Saturday, November 20, 2010

Andrew Thackrah on a mining boom built on myth

In the piece below Andrew Thackrah shows how much of the political and economic logic that underpins Western Australia's so called "mining led economic boom is built upon a series of myths.

In particular, the wealth generated by the mining industry, which enriches some at the expense of many, is built on the back of massive public investment and active intervention by the State Government to advance the interests of mining corporations and WA's business and corporate elite.

This piece first appeared in the online publication Australian Policy and History.

Mining, Myths and making it up in Western Australia

by Andrew Thackrah,
Postgraduate candidate, School of Humanities, University of Western Australia
Following then prime minister Kevin Rudd's announcement in May that the Commonwealth Government would introduce a new 40% 'super-profits' tax on the profits of some mining companies, a wave of hysteria swept through sections of the political class of Western Australia. In its Foundation Day editorial the state's main newspaper, The West Australian, said its inhabitants could be forgiven for feeling like 'they are living in a state under siege'. Prominent Western Australian identity and boss of Fortescue Metals, Andrew Forrest, has predicted the new tax could result in 30,000 job losses.

Julia Gillard's ascension saw a new deal negotiated with the mining companies. The rate of taxation was reduced to 30% and the number of companies affected by the new arrangements was drastically cut. The hyperbole, however, has not subsided. Fresh mining industry-funded ads have claimed that electricity prices will rise and the value of superannuation funds fall if the new arrangements are introduced. With Tony Abbott promising to oppose Labor's 'big new tax', the proposed changes have become a red-hot election issue - nowhere more so than in the mining-centric state of Western Australia.
Western Australia is a mining state whose citizens' obsession with resources has shaped almost every facet of their lives. A degree of parochialism commonly creeps into political debates in the West. Ironically, however, in their strident defence of the significant role played by resource companies in maintaining Australia's prosperity, mining tax opponents have clearly highlighted just how much the dominant framework of political economy in Western Australia draws upon globally ascendant free-market ideology. In short, the history of mining in Western Australia bears striking parallels to the wider history of contemporary free-market capitalism. 

This reality becomes clear when one considers two of the key arguments deployed against the mining tax. First, it is suggested that the mining industry is a 'golden goose' that spreads prosperity throughout society and that government regulation will only succeed in 'killing off' the good times. The 'golden goose' defence of the mining industry was quickly deployed following the announcement of the super-profits tax. Shadow Treasurer Joe Hockey, for example, declared that Kevin Rudd was 'about to take money off the golden goose that's delivering Australia an age of prosperity'. 

Globally, this line of argument commonly has been used to defend the interests of domestically dominant industries. Yet, as British geographer Doreen Massey highlights in World City, her book on the City of London, the golden goose analogy serves to conceal more than it reveals. Massey notes that instead of the concentration of economic activity in London's finance sector over the last two to three decades being seen as '…an element in the production and reproduction of inter-regional inequality… it is taken as given and then interpreted as a source of London's largesse to the nation as a whole'.

The point here is not to deny that the finance and mining sectors have produced substantial wealth. Rather, the golden goose analogy serves to promote the notion that minimal government regulation actually spreads that wealth throughout society, obscuring the creation of inequalities (both local and global) upon which economic growth may actually rely. One only has to think of the economic stagnation in areas of northern England and Scotland and the continuing poverty of some indigenous Australians to be reminded of the losers in periods of rapid growth. 

The second key argument deployed by mining tax opponents is that mining fosters an entrepreneurial spirit that is entirely independent of government involvement in the economy. West Australian newspaper columnist Paul Murray, for example, recently made the extraordinarily simplistic assertion that 'mining has always met its own risk - and provided its own infrastructure. It doesn't want, or need, the Government as a "silent partner" in its business'.

The notion that mining has thrived when government has left the industry to its own devices simply flies in the face of history. As academic (and now Vice-Chancellor of Victoria University) Elizabeth Harman noted in the early 1980s, a paradigm has reigned in Western Australia where state and capital have worked together to ensure that the need for development is prioritised over other interests. Premier Charles Court was particularly pro-active in attracting mining investors to the state. 

A more recent analysis of WA economy by Peter McMahon of Murdoch University reveals that, while private enterprise has played a vital role in the state's history, it has not done so as a solo operator. McMahon notes that 'successive governments…were absolutely critical in developing W.A.' Recently the Barnett Government committed $3.5 million for the development of plans to build a new port in the Pilbara and boasted that the Government's decision to construct new power lines had ensured that a large resource project went ahead. Just as the finance industry was lured to London by conscious government regulatory and tax changes, so, too, the Western Australian mining industry is aided and abetted by the state. 

The 'golden goose' and 'entrepreneurial spirit' arguments outlined above follow from a specific aspect of free market thought - the notion that commercial enterprise guided only by a minimal state sees wealth 'trickle down' to almost all in society. Ideas like these have not emerged in a vacuum. David Harvey in his Brief History of Neo-liberalism explains how such free market notions have become dominant since the Western economic crises of the 1970s. They were championed by leaders such as Ronald Reagan and Margaret Thatcher as part of a conscious political strategy. The continuing reality of inequality reminds us that, rather than being grounded in common sense, free market ideas are a product of a historically specific context that leaves them open to revision and debate. Voters in Western Australia and beyond should look carefully at the rhetoric used by anti-mining tax campaigners. It says much about how the political and economic logic of the present is grounded in myth-making about the past.

Wednesday, October 27, 2010

Australians thinking and writing about Markets and Society

Damien Cahill  is an Australian academic who has written extensively about the influence of neoliberalism and the use of market solutions to an increasing number of social issues. Some of his writings can read here and here.

Damien is also the co-convenor of the Markets and Society Research Network at the University of Sydney, which  brings together social scientists concerned about markets and society to discuss the social foundations of markets; the regulation of markets; the social effects of markets; and the shifting boundaries between the state, private sector, and civil society.

Like this blog, the Market and Society Research Network aims to challenge orthodox conceptions of markets at a time of increasing ‘marketisation’. This  includes critical examination of the role and nature of markets, the legitimate scope of markets as well as investigations of markets as sites of contestation.

The Network recently ran a 2 day conference to critically analyze the increasing reliance on market-based solutions in Australia  in areas such as  climate change, provision of human services, childcare services, health, education, superannuation and housing. The program and the papers can be read here.

Tuesday, October 19, 2010

The crisis in the Murray Darling and the failure of market mechanisms

Bruce Haigh on the madness of using market mechanisms to manage water in the Murray Darling Basin and the need for a radically different approach to the management of Australia's water resources:
"The management of water should not be left to markets where the pursuit of profit has water abused, devalued and often powerless with respect to sustainability. Water needs a voice and a value beyond the market. At the moment it comes a very poor second in calculations relating its use - agriculture and industry have the upper hand and water is required to comply".

"The National and Liberal Parties presided over the slow decline of rural Australia. They had the opportunity to reverse this during almost 12 years of government. They declined to do so and as a result many jobs were lost and economic opportunities that may have come through the provision of better services and infrastructure were not created, but were lost. This neglect saw the rise of rural Independents who now hold the balance of power". 

Sunday, October 3, 2010

The ideological straitjacket of economics

"We need to develop a new way of conceiving the economic process. In calling for an end to economics, I am not suggesting that we should dismiss everything that economists have learned about the economy. Some economic insights are useful. Our goal should be to build up an understanding of the economy in a context that transcends the narrow context of economic theory that characterizes modern economic theory. In doing so, we may lay the groundwork for an economy that transcends our outmoded capitalist way of life." 
Michael Perelman Railroading Economics
Stephen Marglin calls it the "dismal science". Michael Perelman writes about the ideological straitjacket of modern economics. James Galbraith describes contemporary economics in terms of a god that failed, a governing creed whose fallacies have been exposed by events of recent years.  In his book Economia Australian Geoff Davies writes that we have all become so accustomed to the current economic regime that we fail to see how absurd it is. He is right.

I am currently reading the books pictured and all present a radical and sustained critique of contemporary economics. They challenge the idea that market and market forces are a solution to our social, environmental and economic problems.  

These books don't just expose discredited contemporary economic orthodoxies, they also document the destructive effects of those orthodoxies in the real world (rather than the theories of economists and business leaders). These authors more importantly set an  alternative and radical economic agenda for the future.

The books pictured include:
Stephen Margeli (2008) The Dismal Science
Michael Perelman (2006) Railroading Economics
James Gustav Speth (2008) The Bridge at the End of the World

Monday, September 27, 2010

Crisis in WA hospitals

This op ed piece by Professor Gavin Mooney appeared in the West Australian on Friday September 24th in response to ongoing problems in the WA health care system, highlighted by a recent crises involving ambulance ramping at the city's major public hospitals.
Ambulance ramping
The accounts of the ramping of ambulances at the major Perth hospitals last week are worrying and one feels very much for the patients involved and their families. Something clearly is going wrong and, while last week was particularly bad, these events do occur with some regularity.
 But let’s stop and think this through a bit more. There will never be a health care system in WA or anywhere else that can meet all demands and needs for health care. No society can ever achieve that. If we tried to, it would be so expensive and we would end up with very poor educational, transport and justice systems. Or we would have to cut back markedly on private consumption as we paid more and more in taxes. Or, if we went further down the private road, we’d be spending enormous amounts on private health insurance.
Taking public and private together, as a country or as a state, do we spend enough on health care? Well in comparison with other countries we seem to be getting it about right – although out of the total we do spend rather a high proportion on hospitals.
But then of course we need hospitals!  My questions however are these.
First have we got the right mix of types of hospitals? And second have we got the right mix of types of health services? The Reid Review of 2004 which is the most recent assessment of the WA health service indicated that 80% of patients in our big teaching hospitals did not need to be there. That is a staggering figure, especially as these are very expensive places to be. 
There is a ‘law’ in health policy that says ‘a built bed is a filled bed’ meaning that if we create more beds they automatically get used. That 80% figure clearly suggests an oversupply of beds in our big hospitals. Many patients could be treated just as well but at less cost in other hospitals. Rather than building the Fiona Stanley Hospital what we should be doing is expanding other, cheaper hospitals. 
But maybe we need to increase services outside of hospitals – GP and community services, preventive services. It is of note that in the “Citizens’ Juries” (of randomly selected citizens brought together and given good information) in this state that I have facilitated, when asked about their priorities, not one has wanted more hospital beds. Indeed to pay for the priorities that they as citizens want – prevention, mental illness, greater equity, community care - some juries have suggested closing hospital beds!
The push for more and more beds is simply not working. I have been in the west for 10 years and over that period we have pumped more and more money into these teaching hospitals and we still have the ramping of last week. These hospitals are ‘sick’ but the ‘treatment’ over the last decade is not working. We need more ‘investigations’ so that we can up with a better ‘diagnosis’. 
What to do? Well the first thing - and I have asked for this repeatedly – is to conduct a detailed investigation into our teaching hospitals. Where is the money going? What is driving costs? Can the services be provided as well but at less cost i.e. more efficiently? That sort of detailed study was not done by Reid and it has not been done since. We cannot make sense of any of this until that study is done.
The second thing is to put in place more policies to keep people in the community – bolster prevention and invest in programs to keep people out of hospital. Most people want to live as long as they can in their own homes. Let’s respect that. And it is cheaper. 
And third let’s find out what the people of WA want from our health services – and they are our health services, not the doctors’, not the politicians’, not the Health Department’s. They are ours, the citizens’. Let’s have a series of these “Citizens’ Juries”, say ten across the state, so that critically informed citizens can have a genuine say in the future of the WA health service.
Early last month I did one of these Citizens’ Juries in the ACT at the request of the Minister of Health in the ACT, with fascinating results for their services.
Dr Hames, Mr Snowball, I make this plea. In response to ambulance ramping, instead of pouring more and more money into these expensive hospitals, let’s have an investigation into how the vast sums of money they are currently getting current are being used. And rather than assume that supplying more and more beds is the answer, let’s work on reducing demand.  And finally will you please fund a program of Citizens’ Juries across the state so that you can learn what we as citizens want from our WA health services?
Professor Gavin Mooney, Health Economist and Co-convenor, WA Social Justice Network 

Tuesday, September 21, 2010

Industrialising the Kimberley: Colin Barnett's hubris

image of James Price Point, Kimberley, courtsey of Wangle

Excellent piece here by Martin Pritchard, Director of Environs Kimberley about the hubris and nightmarish impact of Colin Barnett's plan to industrialise the Kimberley.

Pritcard shows that the James Price Point development is the first step in the Barnett vision to gift much of the Kimberley region to mining and resource companies and turn into an industrial and mining zone.

Friday, September 17, 2010

Market illogic and the manufacture of "defecit hysteria"

Three hundred US economists have warned that current US economic policies risk plunging the US into a deep depression, unseen since the 1930's. 

As the economic circumstances of ordinary Americans worsen, the economists are warning against "deficit hysteria", the contemporary obsession with short term government deficits which lead governments down the path of severe austerity measures and massive reductions in public spending. 

The economists argue that defecit hysteria is a manufactured crises and is being used as cover for other agendas, including more privatization and slashing of social security and social spending.

The economists stress the need for increased public investment to thrust the US economy back into recovery.

The economic crises confronting the US is borne out by recent data which shows that more Americans are poor than ever before (since data was collected). Unemployment and job losses continues to rise and there are now 43.6 million Americans who are poor, as measured by the US Census Bureau. 

Juxtapose this information with the graph below about US income growth (posted before) and we can begin to understand what David Harvey means by accumulation by dispossession, the process whereby the rich, the wealthy and upper middle class gain greater wealth and power at the expense of the rest.

Thursday, September 16, 2010

WA miners spend their money everywhere except where the mines are

image courtesy of the ABC
 The mining and resource companies are always telling us that local economies and local communities benefit from all the money spent by those who work in the mines. 

In the Pilbara and Kimberley  region of WA 78% of mining salaries earned in the region are not spent in the region. The reason is the fly in fly out workforce.

Compare that figure to Queensland where 39% of mining salaries are spent outside the area.

For every $100 earned by miners in those regions, workers in the social welfare and health sectors earn $48 and workers in the retail trade earn $29. 

Those other workers actually live in the Pilbara and Kimberley towns and have to survive the massively inflated costs of living, housing and basic good and services that are driven up by the mining boom, without the huge salaries of their mining counterparts. 

They also live in towns suffering from the lack of long term investment by governments, the mining companies and the private sector in an adequate level of social infrastructure and public goods and services.  And they face the health, social and environmental consequences of living in close proximity to industrial plants and mining sites.

The boom economy does not reach many of those who have to live in the shadow of the mining industry.

Monday, August 30, 2010

For an an alternative perspective on economic policy: read Billy blog

Bill Mitchell's blog Billy Blog-alternative economic thinking is an excellent site to read about the myths and propaganda promulgated by mainstream economists, economic commentators in the media and most politicains and political commentators. 

As a non-economist interested in economic matters I greatly appreciate Billy blog's sustained critique of neoliberal and neo conservative market economics.

Reading one of his latest posts about the standard myths that dominate most neoliberal economic thinking I found this:
"The overwhelming sentiment of the business community and the conservative nature of our political system (and its participants) leads to a largely anti-government swell of opinion which is continually reinforced by the media – the “debt-deficit hysterics”. The neo-liberal expression of this over the last three decades has overwhelmingly imposed massive political restrictions on the ability of the government to use its fiscal policy powers under a fiat monetary system to ensure we have full employment.

We now accept very high unemployment and underemployment rates as a more or less permanent feature of our economic lives because of the political constraints imposed on government"

Sunday, August 29, 2010

The harm that markets cause: event in Fremantle

Great to see this event The Global Economy and Human Wellbeing  being run by Rob Lambert* at the Edmund Rice Centre for Social Justice in Fremantle this Saturday 4 September, 2010 between 10:00 AM - 5:00 PM.

The event is designed to provide people with a deeper understanding of what global free markets are doing to persons, families and societies;  the nature of corporate restructuring of work, and its social and psychological impacts for families and communities; - basic analytic techniques of ‘political economy’ necessary for understanding these changes; - the values underlying these changes, and how they might be ethically assessed; and - how to envisage (imagine) alternative models of work, and the process of realising such change.

 *Winthrop Professor Rob Lambert is based at the University of Western Australia’s Business School, where he specialises in labour studies. He is co-author of the award-winning book, Grounding Globalization: Labour in the Age of Insecurity (Oxford, Blackwell, 2008),a critique of the free market economy that identifies destructive impacts for the environment, society, families and persons. Rob is the founder and coordinator of the Southern Initiative on Globalization and Trade Union Rights (SIGTUR), founded some 20 years ago. This movement brings together democratic trade unions across 15 countries and four continents in the global south. Rob has a background as a South African activist, and was National Secretary of the South African Young Christian Workers and then advisor to the Southern African Catholic Bishops Conference before coming to Perth.

Thursday, August 26, 2010

Why we need more public investment in public services and public infrastructure

Interesting to read a recent US study that found that the most effective options for creating jobs and building a prosperous regional and state economy is for governments to spend and invest more in public services and public infrastructure.

Disputing the idea promulgated by pro-business and pro-market politicians and advocates that funding public services and economic development are competing interests the study found that:
" The tax cuts and business subsidies approach to economic development will do little to create jobs in the short run and is not the most effective to generating growth over the long term".
The study found that investing public funds in public services, such as education and health and in public assets and public infrastructure is the best approach for state and local development, and raises gross state product, expands productive capacity, increases employment and raises personal income.

The study found that providing incentives to corporations and business such as tax breaks, public subsidies, employment subsidies and other forms of business incentives are not effective and are often counterproductive because they deplete resources that could be spent on education and investments in public services and public infrastructure. 

Strategies that shift resources and assets from the public sector to the private sector- privatization, marketization and corporatization- reduce costs and increase corporate and business profits but are not effective in terms of state and local development and building a prosperous state and regional economy.

The study concludes:
Instead of trying to lure firms with deals and lower corporate taxes, an approach to economic development that builds the skills of the current and future workforce, improves the physical infrastructure of regions, and makes communities more attractive places for families and firms represents a more effective use of a state’s scarce resources.

Tuesday, July 13, 2010

Democracy and the big miners

A PS to the RSPT

By Gavin Mooney

The ‘debate’ around the super profits tax has been illuminating. For me it has said so much about the mentality of the top executives in the mining sector - and of politicians. Early on there were the suggestions that Kevin Rudd was a communist (Clive Palmer), that it amounted to nationalisation (Andrew Forrest) and the tax was straight from the pages of Das Kapital (Julie Bishop)

In the wake of their success in bringing down both Rudd and the tax, their arrogance and their indifference to democracy is now out there in full flow. According to Forrest it wasn’t the miners who brought down Rudd – Twiggy’s pal – it was Ken Henry. Atlas chief David Flanagan divulges to The Australian that he would talk to his wife each night about the implications of the tax ‘and the legacy it would leave for their two children’. He went on: ‘I actually could see a scenario where the RSPT could destroy the fabric of the Australian economy… I mean, totally f…ing smash it to bits.’

Forrest asked ‘who voted for Ken Henry?’ Thank God for Forrest to alert us to the dangers of an unelected Ken Henry. And thank God for those who brought down the tax and saved us from these commies who were otherwise set to ‘destroy the social fabric’ of Australia.

These mining giants also have global aspirations. They are keen to use their power to save not just Australia. They want to save the world from nasty governments elsewhere as well! In a speech to mining executives in London last week, Tom Albanese, the Rio Tinto CEO, according to Peter Wilson in The Australian, ’issued a none-too-subtle warning about the events in Canberra to other governments attracted to the idea of “resource nationalism” and hiking taxes on mining profits’. Albanese is reported to have stated: ‘Policy makers around the world’ (and presumably that includes democratically elected governments – like ours) ‘can learn a lesson when considering a new tax to plug a revenue gap, or play local politics’. We are fortunate however that as Wilson reported Albanese ‘held back from openly crowing about the fall of Mr Rudd’.

The Fin Review joined in. ‘In a shot across the bows of Brazil, South Africa and Chile’, writes Andrew Cleary, ‘Rio Tinto’s chief executive Tom Albanese, has warned countries considering a super tax on resources to “learn a lesson” from the Australian government’s experience in dealing with the industry’s opposition’.

I would encourage readers to write to The Australian and the Fin Review to express their thanks to the big miners for saving – today - the social fabric of Australia yesterday and – tomorrow - the world. Good chance your letters will be published.

Against this background what chance any reasoned debate about the impact of the mining industry on global warming? Ah, but the Flanagan kids’ future is secure in the knowledge that their dad and the other big miners are there to look after the future of all of us.

And just a final thought: why do we need an election?

Monday, July 5, 2010

WA writers on the failure of the market economy to deliver social and economic and environmental justice

Western Australian writers and thinkers continue to write about the market and corporate economy and issues of social, economic and environmental justice.

Sarah Burnside has published recent pieces in online publications New Matilda and Online Opinion. In New Matilda she challenges the idea that the majority of Aboriginal people benefit from the mining and resources industry. In reviewing a recent Australian monograph on Indigenous people and the mining industry Sarah suggests that there little evidentiary support for the idea that mining is clearly good for Aboriginal people.

On his blog Neville Numbat, Piers Vertegen continues to write important pieces on environmental issues. His most recent piece, also published in the online publication Wangle, discusses the likely impact of Julie Gillard's ascendancy for climate change policies. Piers argues that based on her past record the new PM appears unlikely to support real action to address climate change.

In other articles Piers writes about a recent WA Auditor General's report on the failure of WA government agencies to reduce energy consumption and the lack of tangible action and commitment by the Barnett Government to take action to reduce the alarming growth in carbon pollution in WA.

Colin Penter has published this piece in Online Opinion contrasting the ways that civil society groups are whistleblowers are criminalized, while corporations that break the law regularly avoid any substantial penalty. The tenets of limited liability and corporate personhood are used to enable corporations to avoid facing the full force of the law for their criminal behavior. This is a protection not available to individuals and civil society and violates the idea of equality before the law.

Perth based journalist Vicki Laurie has published a long essay in the July edition of the Monthly on the response of WA government agencies to Aboriginal disadvantage. Using the lived daily experience of one Aboriginal family, Vicki demonstrates the enormous gulf between the policy rhetoric of politicians and government agencies and the realities of life for Aboriginal families.

Disability activist Erik Leiopold has published a number of recent pieces in the West Australian and Online Opinion on the private members bill on Euthanasia currently before the WA Parliament. Erik's piece draws on his new book, based on his PhD thesis, which explores the links between market values, disability and euthanasia.

Academic and Director of the WA 2020 Project Peter McMahon has published an Op Ed piece in the West Australian (Monday July 5 2010) on the coming energy crises and its likely impact on Perth. Perth is one of the least sustainable cities in the world and Peter's article describes the energy challenges facing the State as a result of dwindling oil reserves and climate change.

In the lead up to NAIDOC Week Myrna Tonkinson from the University of WA has written this piece in Eureka St lamenting the lack of progress and commitment by Governments in addressing Aboriginal disadvantage.

Market logic, disability and euthanasia: A book review

A Book Review
by Gavin Mooney
Book Reviewed:

Erik Leipoldt (2010) Euthanasia and Disability Perspective:
An Investigation in The Netherlands and Australia VDM Verlag Dr. Müller Aktiengesellschaft, Saarbrücken

Each of the two central issues in this book - euthanasia and disability - is big in itself. Bringing the two together is a monumental task and especially when this is set in a values framework. The author succeeds in his efforts to do this and in a way which is both accessible and challenging.

The purposes of the study reported in this book were (p39) `to discuss Dutch and Australian disability perspectives towards euthanasia and physician assisted suicide; and to find how the life experiences of the informants [people with quadriplegia] ... may illuminate these perspectives'.

Yet to me the central theme of the book is not euthanasia as such nor indeed disability. What the book questions in debating these themes is what autonomy is and whether it merits being seen as so much of an individualistic phenomenon as it so often is, at least in this neo liberal world in which so many of us live. As Leipoldt argues `individual autonomy is the dominant discourse of our age'.

Without disagreeing I wonder if things are not changing. I have in the past been much struck by the work of the likes of Catriona McKenzie, Diana Meyers and Natale Stoljar [1] on relational autonomy and the idea of `community autonomy'. Despite the efforts of so many economists today (this reviewer is an economist) - particularly market economists - and many liberal philosophers to see us all as free floating atoms, that depiction of human beings just somehow does not ring true. We are social animals, we rely on others to some extent and maybe even take our identities in part from our interactions with others. And the interdependency of peoples across the globe has been heightened yet further by both the Global Financial Crisis and the threat of climate change. OK the impact of these on government policies and in turn on human relationships have not really percolated through yet. But this is one `trickling down' that I am confident will trickle down.

Certainly Rawls' placing of individuals behind his veil of ignorance was simply a philosophical construct to aid understanding. Yet it is so false that one has to question how valuable that device is in reaching any sort of understanding of what it means to be a person. Behind a veil of ignorance or a free floating atom? In an odd sense, much of a muchness and much of an unreality.

So for Leipoldt to look at euthanasia through the eyes of 28 people with quadriplegia in Australia and the Netherlands provides not only a novel view but one that in turn challenges the notion of individual autonomy in a most useful fashion. Whatever else, no one reading this will ever again see autonomy in quite the same way - unless maybe a person with disabilities.

The views of people with quadriplegia on this issue have not been examined before which is a quite startling revelation in itself. Leipoldt suggests (p38): `The perspective of people with disabilities may be able to contribute new ... aspects to the euthanasia debate. Major physical, social and psychological changes and challenges arise for a person who acquires a significant disability like quadriplegia.'

On the question of autonomy and individualism the shift to more of the latter is highlighted by one respondent (p 170): `people are becoming more assertive and demand more. I think that if you look ten years ahead people's autonomy will go further ... I think society will become more and more individualistic.'

The book is insightful on the issue of dependency with one response (p 205) suggesting that `dependency gives a very deep relationship with people and you'. And again (p 209): `How do we look at things like interdependence, that are the bigger issues? Because it doesn't matter how dependent or independent you are if you have people around you and you are part of what's happening and contributing to that then whether you can do it on your own isn't the issue.' Wonderfully for me, issues of reciprocity, mutuality, participation, sharing and caring shriek out from these pages.

There is a sense in which what this book tells us primarily in capturing the views of a group who are in many ways dependent and vulnerable as people with disabilities are two things. First interdependence and dependence are not negative traits; and second in some sense or other to be complete human beings we need to be interdependent and dependent and we need to recognise that need. These are particularly interesting issues in the very specific context of the main thrust for the author of this book i.e. euthanasia and disability. But for me the book shows that worshipping at the altar of individual autonomy or even individualistic autonomy is to bow down before false Gods. Such autonomy is almost certainly not attainable and, even if were, it aint worth attaining.

This is a powerful book at many levels.

1. C Mackenzie and N Stoljar (eds) 2000. Relational Autonomy. Oxford: OUP.

Tuesday, June 15, 2010

West Australian families and the environment pay for the market's excesses

image courtesy of the Conservation Council

This excellent piece by Piers Verstegen the Director of the Conservation Council of WA appeared recently in the West Australian and can be found on Piers's excellent blog site Numbat News. There is also a Facebook site to keep up with latest activities of Piers and the Conservation Council.
State Budget rewards polluters but punishes environment and families

By Piers Verstegen

In a closed briefing to business and community groups on the State budget, Premier and Treasurer Colin Barnett said that this budget strongly reflects the policy agenda of the Liberal-National Government. Sadly, an examination of the budget reveals this agenda as one that places the environment as one of the Government’s lowest priorities.

The second budget produced by the Liberal-National Government continues the established trend of running our environmental regulators on the smell of an oily rag. Much less than 2% of the overall State budget is dedicated to the increasingly impossible tasks of reducing carbon pollution, managing waste, regulating polluting industries, controlling land clearing, managing national parks, reducing air pollution, protecting the marine environment and all the other functions of the State environment portfolio.

When you consider that environmental protection is the responsibility of States under the Australian Constitution, this is grossly inadequate. The inevitable consequence of this budget frugality will be increasing impacts on our environment, increased threats to our biodiversity and health, and carbon pollution skyrocketing out of control in WA.

For a realistic assessment of the environmental consequences of this year’s budget, one must look beyond the environment portfolio. On the other side of the ecological balance sheet, the budget increases the already very significant taxpayer subsidies for polluting and destructive industries in Western Australia.

For example, the budget earmarks over $100 million towards assisting the development of a polluting LNG processing plant on the Kimberley coast – in the middle of the southern hemisphere’s most important hump-back whale calving ground. If it goes ahead, this development would be responsible for increasing WA’s greenhouse emission by 25% on its own.

Premier Barnett has stated that the Kimberley is the Government’s number one environmental priority, and a small allocation has been made to allow for the creation of a new marine park at Camden Sound, North of Broome. This funding is welcome; however the government’s environmental credentials in the Kimberley must be weighed against the heavy taxpayer investment in opening up the north for damaging and unsustainable industries.

Expenditure in the energy portfolio, which could hold the key to a clean renewable energy future, is even more alarming. The budget reveals that more than 99% of capital expenditure by the government’s energy utility will fund polluting fossil-fuel generation; less than 1% will be spent on renewable energy.

And if this is not bad enough, the budget totally fails to account for the massive economic liability that will be passed on to future Western Australians as a consequence of Western Australia’s rapidly increasing carbon pollution.

The Rudd government have delayed the introduction of an Emissions Trading Scheme for the moment, but some price on carbon will inevitably be introduced in some form in the future. Failing to disclose this cost to householders who will be forced to bear that cost because of decisions made to subsidise polluting industries today is duplicitous.

The EPA have advised that WA carbon pollution is likely to increase by an alarming 75% in the next few years. Decisions made today will determine whether Western Australia unlocks its clean energy potential, or locks into a future where Western Australian’s will be forced to pay higher and higher carbon polluting costs.

The disparity between the government’s treatment of the environment and polluting industries is echoed just about everywhere you look in the budget papers.

For example, water charges for households will be increased, but Collies rapidly expanding coal-fired power industry will continue enjoy huge volumes of water almost totally free of charge.

Mining companies receive even more handouts as part of the State Governments $80 million mining exploration incentives package (they already receive generous tax concessions for expolration activities from the Commonwealth), but taxpayers will have to pick up the bill for environmental damage caused by mining as the government continues it’s policy to exempt miners from paying bonds to cover the cost of rehabilitation.

And while families pay more for power, the budget continues the generous energy subsidies enjoyed by mining and other industries supplied from the grid in regional areas.

Financially this budget is in surplus, but that fails to account for the massive environmental and economic liability that will be transferred to future generations as a consequence of the Barnett Government’s overwhelming focus on expanding and subsidising unsustainable and polluting industries in WA.

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Wednesday, June 9, 2010

Corporate control of Health care

The Corporatization of Health By Gavin Mooney

As a health economist one ceases to be shocked by the quite disgusting behaviour of the pharmaceutical industry. It happen so often. But every now and then Big Pharma manages to find yet more offensive ways of trying to corrupt research, clinicians and the WHO.

At the same time I note how willing some in health services – doctors and others – are to take the Big Pharma shilling and without any recognition often of the conflicts of interests involved. A couple of examples from my own experience. Nearly 20 years ago, a leading Australian clinician was keen to do a study with me which would have involved bringing a colleague out from the UK. He said he’d get the money for the airfare from a drug company. I indicated that if there were any drug company money involved then I would not be. He was amazed at this response and said: ”I can’t remember when I last paid for an airfare.”

More recently I suggested to a very senior university administrator that the university should not accept drug company money when evaluating drugs since there was good evidence that such funding resulted in bias in favour of the company’s drug. “Studies sponsored by pharmaceutical companies were more likely to have outcomes favouring the sponsor than were studies with other sponsors” (1). The university administrator’s response? “But if we say no Gavin, the company will just go down the road to another university!”

There are countless such stories and on a much bigger scale. One is the recent case of WHO and the swine flu pandemic. The Guardian of June 4 (2) reported: “An investigation by the British Medical Journal and the Bureau of Investigative Journalism … shows that WHO guidance [on stockpiling drugs in the event of a flu pandemic] issued in 2004 was authored by three scientists who had previously received payment for other work from Roche …and GlaxoSmitKline (GSK)” the companies which make the drugs which were to be stockpiled. The guidance led to drug companies making billions of dollars from the stockpiling.

According to the Guardian, one of the main authors (Professor Fred Hayden) was being paid by Roche for lectures and consultancy work at the very time he was writing the guidance! And he had previously received payment from GSK.

What I find most worrying in all of this is that there are so many stories of the nastiness of drug companies in funding unethical practices, arranging ghost written articles for clinicians to sign on to (yes that is true! (3), etc. ... and nothing changes. Nothing.

Can this sort of corruption be stopped? Well there seems not much point in trying to stop individual clinical researchers and individual universities accepting payment and kickbacks from the drug companies. It’s been tried. It does not work. Policing it is just impossible and the climate and culture of clinical research would need a revolution. It will not happen.

The place to tackle this is in the incentive structures that the industry faces. So state ownership of companies is one option. Those who worry that investment in new drugs would dry up need to note that currently only 14% of the industry’s budgets goes on developing drugs (4). Another attractive option is one that the economist Joseph Stiglitz (5) has come up. He suggests that there be a massive multi-billion dollar prize set up by governments which would be won on the basis of drug inventions which did the most to improve health – instead of profits. I would suggest that rather than have governments pay for the prize as Stiglitz proposes, that this is funded by taxing the drug companies’ marketing budgets.

The majority of health problems in this world are in very poor countries where there are very limited monies available from governments and from people to pay for drugs. So the chances currently of Big Pharma seeking to develop drugs for developing countries is remote – the prospect of making profits is just not there. So the R&D on malaria drugs for example is inevitably tiny. And the extent to which the world gets on top of malaria is … tiny.

Currently the world’s poor struggle to pay for their drugs. When they succeed they often push themselves deeper into poverty. When they fail, they die.

There has to be a better way but it starts with outrage that this profit driven enterprise that could do so much good gets away with doing so little - except making big profits.


1. Lexchin J, Bero L, Djulbegovic B and Clark O, Pharmaceutical industry sponsorship and research outcome and quality: systematic review British Medical Journal 2003;326:1167-1170

2. Report condemns swine flu experts' ties to big pharma

3. Medical editors push for ghostwriting crackdown

4. Angell M (2004) The Truth about the Drug Companies. New York: Random House.

5. J Stiglitz Scrooge and intellectual property rights

Thursday, June 3, 2010

A public health case for the super profits resources tax

The Resources Super Profits Tax – a public health initiative

by Luke Slawomirski*

Amidst all the hysteria surrounding the proposed RSPT, not a single person has made a key argument in its favour…. That it will benefit the health of all Australians.

Those to whom this may seem preposterous overlook a key underpinning philosophy for the tax, which Lindsay Tanner eloquently outlined in Parliament a couple of weeks ago. This is to prevent the (further) development and embedding of a two-tier economy driven by extreme commodity prices and a largely oligopolised market.

By extension, this situation naturally leads to some individuals growing wealthier while others are left behind, an effect compounded by inflationary pressures induced by super profits (anybody living and paying their rent/mortgage in WA will attest to this).
This is bad for our health.
Surely not! A rising tide lifts all boats; there’s a trickle down effect; more money coming in means people are happier and give more to charity; jobs are created; the tax will push cost of living up even further!

The last argument was comprehensively debunked by Ken Henry in front of a Senate Committee. A recent study by the Australia Institute dispelled the ‘rising tide’ myth. It is well known that charity contribution has nothing to do with wealth. An there’s no need to even speak of the tenuous link between wealth and life satisfaction.

More and more empirical evidence is emerging to show that the more unequal or economically stratified a society, the less healthy all its citizens are.

Let me be clear. We’ve know for a long time that being poor is bad for your health. What we are learning now is that being rich in itself is not enough if you live in a country with a steep socio-economic gradient (where the gap between rich and poor is large).

The work of epidemiologists such as Sir Michael Marmot and Richard Wilkinson is showing that, beyond a certain threshold of GDP per capita termed the ‘epidemiological transition’, absolute wealth ceases to exert any significant influence of health and wellbeing. Rather, it is how the wealth is distributed that counts.

Nations which consistently outperform their counterparts on a range of health and wellbeing indicators (such as life expectancy, coronary disease, obesity, smoking, depression, drug abuse, homicide, incarceration rates, suicide and so on) are ones where the wealth gap is narrower. These tend to be the Scandinavian countries like Norway (which, as it happens, has a functioning tax on its oil reserves very similar to the one proposed here).

Japan also stands out (no it’s not their diet or culture… the rise has only been apparent since WW2). It is a low-taxing country but the income gradient is relatively flat – the CEO of a company will earn maybe 20-30 times what the janitor earns.

Even some developing countries like Costa Rica outperform much more affluent ones on a range of measures. Kerala, a state in southern India, has lower infant mortality rates and comparable life expectancy to the USA, despite being much much ‘poorer’.

The USA, in spite of its wealth and tremendous spend on health care (12-13% of GDP), languishes around the middle of the table that includes developing as well as developed nations.

This same can be observed when comparing states within the USA, neutralising the argument that the differences are cultural and measurement related. Adjoining states with homogenous populations can exhibit considerable differences in population health.

Differences that are largely attributable to the levels economic (in)equality within them. These reductions in health manifest at both ends of the social spectrum.

So how does Australia rate?

Overall not too bad but slipping. We also have inordinately high rates of mental illness and drug abuse.

The point is that, based on the epidemiological research into inequality, permitting a 2-speed boom/bust economy to develop will be to the detriment of social cohesion and consequently bad for our health…of everyone.

So back to ‘the tax’.

The economic arguments for the RSPT are sound (almost all reputable economists in Australia endorse it) not least because it is coupled with a lowering of company tax. The environmental case is strong, as is the moral argument. And, as we can see, there is also a for public health case for instituting it.

So what’s the problem?

Firstly, I think the population is so strongly inculcated with the ‘more is more’ mantra that mounting any argument for wealth redistribution is extremely difficult. Anybody raising this as an issue is branded a communist. Tax is un-Australian and anti-freedom.

There is also the strong mythology around mining and wealth creation built into our national narrative. People like Andrew Forrest and Clive Palmer are seen as heroes not only because they have managed to become extremely wealthy (let’s remember that Kerry Packer got a state funeral here) but their image taps squarely into the mystique of Aussie machismo.

Latte-belt pinkos can squawk all they like about equality. Twiggy and Clive are the real men who turn the wheel of the Australian economy, put 4WDs in our driveways and jest skis on our waterways. This perception has been very astutely exploited by the pro-mining lobby in the RSPT debate.

The mining mythology makes it politically very hard to argue for the tax, but I think the Government has also made an absolute hash of selling it. Also, the lack of consultation has been astoundingly short sighted and arrogant. Meanwhile the Opposition, true to form, have trained the crosshairs squarely on the lowest common denominator, braded it a ‘great big new tax’ and prophesised impending economic doom.

On the grounds of this tax and the Coalition’s declaration to dump it, one can only hope that the Government scrapes in at the next election and commences the necessary reform to make this a more cohesive, progressive and ‘healthy’ nation.

*Luke Slawomirski is a public servant working for a Western Australian Government Department. He has a clinical background and a Masters Degree in Health Economics. He has strong interest in health policy, and, in particular, the social determinants of health. The opinions expressed in his piece are personal and not reflective of the view of the Government agency for which he works.