politics | Paul Wallbank - Communications Professional

Enniskillen and the G8’s Potemkin Village

Britain puts on a brave, if false, face for the G8 leaders summit

In the middle of this month the G8 group of world leaders will meet in Northern Ireland when the UK takes their turn to host the annual conference.

With the leaders of eight of the world’s biggest economies – which includes Canada but not China – coming to visit the Northern Irish government is anxious to present a prosperous face to the world, including allocating £233,000 to give Enniskillen’s town centre a ‘facelift’.

It seems a good chunk of the facelift money has been spent on creating fake shops in the distressed town’s centre.

In a little over two weeks they and other leaders will gather for a G8 summit at a golf resort in Enniskillen. And as the date approaches the cleanup is moving into high gear. It includes new coats of paint on houses, tidying up lawns, and putting up fake storefronts on shuttered businesses.

For the visiting dignitaries, their advisors and the media caravans that follow them, Enniskillen’s shops will be looking prosperous when the reality is very different.

“The County of Fermanagh has suffered terribly as a result of the credit crisis and the resulting recession,” says Dan Keenan of the Irish Times.

Fermanagh County’s efforts to present a brave, if false, face to the world is symptomatic of the Western world’s refusal to accept the consumer based economy that drove the Corporatist model of government over the past fifty years is over.

Just as the fall of the Berlin Wall in 1989 signalled the end of the Soviet experiment, the global financial crisis of 2008 marked the end for the big spending, big debt era which had driven the Western economies through the last half of the Twentieth Century.

Unlike the Soviets, we refused to accept the game is up and have kept a failing economic philosophy alive with massive borrowing and money printing. In this respect, we’re dumber the Russian communist leaders who accepted the reality of the world they found themselves confronting in 1989.

All of which will probably amuse Russian President Vladimir Putin as his motorcade speeds past the repainted shopfronts of Enniskillen and no doubt he’ll be thinking of the face Russia will present next year when they host the G8 Summit.

Perhaps its time for the G8 leaders to invite the People’s Republic of China to join their privileged club – at present Japan is the only non-‘white’ nation.

If the G8 decide to let the Chinese join, there’s the South China Mall that would be a perfect counterpoint to the Potemkin Village of Enniskillen and the world’s great leaders can continue to believe that the business rules of the 1980s still hold true today.

Yesterday’s men are still pursuing yesterday’s dreams, dressing up Enniskillen may cater to their fantasies but it won’t help today’s economy.

Picture of a propped up facade courtesy of Ingolfson through Wikipedia Commons.

Doing social media right

Whoever runs your social media feed is an official spokesman, it’s important to choose the right person and give them authority.

After last week’s Associated Press hack and the stock exchange fallout, regulators are struggling with implications of social media and informed markets.

In a speech delivered last week the Australian Securities and Investments Commission’s Deputy Chair Belinda Gibson and Commissioner John Price gave some refreshing commonsense views on how businesses should handle public information.

The continuous disclosure advice given by Price and Gibson is aimed at meeting the requirements of Australian corporate law, but it’s actually good social media advice.

Having delegations in place for who has authority to speak on behalf of the company – whether in response to an ASX ‘price query’ or ‘aware’ letter, or when they become aware of information that needs to be released to the market, perhaps in response to speculation.
Ensuring that there is a designated contact person to liaise with the ASX, who has the requisite organisational knowledge and is contactable by ASX.
Have a clear rapid response plan and ensure all board members and senior executives are fully appraised of it. Give it a practice run every so often – a stress test of sorts.
Have a plan for when you will consider a trading halt appropriate.
Have a ‘Request for trading halt’ letter template ready for use.
Have guidelines for determining what is ‘material’ information for disclosure, tailored to your company.
Prepare a draft announcement where you are doing a deal that will
likely require an announcement at some time, and a stop-gap one in case of a leak

Having a nominated contact person with requisite organisational knowledge is possibly the most important point for any organisation.

Even if you think social media is just people posting what they had for lunch or sharing cute cat pictures, it isn’t going away and those Twitter feeds and Facebook pages are now considered official communications channels.

The intern running your social media is now your company’s official spokesperson. Are you comfortable with this?

A good example of where this can go wrong is the Australian Prime Minister’s Press Office where an immature staff member has been put in charge of posting messages. The results aren’t pretty.

The funny thing is the Prime Minister’s office would never dream of some dill getting up and saying this sort of thing on her behalf, yet allows an inexperienced, loose cannon put this sort of material in writing on the public internet.

Here’s Twenty Rules for Politicians using the Internet.

On a more mature level, the ASIC executives also have some good advice on writing for social media.

Don’t assume that the reader is sophisticated or leave readers to read between the lines. Companies need to highlight key information and tell it plainly.

While the ASIC speech is aimed at the specific problems of complying with company law and listing requirements, it’s a worthwhile guide for any organisation needing to manage its online presence.

Don’t be like the Prime Minister’s office, understand that an organisation’s social media presence is an official channel and treat it with the respect it deserves.

A question of relevance – why the PM welcomes bloggers

The Prime Minister’s courting of bloggers in the run up to the Australian Federal election later this year shows how credibility and relevance are most important asset of any media outlet

The Prime Minister’s courting of bloggers in the run up to the Australian Federal election later this year shows how credibility and relevance are most important assets for any media outlet.

Late last year the Prime Minister invited bloggers to Kirribilli House for lunch then to dinner during her Rooty Hill adventure a few weeks ago.

The press gallery grumbled and wrote patronising articles about North Shore mummy bloggers but failed to recognise the real threat to the established media outlets – these writers are more relevant to people’s lives than the machinations of ‘anonymous political sources’, sports stars or Hollywood celebrities.

Now the Prime Minister is giving one on one exclusive interviews to some of those bloggers, something that will irritate the nation’s political journalists even further.

Old media’s loss of relevance

The press galleries’ problem though is relevance, which lies at the heart of any successful media outlet.

In 1831 when The Sydney Herald’s first edition was published, the front page was made up of advertisements and shipping notices as it was with all newspapers of the time.

That was relevant to the readers, they paid 7d – not an insubstantial amount in 1831 – to find out the latest in shipping movements, real estate sales and livestock prices which were essential to life and business in the colony.

It wasn’t until 1944 that the now Sydney Morning Herald moved news to the front page, the London Times held out until 1966. What was now relevant to readers were photos and wire stories from around the world.

Papers continued to do well despite the introduction of radio in the 1930s and TV in the 1950s because they were continued to be relevant to their readers. If you were looking a job, a house or where to take your mum for her 60th birthday then the local newspaper was the place to look.

The shift to sensationalism

In the 1980s all the media – newspapers, TV and radio stations – started a shift to sensationalism and infotainment and steadily all became less relevant to the populations they served.

At the time media outlets got away with it as there was no-where else for people to get news. If you didn’t like stories about Princess Di’s wedding dress then you had to curl up in the corner with a good book.

Then the web came along.

All of a sudden engaged readers could get relevant information from all over the world.

With social media and blogs, reporting Kim Kardishian’s latest wardrobe malfunction raised a ‘so what’ from an audience that learned about it two days ago on TMZ, the Huffington Post or Facebook.

Making matters much, much worse were the advertising rivers of gold moved to specialist websites and Google.

Newspaper executives found their revenues were evaporating and they worked their way deeper into the quicksand by cutting costs in the areas where their editorial strengths lay, making them even less relevant to the readerships they want to serve.

Relevant lifestyles

Today the mummy bloggers – along with the food bloggers, travel bloggers and political bloggers – are attracting audiences with relevant, useful content that the audience can engage with.

Last week’s embarrassing circus in Canberra was an example of how irrelevant the media, and much of politics, has become to the average Australian.

Indeed it’s interesting to contrast the self important Canberra press gallery pushing non-stories while fawning over their discredited ‘anonymous party sources’ with the genuinely questioning tone of the some of the bloggers.

So the mainstream, established media can kiss the mummy bloggers’ backsides; if they can’t find relevance in today’s society then they may as well shut up shop.

For politicians relevance is important too – political parties that pitch themselves to 19th Century class struggles or 1980s corporatist ideologies are as irrelevant to today’s society as the Soviet Communist Party.

It would serve the Prime Minister and her staff well to listen closely to what the mummy bloggers and their readers are saying.

Now may not be a good time to buy Melbourne property

Why do monster skyscrapers mark a looming economic downturn?

There’s plenty of indicators that can be used to predict the health of an economy

While my favourite is the mini-skirt index, the most reliable is when rich folk start building huge skyscrapers.

Whenever developers propose a hundred storey building it marks the top of the property cycle. Should they get to actually build the thing, you can be guaranteed a nasty economic downturn is about to hit.

The Skyscraper Index’s historical record

This track record was set with the very first megatower – the Empire State building was started just before the 1929 stock market crash and completed as the great depression tightened its hold on the United States.

Forty years later New York’s ill-fated World Trade Center opened just in time to welcome the 1973 oil shock and subsequent recession.

A more recent example is Dubai’s Burj Khalifa, the world’s tallest building which was topped out in time for the city’s property crash and economic rescue by neighbouring Abu Dhabi.

In Australia, the most notable downfall was 1980s entrepreneur Alan Bond who planned to build a 140 storey tower on the World Square site opposite Sydney’s Town Hall.

The site was excavated but Bond went broke before work started and the hole remained for over a decade until a more modest 40 storey tower was built on the site.

Australia 108

So the news that property developers want to build a 108 storey tower on Melbourne’s Southbank should worry the Victorian government and unsettle the state’s property owners.

What’s always notable about these super skyscrapers is the garishness of the project. While Australia 108 won’t match the Burj for sheer Las Vegas gaudiness, it will feature the ‘Star burst’, a star-shaped Sky Lobby and hotel at the top of the tower.

Why the Skyscraper index works

The reason why 100 storey buildings are such a reliable economic indicator is because they illustrate there’s too much dumb money in the economy. It rarely makes sense to build such tall buildings.

Designing and building high rise buildings is complex and expensive – the higher you go, the more construction challenges there are as this Popular Mechanics article describes.

Skyscrapers are subject to the law of diminishing returns as the taller the building is, the more space that’s needed for services like elevators, air conditioning, water supplies and fire protection which reduces the landlord’s rentable floorspace on the lower levels.

When a building reaches a hundred storeys, there’s little space available on the lower floors for paying tenants. So the economics don’t add up.

Builders, property developers and financiers know this so when they start proposing projects that don’t make commercial sense it’s a fair indication the locals are gripped with irrational exuberance and Adam Smith’s invisible hand is going to deliver a short, sharp slap to the back of the economy’s head.

Does it matter to Australia?

And so it is in Melbourne, which is going to be interesting to watch as South East Queensland is the only Australian metropolitan area to suffer a prolonged property downturn in the last twenty years.

Hopefully Melbourne’s woes won’t affect the rest of the Australian economy but given how much the nation has invested in property and the stratospheric debt levels to service that speculation, it may well be that the rest of the country will follow Victoria.

Winning the next election might not be a good thing for Tony Abbot and his followers who genuinely believe a Liberal government will deliver a magic pudding to the home of every dinky-di Working Australian.

Graphs, damn lies and the middle class

Graphs can give us a misleading picture of our society, particularly when we’re looking at the middle classes

Graphs are great for illustrating a story, and also excellent at misleading people.

A good example of where a graph can give an incorrect impression is the Sydney Morning Herald’s story Whatever Happened to the Middle Class.

The story is a very good explanation of the predicament Australia’s political classes have put themselves into – exacerbated by their 1950s view of dividing the workforce into poorly paid ‘blue collar’ workers and affluent ‘white collar’ office staff – but it suffers from the selective use of headline graphs.

Viewing the big picture

The first graph shows how Australians are identifying themselves as middle class and the trend looks staggering,

Now if we add those who identify themselves as working class, the picture looks even more dramatic with some pretty volatile swings,

However if we now add in those who identify themselves as rich, or upper class, we get a better perspective as the entire range is now shown,

Selective choosing the Y, or vertical, axis will always give an exaggerated view of a trend or proportion. Once we take the full range in we see the real extent of things. It also has the benefit of showing the trends aren’t as volatile as first appear.

Middle class perceptions

When we look at the graph showing the full picture there’s a number of interesting trends and characteristics about Australian society that come out of it which are worthy of some future blog posts.

Most notably is the identification of Australians being middle class as their property values increased.

On this point, it’s worthwhile contrasting the Australian experience with the US, here’s a Gallup poll from last year on how Americans see themselves,

While the definitions are different – that Americans differentiate ‘working class’ and ‘lower class’ is interesting in itself – it’s clear that the same trend happened in the US with more people identifying themselves as being members of middle class when their property values were increasing.

In 2008 and 9 there’s suddenly a sharp increase in Americans identifying themselves as working class as the property downturn bites. The steady increase in those claiming to be ‘lower class’ from 2006 onwards is worth closer examination.

What this means for Australia

The implications of the US trends is that any Australian politician intending to dismantle John Howard’s middle class welfare state will have to wait until the property market falls before trying to win any popular support.

For this year’s Australian election though, what’s clear is that any attempt to stoke the fires of class warfare is going to fail dismally in the outer suburban marginal seats so coveted by both parties.

We’re going to see a lot more selective graphs during the course of this year, it’s worthwhile taking time to look at them closely. The stories may be different, and a lot more nuanced, than the headlines tell us.

Have we come to the end of the middle class era?

Was the middle classes’ growth during the Twentieth Century an aberration?

Technology has transformed workplaces over the last century, drove huge income growth and moved many into the middle classes. Are we now seeing computers and robots displacing those middle class jobs?

At Tech Crunch Jon Evans warns Get Ready To Lose Your Job as “this time it’s different” – unlike earlier periods of industrialisation where jobs shifted to the new technologies such coach builders became car makers – robots and computers are making humans redundant.

So I see no mystical Singularity on the horizon. Instead I see decades of drastic nonlinear changes, upheaval, transformation, and mass unemployment. Which, remember, is ultimately a good thing. But not in the short term.

In The Observer John Naughton, professor of the public understanding of technology at the Open University, says Digital Capitalism Produces Few Winners.

Professor Naughton’s view is that high volume, low margin businesses like Amazon mean there’s fewer well paid jobs available and many of the lower positions will be soon replaced by robots.

At the other end of the digital marketplace, the high margin businesses like Apple, Google and Salesforce don’t need many staff to generate their profits, so wealth is concentrated among a small group of managers and owners.

While the low paid and manufacturing workers have been squeezed for decades in the West, it’s now the turn of the middle classes to feel the pain of automation, outsourcing and restructuring.

There’s two ways we can look at these changes, the optimistic is that our economy is going through a transition to a different structure; those out of work coachbuilders a hundred years ago didn’t immediately get jobs building cars and the same adjustments are happening again.

A more pessimistic view is that the Twentieth Century was an aberration.

It may be that Western world’s steady climb into middle class prosperity was itself a transition effect and we’re returning to the economic structures of the pre-industrialised age where the vast majority of people have a precarious income and only the fortunate few can afford middle class luxuries.

The next decade will give us some clues, but the portents aren’t good for the optimistic case, the Pew Research Centre shows America’s middle classes has been shrinking for forty years.

For those Americans still in the middle class, the Pew research shows their incomes have been falling for a decade.

Regardless of which scenario is true, the dislocation is with us. As individuals we have to be prepared for changes to our jobs, however safe they look today. As a society we have to accept we are going through a period of economic and social upheaval with uncertain long term consequences.

What’s particularly notable is how today’s political and business leaders seem oblivious to these changes and are locked in the ‘old normal’ of thirty or fifty years ago.

One wonders what it will take to wake them up to the changes happening around them and what will happen when reality does bite them.

Picture of a nice, middle class house by Strev via sxc.hu

Do kids really need laptops in school?

Computers are seen as essential to education, but are we mistaking the tools for the methods.

Are laptop computers really essential to educating our kids? Fairfax media reports this weekend that the Australian Federal government’s laptops in education scheme is near collapse.

What stands out from the story are the quotes from educators;

Chatswood High School principal Sue Low said her school was providing laptops to students in year 9 but the uncertainty over future plans was unsettling.

“Laptops are now just as much of the culture of education as are pens and paper,” she said. “To not have certainty over how we will administer laptops to our students is very disruptive, and we need that certainty as soon as possible.”

Some schools have come up with their own solution to the problem. One NSW school has made arrangements with a private provider under which parents can buy a laptop for $1341 or rent-to-buy for $90 with monthly payments of about $50.

That computers are important is not a debate, but are we putting to much emphasis on the tools and not enough on what education is trying to achieve?

One educator said a decade ago that they could teach an 80 year old to use a computer in a few hours, but an illiterate 15 year old may be lost for life. This is truer today than it was then.

Computers are flooding our lives with information and the tools to gather that information are intuitive and don’t need 12 years of school to master.

What we are all need are the critical and mathematical skills to filter out the dross and misinformation that floods onto our screens.

Old and young have the belief that if something is on the web, then it must be true. The biggest challenge for parents and teachers with the web is convincing kids that cutting and pasting huge slabs of Wikipedia into an assignment isn’t research.

Not that this is just a problem in the classroom – plenty of politicians, business leaders and time poor journalists have been caught out plagiarising Wikipedia and other websites.

In recent times I’ve been to a lot of ‘future of media’ events where the importance of ‘data journalism’ has been raised. What really sticks out listening to these is how poorly equipped both young and old journalists are to evaluate the data they’ve gathered.

This isn’t just a problem in journalism – almost every occupation needs these skills. We could argue those skills are essential for citizens who want to participate in a modern democracy.

Computers, and coding skills, are important but we risk giving students the skills of today rather than giving them the foundations to adopt the skills of tomorrow.

We also risk making technological choices that risk education departments, schools and kids being locked into one vendor or system.

Giving every child a laptop is not a replacement for them having the critical, literacy and numeracy skills to participate in 21st Century society.

High cost politics – how the Australian election will fail business

The introduction of middle class welfare by the Howard government and Labor’s refusal to undo it is locking Australia into a high cost trap with little hope either party addressing the real issue.

“Running costs have gone crazy” complains Sydney restauranteur Jared Ingersoll at the same time the Australian events industry warns it’s being crushed by a higher dollar.

While the closure of an inner city cafe doesn’t mean that much, a bigger warning about Australian costs comes from Royal Dutch Shell who have put their gas investments on hold due to project blowouts.

Natural gas investments are the core of Australia’s economic policies with the country’s Asian Century report identifying energy exports as being the country’s main revenue earner over the next quarter century.

Costs of doing business in Australia have been steadily on the increase since the Howard government introduced the GST which triggered Australia’s transition to a high cost country.

It didn’t have to be that way but Howard’s addiction to middle class welfare meant what should have been a opportunity to reform the economy during the mid 2000s was squandered with gifts handed out by one of the highest spending governments in Australian history.

While Whitlam at least spent money on bringing sewers to the suburbs, Howard spent his on subsidies to rich schools and parking permits to self-funded retirees.

It would take a brave government to undo Howard’s work which isn’t something we can expect from the populist and cowardly Australian Labor Party that lacks any of the honesty or strength required to confront the whining middle classes about their unsustainable entitlements.

Which makes the election announced last week interesting. In her election announcement the Prime Minister made a mention of dealing with the high Australian dollar, which at least shows the Labor Party sees there’s a problem – although they certainly don’t have the stomach to make the tough decisions required.

On the other side of politics though it’s all unicorns and magic puddings. Tony Abbot and his friends are partying like it’s 1999.

The Liberal Party policy paper released last week is notable for not acknowledging the global financial crisis and maintaining that taxes can be cut while Howard’s middle class welfare state can be expanded.

The best example of the Liberal’s addiction to middle class welfare is their promise to introduce a parental leave scheme. As their Strong Australia policy document explains;

Paid parental leave ought to be paid at a person’s wage rate, like holiday pay and like sick pay, because it is a workplace entitlement, not a government benefit.

Not only does the Liberal Party believe that high paid workers should get subsidies for their nannies, but that employers should pick up the bill, just like holiday and sick pay.

Middle class welfare and a massive business cost increase to boot.

In a Smart Company poll last week, the small business readers overwhelming endorsed the Liberal Party.

They should be careful what they wish for.

For those worried about getting Australia’s high cost base down there are serious debates to be had about our tax and welfare systems along with tackling issues like high property prices, over-regulation, aging population and workforce skills.

Most importantly, we have to define what Australia wants to be in the 21st Century.

Little, if anything about these issues will be discussed before September and in the meantime the Dutch disease will slowly strangle Australian business. We need better.

Explaining the NBN on 702 Sydney ABC Radio

The myths and challenges for the NBN in 2013 as the project to roll out fibre optics to most Australians begins to struggle

I’ve covered what the NBN is previously on the ABC for Tony Delroy’s Nightlife and on Technology Spectator last year looked at the challenges ahead for the project in 2013.

The National Broadband Network was always going to be one of the key issues in the 2013 Federal election, The Liberal Party’s policy launch on Sunday and Malcolm Turnbull’s comments on ABC Radio station 702 Sydney on Friday illustrated how critical it will be.

His assertion that wireless should be affordable is laudable, but the indications are that it is increasingly going to become less affordable.

It also puts the coalition in a bad position, losing the three to four billion dollars expected from the spectrum auction wouldn’t help their budget position.

One comment from Malcolm that particularly sticks out is on subsidies;

If I could just make one other point Linda, possibly the most important. The government as we know is spending a stupendous amount of money on building a national fibre to the premises broadband network. And the subsidies there run into the tens of billions of dollars –

The member for Wentworth is facturally wrong; there are no subsidies for the NBN, the government is providing the capital for the project which they hope will be paid back by 2018.

the value of the network once completed will be a fraction of what the government is spending on it.

On what basis? Certainly fibre has a 25 to 40 year expected life cycle, but that’s true of a roadway or an office building; does Malcolm suggest we don’t spend on that as well.

you could make a very powerful argument that the form, the channel of broadband communication which adds the most to productivity is in fact wireless broadband.

Possibly, but let’s see that argument. Currently data downloads to fixed lines still dwarfs mobile, both are growing exponentially.

Malcolm actually touches on the problem we’re facing with wireless — the shortage of bandwidth.

The government has been very slow at getting it out. As of the last report there was only about eight and a half thousand premises connected to the fibre optic network that they’re building throughout all of Australia

This is true, the rollout so far of the NBN has been disappointing. This is what observers are watching closely on this.

The Fibre to the Node setup also creates another problem – that of ownership. If Telstra retain ownership of the copper cable from the node to the premises, it means providers have to deal with two wholesalers one of whom is their competitor.

In fact it creates a whole rabbit’s nest of problems for retailers and could very quickly find us in a situation where telco access requires dealing with two monopolies — Telstra and NBNCo.

One the disappointing things about the National Broadband Network has been the poor debate around the topic, indeed the whole debate at times has been wrong headed. Any hope it’s going to improve during the election campaign isn’t likely

Australia’s grapes of wrath

The Australian wine industry is a good example of where the country’s industrial policies and business leadership have failed.

In a great post, The Wine Rules looks at what ails the Australian wine industry after the news of Cassella Wine’s problems.

Three things jump out of Dudley Brown’s article – how industry bodies are generally ineffectual, the failure of 1980s conglomerate thinking and how fragile your position is when you sell on price.

Selling on price

It’s tough being the cheapest supplier, you constantly have to be on guard against lower cost suppliers coming onto the market and you can’t do your best work.

Customers come to you not because you’re good, but because you’re cheap and will switch the moment someone beats you on price.

Worse still, you’re exposed to external shocks like supply interruptions, technological change or currency movement.

The latter is exactly what’s smashed Australia’s commodity wine sector.

A similar thing happened to the Australian movie industry – at fifty US cents to the Aussie dollar filming The Matrix in Sydney was a bargain, at eighty producers competitiveness falls away and at parity filming down under makes no sense at all.

Yet the movie industry persists in the model and still tries to compete in the zero-sum game of producer incentives which is possibly the most egregious example of corporate welfare on the planet.

When you’re a high cost country then you have to sell high value products, something that’s lost on those who see Australia’s future as lying in digging stuff up or chopping it down to sell cheaply in bulk.

Industry associations

“It’s like a Labor party candidate pre-selection convention” says Brown in describing the lack of talent among the leadership of the Australian wine industry. To be fair, it’s little better in Liberal Party.

There’s no surprise there’s an overlap between politics and industry associations, with no shortage of superannuated mediocre MPs supplementing their tragically inadequate lifetime pensions with a well paid job representing some hapless group of business people.

Not that the professional business lobbyists are any better as they pop up on various industry boards and government panels doing little. The only positive thing is these roles keep such folk away from positions where they could destroy shareholder or taxpayer wealth.

Basically, few Australian industry groups are worth spending time on and the wine industry is no exception.

Australia conglomerate theory

One of the conceits of 1980s Australia was the idea that local businesses had to dominate the domestic market in order to compete internationally.

A succession of business leaders took gullible useful idiots like Paul Keating and Graheme Richardson, or the Liberal Party equivalents to lunch at Machiavelli’s or The Flower Drum, stroked their not insubstantial egos over a few bottles of top French wine and came away with a plan to merge entire industries, or unions, into one or two mega-operations.

It ended in tears.

The best example is the brewing industry, where the state based brewers were hoovered up in two massive conglomerates in 1980s. Thirty years later Australia’s brewing industry is almost foreign owned and has failed in every export venture it has attempted.

Fosters Brewing Group was, ironically, one of the companies that managed to screw the Australian wine industry through poorly planned and executed conglomeration. Again every attempt at expanding overseas failed dismally.

In many ways, the Australian wine industry represents the missed opportunities of the country’s lost generation as what should have been one of the nation’s leading sectors – that had a genuine shot at being world leader – became mired in managerialism, corporatism and cronyism.

All isn’t lost for the nation’s vintners or any other Aussie industry, Dudley Brown describes how some individuals are committed to delivering great products to the world. There’s people like them in every sector.

Hopefully we’ll be able to harness those talents and enthusiasm to build the industries, not just in wine, that will drive Australia in the Twenty-First Century.

Picture courtesy of Krappweis on SXC.HU

Revolution and disconnected leaders

Revolutions are unexpected, but the causes are often obvious to all. The West shouldn’t be too smug about the economies of other nations.

China expert Patrick Chovanec has a provocative blog post on What Causes Revolutions, building upon the Financial Times’ description of how the Chinese Communist Party is struggling with corruption.

In his article Chovanec quotes Richard Pipes’ Three “Whys” of the Russian Revolution which looked at how the fall of the Tsarist government was largely unexpected.

This is true with the fall of all great regimes, in the late 1980s the idea that the Soviet Union would cease to exist within a decade was unthinkable.

Chavonec quotes a key part of Pipes’ book;

In 1982 [Pipes writes], when I worked in the National Security Council, I was asked to contribute ideas to a major speech that President Reagan was scheduled to deliver in London. My contribution consisted of a reference to Marx’s dictum that, when there develops a significant disparity between the political form and the socio-economic context, the prospect is revolution.

“A significant disparity between the political form and social-economic context” could be just as applicable to Western democracies.

The Economist article makes a point about the French revolution “the widely accepted theory now is that the French Revolution was one of rising expectations that eventually could not be met.”

As Stratfor’s George Freedman pointed out last week, a generation of Americans have expectations that are not going to be met. The same is true in Europe.

While there’s no doubt the China’s political structures – like those in all totalitarian nations – are more brittle than those in established democracies, it might not be a good idea for those of us in the West to be smug and complacent about our own systems.

Zapata image is courtesy of Ferferfer through SXC.

Life in the mob

At a time of easily generated moral hysteria, it’s best to keep your head rather than joining the mob.

The reaction to last week’s tragic passing of a nurse over a hoax phone call shows how hysteria and cynicism in new and old media fuel each other.

Having created villains, in this case the two hapless Sydney radio hosts, the mainstream media creates a moral outrage to stir up the mob which in turn generates more headlines.

As with the Hillsborough tragedy, this allows those in positions of responsibility the opportunity to avoid scrutiny and accountability.

In this case we see the hospital management demanding action being taken against the Sydney duo while conveniently ducking questions about why poorly paid nurses are expected to act as switchboard operators on top of their already considerable responsibilities.

Now we’re seeing calls to make practical jokes illegal – no doubt there’ll be a wave of teenage boys being prosecuted for making prank phone calls when panicked politicians pass poorly drafted laws to deal with the ‘problem’.

Our taxes at work.

Your mission in life is to use your brain and not to be one of the torch bearing mob.

If it’s you the mob are looking for, then it’s best to lie low until another headline or something shiny distracts them.