Category: politics

The risks of government surveillance – how Australia’s data retention laws hurt

The Australian government is about to pass data retention laws which will be expensive and won’t work

This morning I’m speaking on ABC Radio’s Overnights about the risks of the Australian government’s law to force telecommunications companies to retain users’ metadata for two years.

While the act, currently before the Senate having passed the House of Representatives last week after the poorly named ‘opposition’ Labor Party supported it, mandates that telcos and ISPs will have to retain the details of users’ connection times, places and type of device for two years and that government agencies will be able to access this data without a warrant.

The program was broadcast on 26 March 2015 at 4.15am Eastern Time with Trevor Chappell and is can be listened to on the ABC radio website.

Some resources on the data retention bill follow;

Links of the day – Terrorism, deflation and London’s rebirth

The terrorist murders in Paris lead today’s links of the day.

Today’s links kick off with the worldwide reaction to the terrorist atrocity in Paris. The other links, which pale in contrast, include why we should really fear deflation, the decline and rise of China and how to understand a food critic.

Cartoonists unite over French terrorist murders

After the terrorist atrocity that saw twelve people murdered in an attack on a magazine office in Paris, cartoonists around the world have shown their reaction.

Why Europeans should fear deflation

Yesterday the main economic news was the Eurozone had re-entered a deflationary period. Irish economist David McWilliams explains why deflation scares governments and banks with some lessons from the Great Depression.

The decline and rise of London

In 1939 London reached its peak population of 8.3 million then saw declines for the next fifty years as war, government policies and economic restructuring saw the city’s attractions wane.

Sometime this week London will pass its 1939 peak and Citymetric magazine looks at the reasons for the decline and why the recovery began.

China’s incredible disappearing former leader

In November 2012 Chinese leader Hu Jintao stepped down from his post. Since then he’s effectively disappeared from public view Foreign Policy magazine reports.

At the same time many of his allies and supporters have been purged from their party positions as part of a major change in direction for the Chinese government. What this means for the parties’ cronies who’ve been propping up property prices across the Pacific and Macau’s lucrative casino business remains to be seen.

What restaurants should know about food critics

First impressions matter warns former restaurant critic for the New York Times and Los Angeles Times, Ruth Reichl, in a terrific interview with Open For Business.

Reichl’s advice is good for pretty well any business; make sure your first impressions are good, don’t rip off your customers or be too pushy with upselling and train your staff. It’s an entertaining insight into a field dominated by egos that’s largely becoming extinct.

Links of the day – dead malls, economics and politics of the future

What will the economy and politics of the future look like?

Today’s interesting links revolve around economics – those of shopping malls, the future and how politics might react to a world where the majority’s incomes are lower and far more precarious than we’re used to.

The economics of dead malls

Shopping malls were the town square of the late Twentieth Century consumerist society. Now in many parts of the US the shopping mall is dying as economics and culture turns against them.

The New York Times looks at the economics of shopping malls and how they are affected by changes to society, particularly the decline of working class incomes and the middle class squeeze. In the meantime high end malls seem to be doing extremely well.

Having opened in 1986 with a renovation in 1998, Owings Mills is young for a dying mall. And while its locale may have contributed to its demise, other forces played a crucial role, too, like changing shopping habits and demographics, experts say.

A number of factors are working against old fashioned shopping malls including growing wealth disparity, falling middle and working class incomes along with fundamental changes to the economy which mean retail businesses, along with other industries, are going to have to adapt to a very different future.

Journey through the landscape of the future

Some of those changes to the global economy are described in Deloitte’s Centre For The Edge’s The hero’s journey through the landscape of the future, first published in July last year.

The Deloitte think tank describes a world where the workforce is more casualised – dare one say more precarious – and the barriers to business far lower than today.

Democracy in the 21st Century

Changes like those described by Deloitte don’t happen without consequences and economist Joseph Stiglitz suggests this will change our democratic institutions.

Sadly Stiglitz doesn’t suggest the changes that might happen apart from observing the current system that seems to be baking in inequality probably isn’t sustainable.

In a world where incomes are less stable and economic standards of livings are falling for the majority of people, the current beliefs that underpin the philosophies of political parties and government agencies become redundant. How today’s governments react to these changes will be an important question for how our societies look in the 21st Century.

Lessons from the G20 leaders meeting

The Brisbane G20 meeting shows the world’s leaders are locked into old models, it’s up to you to change your world.

This year’s G20 talkfest has come to an end with the usual communique of fine words.

Apart from the discussion of climate change there’s little in the communique that wouldn’t have furrowed the brows of Margaret Thatcher or Ronald Regan thirty years ago with most of the pronouncement a being around opening markets, reducing unemployment and freeing capital.

On the latter point, the call to reduce tax avoidance given this was an obvious consequence of the 1980s reforms would be met by with a rueful laugh from those responsible for the deregulation wave of the Reagan and Thatcher years given reducing taxes on corporations was one of the reasons for the ‘reforms’

An aspect that would trouble Maggie’s and Ronnie’s ghosts would be the commitment to ‘address deflationary pressures’, something undreamt of in the 1980s, although a clear warning to today’s commentators and investors that Quantitative Easing is not going away any time soon.

What today’s communique shows is the world’s leaders are still very wedded to the economic models of the Twentieth Century despite the massive demographic and technological developments changing our society.

The real message from the G20 is don’t wait for your country’s leaders if you want progress; at best they probably won’t comprehend what you’re saying.

Although if you can put your ideas in terms of creating growth or reducing youth unemployment then you might have a willing audience with your local minister, chancellor or President.

Business class syndrome and travelling hard class

Much of the advice from business and political leaders is through a prism of privilege

“Why are you travelling by train?” I was asked by the expat project manager as I planned a site visit to a factory being built by our company on the outskirts of Bangkok.

For me, that two hour third class train trip was an opportunity to get out of the pampered bubble that is life as an expat in a country like Thailand and get a brief, if incomplete, picture of daily life in a rapidly changing nation.

Travelling Business Class

Business Class Syndrome — a view of the world seen through the prism privileged lifestyle that isn’t shared by most people — is a phenomenon that afflicts many of our business and political leaders who are insulated from the real world.

Over the past three days I’ve been dipping in and out of various economic forums as the B20 and the Young Entrepreneurs’ Alliance conference being held in Sydney this week ahead of the G20 Heads of Government meeting being held in Cairns next October.

Both events illustrate Business Class Syndrome as global experts travel the world discussing issues like youth unemployment, third world growth and startup businesses that are beyond their experience.

None of this is to say the speakers at these events were wrong or dishonest, just their ideas — however well informed and intentioned — are developed through a selective view of the world.

Taking the privileged view

That selective view has to be kept in mind when reading the recommendations of such experts. White, middle aged, western men don’t have a monopoly on the planet’s good ideas.

In the case to the Bangkok project managers the expats didn’t really care about what was going on; their job was to build and move on, which they (and I) did.

However I hope those hard seat journeys left me a little more understanding about Thailand than those who wouldn’t leave an airconditioned site hut.

Indian Railways sleeper image by dforest via wikimedia

Living in the 1970s – Australia looks backwards

Australia harks back to the 1970s as the nation retreats from the 21st Century

An interesting observation about life in Australia over the last twenty years is how the nation decided to look backwards and become insular in many fields.

One of the manifestations of this insularity is the sensitivity towards outside criticism by many of the nation’s business and political leaders.

Today saw an example with two Members of Parliament on the ABC’s The World Today program responding to criticism from a former Thatcher government minister, Lord Deben, over the government’s climate change policies.

GEORGE CHRISTENSEN STATEMENT (voiceover): The last time I checked, the House of Lords, that undemocratic anachronism in a modern British democracy, and its Privy Council, had no jurisdiction over Australia, thank God.

Yet Lord Deben has waded into Australian affairs, whingeing about what we are doing regarding climate change when we contribute less than 2 per cent to total global carbon dioxide emissions.

…

If this whingeing pom thinks the carbon tax was actually doing something for the planet, can he please advise us lowly commoners how many degrees the Earth would have cooled to because of the carbon tax?

…

IAN MACDONALD: I think the Australian Government and Australian policy should be run by Australians not by some retired English Lord.

MacDonald’s and Christensen’s sensitivity towards criticism from a ‘whingeing pom’ is notable – as is their contempt for the British House of Lords despite being members of a political party that supports the English Queen as Australia’s head of state.

On their own, the ramblings of a pair of insular rural apparatchiks doesn’t count for much but the same hostility towards educated outsiders was on show two days earlier when US economist Joseph Stiglitz appeared on ABC Television’s Q&A program.

An early audience question to Stiglitz set the scene;

Thank you for taking my question. My question is for Professor. Sorry, excuse me. What gives you the right, as an American, to come to Australia and criticise our budget, especially the $7 co-contribution payment, which is capped at $70 per year?

The ‘what gives you a right as an American?’ theme was gleefully picked up by Professor Judith Sloan, the token government apologist on the panel – faux news balance beings as alive and well in Australia as much as anywhere else in the world – who dismissed many of Stiglitz’s observations on the Australian economy as being the misguided views of an ill informed outsider.

Dismissing the whingeing poms and arrogant yanks harks back to an earlier time in Australia’s development. It may well be the nation has gone back to the days of Barry Mckenzie where Down Under is the working man’s paradise that the rest of the world desperately wants to be part of.

Strangely, the immigration officials in that 1972 movie could well pass for today’s Australian politicians.

As it turned out, the 1970s were a tough decade for Australia as it looked like the luck had run out. It may well turn out the Twenty-First Century is a lot tougher for the Lucky Country.

 

Economics for the ordinary person

Economist Ha-Joon Chang believes we should challenge the economic theories that rule our modern governments

“95% of economics is common sense” says economist Ha-Joon Chang in his book The Little Blue Book — Five Things They Don’t Tell You About Economics.

In a presentation at this year’s RSA conference Chang explains some of the underlying themes of his book, particularly the point that the various schools of economics theory are based on their own sets of cultural assumptions and that every group struggles to explain the world, especially when asked to fit Singapore into their models.

Chang’s five points are a call for the average person to understand economics and be prepared to challenge the orthodoxies being trundled out by business and political leaders.

You should be willing to challenge professional economists (and, yes, that includes me). They do not have a monopoly over the truth, even when it comes to economic matters.

As economists have been allowed to become the high priests of modern society — or possibly the court jesters of the corporatist world — it may well be time to challenge them.

Competing in the global tech race

Some countries’ leaders recognise they live in the Twentieth First Century while others are struggling with Twentieth Century.

Last week I wrote a piece for Business Spectator on the contrast between countries competing for tech investment and skills.

Irish Taoiseach Enda Kenny was in Silicon Valley promoting Ireland as an investment and operating location while in London the Queen hosted 350 British tech companies at Buckingham Palace.

Earlier this week President Obama hosted the first White House Makers’ Faire with over thirty inventors showing their ideas.

All of this contrasts with the Australian Prime Minister Tony Abbott’s recent North America where he touted the country was ‘open for business’ by offering mines and toll roads to Canadian pension funds.

It’s clear some countries’ leaders recognise they live in the Twentieth First Century while others are struggling with Twentieth Century.

Saving retirement

The costs of the baby boomer population bubble are becoming apparent

Retirement age is vexed problem in the developed world; while life expectancy has increased over the last Century, the age where one becomes eligible for the pension has barely changed.

Harvard University professor Martin Feldstein illustrates this in a post on Project Syndicate, Saving Retirement, where he has a number of suggestions of moving the pension age to ease the pressures on public finances.

Obviously, retirees deserve advance notice before benefits are reduced. That is why it is important for the US – and for many countries around the world – to act now to make the changes needed to stabilize future pension finances.
Those pressures are going to become more real in the decade as the baby boomers join the ranks of the retired, the cry “I’ve paid my taxes, where’s my benefits?” is going to get louder.
Unfortunately for them, the kitty’s going to turn out to be bare – there simply aren’t enough Generation X and Y workers in the developed economies to pay for millions of boomers collecting pensions for the next thirty years.
Governments around the world have ignored this obvious, and predictable, problem for fifty years and now it’s time to address it. Unfortunately few leaders have the courage to tell their electorates the truth of the challenge ahead.

Technology’s Ayn Rand fallacy

The tech industry’s love affair with Ayn Rand and libertarianism is a deep contradiction with its roots.

Adam Curtis in his wonderful BBC series All Watched Over By Machines of Loving Grace discusses how Ayn Rand influenced many in the tech industry.

Having been accused of being a ‘techno-utopist’ Curtis’ story is a good reminder of the limits of technology and how the future doesn’t usually turn out how we imagine.

The Ayn Rand influence is worth reflecting on as Rand’s libertarian outloook is shared by many in the technology industry – from the lowest PC technician to the highest flying software mogul.

Rand’s beliefs are best portrayed in her own words, in a 1958 interview with Mike Wallace she tells of how she believes in “challenging the moral code of altruism.”

In Rand’s world view it was the duty of each man to achieve their own happiness, self sacrifice and caring for other is weakness.

That technologists should have those views is curious in that the entire computer industry, the internet and Silicon Valley itself is the result of massive US government spending during World War II and the Cold War.

An more delicious irony is the centre of Silicon Valley, Stanford University, is itself the result of a bequest by railroad tycoon and former Californian governor Leland Stanford.

So self-sacrifice, altruism and government spending forms the basis of the entire modern tech industry – something that computer industry’s libertarians ignore, if they are conscious of history at all.

An even bigger contradiction is the belief that the internet dismantles government and corporate power – one of the lessons of Edward Snowden’s revelations is how comprehensively intelligence agencies monitor online communications.

When the history of Silicon Valley and the 21st Century tech boom is written, one of the compelling themes will be the contrast between the industry’s beliefs and reality.

The final chapters of that history will describe how that contrast between reality and beliefs is resolved.

Peak employment and the political challenge

The current angst about employment in an age of automation is a political, not technological, problem

This week’s edition of The Economist asks about the Future of Employment and where the jobs are in a society where work is increasingly done by machines.

For the Economist the conclusion is that the future of employment is ‘complex’ and observes economists and politicians haven’t given enough thought to the effects of the changing workplace and the dislocation of many workers.

Much of the Economist’s story is based around the ideas of professors at MIT Erik Brynjolfsson and Andrew McAfee in their upcoming book “The Second Machine Age”.

The race with the machines

Professor Brynjolfsson gives his view at TED 2013 in the key to growth? Race with the machines, a presentation countered by Robert Gordon in the ‘death of innovation, the end of growth’ and followed by an excellent debate between the two.

Brynjolfsson cites the dilemma of bookkeepers being displaced by software applications such as Intuit Turbotax as an example of where service sector staff are being displaced.

“How can a skilled worker compete with a $39 piece of software?” Brynjolfsson asks.

“She can’t. Today millions of Americans do have cheaper, faster, more accurate tax preparations and the founders of Intuit have done very well for themselves. But 17% of tax preparers no longer have jobs.

“That is a microcosm of what’s happening not just in software and services, but in media and music, in finance, manufacturing, in retailing and trade. In short, in every industry.”

The great decoupling

Brynjolfsson’s key point is that workers’ wages have been decoupled from productivity and that the workforce isn’t sharing the rewards of improved practices and increased wealth.

That is certainly true over the last forty years, however that may not be a technological effect, but the business consequences of liberalising the financial sector which has seen massive pay increases to the banking industry and managerial classes that has been way out of kilter with the rest of the workforce.

It may well be the current golden era of high executive salaries is a transition effect of an evolving economy, albeit one where our grandchildren will puzzle over an era where a failed executive can receive a $100 million payout on being fired.

As The Economist points out technological change itself tends to create new jobs that make up for those displaced in old industries, this is a view supported by GE’s Chief Economist Marco Annunziata.

The main problem that Brynjolfsson identifies is the medium term issue of dislocated workers finding themselves out of work with superseded skills and, as The Economist point out, it’s clear the developed world’s political leaders haven’t though through the consequences of that transition.

In almost every sense, the current crisis of confidence about employment prospects is more a political and social problem rather than technological.

Helping displaced workers is going to be the greatest challenge for today’s generation of business and political leaders, the real question is are they up to that task?

Facebook and the Fax Machine

What manufacturing was to the Chinese economy of the 1980s, information is today. How will the country’s leadership handle this?

The South China Morning Post reports the Chinese government is allowing access to otherwise restricted sites like Facebook to those in the Shanghai free trade zone.

In many ways this parallels the original Special Economic Zones set up by the People’s Republic of China at the beginning of the 1980s – these areas’ separate legal, immigration and economic status attracted foreign investment and trigged the economic boom that’s seen China become one of the world’s biggest economic powers.

Just as manufactured goods were the key to the nation’s development 30 years ago, today it’s information as the PRC leadership works on moving China up the global value chain.

For a nation of knowledge workers to succeed, the workers have to have access to knowledge.

It’s claimed the humble fax machine was responsible for the fall of the Soviet Union, how true that is open to debate but an open flow of information is never good for those who rule without the support of their citizens.

With the explosion of Chinese social networking sites, it’s become harder for the government to control the flow of information between citizens and the opening of the internet in parts of Shanghai is another small change.

How the Chinese Communist Party manages to keep the support of its increasingly affluent and better informed citizens will define the course of 21st Century history.

As China shifts from being a low cost manufactured goods supplier to a more sophisticated, diverse and expensive economy the government has no choice to face these challenges.

Beijing’s cadres would be hoping our children aren’t talking about Facebook in 2012 Shanghai in the same way that we talk of fax machines in 1982 Leningrad.

Image of a fax machine courtesy of Kix through sxc.hu