friction between the

Courts and the Parliaments—bothimperfect institutions—is probablyinevitable. When Immigration Min-ister Phillip Ruddock observed thatthe ‘courts are finding a variety ofways and means of dealing them-selves back into the immigration re-view game’, the Federal Court tookumbrage, accusing him of trying topressure the Court. It was but thelatest episode in a long-standing dis-pute during which the same Minis-ter had said that, ‘if judges wantedto have a political say, they shouldresign and stand for parliament.’

As we might hope and expect, Jus-tice Michael Black asserted that ‘Thecourt is not amenable to external pres-sures’. But he also went on to say, ‘Weare also concerned that members ofthe public might see the court as ame-nable to such pressures’. That shouldconcern the bench, but popular opin-ion is not that the judges are weak.Rather, it is that they are self-opin-ionated and out of touch with com-munity aspirations. If judges mustwalk a tightrope balancing ‘judicialtechnique’ with ‘what is seen to beconvenient’, then criticism is theirbalancing pole.’

Various legal experts told us viathe media that, although the two-page statement by the judges did notexplicitly mention contempt action,its strong wording indicated that that

P

Thoughts on thePractice of

Bagging JudgesJOHN HYDE

was now in prospect. Since, underFederal Court rules, contempt actioncould see Mr Ruddock personallybrought before the court, or arrestedand jailed, we might ask who was put-ting pressure on whom? However,since I doubted that even the mostpolitically naïve judge would choosean issue enjoying as much popularsupport as the Government’s stand onillegal immigration to test the pre-rogatives of the courts, I was not sur-prised that the Court accepted theMinister’s carefully worded explana-tion. Irrespective of the jurisdiction,such matters tend to be settled by theways of politics and both parties madetheir points. Although the outcomewas without drama, it could havebeen better.

Instead of being so precious, Jus-tice Black might have levelled justifi-able criticism at the Minister. Hemight have said something like, ‘If theMinister does not like the legal inter-pretations he is getting, he shouldpresent Parliament with legislationthat is precise. In so doing, he wouldinevitably leave himself and his min-ions with less discretion and thatwould be no bad thing’.

The precious Judges remind thisone-time politician of the self-servingtrade, industry and professionalunions or associations which used totell him that he simply did not appre-ciate their exceptional circumstances.But there is one important difference.Those groups had very little author-ity and their delusions were not, like

float in the Gay and Lesbian MardiGras or add my voice to a campaignfor state-funded childcare. Moreaccurately, I’d prefer that AI helpedprevent specific Nigerian adulteressesfrom being stoned to death first. Toargue that human rights are not‘relative’ and that AI must defendthem wherever and however they seetransgression is missing the point.Activism is a zero-sum game. Tenletters in support of the ‘culturalrights’ of the Inuit to hunt whalestraditionally are ten letters not writtenin support of Iraqi children sufferingunder Western sanctions. As globalcitizens, is it truly more morally urgentto focus on a thousand desperateasylum-seekers here than on tens ofthousands of desperate Kurdsoverseas?

AI has always striven to avoidassigning ‘priority’ to HR issues on thebasis of practical convenience, orworse, ‘personal resonance’. TheMarch IPA Review criticisms arecertainly exaggerated, but no globalorganization can afford to fixate on itsown backyard, for it smacks of self-centred moral vanity and may resultin failure to allocate resources wherethey’re most needed. Securing yourown moral high ground beforecriticizing others is important, but itpays to recall the endless ideologicaldebates which preoccupied the West’sfree intellectuals during the Cold War,and then reflect upon how demorali-zing all that introspective abstractionturned out to have been, all along, toso many oppressed anti-Communistdissidents.

Contemporary HR activists mightdo well to ask: when the NorthKorean political prisoner squattingmiserably in his cell today finally winshis liberty, will he speak approvinglyof the disproportionate HR attentionthat we in the West seem intent onlavishing on a volunteer thrill-seekerlike David Hicks?

Jack Robertson is the Letter-Writing Co-ordinatorfor the Balmain branch of Amnesty International,

and editor of [jackrobertson.blogspot.com].These are his personal views.

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In democracies,parliamentary law-

makers gain theappropriate incentiveto reflect communityaspirations and theirauthority by beingeminently sackable

those of judges and politicians, there-fore, dangerous. The observation thatpower is prone to misuse and tends tocorrupt is not original. Nevertheless,when all their opportunities are con-sidered, it seems to me that Austra-lian judges have, in the main, resistedtheir own corruption remarkably well.From time to time, however, one dem-onstrates that they are not immunefrom original sin, and none is immuneto those errors for which criticism isthe only antidote.

Judges, like Cabinet Ministers,cannot avoid the company of syco-phants—a daunting moral hazard!That either should be deprived of theinformed criticism of the other strikesme as an egregious waste of a rare com-modity. As for public respect for ei-ther flawed institution: reasonablecases can be made that the public al-ready affords politicians and judgesmore respect than is good for them ortheir institutions.

While bagging judges is a publicduty for the same reason that baggingpoliticians is a public duty, to the ex-tent that the law as laid down by ei-ther deserves respect, there is, ofcourse, a cost associated with dimin-ishing it. Who, however, is to be thearbiter of respect? Even though crit-ics will often be wrong, the cost of notcriticizing is the greater likelihood ofdecisions based on whim, prejudiceand wishful thinking; in short, the sortof decisions usually associated withunchallenged authority anywhere andoften associated with people whospend too much time with their ownkind. Why do we have open courts ifnot so that their findings, proceduresand the worthiness of those who ex-ercise authority within them may becriticized? Despite their Honours’ fearsthat they may be seen to bow to pres-sure, criticism during a case seems tome no less important than that madesubsequently, perhaps sometimes evenmore important.

Although both judges and politi-cians are involved with the law, theyhave very different backgrounds, ap-titudes and, in particular, disciplines.It is, therefore, important that each

institution should develop its com-parative advantage.

Judges are clever specialists whotend not to be well-rounded peoplewith experience of the world. Mostlawyers’ inability to understand evenfundamental accounting principles isnotorious, as is their inability to graspfundamental economics. But the realproblem is the judicial function itselfthat provides no means for assessingsocial and economic ramifications.Law is best made by people better ablethan are judges to take into accountdiverse interests, attitudes and con-straints, and with stronger incentivesto reflect them. In democracies, par-liamentary law-makers gain the ap-

propriate incentive to reflect commu-nity aspirations and their authority bybeing eminently sackable.

Judges, however, made the com-mon law and it is generally agreed tobe wise law. Its genius derives not fromindividual judges, great as some were,but from a system that allowed baddecisions to be reversed in subsequentparallel cases (and sometimes on ap-peal) and a strong tradition by whichjudges relied on precedent, changingthe common law only by successivesmall increments. Thus the commonlaw grew as the sum of the incremen-tal application of what Justice OwenDixon referred to as ‘strict logic andhigh technique’ over a long time.

But for that strong tradition, theexpression ‘rule of law’ would be

empty. The incremental changes thatsurvived to be built upon—many didnot—were, as Justice Oliver WendellHolmes (Jr.) put it, those that were‘understood to be convenient’. Likeeconomies and ecosystems, the com-mon law is the consequence of keep-ing what was convenient and aban-doning what was not, but only by suchsmall steps that people (in the caseof ecosystems, species) could enjoystable environments. Yet, followingthe Mabo and Wik decisions, theHigh Court judges could be crediblybagged for making huge leaps thatundermined people’s confidence instable rules by which to invest theirtime and their capital—that is, forcreating ‘sovereign risk’. Further,many of the judges’ critics supportedthe liberal view that the law shouldnot recognize rights based on race.

Not only did these decisionschange the law radically, they effec-tively constitutionalized the change,making it impossible for parliamentto reverse or substantially modify it.Nevertheless, the Keating andHoward Governments through Par-liament were left with the task of pro-ducing something workable. ThatGovernment should be critical ofthose who left it the unwanted taskis inevitable and healthy. Radicalchanges should be criticized, even ifthe ultimate conclusion should bethat they were the best possible in allthe circumstances.

Mr Ruddock was wrong to say thatjudges should resign and stand for par-liament if they wanted to have a po-litical say. Judges are as entitled to apolitical say as are all citizens, andbetter equipped to ‘say’ wisely thanare most. What he no doubt meantwas that judges ought not use theirinstitution to take over Parliament’srole by making changes in law farbeyond its current margins.

John Hyde is a Senior Fellow with the Institute ofPublic Affairs. This article is based on his

forthcoming publication, Dry.

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CROSS the world, coralreefs are turning into ma-rine deserts. It’s almost un-thinkable that Australia’s

Great Barrier Reef [GBR]—the world’sbiggest coral edifice, 2000 kilometreslong, home to 400 coral and 1500 fishspecies—could be headed the sameway.’

Thus began the ABC Four Cornersprogramme, ‘Beautiful One Day’,broadcast on 22 April 2002. TheWorld Wide Fund for Nature (WWF)could not have been happier. TheABC was essentially implementingthe WWF communication strategyformulated over two years ago andlaunched in June 2001 with the pub-lication of a Great Barrier Reef Pollu-tion Report Card. The environmentgroup’s determination to establish inthe public mind that a raft of theo-retical threats to the GBR is real, andthat the causes are known, was a con-siderable victory. The ABC, thenation’s public broadcaster, had runthe WWF campaign almost to a tee.

The issue of scientific disagreementas to ‘whether’ the reef was underthreat was raised, but never proceededwith. Instead, the programme ‘inves-tigated’ a list of potential threats to theGBR—oil exploration, coral bleach-ing, intensive fishing, and water pol-lution sourced from the grazing andsugarcane industries—with an accom-panying accusation. The accusationwas that industry was the cause of thealleged degradation and that industrywas ‘digging in and not giving an inch’.No evidence, just a speculation,boosted in the programme by ImogenZethoven, GBR Campaign Manager

‘A

GARY JOHNS

The Four Corners of the Reef:Investigative Journalism orEnvironmental Activism?

for WWF. ‘It’s unfortunate that cane-growers [alongside cattle-grazing, theobject of Green fury] have decided totake a position of denial.’

Each threat in the documentarywas presented in one of three ways. Itwas given the ‘preferred’ scientisttreatment as to the existence and/orthe cause of a threat, there was asimple assertion of a threat with noscientific evaluation as to cause, orthere was a simple assertion devoid ofany evidence of a threat. The viewer

was left with the impression that therewas a problem and that WWF was thesaviour. Certain industries, and gov-ernment, were assigned the role of in-sensitive destroyer.

The GBR is an Australian icon andrecognized as one of the Seven Won-ders of the Modern World. Most of thereef is managed by the Great BarrierReef Marine Park Authority(GBRMPA) as a World Heritage Area.

The GBRMPA publishes audits ofthe health of various reef attributes.The latest audit, published in 1998,indicated that water quality, man-

groves and seagrasses show no obvi-ous adverse trend. While, in contrast,the following attributes show ‘decline’or ‘substantial impacts’: birds, marineturtles, dugongs and inter-reefal andlagoonal benthos. Significant pres-sures on these specific attributes in thisreport are identified as: human distur-bance from visitation (birds), bycatchin trawl and shark nets (turtles), hunt-ing both locally and overseas (turtles),predation of eggs and young by feralanimals (turtles), boat strike (dug-ongs), indigenous hunting (dugongs)and trawling (benthos).

Given that Four Corners prides it-self as being at the forefront of inves-tigative journalism, it is surprising thatseveral of these documented threatswere essentially ignored. The activi-ties that were left alone were tourismand recreational (including indig-enous) fishing. These were obviouslyfriends of the WWF campaign, not tobe touched by the ABC, despite evi-dence from the Authority of their im-pact on the Reef.

As Dr Piers Larcombe, marine bi-ologist of James Cook University, ob-served in the online discussion follow-ing the programme, ‘didn’t you noticethat [the programme] didn’t point toany examples of GBR degradationlinked to anything except warm wa-ter? Read the established, publishedrefereed science, and insist the man-agers use that information to spendyour money on the reef and other en-vironmental issues’.

The oil threat was clearly bogus,and presumably used for dramatic ef-fect. Its treatment required simplefacts, but these were not supplied in

The issue of scientific

disagreement as to

‘whether’ the reef

was under threat

was raised, but

never proceeded with

11JUNE 2002

E V I E WR

API

the programme. Instead, the Ministerwas confronted with the allegation ina way that any denial left a suspicionof guilt. For example, in response tothe speculation that a governmentdepartment would have provided in-formation to oil companies with thethought that oil drilling on the Reefmight be permitted, EnvironmentMinister David Kemp stated, ‘Oil drill-ing on the Reef is absolutely banned,it has been since 1975, and that isn’tgoing to be changed’.

The viewer is left to rely on theword of a politician. The implication,of course, is that this is insufficient. Af-ter all, two journalists had found docu-ments to suggest connivance betweengovernment departments and oil com-panies. The facts are easily ascertained.Professor Bob Carter of James Cookstated in the online discussion

depiction of the scientific coringundertaken by the Ocean DrillingProgram (ODP) as oil drilling isgross misrepresentation, and mis-chievous. ODP Leg 133, cored inthe 1990s, provided us with invalu-able information as to the historyand evolution of the GBR, whichwas freely published by an interna-tional team of scientists for all ofus to share … of course the resultsof ODP Leg 133 were of interest tothe oil exploration industry … Oiloccurs in sedimentary rocks.Therefore, any advance in our un-derstanding of sedimentary rocksand how they were deposited is ofgeneral interest to the oil industry.The ABC blamed coral bleaching

on Greenhouse gas emissions. Theprogramme produced no evidence toback the assertion, apart from theWWF mantra that Greenhouse causesbleaching, which is the mainstay ofthe WWF campaign to ‘save the Reef’from all sources of threat.

The ‘preferred’ scientist in theprogramme on the bleaching issue wasDr Terry Done of the Australian In-stitute of Marine Science. He observedthat, in 1998, in places such as theSeychelles, 90 per cent of the coralswere destroyed following an episodeof ‘a very large pool of hot water float-

ing around in the Indian Ocean’.There was no suggestion from Dr Doneduring the programme that the hotwater was caused by global warming.Just the assertion by the reporter.

There are scientists, including Pro-fessor Ove Hoegh-Guldberg of theUniversity of Queensland, who makea definite link between greenhouse gasemissions, global warming and coralbleaching. Nevertheless, Dr DaveBarnes of The Australian Institute ofMarine Science recently published anarticle which shows that growth rateand calcification rate in a major reef-building coral, collected from sitesalong and across the GBR, increasedslightly over the 20th century, prob-ably because of a 0.5°C increase in thetemperature of GBR waters.

Moreover, the health of corals canbe reliably measured through coralcores that have compared calcificationrates dating back to the fifteenth cen-tury. These studies have shown thatduring the last century (the 20th cen-tury) calcification rates (in otherwords, coral growth rates) increased byan average of four per cent across theinner, middle and outer reef systems.They certainly did not decrease, assuggested in the Four Corners pro-gramme.

Dr David Williams, Research Di-rector, CRC (Reef), was the ‘preferred’scientist on the issue of sediment andnutrient pollution from the sugarcaneand grazing industries. He stated,‘there are many examples in South-

East Asia where the population pres-sure on the land, and particularly cut-ting down trees and so on, has led tosedimentation and run-off of nutrientsthat have had major impacts on thereefs’. At no stage, however, did heproduce evidence or research to sug-gest any such threat to the GBR.

Interestingly, Four Corners wasovertly sceptical of the position takenby the better-published scientist in thisarea, Dr Peter Ridd. Dr Ridd suggestedthat evidence on the Great BarrierReef shelf of either increased sedimentinput or increased turbidity is absent.These ‘good news stories’ have beenpublished in peer-reviewed scientificpublications, but because they do notaccord with the ‘Litany’, they are dis-missed.

The programme illustrated the is-sue of fishing pressure by retelling thestory of one fish-kill washed up at Mis-sion Beach, far north Queensland,which resulted in a further expansionin the designated Marine Park. Therewas no attempt to evaluate the gen-eral accusation that fish life on theReef is in danger from overfishing. Itwould be interesting to understand therelative potential contributions of im-pacts from recreational versus commer-cial fishing on fish stocks. What is thelatest science regarding the potentialrelationship between overfishing andoutbreaks of crown-of-thorn starfish?

The difference between fact andallegation regarding the GBR is partof a much wider problem. There is in-creasing competition for researchfunds amongst scientists and for do-nations and membership amongst es-tablished conservation organizations.One way to obtain funds is to make alot of noise about a potential problemand at the same time become an ex-pert and/or advocate for the issue. Theiconic status of the GBR makes it arallying point both for opportunisticscientists and environmental activists.It is disappointing that Four Cornerscould not see this.

Dr Gary Johns is a Senior Fellow with theInstitute of Public Affairs Ltd.

The iconic status of

the GBR makes it a

rallying point both

for opportunistic

scientists and

environmental

activists

12 JUNE 2002

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FTER the surprise result ofthe first round of the Presi-dential election in France,there was a torrent of panic

reminiscent of the reactions in ourlocal press to Pauline Hanson—andfor much the same reasons.

Things simmered down somewhatwhen it was realized that Le Pen gotthrough to the final round becausethe Left voted for the Trotskyist can-didates numbers one, two and three,a couple of nutty ecologists and theunreformed Stalinist CommunistParty of France. The Left’s self-loath-ing reached a delicious peak withmuch sobbing and gnashing of teethin public.

In France, one finds nearly halfthe population voting for crackpotextremists of both shades in one ofthe world’s most educated and sophis-ticated democracies. Even Serge July,the founder of the radical Left news-paper Libération, was led to exclaim,‘France is a disoriented, panickycountry, which is scared of its ownshadow, which finds it hard to turntowards the future’. It is, in fact, a mixof Leftist anti-capitalist globophobiaon the one hand, and a hardeningagainst uncontrolled, inassimilableimmigration on the other.

The traditional anti-capitalistfeelings in France are both culturaland historical in origin. They relate,in part, to a supposed Anglo-Saxonhegemony, both economic and stra-tegic, simmering from the days of theCold War and France’s desire to go italone outside NATO, and intellectualtradition.

Jean-François Revel, in his mostrecent book, Les Plats de Saison, un-derlines the importance of Leftistthinking in France. With the disap-pearance of the Eastern Bloc, it is nowpossible to dream of an alternative toeconomic liberalism without facing API

A

The French MalaiseANDREW MCINTYRE

‘real society’. The hard Left, the farRight and the trade unions, unlike inthe English-speaking world, consti-tute a majority in France. Althoughthere has, admittedly, been extensiveprivatization by stealth and a reduc-tion in labour costs—economic ratio-nalism, the ‘Anglo-Saxon disease’ isindeed encroaching on the exceptionfrançaise—the French cannot admitit. Mr Jospin, when Prime Minister,never ‘privatized’, he ‘opened publiccompanies to capital’. The conserva-tive President Chirac said two yearsago that ‘globalization was a cause ofworld poverty’. Since his re-election,he has emphasized the importance of‘controlling globalization’.

Illegal and violent protests are anaccepted part of the way in which theFrench do things. Anti-capitalistdemonstrators demanded free ticketsto take the train to Nice to disruptthe European summit, and the Trans-port Minister offered them a 50 percent reduction. ‘It is a revolution sub-sidized by those against whom it isdirected’, comments Revel. The hate-ful anti-American, anti-globalization‘farmer’, José Bové, is treated as a na-tional hero for trashing a McDonalds.Faith in markets is equated with ul-tra-liberalisme in France. Remember

that the first Mitterand Cabinet in1981 had four communist ministers,when the CPF attracted 25 per centof the votes!

Contributing to French paranoiais a relative decline in France’s wealth,sliding from 14th to 17th in theOECD, a diminishing role in the EUwith the reunification of Germanyand the prospect of a flood of newmembers from the East. Young Frenchprofessionals are flocking to Londonwhere there are jobs and a future.

As for immigration, Hervé Alga-larrondo, in a new book, Securité: LaGauche Contre le Peuple, explains that,for the Left-wing intelligentsia, crimi-nals of immigrant origin now take thecherished notional place of the oldproletariat, and that they are valuedin proportion to the intensity of theirhatred for French society.

Le Pen has been the only one tospeak up. ‘Socialist ministers hadbeen talking about making immigra-tion rules more flexible. And here weare with young north Africans turn-ing to fundamentalist Islam, with im-migrants who were once integratedun-integrating themselves, and ourcrime problem escalating out of allproportion—and no one is talkingabout it.’

Chirac has listened and appears tohave responded to the concerns of theelectorate. And, like Hanson in Aus-tralia, Le Pen has disappeared. It re-mains to be seen, however, if he hasthe courage to do what he promised;it goes against the national grain.Berlusconi’s Italy has just moved to theLeft in municipal elections. The ideathat Europe is moving comfortably tothe Right may yet be premature.

Andrew McIntyre is Public Relations Manager atthe Institute of Public Affairs.

The hard Left, the far

Right and the trade

unions, unlike in the

English-speaking

world, constitute a

majority in France

13JUNE 2002

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HE recent nomination ofLord Peter Bauer, the 86-year-old, Hungarian-bornBritish economist, for the

Milton Friedman Prize for advancingliberty is good news to all those whohave seen international aid as a dan-ger to Kenya’s development. He dieda fortnight before receiving his awardfrom the Cato Institute.

Described as a lone voice in the wil-derness, Lord Bauer wrote books whichchallenged the myth that poverty isself-perpetuating, and which arguedthat Third World countries are not im-mune to wealth accumulation. Writ-ing on the popular myth of the cycleof poverty, he noted, ‘Throughout his-tory innumerable individuals, families,groups, societies, and countries—bothin West and the Third World—havemoved from poverty to prosperity with-out external donations. All developedcountries began as underdeveloped. Ifthe notion of the vicious circle werevalid, mankind would still be in theStone Age at best’.

He was known for urging countriesto avoid foreign aid and for showingthat donor agencies, such as The WorldBank and International MonetaryFund, do more harm than good to poorcountries. Swaminathan Aiyar of In-dia observes that Bauer’s ideas were ig-nored as politically incorrect and stillare. His warnings were drowned by ahost of other voices ranging from naïvedo-gooders (who saw aid as a WhiteMan’s Burden) to cynical Cold War-riors (who saw it as a way of buyingcorrupt Third World dictators).

For decades, Bauer stood almostalone against the consensus that gov-ernment aid was the primary driver ofThird World growth. In the 1950s, he

T

Peter Bauer:A Third World Hero

JAMES SHIKWATI

argued that state planning for devel-oping economies would be a disasterand that foreign aid perpetuated pov-erty by supporting corrupt and oppres-sive governments. Today, there isplenty of empirical evidence for thisthesis: take the Asian Tigers, which fol-lowed the market path to unprec-edented growth; and Russia, whichstarted getting its act together afterbeing abandoned by the IMF do-gooders. Compare these with Africa,which has shown little or no economicgrowth despite the billions it has re-ceived. Kenyan government officialshave been throwing stones at the

World Bank for delaying aid; but thepublic has discovered at the same timethat the donor agencies are the sourceof those same officials’ personal wealth.

Writing in The Wall Street Journalin April 1991, Lord Bauer noted thatsince the Second World War, subsidiesin the form of grants or soft loans fromricher countries to poorer ones had bal-looned from a few hundred million dol-lars a year to about $50 billion by the1980s. The subsidies, he noted, did notgo to the poor in the aid propaganda,but to their rulers. The rulers were of-ten directly responsible for the harshconditions of their subjects. Upon re-

flection, one will note that resumptionof aid to Kenya is not tied to thechange in behaviour of the citizens;rather it is tied to the rulers. The citi-zenry have been rendered powerless intheir electoral roles, hence the back-and-forth dance typical of our leaderswith donor agencies. Democratic sys-tems have been watered down, too,where aid money is used to financeparty politics.

Kenyans give birth to already-in-debted children. Stalled projects, frombuildings at the universities, roads, andgovernment vehicles now dot ourlandscape. Over-reliance on aid has ledthe government to devise policieswhich do not address national needs,but the needs of donor agencies. Re-trenchment of workers has been largelydue to poor public policy that servespolitical interests rather than eco-nomic interests. The World Bank andthe IMF have been famous for offeringprescriptions to Kenya, which explainthe outburst from finance ministersabout being forced to sign ‘on the dot-ted line’. But Kenyans have tasted thefruits of economic liberalization—especially in the information sector—and would not wish to go back to theDark Ages. It can rightly be argued thatthe Cato Institute’s recognition of LordBauer not only makes him a ThirdWorld hero, but also calls for a rethinkin international aid strategies.

Let Kenyans learn how to fish. Weare fed up with the ready-to-eat fishthat has come our way since indepen-dence.

James Shikwati is Director,Inter Region Economic Network—Kenya.

This article is published courtesy of the IREN.

‘If the notion of thevicious circle were

valid, mankindwould still be in theStone Age at best’

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The Blair FilesTIM BLAIR

Let’s Talk

There’s your founding principle ofthe United Nations. Of course, inits own version, the UN uses rathermore words: ‘To develop friendly re-lations among nations based on re-spect for the principle of equal rightsand self-determination of peoples’etc, etc, and so on, until sleep ordeath intervene. But talking aboutproblems as a means of solving themis central. Sounds sweet, doesn’t it?

Except that talking about prob-lems doesn’t always solve them,especially in cases where the personyou’re talking to is the problem—asin the Middle East, where years oftalking to Yasser Arafat has led notto peace, but to families being blownto pieces.

Or where the discussion isframed in such a way as to createmore problems—as at last year’s UNConference Against Racism, whichprovoked the worst outpouring ofracism since lynch mobs prowledthe Deep South.

Or when someone from the UNis doing the talking.

Oh, they do so love to talk. Itsaves them the trouble of actuallydoing anything. See if you canidentify UN human rights worrierMary Robinson’s post-September 11feelings from the following editedtranscript, taken from a BBC inter-view she gave last December:

I am concerned … I amconcerned that in the way inwhich events have developed,the long-suffering people ofAfghanistan, are paying a veryhigh price … the concern that Ihave … Our joint concern isthat any measures taken tocombat terrorism must be withinvery strict limits and must

uphold the values of humanrights and mustn’t erode them …I am concerned … it’s hard toanalyse everything and I amconcerned … I am concernedabout that prison revolt. I amconcerned about the reportswe’ve had … the UnitedNations is very concerned abouthuman rights problems …governments have to beconcerned about violations ofhuman rights by governmentselsewhere … I am and continueto be very concerned … I amconcerned that the UnitedStates and other countries mayease up on addressing the humanrights violations.At a glance, I’d say Mary was

concerned.She’d do better to be concerned

about her own organization, whichlately has been exposed as a hive ofsex-for-rations gangsters (in placeslike Guinea and Liberia), a havenfor murderous liars (Robert Mugabebrazenly told the UN’s hunger con-ference this year that starvation inZimbabwe was caused by a famine,instead of his policy of ‘removing’white farmers) and an active hazardin the cause for peace in the MiddleEast.

In the wake of Israel’s counter-attack in Jenin, following the ter-rorist deaths of dozens of Israelis, andwith soon-disproved claims thathundreds of Palestinian civilianshad died in that attack being floatedby Palestinian propagandists, here’show the UN’s special co-ordinatorfor the Middle East, Terje Roed-Larsen, summed up events: ‘Israelhas lost all moral ground in theconflict’.

Hey, Terje; I thought you werethere to make friends, not point

fingers. Especially before theevidence was in—which showedyou and the Palestinians to beexactly wrong.

Australia pays a disproportionateamount of attention to UN talk. In2000, the broadsheet newspapersand the ABC ran hot on the UN’scondemnation of mandatory sen-tencing in Western Australia andthe Northern Territory. The shout-ing didn’t abate even when it wasrevealed that the author of thenegative UN report, Americanactivist Ms Gay McDougall, hadnever bothered to visit Australia.She’d just listened, in the UN’s way,to a whole bunch of talk.

So why have anything to do withthe UN? Why should it exist? Whydo nations need a level of foreignrepresentation above diplomats andconsulates? I asked this of KeithSuter, former president of theUnited Nations Association of Aus-tralia, a few weeks ago when wediscussed the UN on ABC radio. Helooked astonished. I had to repeatthe question.

His answer went along theselines: We need the UN to providesafety and stability in this dangerousworld. In fact, we need the UN nowmore than ever, because the worldis now so much more dangerous.

That would be the world the UNhas overseen for the past fivedecades. And he continued: If theUN didn’t exist, small countries likeAustralia would never get a chanceto have their say on world events.

In other words, let’s talk.

Tim Blair is a Sydney-based writer, a columnist atThe Australian, editor of Sports Illustrated, and a

former senior editor at Australia’s Time magazine.

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ORD Kelvin describedthe telephone as ‘the won-der of wonders’ when itwas first exhibited in 1876.

Despite contemporary cynicism, westill marvel at the endlessly creativewonders of telecommunications.

Telecommunications have pro-gressed from one experimental phoneto a range of services and technologiesthat pervade our lives. The market fortelecommunications services is rapidlyevolving, complex, vigorously con-tested, heavily regulated and, for allthese reasons, imperfect.

Imperfect markets may need moni-toring and intervention to correctabuses of monopoly power and to pro-tect consumers from unscrupulous op-erators. The Trade Practices Act existsto do both.

But you can have too much of agood thing. The regulation applied tothe telecommunications market hasshown the same rate of growth as theindustry itself. We can see this not onlyin the size of the rule book, but also inthe propensities of the principal regu-lator, the Australian Consumer andCompetition Commission (ACCC).

REGULATION BREEDS MOREREGULATIONGood regulation should result in itsown demise. In the case of telecom-munications, regulation has only bredmore regulation and has not bred com-petition in some crucial markets.

To induce and sustain new com-petitors, the regulator must restrainthe full competitive power of theincumbent(s). In other words, theregulator hopes to encourage long-term competition by limiting compe-tition now. With telecommunications,

L

Regulating Telecommunications

JIM HOGGETT

the privilege to new entrants has ex-tended beyond this competition ‘holi-day’. The ACCC also arranges for ac-cess to the incumbent’s network at acontrolled price. The danger is thatthe regulator may end up building per-manent shelters for the (not so) newentrants and discourage them fromusing or building their own facilities.It is similar to the ‘infant industry’ casebeloved of protectionists. The ‘infants’never grow up. As time goes on, moreregulation is required to sustain theinfants.

Such seems to be the case in tele-communications. Most of the new en-trants don’t want to be exposed to fullcompetition yet. The building and useof new facilities, particularly new net-works, has fallen far short of what washoped. There seems little prospect thatthis situation will change. The presentstructure of regulation is failing in itstask.

THE REGULATION IS OVERKILLThe attitude of government towardsthe telecommunications industry hov-ers between a fear of its fertile and un-controllable ingenuity and a determi-nation to exploit it politically.

In the early 1990s, when the tele-communications market was opened tocompetition, industry-specific provi-sions were included in the Trade Prac-tices Act to provide for access to essen-tial facilities (mainly the Telstra net-work) and to restrain the abuse of mar-ket power. This was in addition to regu-lations prescribing price control, theimposition of several community ser-vice obligations on Telstra, and a longlist of licence conditions.

It is doubtful whether the specificprovisions were necessary in the first

place. There are similar general com-petition provisions in Part IV of theTrade Practices Act. The action was nodoubt dictated by prudence. This isunderstandable in a country wherecommunications are so important andour embrace of market solutions sotimorous.

The ProductivityCommission Report

The Productivity Commission (PC)recently reviewed the competitionprovisions for the telecommunica-tions industry in the Trade PracticesAct.

The PC looked closely at Parts XIBand XIC of the Act, whichspecifically regulate competition inthe industry and the access to vitalfacilities, mainly the Telstra cablenetwork.

In its Draft Report, the PC took arelatively robust view and raised thepossibility of repeal of Part XIB. TheIPA had argued for even moreextensive rollback of legislation,given the strong general provisionsof the Act, which deal with both anti-competitive behaviour and access.

In the event, the PC took a muchmore cautious, even timid approachand advocated only a few, mainlyprocedural, changes to the industry-specific provisions of the Act. Thisis disappointing as this was anopportunity to deregulate whichoccurs only once in a decade.

The Report also gave theGovernment room to do little, whichit has proceeded to do. So thisinformative and interesting report islikely to have minimal impact.

Trade Practices Overkill

▲

16 JUNE 2002

E V I E WR

What transpired was not what wasintended by those who set the indus-try on the road to liberalization. Regu-lation now covers pricing, access, con-nectivity, pre-selection, number port-ability, record-keeping, technical stan-dards, service standards, and universalservice obligations as well as competi-tion regulation. There are at leastseven regulatory entities.

The result is exemplified in the areaof price-setting. Eight of the main ser-vices provided by Telstra are includedin a global price control. Then thereare numerous price sub-caps and otherprice conditions. Then there are con-trols on prices for access to the Telstranetwork.

The most recent and best opportu-nity for radical reform has been a dis-appointment (see Box). The ACCChad also recommended the removal ofmost of the price sub-caps. The Gov-ernment has responded by announc-ing its intention to extend the regula-tory régime, including price regulation.

What we now have is a structureof regulation described by the Opposi-tion Shadow Minister for Communi-cations, Lindsay Tanner, as ‘so compli-cated that it is virtually impossible tojudge whether an appropriate balancebetween the interests of the incumbentformer monopolist [Telstra] and the in-terests of competitors seeking accesshas been achieved’. One might add, ‘letalone the consumer’.

Yet, as we tie ourselves into regula-tory knots, we look for relief in moreof the same.

THE ACCC IS IN OVERKILLMODEThe ACCC is charged with admin-istering much of the regulation andthus it effectively controls many ofthe crucial retail prices, sets accessconditions (wholesale prices) andsets service standards (product qual-ity).

It is a fact that the ACCC nowexercises far greater market power inthe telecommunications market thanany other entity, and it does so withthe backing of the law and withoutany penalty for errors or excessive zeal.

If a government delegates powerto an agency in this way, it also abro-gates a great deal of its responsibility.In such a case, there is an almost in-evitable temptation for the regulatorto see itself as able to produce resultssuperior to those that might comeabout from a free interaction in themarket. This leads it progressively toexercise its powers to the full and torestrict avenues of appeal against itsdecisions.

This has happened. More andmore detailed intervention in thetelecommunications market has beenthe feature of the past decade. Thereare now 32 different steps on mul-tiple alternative pathways to arriveat settlement of access terms and con-ditions in any given case.

Such detailed regulation inevita-bly leads to delays, often extreme de-lays, which are costly to business andslow down or stifle innovation. For ex-ample, local call resale prices tookmore than two years to settle. Prod-ucts have even been declared underthe Act before they get launched orwhere no disputes exist. Delays can bemade worse by regulatory gaming onboth sides, an inevitable accompani-ment of over-prescriptive regulation.

Besides the inefficiencies theygenerate, the regulations stumbleinto inequity:• Poor people in cities subsidize

well-off people in the regions.• Small business battlers subsidize

wealthy residential users.

• Poor users pay while the better-off use their business phone.The propensity to overkill is ex-

acerbated by the dual role of theACCC as the consumer and compe-tition watchdog. It has to weigh thedemands of consumers against theneeds of industry. Consumers aremore numerous and politically sig-nificant, so the pressure to favourthem is strong. For example, theACCC recommended PSTN (localcopperwire network) conveyancingcharges for Telstra that were the low-est among benchmarked interna-tional prices, including the USA,Canada, the UK and Germany (seeChart).

The consumer remit also encour-ages the use of the media to attackcompanies. The pressure on theACCC to be seen to be active is in-tense, but public comment should bescrupulously fair and be backed bymore than the complaints of one ora few individuals. Business is as en-titled to a presumption of innocenceas individuals. Similarly, attacks onthe parties to out-of-court settle-ments, as occurred in the PSTN case,only serve to inflame disputes.

THE RESULT IS REGULATION-INDUCED CONFUSION ANDINVESTMENT UNCERTAINTYWhen government intervention inan industry is so pervasive, it is a formof state planning, with the usual re-sult.

Aus

tralia

n ce

nts

per

min

ute

Chart 1: International Comparisons of Net Origination Charges(5.96 minute call duration)

0.00

0.50

1.00

1.50

2.00

2.50

German

y (Deu

tsche

Telek

om)

Austra

lia (A

CCC: 200

0–01

)

USA (B

ell A

tlanti

c MA)

UK (BT

)

USA (B

ell A

tlanti

c NY)

Canad

a (Be

ll Can

ada)

Austra

lia (T

elstra

: 200

0–01

)

Finlan

d (So

nera

)

USA (N

evad

a Bell

)

Japa

n (NTT

)

Austra

lia (A

CCC: 199

9–00

)

USA (A

rmite

ch)

USA (B

ell A

tlanti

c)

USA (C

incina

tti Be

ll)

Austra

lia (T

elstra

: 199

9–00

)

Average cost-based origination

Source: Telstra Submission to Productivity Commission Inquiryinto Telecommunications Competition Regulation 2002

17JUNE 2002

E V I E WR

ICTORIAN roadsidefood sellers and fruit andvegetable markets willsoon be squeezed further

by ever-increasing regulation. TheVictorian Department of HumanServices (DHS) is spearheading aninitiative requiring all food busi-nesses to submit a detailed FoodSafety Programme (FSP) annually.The regulation is similar to volun-tary quality standards such asISO9000 and FQS2000. The de-tailed FSP must be lodged with lo-cal Government on the next an-nual food business registration. Fur-ther to this, the business must sub-mit to an annual audit by a thirdparty or local council.

Easy enough, until one actuallysits down and reads an ‘official tem-plate’ of the FSP. The DHS has pro-duced an 81-page document whichgoes to absurd lengths to regulatebusinesses into operating ‘theproper way’. All measuring devicesare to be calibrated annually, andmid-year testing (including buck-ets of ice and pots of boiling wa-ter) is described for the benefit ofthe reader. A detailed log must bekeep whenever a business decidesto thaw out sauce. The businessshould keep a thermometer at handto go inspecting the insides of de-livery trucks and delivered pack-ages (keep it logged, remember).The enterprise must also keep a de-tailed log of when every piece of‘high risk’ food has passed through

V

API

Food Police AreAt It Again in

VictoriaSTEVE CLANCY

a ‘danger zone’—right before theythrow the food away (log that too).

The onerous new requirementswill be policed by the municipalityin which the business resides.Ballarat City Council, for example,will be charging an annual registra-tion fee of $275 for lodging andmaintaining the required FSP, al-though the fee may vary from shireto shire. Possible penalties for notcomplying are substantial: $5,000for the first offence, and $10,000 foreach subsequent breach of the regu-lations. This sort of heavy-handedapproach, while typical of an over-active bureaucracy, is daunting formost small food businesses.

The reasons for the drastic newrequirement are almost non-exis-tent. The DHS could only point tothe much-publicized Kraft PeanutButter and Garibaldi food contami-nation cases. Yet these businessesalready had food safety programmesin place that paralleled the DHSplans. Victorian Farmers Federa-tion Horticulture President, TerryBurgi, ‘does not know of any ma-jor health scares from roadside sell-ers’. Mr Burgi fully supports safety,but questions the risks associatedwith roadside seller and growers.He feels that the DHS may be tar-geting fresh food markets, while theother States are sitting on theirhands waiting to see the messVictoria gets into.

When pushed as to why theregulations were being imposed

Because all regulation is distort-ing, the pinning down of one priceor one corner of the market inevita-bly leads to a distortion elsewhereand the need for further regulation.

Continual intervention todayalso suffocates the technologies of to-morrow. The innovators and theirbackers should find, develop and uti-lize new technologies that will offermore and cost less. Governmentwants our industry to take a lead inthis.

But if companies know that thereis a permanent prescriptive mindset,then they cannot undertake researchand development with confidence.They know that the rewards fromtheir risk-taking and expenditurewill be regulated away by controls.So they won’t innovate here. Theywill do it in more friendly jurisdic-tions. Australia will be a residual andlate beneficiary rather than a cre-ative leader.

ONLY DEREGULATION WILLHELPAt present we have a severe attitu-dinal problem among the regulators.It is a propensity to control thishighly creative sector in detail andto limit the reward for effort or cre-ativity, rather than let the marketsort out the inefficiencies.

The Government is doing noth-ing to correct this. Indeed, govern-ment both reinforces the attitudeand itself uses telecommunicationsas a social policy tool at the expenseof the industry and its customers.Telecommunications is a performingmilch-cow.

A lighter hand on the tiller, di-rected at real abuses, would allowmore and faster industry develop-ment and elimination of activitieslurking inefficiently in regulatoryshelters. A return to the genericcompetition provisions of the TradePractices Act would simplify therégime and provide sufficient protec-tion against abuses.

Jim Hoggett is a Senior Fellow with the IPA.

▲

18 JUNE 2002

E V I E WR

with no major reasons, the DHSbluntly said that the regulations‘were 6 to 7 years in the making’.The DHS contact could not evenpoint to any readily available im-pact statement about the regula-tions. These new requirements areof major concern to many foodbusinesses, so an impact statementshould have been the least that theDHS could do to recognize possibleimplementation issues. It wouldappear that the DHS has simplyignored the real-life concerns ofVictorian food businesses. Such anoversight will most probably resultin businesses leaving the industry.

Sensible public policy dictatesthat before aregulation is im-posed, there mustbe some majorcauses for theregulation, andthat an appropri-ate study must bedone on the costsand benefits ofthe regulation.The DHS has ap-parently doneneither. Whatthen, was theDHS’s big reasonfor pushing theregulations? ‘Be-cause we’re betterthan the otherStates’ was theanswer provided by the depart-ment’s contact.

Victoria’s DHS may be ‘better’than the rest of Australia, but notyet ready with the details of thenew requirements. In a rush to pushthe Food Safety Programme ontothe public, the department has ne-glected to tend to the fiddly things;such as implementation issues re-garding definitions and procedures.Ballarat Chartered Accountant IanBell said that it was difficult to con-sult with growers on the issuesraised in the regulations, becausethe DHS has not yet finalized manyof the details.

Most commentators

within the debate

recognize that most

major food

businesses already

have appropriate

food safety

plans in place

One organization particularlyaffected by the sweeping new re-quirements is the Melbourne Mar-ket Authority. This statutory body,based in Footscray in Melbourne’swestern suburbs, is composedlargely of small growers/wholesal-ers. The FSP concerns them be-cause most of the marketers havedifficulty in reading and writingEnglish. Many of the market occu-pants are of Chinese and Vietnam-ese descent, and a substantial por-tion do not speak a word of English.The DHS has not offered any as-sistance with the practical con-cerns of implementation.

Most commentators within thedebate recognizethat most majorfood businessesalready have ap-propriate foodsafety plans inplace. This is notthe case for manyof the smallerfood businesses.Yet, while notbeing able toimplement a ro-bust ISO9000-type programme,many small play-ers have begun todevelop theirown quality pro-grammes. Thissort of spontane-

ous order approach to the foodbusiness is not what a bureaucracysuch as the DHS wants. In theirattempt to impose an impractical,cumbersome, ill-fitting uniformcode to the food industry, the DHShas left many small businesses be-hind. The DHS is tilting at wind-mills. And removing hundreds offresh food suppliers from oureconomy for no reason is definitelynot a ‘human service’.

Steve Clancy is a Student Intern withthe Institute of Public Affairs.

API

Economic FreedomOver the past five years, Australia’seconomy has proven to be both ro-bust and resilient. It has, despite theAsian crisis and a rolling recessionin Japan, produced high levels ofgrowth in outputs, jobs and exports.

The pundits are predicting that thegood run will continue, with Aus-tralia expected to produce the bestset of growth numbers in the devel-oped world over the next year.

Why? Well, the answer in largepart is contained in the latest Eco-nomic Freedom of the World Re-port.

In 1975, Australia ranked a lowly16th out of 70 nations rated in thatyear. As result of policies designedto open the economy to trade andinvestment, reduce governmentregulation and ownership, reduceinflation and restrain the growthgovernment spending, Australia’seconomic freedom rating improvedand, by 2000, ranked eighth outof 123 nations.

As shown in the Chart, the move-ment from a second-ranking to thetop rank of free nations, as Austra-lia has done, gives a country’sgrowth rate a real boost.

In short, our new-found economicstrength can, in large part, be putdown to the pursuit of economicfreedom.

Economic Growth andEconomic Freedom

More details can be found at theFree the World Website:

http://www.freetheworld.org/

19JUNE 2002

E V I E WR

ALAN MORAN

The ‘R’ FilesRenewable Energy:Chasing Moonbeams,Passing Wind orBasking in the Sun?

ASKING THE QUESTIONSON CLIMATE CONTROLIn relation to combating the sup-posed global warming trend, envi-ronmentalists are fond of saying, ‘Ifnuclear is the answer, we are askingthe wrong question’. The answersfavoured by the greenhouse warriorsrange from a draconian reduction ofenergy usage to adopting the Kyotoemission targets for ‘greenhousegases’, primarily carbon dioxide.

But implementing the Kyotoagreement can never be more than avery hesitant move to first base. Fullimplementation of the Kyoto Proto-col would have only a trivial effect onthe build-up of global CO2 levels. Itwould delay any possible effects,adverse or otherwise, by only fouryears. In other words it would put backsome scientists’ forecasts of a 2°C risein global temperature from 2100 (un-der business-as-usual) to 2104.

The pain in achieving even theapparently modest Kyoto goal is nowbeing seen across a great manynations. In Australia’s case, itinvolves limiting greenhouse gasemission increases to 8 per centabove the 1990 levels by 2010. Thisis unattainable, given that ourpresent output is 23 per cent abovethe 1990 level.

AUSTRALIA’S REGULATORYRESPONSEAustralia’s approach to Kyoto in-volves fostering the four most com-mon sources of renewable energy:wind; certain small-scale hydroschemes; biomass from waste; and so-

lar thermal and photovoltaics. Topromote the shift away from high-carbon fuels, Australia has imple-mented a mandated renewable en-ergy targets programme for electric-ity supply which involves the cre-ation of renewable energy certificatesfrom these eligible sources of genera-tion. The certificates are readilytradeable and unused ones can be‘banked’ for future usage.

There are two schemes currentlyin operation:• the Mandatory Renewable En-

ergy Target (MRET); and• the voluntary ‘Green Power’

sales.The MRET scheme requires approxi-mately 2 per cent of ‘additional’ elec-tricity by 2010 to come from the ap-proved green sources. This is set at9,500 GWh (equivalent to about 4.2per cent of the total electricity usageby 2010). Direct users and retailersare allocated shares of this and thepenalty for non-compliance is $40per MWh (4 cents per kWh); formany firms this is up to $57 per MWhin after-tax terms. Moreover, firmsmay pay a premium on the $40 perMWh (although at present they canmeet their needs at a discount) sincenon-compliant companies are likelyto face unwelcome publicity.

The Green Power scheme isbased on the consumer opting to pay

a premium (commonly $1 per week)for an additional percentage of greenpower to come from certified greensources, over and above those fallingwithin the MRET obligations.

A recent audit1 estimated thatabout 70 per cent of additional greenenergy used the MRET subsidy with30 per cent being funded throughGreen Power. Most of the voluntaryfunding is by government agencies.

COSTS OF UNCONVEN-TIONAL LOW-CARBONENERGY SOURCESThe exotic energy supplies are farmore expensive than conventionalones. The general range of costs ofgeneration in Australia are as fol-lows:

Some specific cost estimates ofrenewables that have been broughttogether by the Sustainable EnergyDevelopment Authority of NSW areidentified In Table 2.

Of the exotic forms of energy,only certain waste products, landfilland sewage gas, and some hydroschemes offer generation at costs that

Advanced browncoal 3.3Advanced blackcoal 3.7Conventional browncoal 4.0

Gas 4.0

Wind 7.5–8.5

Biomass 8.0–9.0

Solar 10.0+

Generationtype

Costs ofgeneration

(cents/kWh)

Table 1: Generation Costs

▲

20 JUNE 2002

E V I E WR

approach competitive levels. All ofthese are relatively limited in theiravailability and are likely to bequickly taken up. Solar hot water isthe next cheapest, and would behighly competitive if users could relyon it totally and thereby avoid thecosts of wires bringing energy tothem.

The fact that solar relies on back-up mains-supply brings into reliefsome additional costs to be factoredinto comparisons of different fuel-sourced electricity. Even though allelectrons are the same, some involveadditional costs.

The most valuable power is thefast-start plant, such as hydro, whichmay be worth, say, $70 MWhbecause it can be turned on and offto meet high price contingencies.Flat contracts offered by coal base-loaders may be worth $40 per MWh.

Power from windmills, which isthe most prevalent exotic alternativeto conventional sources, is only avail-able, at best, 30 per cent of the time,

and the availability isepisodic—in the handsof the Almighty, notman. And most windpower is worse than epi-sodic, because it is morefrequently available atnight, when demand,and therefore price, islower.

Episodic power inother than trivial quan-tities would be dis-counted in value by atleast 30 per cent, unlesspeople can be per-suaded to pay a pre-mium for its environ-mental attributes. Be-cause it is unreliable,wind power needs ex-tensive back-up ‘ancil-lary’ services. Manag-ing these, in addition totheir costs, can presentsevere difficulties, andit is for this reason thatmodern electricity sys-tems would be hard

placed to cope with more than 10 percent of wind power.

There are suggestions that theefficiency of the exotics will increaseover time. Doubtless this is true, butit is also true of other forms of power.Over recent years, there has beenlittle or no narrowing of the relative

cost of wind and coal. Moreover,modern windmills already draw 45per cent of the available energy fromwind and the theoretical maximumis said to be 59 per cent.

GROWTH IN WINDGENERATIONThere has been a rapid increase innew installations of wind generatorsacross the world. In all cases, this hasbeen on the back of hefty subsidies.

Denmark has been the stand-outcase with, on some estimates, up to17 per cent of its electricity comingfrom wind. But this is likely to bepared back by a new governmentkeen to address electricity costswhich, as a result of existing energypolicy, are three times the Australianlevel.

Germany and the US are othermajor users. Germany boasts that ithas wind power capacity equal to 3.5per cent of total electricity-generat-ing capacity. In the US, with 2,500MW, the share of capacity is 0.2 percent. In both cases, the low availabil-ity of wind means that the actual pro-duction share is much lower thancapacity share; in the US, for ex-ample, wind actually provides only0.13 per cent of electricity.

The following figure shows themajor wind installation capacity andits share in the major countries withsuch installations.2

Type of generation

Averagegeneration costs

(cents/kWh))

solid waste gasification 9.5

forestry waste 6.1

food and ag. waste 8.6

bagasse 5.3

landfill gas 5.3

sewage gas 6.6

small hydro 6.8

large hydro 5.0

micro hydro 10.2

wind 11.9–33.0

solar voltaic 73.5

solar hot water 7.2

tidal 20.5

geothermal, aquifer 19.2

geothermal, hot rock 15.6

solar thermal 23.9

photovoltaic for remotes 146.4

mine waste methane 4.3–6.6

Table 2: Generation Costs—Renewables

Source: SEDA February 2002.

Source: Global Wind Energy Market Report, 1999.

Figure 1: Major Wind Capacity—Selected Countries

MW

cap

acity

% o

f tot

al in

stal

led

capa

city

Germany US Denmark Spain India UK Netherlands

4500

4000

3500

3000

2500

2000

1500

1000

500

0

10

8

6

4

2

0

MW

share

21JUNE 2002

E V I E WR

KEVIN DONNELLY

How Successful AreAustralian Schools?

Judged by the recently releasednational literacy and numeracy results,we’re doing great. The benchmarktests, carried out during 2000, showthat 92.5 per cent of Grade 3 studentssuccessfully reached the reading stan-dard and that 92.7 per cent reachedthe numeracy standard.

Better still, not only are the over-whelming majority of Australia’s stu-dents achieving success, but the re-sults have improved year after year.In literacy, for example, in 1996, only73 per cent of Grade 3 students metthe set standard, compared to 92.5 percent last year.

Instead of criticizing education de-partments, we should be applauding ajob well done. After all, as everyoneagrees, a strong and rigorous educationsystem is essential if Australia is to beinternationally competitive and a suc-cessful ‘knowledge nation’.

Unfortunately, there is only onething wrong with arguing that Aus-tralian students are doing well. Thereality is that the national literacyand numeracy benchmarks are fun-damentally flawed and, comparedwith overseas benchmarks, sub-standard.

First, raising literacy standardsfrom 73 per cent to 92.5 per cent injust under four years beggars belief.Instead of standards really improving,what the ‘educrats’ have done is tosimply ‘lower the bar’. As with high-jumping, so with schooling, the easi-est way to guarantee that everyonecan succeed is to set the standard solow that everyone gets over.

Second, most parents expect edu-cation to be about promoting excel-lence. Students should be motivatedto do their best and to aim high. Thenational benchmarks take the oppo-site approach. Those responsible forAustralia’s benchmarks are happy tostate that the national benchmarks‘represent minimum acceptable stan-dards’. This is unlike England andAmerica, where standards are usuallybroken into three levels such as ‘ba-sic’, ‘proficient’ and’ ‘advanced’.

Third, instead of representingstrong and rigorous standards,Australia’s literacy and numeracybenchmarks are sub-standard and‘dumbed down’. This explains why,when the benchmarks were first devel-oped, academics attacked them forbeing weak. Such was the concern thatthe Australian Council for EducationalResearch (ACER) was asked by theCommonwealth Department of Edu-cation, Training and Youth Affairs(DETYA) to compare Australia’s draftnational benchmarks with overseasstandards.

The results of the internationalstudies published in 1999 concludedthat Australia’s benchmarks are theweakest. For Grade 3 and 5 numeracy,one report states that standards ‘wereset at higher standards in other coun-tries’.

Instead of aiming for excellence,the approach is one of mediocrity. Asquoted in the numeracy report: ‘theAustralian draft benchmarks perfor-mance standards have probably beenset at a low level relative to standardsin use in other countries’.

Australia’s literacy benchmarkswere also compared with overseascountries and, once again, our stan-

EducationAgenda

▲API

COSTS OF MOVING OUT OFCONVENTIONAL ENERGYIf unconventional electricity sup-plied 1 per cent of total electricityin Australia by 2010 the cost wouldbe considerable. (And it is worthnoting that European advocatesdream of wind at 10 per cent, whilethose in the US are aiming at a still-ambitious 6 per cent.) For Australia,with a penalty of $40 per MWh, eventhe 1 per cent target would mean anannual tax on energy amounting to$380 million, with the funds largelydiverted to high-cost, mainly wind,solutions. And that amount is sim-ply for the Commonwealth mea-sures—it takes no account of addi-tional requirements or pressures fromState Governments.

Each additional 9,500 GWhwould require another $380 millionper annum if capped at $40/MWh.Moreover, these sums do not takeinto account the further costs thatgrid managers are required to incurto accommodate the low quality ofwind and some other exotic renew-able energy sources. These costsinvolve ensuring the availability ofadditional very-fast-start generation,which is necessary to combat theunreliable energy flows from thesubsidized sources.

All this brings us back to thewhimsical aphorism in the openingparagraph. If nuclear is ruled out asan answer, and wind is incapable ofoffering a solution, we should makesure that the question is addressinga real problem.

NOTES1 National Green Power Annual

Audit, March 2002, SEDA,March 2002.

2 The left-hand side is in MW ca-pacity and the right-hand side ispercentage of total installedcapacity.

Dr Alan Moran is Director, Deregulation Unit,at the Institute of Public Affairs.

22 JUNE 2002

E V I E WR

dards were lower. For reading, theACER report states: ‘In almost all in-stances, expectations at Grade 3 levelin the nine countries are higher thanthe expectations described in the Year3 Australian standards’.

It now appears that the govern-ments of the day, both Labor and Lib-eral, preferred to ignore the ACER re-port and instead implemented ‘bench-marks’ that were both sub-standard andinherently flawed.

A second example of how Austra-lian parents are being misled is the wayin which the Program for InternationalStudent Assessment (PISA) resultswere released earlier this year. PISA2000 is an international test on behalfof the Organization for Economic Co-operation and Development (OECD).It involved 32 countries and measuredthe literacy performance of 15-year-olds.

When the results were released, itappeared that Aus-tralian students didvery well as theywere ranked fourthin the combined lit-eracy score. Butwhat this ignored isthat countries thathave always outper-formed Australia ininternational tests(Hong Kong, Sing-apore, Taiwan andthe Netherlands)were not involvedin PISA.

Also ignored isthe fact that PISA did not measure thetraditional school curriculum. In thewords of those responsible for PISA:

PISA is built on a differentframework from other national andinternational studies. It aims toadvance understanding of how wellequipped young people are for theirfuture lives, by emphasizing itemsthat have a real-world context.PISA content is not drawn strictlyfrom school curricula.Instead of measuring academic con-

tent and skills as do tests such asTIMSS, the approach adopted by

PISA emphasized process and the typesof understanding associated with whatare termed ‘everyday situations’.

The bizarre result is that eventhough PISA is a test of literacy, stu-dents were not penalized for spellingor grammatical mistakes. As stated inthe ACER report on how Australianstudents performed:

Errors in spelling and grammarwere not penalized in PISA—ifthey had been, probably allcountries’ achievement levelswould have gone down, but thereis no doubt that Australia’s wouldhave. It was the exception ratherthan the rule in Australia to find astudent response that was writtenin well-constructed sentences, withno spelling or grammatical error.While those in the ‘real world’,

such as parents and employers, mightexpect that good literacy has some-thing to do with correct spelling and

grammar, as thisquotation shows,those responsiblefor developingPISA obviouslyhad other ideas.

For years, Aus-tralian parentshave been worriedabout falling stan-dards. Many stu-dents cannot spellor punctuate cor-rectly. Mentalarithmetic is athing of the pastand teachers seem

more worried about promoting self-es-teem than telling students that theyhave failed.

Across Australia, State andTerritory education departments haveresponded by introducing benchmarksand arguing that standards, as reflectedby international tests such as PISA,have improved. Nothing could befurther from the truth.

Dr Kevin Donnelly is Director of Education Strategies,a Melbourne-based consulting group.

E-mail:kevind@netspace.net.au

API

The bizarre result isthat even though PISA

is a test of literacy,students were not

penalized for spellingor grammatical

mistakes

New OnlineResource at IPA

Just How Many Are There?Employees?

Independent Contractors?

Over recent years there has beena debate over just how many em-ployees and independent contrac-tors there are in the workforce.

The Institute of Public Affairs hasreleased an analysis of the issue,using available Australian Bureauof Statistics data. It found that• 23 per cent of the total work-

force (or 1.2 million Austra-lians) are independent contrac-tors.

• 28 per cent of the private-sec-tor workforce are independentcontractors.

The report also found that unionmembership was• only 21 per cent of the total

workforce; and• only 16 per cent of the private-

sector workforce.Accurate analysis of the workforcenumbers has particular importancefor• The Australian Labor Party, cur-

rently working through its con-nections with the union move-ment, which needs to addressits relationship with the new,emerging class of independentcontractors.

• The Cole Commission, whichhas announced an investigationinto the independent contractorworkforce in the building indus-try after allegations madeagainst independent contrac-tors by the CFMEU.

• The committee reviewing theTrade Practices Act, becausecontractors work under com-mercial contracts regulatedthrough the Trade Practices Act.

The full text of the report isavailable online at the IPA’s

Website:http://www.ipa.org.au

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You Can’t Even Tell a Joke

Political correctness is a force in theland these days. A Shadow AgricultureMinister lost her job last month fortelling an ethnic joke at a rugby clubdinner. You know the kind: an English-man, a Frenchman, an American anda Mexican are in an aeroplane. Theengine fails, and there’s only one para-chute. The Englishman mutters some-thing about stiff upper lips, says ‘Godsave the Queen!’ and jumps without aparachute. ‘Sacré bleu!’ says the French-man. ‘I cannot be upstaged by an En-glishman. Vive la France!’ and jumpswithout a parachute. Seeing thesemagnificent sacrifices, the Americandoes not hesitate. Crying ‘Rememberthe Alamo!’ he … throws the Mexi-can out.

Except that the joke at the rugbyclub wasn’t like that. According to thenewspapers, it was: ‘An Englishman, aCuban, a Japanese man and a Pakistaniwere all on a train. The Cuban threwa fine Havana cigar out the window.When he was asked why he replied:“They are 10 a penny in my country.”The Japanese man then threw a Nikoncamera out of the carriage, adding:“These are 10 a penny in my country.”The Englishman then picked up thePakistani and threw him out of thetrain window. When the other travel-lers asked him to account for his ac-tions, he said: “They are 10 a penny inmy country.”’

There’s no narrative tension.There’s no twist in the tail. The onlypeople who’d find it funny are thosewho agree with it: that Asians in Brit-ain are worthless. Telling the story wasat the very best a crashing error of judg-ment—apparently the people at thedinner didn’t find it funny—and Con-servative leader Ian Duncan Smithswiftly sacked the teller.

Letter from LondonJOHN NURICK

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A few days later, a Conservative onmy local council had to resign becauseof an article on his personal Websiteentitled There’s Nothing Wrong withRacism. He took it down before I couldread it, but later said that ‘feelings ofat least mild preference for one’s ownrace are a normal universal part of hu-man nature which are built into us bythe same processes of biological evo-lution that build into us attraction tothe opposite sex.’1 This is naïve, givenwhat we now know about geneticvariation between and within humanpopulations.

Preference for people like oneselfprobably is a product of evolution, butthe ‘like-ness’ is much more about cul-ture than genetics. Even our appear-ances and smells are matters of cultureas much as inheritance: clothes, hair-styles, diet, ablutions, perfumes. Put-ting it in terms of ‘race’, however, de-mands an exclusively genetic explana-tion which no longer makes scientificsense (if it ever did). For that matter,as the parent of any toddler will tellyou, just because something’s naturaldoesn’t mean it’s right.

It’s not only Conservatives whohave been getting into trouble. Therewas a storm when David Blunkett, theCabinet Minister responsible for im-migration, said that asylum centres

needed classrooms because asylumseekers’ children were ‘swamping’ somelocal schools.

His Foreign Office colleague PeterHain—famous for sabotaging SouthAfrican sporting tours in 1970—thensaid that ‘Muslim immigrants can bevery isolationist in their ownbehaviour and their customs’ and thatthis could ‘create real difficulties’ andbe exploited either by Islamic extrem-ists or by racists. It was necessary to‘send a clear message that British Mus-lims are welcome here and enrich ourculture but also they must be a part ofour culture.’2 For this he was roundlycondemned by Muslim ‘representa-tives’.

Both are still in their jobs. Theyare ambitious and very able politicians,in good control of their tongues. (MrBlunkett claims that ‘swamped’doesn’t connote anything differentfrom ‘overburdened’, but he is blind,so his conception of a swamp may con-ceivably be different from yours ormine.)

So: difficult things can still be said.But if you’re Conservative, and silly,and politically incorrect, you may dobetter to keep your mouth shut.Remember how Bertie Wooster usedto say ‘Good egg!’? Apparently ‘egg’ isnow rhyming slang, short for ‘egg andspoon’. Just as well Aunt Agatha didn’tknow, what?

NOTES1 Geoffrey Sampson in interview on

BBC Today, 13 May 2002.2 [ w w w. t e l e g r a p h . c o . u k / n e w s /

main.jhtml?xml=/news/2002/05/12/nhain12.xml]

John Nurick is a management consultant based in theSouth of England. From 1985 to 1990, he was

editorial director of the Australian Institute for PublicPolicy, and later edited newsletters reporting on theUK Parliament and European Union institutions.

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most obvious difference lies at theheart of the line put out by industryorganizations when they talk of the‘theft’ of computer software, mov-ies or music. They are not talkingabout masked individuals stealingdisks from shop shelves, but normalpeople copying the content of thosedisks.

This is not stealing, at least incommon-law jurisdictions. One ofthe elements of proof of the crimeof larceny is that the owner has beenpermanently deprived of the use of theproperty. Yet intellectual propertyremains with its owner or origina-tor even after someone else has cop-ied or used it.

LEGAL MONOPOLIESA person who controls any physicalgood has a monopoly over it. Butthe originator or possessor of an idea,an expression, an invention, cannotexercise a monopoly over it once it

has been disclosed, unless a govern-ment intervenes.

This is precisely what govern-ments do: they confer monopolieson expression and inventions in theforms, respectively, of copyrightsand patents. The arguments for thisare based on the incentive theory:that without protection of an eco-nomic monopoly, there will be little

incentive for a person to write abook or invent a useful contrivance.

Patents are usually awarded forfixed, reasonable time periods: usu-ally of the order of years. Copyrights,by contrast, have long had extraor-dinarily lengthy protection: in thecase of works by natural people, thiswas until recently the life of the au-thor plus fifty years, or 75 years fromthe work’s creation in other cases (inthe United States, with similar stan-dards in most Western nations). Buta few years ago, Disney noticed thatits 1928 creation, Mickey Mouse,would soon become unprotectedand lobbied for new laws. TheSonny Bono Copyright Term Exten-sion Act was promptly passed, add-ing twenty years to each term.Mickey remains in the safe hands ofDisney until 2024. Emboldened bythis success, Disney is lobbying theUS Congress to require all new con-sumer electronics and computerequipment to be hobbled to preventcopying of copyright material.

Oddly enough, copyrights andpatents are an explicit power in theUS Constitution: ‘[t]o promote theprogress of science and useful arts’by securing monopolies ‘for limitedtimes’. How ‘limited’ has exercisednot only Disney, but many others oflate.

Originally, copyrights in the USextended for 14 years. The ‘life plus70 years’ rule now in place has beenchallenged in the United StatesSupreme Court on the basis that iseffectively unlimited. A superb es-say on the whole copyright saga ap-pears in Reason OnLine:

reason.com/0003/fe.jw.copy.shtml

In one of those fun twists, a quickGoogle search reveals that this ar-

NEW BUSINESS VS OLD, ORTHE DEATH OF MICKEYMOUSEHow many times have you heard anews report on the radio about somenew bit of technology, closely fol-lowed by commentators’ remarksthat ‘the law has to catch up’? Or,worse, that the law needs to antici-pate these developments. Rarely isthe thought offered that perhaps thelaw needs to move back, fail to re-spond, reduce its interference.

The new technologies aboutwhich most is heard on the radio arebiological: genetically modifiedfoods, stem cells, cloning and othernew reproductive technologies. Be-cause it is less sensational, however,not so well-reported are the clashesbetween law and commerce, pro-gress and economic conservatism, inthe field of intellectual property.

Great philosophers and econo-mists alike have held that liberty isimpossible without property rights.Natural law theories of liberty arguethat property is the fruit of one’sbody (directly, through labour, or in-directly through purchase) and con-sequently that interference with aperson’s property should be as un-acceptable as interference with aperson’s body. Of course, few gov-ernments have actually baulked atinterfering with people’s bodies, soin practical terms these theories of-fer little protection.

But to the extent that we retainproperty rights, what is the propertyin respect of which we retain thoserights? Does it include intellectualproperty?

Clearly—or perhaps not soclearly, since so few people seem tobe able to recognize them—thereare major differences between physi-cal and intellectual property. The

Free_Enterprise.com by Stephen DawsonFile View Go Bookmarks Options Directory Window Help

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placed annotated copies of these onhis Website to provide a detailedresponse (since the magazine wouldonly permit him a 1,000 word re-buttal in a later edition, to whichit, in turn, published a 700-plusword rejoinder). The magazinethreatened to prosecute him forbreach of copyright, forcing him toremove its text from his full re-sponse. Go to:

www.lomborg.com/critique.htm

and also to:

www.greenspirit.com/lomborg/

HOW MUCH DOES PIRACYCOST ANYWAY?Industry organizations occasionallyissue press releases—or issues briefsto politicians when seeking new leg-islation—that include figures whichhugely exaggerate the financial coststo their members of copyrightbreaches. The methodology seemsto be to estimate the number of pi-rated copies of CDs, movies, soft-ware or whatever there are in a mar-ket and then multiply this figure bythe average unit costs had thesebeen sales of non-pirated items. Thisassumes that were the illegal copiesnot available, those sales would havebeen made.

This model has been utterly de-stroyed by an analysis at:

kmself. home. netcom. com/Rants/piracy.html

Amongst other things, this pointsout that with total 1997 legitimatesoftware sales of $US60 million inChina, the industry estimates of$US1.4 billion in sales lost in thatmarket to piracy are grossly over-stated.

CLONING AND COPYINGThe issue of copyrighting genes hasbeen controversial lately. But if ‘A’can copyright a gene createdthrough novel technologies, can ‘B’copyright an organism formed by

genes created through time-honoured technologies … such asparenthood? Go to:

www.gwilly.ca/357/harvard.html

A regular defender of freedom, par-ticularly in the high technologyfield, is a publication entrancinglyentitled Tech Central Station. This isaccurately subtitled ‘Where FreeMarkets Meet Technology’. Duringthe US Government harassment ofMicrosoft, this site proved to be oneof the most consistent defenders ofthe right of innovators to achievemarket dominance: to achieve mo-nopolies of their own. Its writers rec-ognize that such monopolies willonly be temporary … unless the gov-ernment steps in to make them per-manent. For this and much more,go to:

www.techcentralstation.com

FEEDBACKI would welcome advice from read-ers on any other sites of interest toIPA Review readers. E-mail me onscdawson@bigpond.net.au.

Free_Enterprise.com by Stephen DawsonFile View Go Bookmarks Options Directory Window Help

ticle has itself been mirrored(Internet terminology for a copy ofa document being hosted elsewhere)on several sites.

FAIR USE?One of the points raised in that pa-per is that much of any original cre-ation is derived from other work.The Disney that seeks to keepMickey out of the public domain isthe same Disney that has plunderedthe public domain for such moviesas The Little Mermaid (although theutterly different outcome in Disney’sversion compared to the originaldoes, perhaps, make it an originalwork!), Beauty and the Beast, SnowWhite, Sleeping Beauty and so on.

Copyright and patent protec-tions (and trademark rights) havebeen used increasingly not just topreserve the economic value of in-

tellectual property, but to restrictcriticism. For example, strategic pat-enting of potentially competitiveinnovations by large concerns canensure that competition is destroyedbefore it can even start up.

Or consider the experience ofBjørn Lomborg. His landmark book,The Skeptical Environmentalist, wassubjected to 11 pages of negative re-views in the January 2002 editionof Scientific American. Lomborg

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KEN PHILLIPS

A Competition Con Job?These days, the Australian Compe-tition and Consumer Commissionseems to be at war with business.The ACCC holds itself up as thechampion of the oppressed con-sumer, firing righteous gunshot atbusiness price-fixers and competi-tion rorters.

That the ACCC, or some otherbody do this, is necessary. Forgetwhether they have the balance rightor not, successful market economieshinge around managing tension be-tween the natural and creative urgeof humans to want monopoly andthe societal need to frustrate mo-nopoly.

But nothing is what it seems, be-cause the ACCC actively endorsesprice-fixing and the prevention ofcompetition when it suits. The pro-cess works this way.

The ACCC is legislativelybarred from intervening in labourrelations. Yet Australia’s industrialrelations system is a process in whichanti-competitive, price-fixing pro-cesses are legalized. Every objecttraded in a society is nothing morethan the sum total of multi-layeredlabour inputs. A coffee cup beginslife as a piece of dirt. Labour extractsthe dirt and labour adds valuethrough to the end product. Oureconomic laws enforce competitionand bar price-setting in the tradingof objects (coffee cups), but employ-ment law legalizes price-fixing onlabour inputs.

The dividing line between whento allow price fixing and when tobar it is identified by the type of con-tract at play. If a contract is com-mercial, price-fixing is banned. If acontract is employment, price-fix-ing is legalized. Hence the ACCC’s

powers, by design, do not encroachinto labour issues.

This has not, however, stoppedlabour regulators seeking to moveinto the ACCC’s power zone. Oneof the current thrusts of labour regu-lators is to bring within their author-ity people who supply their labourthrough commercial contracts. Thelabour regulators’ justification is the‘need’ to protect persons who alleg-edly are incapable of working un-der commercial contracts. Clothingoutworkers have become the sym-bol of these alleged incompetentswho need protection.

Based on allegations of $3-an-hour pay rates, the labour regulatorshave moved to ‘protect’ outworkers.Although recent IPA research[www.ipa.org.au] proved the lowrates to be a sham, the exploitationstory has been promoted long andhard enough to have entered politi-cal mythology. Consequently, thelabour regulators have secured leg-islation that controls labour pricesunder commercial contracts.

This is the intent and structureof the NSW Industrial Relations (Ethi-cal Clothing Trades) Act, passed inlate 2001, which relies on theACCC’s approval for its existence.The Act does much more than sim-ply guarantee minimum rates tooutworkers, which have always beensecured under standard employmentregulations. The Act makes everymanufacturer in the supply chain re-sponsible for the pay rates ofoutworkers at every lower level inthe supply chain. To achieve this,the Act treats commercial contractsoperating in the supply chain as em-ployment contracts and, in effect,determines and fixes the price of ev-ery commercial manufacturing con-tract in the NSW clothing industry.

What’s A Job?

During 2002, manufacturers’ ad-herence to the Act’s price-fixing isvoluntary. In 2003, the price-fixingis likely to become mandatory.

It could have been expected thatthis would create concern for theACCC. But no, the second readingspeech of the Act explains that:

A specific exemption from therequirements of the Trade PracticeAct is provided for.… TheAustralian Competition andConsumer Commission hasalready granted … an authorizedexemption under the TradePractices Act after concludingthat any anti-competitive effectis outweighed by the benefit tothe public.The ‘benefit’ of the anti-com-

petitiveness is self-evident for thelabour regulators, but unexplainedby the ACCC. However, the out-come can be predicted. The domes-tic clothing industry is already insevere recession. The process ofACCC-endorsed, legislative price-fixing will suck out any capacity ofthe industry to find solutions to itsstructural problems, and will forcethe balance of the industry into im-port replacement.

This leap by labour regulators tocontrol non-employment commer-cial contracts—with the ACCC’sblessing—raises serious questionsabout how well the ACCC under-stands the principles that are sup-posed to guide its actions. If theACCC is not prepared to protectthe core sanctity of the commercialcontract, what is the value of itshigh-profile business prosecutionactivity?

Ken Phillips is a workplace reform practitioner whopromotes the principles of ‘markets in the firm’.

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Bush’s Trade WarDuring his 2000 Presidential cam-paign, George W. Bush championedfree trade and open markets. Yet, in2002, he signed several highly protec-tionist measures passed by Congress.First, there was the imposition ofhigher steel tariffs by up to 30 per cent.Second, was the imposition of 27 percent duty on Canadian lumber, in whatis supposed to be a North AmericanFree Trade Area. Third, was the great-est reversal of all, the farm bill, whichraised farm subsidies by 80 per cent andwill cost the US taxpayer $190 billionover ten years, more than doubling thecurrent cost. This was a total U-turnfrom the 1996 farm bill, which hadbegun the process of phasing out sub-sidies, and which Bush had praised in2000.

The new US protectionism hasbeen met by almost universal condem-nation outside America, accompaniedby counter-productive tariffs and quo-tas against US goods. The US threat-ens to undermine any progress towardsfreer trade promised under the Dohaagreement in November 2001. This isnot, however, a case of the USAagainst the rest of the world. The Presi-dent was strongly urged to oppose thebills by his closest advisers on tradepolicy, Treasury Secretary Paul O’Neilland US Trade Representative BobZoellick. These bills received hostilecoverage in all the mainstream media,including The Washington Post and TheNew York Times. Most House and Sen-ate Republican leaders refused to votefor them, even after Presidential en-dorsement. There is no evidence thatpublic opinion wants more protection-ism. Its strongest proponent in 2000,Pat Buchanan, received very few votesas a Presidential candidate. The coststo the US are massive: to taxpayers insubsidies, to consumers in prices and

Letter from AmericaNIGEL ASHFORD

to US companies struggling to export.Furthermore, such laws discourage theprotected industries from respondingto competition with greater efficiencyand thus undermine their long-termfuture.

How could it happen that measuresthat are clearly against the interests ofthe vast majority of the Americanpeople pass into law? The answer isthat useful phrase from public choiceeconomists: ‘concentrated benefits anddispersed costs’. The benefits of pro-tectionism are concentrated in thehands of a small number of people:those in the farm, steel and lumberindustries. The losers are other Ameri-can taxpayers, consumers and workers.Yet those seeking special subsidies, tar-iffs and quotas are likely to be vigor-ous in working actively for their side.The average American is unaware ofthe costs to him of these measures, buteven if he did know, the cost to eachindividual is so small that there is littleincentive to become a free-tradeactivist.

Why this happened is widely rec-ognized as electoral politics. PresidentBush’s top political priority is to be re-elected in 2004. His second priority isto elect a Republican majority in Con-gress this November, enabling him topass his legislation. He has identifiedthree key states in his re-election: WestVirginia, Pennsylvania and Ohio—

steel states. He sees this year’s mostlikely Republican Senatorial gains inSouth Dakota, Montana, Minnesota,Iowa and Georgia—farm states. Theselaws are not in the interests of mostvoters even in these states. But it is inthe interests of farmers or steel work-ers strongly represented in these states,and whose votes can be won.

Privately, the Bush Administrationdefends its actions by saying that suchcompromises were necessary to gainpassage of legislation granting TradePromotion Authority (formerly knownas fast-track), in which Congress sur-renders the right to amend trade deals,allowing the President to negotiateeffectively in international trade. Thiswould be a victory for free trade if itcan be passed without substantialamendment. What the Administra-tion fails to recognize, however, is thatfree trade requires champions to ex-plain the value to Americans and theworld of removing trade barriers.Widespread understanding that tradeis in the national interest is a neces-sary counterweight to the special in-terests. Bush has failed to use his posi-tion as a bully pulpit for that cause andany credibility for doing so has beenseverely undermined by the legislationhe has now endorsed.

What hopeful signs are there? Theheart of this Administration is for freetrade. It would probably behave differ-ently if it had a Republican Congressand victory in 2004. It is the congres-sional Democrats who are the mostprotectionist, heavily dependent formoney and campaign workers upontheir union allies. But in the mean-time, opponents of a free world con-tinue to rack up their victories.

Dr Nigel Ashford teaches in the Institute of HumaneStudies at George Mason University, and is co-authorof US Politics Today (Manchester University Press).

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S T R A N G E T I M E SCompiled by IPA staff, columnists and consultants …

FEATHERING THE NEST,AS USUALDespite all the big issues facing thehealth system and the paucity of re-search undertaken in that area, theboffins at the ANU National Centrefor Epidemiology and Population areon the sniff for real research funding… from the Kyoto bandwagon.

Their new interest includes themeasurement of the collateral healthcosts and benefits of social policydecisions stemming from the Kyotoprotocol and the imposition of carbontrading.

They wish to appoint aneconomist who will be involved inresearch on the economic burden ofillness attributed to environmentalchange.

INEDIBLE SCIENCE‘Everything gives you cancer.’ That’swhat food cops and anti-consumeractivists would have us believe. TheWall Street Journal declares, ‘Breadkills,’ reporting that Swedish scien-tists have found that the ‘starchpresent in dough, when it is heatedto bake the bread, turns into a ‘prob-able human carcinogen…’

So, now that we know that breadkills, what next? For the EU at least,the way ahead seems clear. Theprecautionary principle, enshrined inEU law as the governing doctrine incases of scientific uncertainty, surelyindicates that a bread ban is in order,at least until more evidence about itsreal risks can be gathered. Perhaps abakery quarantine, pending expens-ive ‘bread abatement’ procedures,should be considered.

DEMOCRATIC REPUBLIC OFDISASTEREast Timor has won its independence,but what now? It has taken on theominous new name, Democratic Re-

public of East Timor, the sort of namethat usually gives democracy a badname. Fully half of the ministers inthe new cabinet come from the so-called Mozambique clique withinFretilin, a freeze-dried version of the1975 Marxist organization based onthe communist Frelimo of Mozam-bique. And a bizarre decision hasbeen made to make Portuguese thenew official language, although onlyaround a quarter of the populationspeak it. Are they already hearing theaid dollars ringing?

DECLARATION FOR PLANTRIGHTSThe organization, United PoultryConcerns (UPC), where they lovechickens—as personable and intelli-gent pets—is now talking up the in-telligence of vegetables. Its Websiteasks, ‘Don’t plants have feelings too?It is very possible that plants have sen-sitivities that we do not yet under-stand’. UPC claims that recent scien-tific evidence suggests that plants doindeed experience pain and suffering.‘To become a plant-rights activist, juststop eating meat’, UPC suggests.‘When we eat animal products, weconsume many more plants indirectlythan if we ate those plants directly,because the animals we eat are fed hugequantities of grasses, grains, and seeds.’

LIQUID HOT DOGS FORSOCCER CROWDSChoi Han-Gwon, leader of a SouthKorean association of dog meat res-taurants, said that visitors to Seoul’sSangam Stadium would be offeredsamples of dog meat juice in a bid toallay foreign prejudice against thedelicacy. ‘We plan to develop canneddog meat tonic juice, which footballfans can enjoy in their stadium seatswhile watching games,’ said Han-Gwon. But he denied local reports

that the association he heads upwould offer dog meat burgers or sand-wiches to visiting football fans.

MACRO NEUROTIC FOODThe US Government has said timeand again that organic foods have noadded health benefits, and some re-searchers have even suggested thatorganic growing methods can in-crease the risk of E. coli. A NewZealand study, the first critical reviewof research comparing organic andconventional foods to be publishedby a leading international sciencejournal, claims that they ‘found nostrong evidence that organic and con-ventional foods differ in concentra-tions of various nutrients’. They alsofound no convincing evidence of anydifferences in taste between conven-tional and organic produce.

So what’s the difference betweenorganic and traditional produce? Justthe cost, it seems: organic can costtwice as much. Not deterred, TheresaMarquez, marketing director forOrganic Valley, logically argues, ‘Thequestion is not, why is organic foodso expensive. The question is, why arethe foods we are eating now so cheap?’

A NEW SOLUTION FOREQUAL OUTCOMESSince the passage 30 years ago of alaw known as Title IX, college admin-istrators in the US have been boundto assure that sports participation bywomen is on par with those of men.If there are fewer women who wantto participate in the field, or pool orstadium, then fewer men can partici-pate in their own activities. Since thelaw was passed, more than 170 wres-tling programmes, 80 men’s tennisteams, 70 men’s gymnastics teams and45 men’s track teams have been elimi-nated.

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NE of the awkward fea-tures of democracy is thatsome of the stakeholdersin a government’s deci-

sions do not have votes. They in-clude orphans in institutions, thosesuffering severe mental disability,foreign nationals, and refugees seek-ing asylum. It is thus no surprise tofind them at various times the vic-tims of governmental interventionsranging from bureaucratic hassles toindefinite confinement. Special dif-ficulties arise if a government de-cides, for one reason or another, thatit needs to act on behalf of one ofthese groups, but the voters are un-likely to be convinced. Should thegovernment conspire against theelectors and pull the wool over theireyes?

A case in point is the Australianimmigration program since WorldWar II. The transformation of Aus-tralia into a multicultural nationsince 1947 is not something that theAustralian people were asked to ap-prove. Nor were they told the rea-sons why their successive govern-ments agreed to it.

In 1946, Australians were almostentirely of British and Irish descent.There were no plans to change that.Meanwhile, there were a millionanti-Communist Eastern Europe-ans—Baltic peoples, Poles, Ukraini-ans and various others—in camps inGermany and Austria, refusing to beshipped back East. They threatenedto disturb the reconstruction of west-ern Europe. In contrast to the inef-fectual responses of the internationalcommunity in almost every otherrefugee crisis, this one was solvedfirmly, efficiently and quickly. In1950, the camps were empty andwere burned down. The million refu-gees had been parcelled out to coun-tries with plenty of money and space.

O

Immigration vs DemocracyJAMES FRANKLIN

180,000 of them—two per cent ofthe Australian population—wereNew Australians, and Australia’sroad to multiculturalism had begun.

The Australian people were nottold any of this—of the behind-the-scenes arm-twisting to round up re-luctant host countries, of the cablesfrom Whitehall instructing the Aus-tralians to get on with it, of theworldwide lobbying efforts byCatholic representatives (Immigra-tion Minister Arthur Calwell, latera Papal knight, wrote in reply to histhank-you note from the Vatican,

‘no letter which I have written inthe six years in which I have beenprivileged to hold Ministerial officein this country has given me greaterpleasure than this acknowledgementof the Holy Father’s appreciation ofmy humble efforts in the cause ofdistressed humanity’.) For local con-sumption, the story was cast in termsof ‘populate or perish’ considerationsand arguments about labour for na-tional development. Those reasonswere genuine enough as far as theywent, but they were far from the fullstory. The Australian people weretold only what they were likely towant to hear.

When overpopulation threat-ened the political stability of Italyand Greece in the early 1950s, thesame co-ordinated action was under-taken, and Australia was againamong the largest recipients. Aus-tralia helped again with the smallerHungarian refugee crisis of 1956. Itwas not so keen to help after the fallof Saigon in 1975; according toEmployment Minister ClydeCameron, Gough Whitlam angrilyrefused to have any ‘f***ing Viet-namese Balts’ coming here. Butwhen South-East Asian nations be-gan towing boat people back to seain 1979, the US State Departmentorganized international pressure, andAustralia, by then under the FraserGovernment, was yet again amongthe largest contributors to the re-settlement of all the Vietnamese inthe camps.

Contrasting those events with re-cent ones, Malcolm Fraser notedthat Calwell knew unionists in histime would not have agreed to large-scale immigration, so he avoidedasking them. Similarly, Fraser said,‘If I had asked Australians, do youwant me to embrace policies whichwill lead to about 200,000 Vietnam-ese … coming to Australia; … if I’dtaken that vote people would havesaid ‘no’. But we believed that it wasnecessary in Australia’s interest …’

As a reason for policy change, ‘wewere pressured by great and powerfuloverseas friends’ is not something ademocratic government can sell toits constituents. It may be a soundand honourable reason for actionnevertheless.

James Franklin, Senior Lecturer in Mathematics atthe University of New South Wales, is, with

R.J. Stove, writing a book on the internationaldimensions of Australian immigration.

The transformation ofAustralia into a

multicultural nationsince 1947 is not

something that theAustralian people

were asked to approve

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As one observer has noted, V.I.Lenin, analyzing all this from hisdacha in hell, must be stroking hisbeard in utter bewilderment.

Source: Deroy Murdock, ‘EvenRussia Realized the Wisdom of aFlat Tax’, Dallas Morning News, 4March 2002.For more on Russia http://www.ncpa.org/iss/int

WOMEN, CHILDRENSAFER IN MARRIAGE

ENVIRONMENTMarriage is the only institutionthat protects mothers and childrenfrom domestic abuse, according toa new study from the HeritageFoundation.

• The report reveals that domes-tic abuse is twice as high amongwomen who have never marriedas among those who have.

• Children of divorced or never-married mothers are six to 30times more likely to suffer fromserious abuse than childrenraised by both biological parentswho are married.

• Never-married women experi-ence more domestic abuse thanthose who are married.

• Children who live with theirmother and a boyfriend who isnot their father are 33 timesmore likely to be abused.

The rate of abuse is six times higherin stepfamilies, 14 times higher inthe single-mother family and 20times higher in cohabiting biologi-cal-parent families.

Source: Ellen Sorokin, ‘MarriageSafest Bet to Prevent Abuse,Heritage Data Show’, Washington

Times, 15 April 2002; based onPatrick F. Fagan and Kirk A.Johnson, ‘Marriage: The SafestPlace for Women and Children’,Backgrounder No. 1535, 10 April2002, Heritage Foundation.

HOW ASIAN BRAIN DRAINWINDS UP BENEFITTING

ASIASome critics view the influx oftechnologically sophisticated im-migrants from China and Indiainto Silicon Valley as robbing theirhome countries of the very talentthose countries need to compete inworld markets.

But new research shows that theprocess is a two-way street.

Here are some findings of asurvey by the Public PolicyInstitute of California:

• It is common for immigrantswho have become a staple ofSilicon Valley’s growth to ex-port their experience—andnorthern California’s entrepre-neurial culture—back to theirhomelands.

• Immigrant entrepreneurs andprofessionals—particularlythose from China and India—are increasingly meeting withgovernment officials and con-sulting with companies in theirhomelands.

• The study found that 18 percent of the immigrants surveyedhad invested in their own start-ups or in venture funds in theirhomelands.

• Researchers found that 40 percent of the immigrants surveyedhad helped arrange businesscontacts in their countries—and 30 per cent had met with

F U R T H E R A F I E L DSummaries and excerpts from interesting reports

RUSSIA’S FLAT TAXREFORM

This year, Americans will pay ac-countants and attorneys $140 bil-lion to do their taxes and helpthem navigate the 46,000-page USTax Code. Too bad, observers say,that this isn’t Russia:

• Since 1 January 2001, Russianshave enjoyed a 13 per cent flattax.

• Even the old Russian system wassimpler than the USA’s, withthree tax rates—12, 20 and 30per cent.

• The US has six—6, 10, 15, 27,30, 35 and 38.6 per cent, the lastof which takes hold at $307,500for married couples filingjointly.

The majority of Russian taxpayersdon’t need to file forms. The 13 percent rate has exceeded expectationsin terms of revenue, as real roublerevenue increased 28 per cent.

• Three years ago, tax revenueequaled 9 to 10 per cent of Rus-sian gross domestic product.

• By last November, that hadgrown to 16 per cent as a resultof following the Laffer Curve:lower marginal tax rates pro-duce higher revenues.

• The new system has also greatlyreduced the underground eco-nomy, where people were paidin goods, rather than cash, to fa-cilitate tax evasion.

In other pro-market moves, Presi-dent Vladimir Putin has signed leg-islation to cut the corporate tax ratefrom 35 to 24 per cent. The Kremlinmay also offer Russians privately-in-vested social security accounts, muchas President Bush wants for Ameri-cans.

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People from these groups playedthe same economic games that hadbeen extensively tested on collegestudents in developed countries. Inan ‘ultimatum’ game, a playerdivided a sum of money (orcigarettes or other valuable goods)between himself and an anony-mous partner, who could accept thedivision—in which case bothreceived that amount—or reject it,in which case neither got anything.The results reveal concepts offairness and the degree of trust.• Peruvian forest dwellers, for ex-

ample, usually offered 15 percent to 25 per cent of the pot—and responders agreed to nearlyall offers, even below 15 percent.

• Tanzania’s Hazda hunter-gath-erers made similarly low offers,but responders usually rejectedthem.

• In contrast, American under-graduates usually tender 30 percent to 40 per cent of the total,and most responders reject any-thing below 20 per cent.

• And in another ‘trust’ game,people in a rural Missouri townusually ended up with equalshares.

‘Industrialized nations promote astronger ethic of fairness than domany of the traditional societies’,says anthropologist Joseph Hen-rich. And, suggests economistColin Camerer, ‘The opportunityto trade in economic markets maycreate social expectations aboutsharing and trust that exist overand above individual decisions andmotivations…’

Source: Bruce Bower, ‘A FairShare of the Pie’, Science News, 16February 2002.

government officials in theirhomelands.

Some 76 per cent of Indian immi-grants and 73 per cent of Chineseprofessionals said that they wouldconsider starting a venture in theirown countries.

Manufacturing isn’t the onlything being exported. Ideas are, aswell—specifically the culture ofentrepreneurship, those involvedpoint out.

Source: Matt Richtel, ‘BrainDrain in Technology Found Use-ful for Both Sides’, New YorkTimes, 19 April 2002; AnnaLeeSaxenian, ‘Local and Global Net-works of Immigrant Professionalsin Silicon Valley’, 2002, PublicPolicy Institute of California.

DEMISE OF GENETICALLY-ENGINEERED CROPS

PREMATURELY REPORTEDJust two years ago, anti-biotech ac-tivists were rejoicing at signs of theend to genetically-engineeredfarming. But that millenniumdidn’t arrive for them, and biotechplantings are increasing, thank youvery much.

• About 74 per cent of this year’sUS soy crop will be geneticallyengineered—compared with 68per cent last year and 54 percent in 2000.

• Some 32 per cent of the UScorn crop will be of biotech va-rieties—compared with 26 percent in 2001 and 25 per cent theyear before.

• About 71 per cent of this year’scotton crop will be bio-engineered—compared to 69per cent last year.

• The National Center for Food

and Agricultural Policy will re-lease a report in June showingthat corn farmers are paying, onaverage, an extra $6.50 per acrefor this technology and gettingback $8 to $9 in return on theirinvestment.

Nature also benefits, agriculturalspecialists report. For example,plants genetically engineered to re-sist the herbicide glyphosate allowthe chemical to be sprayed ‘overthe top’ of crop and weeds alike,thereby reducing or eliminatingthe need to churn up the soil to killweeds. This allows no-till farming,which tremendously reduces run-off and makes farmland more at-tractive to birds and other smallwildlife.

Source: Michael Fumento (HudsonInstitute), ‘Beating the “Franken-food” rap’, Washington Times, 9 May2002.

UNSELFISH CAPITALISMCapitalism has been criticized forcenturies for its single-minded pur-suit of self-interest. It is oftenclaimed that pastoral and agrariansocieties foster social co-operationand sharing, while industrial soci-eties promote materialism andgreed.

But scientists who actuallytested these assertions found thatpeople raised in market economiesare more trusting and willing toshare than those raised in most pre-industrial cultures.

Over two years, 11 anthro-pologists and an economist con-ducted experiments in diversecultures, including three hunting-and-foraging societies, six slash-and-burn agricultural communities,four nomadic-herding groups andtwo farm villages.

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Father Piero Gheddo, of the Pontifi-cal Institute of Foreign Missions, andauthor of David and Goliath: Catholicsand the Challenge of Globalization (St.Paul Publications, 2001), replies tosome of the questions addressed by theanti-globalization movement at ameeting in Porto Alegre, Brazil, as acounterpart to the Davos summit heldin New York.

Q: What do you think of globalization?

Father Gheddo: There are negativeand positive things, but to demonizeglobalization is not realistic: It is toclose one’s eyes to reality; it inducespessimism about the future becausethe world—whether we like it ornot—is moving toward unity.

The problem lies in making it goforward while respecting the rightsof man, and not in demonizing anunstoppable phenomenon. Researchby Harvard University has shownthat between 1970 and 1990 theeconomy of poor countries open tothe outside world grew by 4.5 percent a year; while that of the autarkicnations stagnated at 0.7 per cent.

Q: Influential currents of the anti-glo-balization movement state that theSouth of the planet is poor because theNorth is rich.

Father Gheddo: I don’t agree. Whenit is said that 20 per cent of the worldpopulation has 80 per cent of thewealth and 80 per cent of the popula-tion has only 20 per cent of the goods,we are playing with words.

What should really be said is: 20per cent produces 80 per cent of thewealth and 80 per cent of people pro-duce only 20 per cent. This is the real-ity and we cannot ignore it. The prob-

Globalization Is NotAn Ideology

AN INTERVIEW WITH FR PIERO GHEDDO

lem lies in producing wealth. If wealthis not produced, there is impoverish-ment.

We don’t realize that a good partof poor peoples do not know how toproduce; they are not educated to pro-duction. In Italy, between 7,000 and8,000 kilos of rice are produced perhectare, while in African agriculturebetween 400 and 500 kilos are pro-duced. Why?

Because they do not have selectedseeds, or artificial irrigation; they don’thave instruments to level the ground;they don’t use fertilizers. The gap be-tween 8,000 and 500 kilos is the gapbetween the rich and the poor. It hasits origin in the capacity, and educa-tion, to produce.

Q: Currents of the anti-globalizationmovement state that, in environmen-tal terms, the earth cannot sustain thepresent level of production of goodsand consumption.

Father Gheddo: I don’t at all sharethese catastrophic predictions that,since the time of Malthus, have beencontinually denied by history.

The earth has enormous possibili-ties of space, production of foods, ofenvironmental paradises for all men.We do not know the limits of our uni-verse nor of Man himself. The moreone progresses, the more one discov-ers that God has made things well; thatis, we discover unimagined resources.Of course the environment, air, water,the seas, etc., must be protected.

Q: What is the ideological origin ofthe anti-globalization movement?

Father Gheddo: There are many cur-rents. However, I think there is a‘Third World’ ideology that still pre-

vails. It is a theory of dependence: atheory that is clearly declining amongexperts, because it has been contra-dicted by the facts, but which remainsalive.

The theory of dependence statesthat the evils of the poor always haveexternal roots, creating among them aprofound conviction of frustration. Inthis way, people are discouraged andresponsibility is removed from them.

African bishops have written: ‘Itwould be unsustainable to state thatcolonization alone has put an end toAfrica’s capacity to take the reins ofits own destiny’.

Third World ideology has becomean excuse for tyrants and continues tocreate illusions among African peoples.

In Ecuador, Comboni BishopEnrico Bartolucci of Esmeraldas toldme as early as 1989: ‘Since the subjectof the external debt has come up, it isnot possible to speak about any prob-lem in the country without blamingthe external debt’.

He took me to visit his city’s hos-pital, built by the European Commu-nity in 1982. By 1989 the elevators didnot work; the mattresses and sheetshad been stolen; the doors did notclose; the operating room no longerhad air-conditioning; and there wasfilth everywhere.

‘If you tell them’, Bartolucci said,‘that they must clean and maintain theinstallations, the first thing thoseresponsible tell you is that the countryis poor because of the external debt.’

NOTEThis is an edited version of an in-terview first published by ZENIT at[www.zenit.org]

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