Archive for the ‘Welfare’ Category

Howard’s ministries: social welfare at the “very limits of acceptable conduct”


Australia’a poorest people have been pursued in an unprecedented and aggressive legal campaign over welfare payments – and the workplace relations department is under fire for running up lawyers’ bills chasing small amounts of money or cases so weak they never reach court.

The number of cases pushed through the courts by the Department of Employment and Workplace Relations has soared almost 20-fold over three years in one court alone, as pension payments are challenged and moves made to recover amounts as low $1300.

The aggressive pursuit of welfare recipients dates from 2004, when the Howard government handed the department control of a $20 billion social security budget. As secretary, Dr Boxall oversaw a significant culture change, with the number of appeals by the department to the Administrative Appeals Tribunal soaring from just 17 in 2004-05 to 202 the following year, and to 321 last year.

A lawyer who has worked closely with the department said it had pursued social security recipients to the “nth degree” – whatever the legal merits of the case. The department was “ruthless in the pursuit of any and every case” where a social security recipient may have received a small overpayment – even when it had been given wrong and misleading advice by Centrelink.

“In my experience, [the department] operated at the very, very limit of acceptable conduct,” he said.

Actually, Australia’s poorest people have nothing like that sort of thing to contend with. Our poorest people have to deal with this sort of thing:

An international student assessment reveals there’s been little improvement in Indigenous performance over the last six years.

The results of the OECD Organisation for Economic Co-operation and Development international student test shows a big gap between Australia’s Indigenous and non-Indigenous students.

Australia’s northern Aboriginal communities will bear the brunt of climate change, with increases in water-borne diseases and loss of traditional food sources, an international report says.

In the Torres Strait Islands, at least 8000 people will lose their homes if sea levels rise by 1m.

… more than 100,000 people in remote Aboriginal communities across northern Australia face serious health risks from malaria, dengue fever and heat stress, as well as loss of food sources from floods, drought and more intense bushfires.

In the remote areas of the Northern Territory, where high unemployment is rampant, the government’s main jobs program has been abolished, forcing thousands more onto welfare. Welfare payments for all Aborigines living on Aboriginal land are now controlled by government bureaucrats. Federally appointed administrators with wide powers have been imposed. The permit system, by which Aboriginal communities in the Territory controlled entry onto their land and settlements, has been abolished.

Olga Havnen, a leader of the National Aboriginal Alliance, said in a message to the protesters in Sydney that the “only visible change in most communities has been the construction of housing for government business managers.”

Doctors from across Australia have launched a high-profile attack on the Northern Territory intervention, saying it is failing indigenous people.

Writing in The Medical Journal of Australia today, the doctors criticise the intervention as disrespectful and badly thought through.

Aboriginal peoples and Torres Strait Islanders will not achieve equal health outcomes with non-Indigenous Australians until all governments properly fund and resource accessible health services and programs, and their economic, educational and social disadvantages have been eliminated.

Aboriginal peoples and Torres Strait Islanders have the poorest health of any group living in this country.

Indigenous standardised mortality ratios are more than three times the expected rate, and death rates between 25-54 years of age are 5-8 times that seen in non-Indigenous Australians.

Indigenous infant mortality rates are three times higher than for non-Indigenous infants.

The 17-year gap in life expectancy between Aboriginal and Torres Strait Islander Australians and the rest of the Australian population must be closed. It is not acceptable in 2007 for any Australian to have a 1920s’ life expectancy. The gap in life expectancy must be closed within 25 years.

I’m just saying Prime Minister Rudd has a lot of work to do. A lot can be left behind in 11 years of government by a neo-colonialist tit like John Howard.

The Voluntary Assistance Return Programme

An interesting development in the UK, vis. (failed) asylum seekers.

Failed asylum seekers are to be offered an extra £500 to return home in the wake of figures showing the number of removals is at its lowest level for five years.

The changes announced by the International Organisation for Migration, which runs the £22m-a-year reintegration scheme, will provide a flexible package of support in cash and in kind to help those who go home to start up their own businesses, go through further education or take up a job.

Under the present system a £500 cash relocation grant is paid at the airport for each member of the family going home and a £1,000 reintegration package paid in kind is made available to help set up a business or in other ways ensure their return home is “sustainable”. About 80% use the aid to start a business and all are given help in getting travel documents and buying flight tickets.

The new approach announced yesterday includes boosting the £1,000 package to £1,500 and making it more flexible to cover an individually agreed return plan. The aid could be used for short-term accommodation costs, to cover part of an annual salary bill for a job or even contribute to the costs of children’s schooling. A further new element is the potential for a further £500-worth of assistance six months after the failed asylum seeker has returned home to keep a new business going.

The natural reaction to this is taken up by the Tories:

The Home Office announcement was criticised by the shadow home secretary, David Davis, who said it was extraordinary that the government was having to “bribe” asylum seekers to return home.

While the more-or-less Toryish justification of it belongs to the government (still reasonably Blairite, fair to say):

A Home Office spokesman said the new approach to voluntary returns represented good value for money against the cost of enforcing a return through deportation. He added that further potential savings would be made through not having to provide support and accommodation while still in Britain. Those who had to be forcibly removed did not receive such help.

What did you expect – kindness? Not from a department dedicated to immigration/asylum in a rich country’s government. They’re lucky they’re not locked up in a prison in the middle of a desert (had they gone to Australia, say).

To muddy the waters, somewhat: do we object to the Home Office paying-off rejected asylum seekers? Or do we object to their rejection? Compared to forcible removal (or mandatory detention, the horrid Australian model for so many), is getting a payoff such a bad thing?

Back when the UN released its report on refugees, all more-than-10-million of them, we got a feel for the origins of the world’s (meaning the world’s – not necessarily the UK’s) asylum seekers:


UNHCR report table 1

One has to ask how far that 500 pounds sterling + GBP1,500 business grant (or, if increased, GBP2,000) will get you in, say, Afghanistan or Iraq, Somalia or the DRC.

One answer says, frankly, pretty far. That’s a lot of money. Moreover, conditional upon being denied asylum/residency in the UK, can you think of a better outcome for the asylum seeker, given the options? The caveat to this answer, more or less clearly, is the attempt by the Home Office to, yes, bribe asylum seekers to abandon their legal avenues and return home, before those avenues are exhausted. Which is a sight below our expectations of ourselves.

The other answer to the question is not very far, because the country is bloody dangerous: odds are the person did escape for a reason (just, apparently, not one one of sufficient urgency). We (all countries) repatriate people to some pretty dangerous countries (in many cases made so, or made more so, by us) – show up back in Baghdad with that sort of money, belonging to the wrong tribe, and with all/most of your previous associates potential dead, left or kidnapped, and how long, honestly, would expect to last? You’re probably better off with the Home Office stealing your kids, rather than some lunatic militia group.

The debate, for me, is just kind of off. These things aren’t the issue. How few refugees are taken in by how many countries who do so much of the damage in the first place, that is – or ought to be – the debate.

Has the UK ever done for an affected country the sort of favours done for it by the US, back after the second World War? Has the US ever repeated the favour? What happened to us? Is it (probably, but we’d like to believe not) purely because our economies have no interest, no investment, in these newly-war’ed-upon economies? Is it racial/ist? Eugenic? Are we just more distracted, now? Are we lead by people of inferior moral fibre? Are those leaders followed by people of inferior moral fibre?

At the end of day it seems reasonable to suggest that we would make very little in the way of sacrifice to support more of the people fleeing the countries we destroy. If we’d only make more of an effort to repair and rebuild them once we’re done, such support need not be permanent – our asylum seekers would willingly return home to rebuild the social fabric of a country whose actual fabric had been re-stitched, I should think. But, then, I’m kind of an idealist.

Eugenic influences on American economic reform during the Progressive era

I’m reading a paper due to be presented in a seminar tomorrow, bearing this title. The author is Tim Leonard, of Princeton University. Etiquette forbids, of course, more than cursory quotation of this paper, but this sort of thing is clearly his bag. In fact I believe that what I have is a companion (or follow-on) piece to this paper, in the Journal of Economic Perspectives.

I treat you (from the latest publication):

… a crude eugenic sorting of groups into deserving and undeserving classes crucially informed the labor and immigration reform that is the hallmark of the Progressive Era (Leonard, 2003). Reform-minded economists of the Progressive Era defended exclusionary labor and immigration legislation on grounds that the labor force should be rid of unfit workers, whom they labeled “parasites,” “the unemployable,” “low-wage races” and the “industrial residuum.” Removing the unfit, went the argument, would uplift superior, deserving workers.

He has also taught me a thing or two about the likes of John Gibson (besides, obviously, that they’re racist twats):

It was a scholarly fashion, circa 1890, to declare the U.S. frontier “closed” and to sound a Malthusian alarm about excess American population growth. But the professional economists who wrote on immigration increasingly emphasized not
the quantity of immigrants, but their quality. “If we could leave out of account the question of race and eugenics,” Irving Fisher (1921, pp. 226 –227) said in his presidential address to the Eugenics Research Association, “I should, as an econo-
mist, be inclined to the view that unrestricted immigration . . . is economically advantageous to the country as a whole . . . .” But, cautioned Fisher, “the core of the problem of immigration is . . . one of race and eugenics,” the problem of the
Anglo-Saxon racial stock being overwhelmed by racially inferior “defectives, delinquents and dependents.”

Fear and dislike of immigrants certainly were not new in the Progressive Era. But leading professional economists were among the first to provide scientific respectability for immigration restriction on racial grounds. They justified race-based immigration restriction as a remedy for “race suicide,” a Progressive Era term for the process by which racially superior stock (“natives”) is outbred by a more prolific, but racially inferior stock (immigrants). The term “race suicide” is often attributed to Edward A. Ross (1901a, p. 88), who believed that “the higher race quietly and unmurmuringly eliminates itself rather than endure individually the bitter competition it has failed to ward off by collective action.” Ross was no outlier. He was a founding member of the American Economic Association, a pioneering sociologist and a leading public intellectual who boasted that his books sold in the hundreds of thousands.

Ross’s coinage gained enough currency to be used by Theodore Roosevelt (1907, p. 550), who called race suicide the “greatest problem of civilization,” and regularly returned to the theme of “the elimination instead of the survival of the fittest.” In that same year, more than 40 years after the American Civil War, Ross (1907, p. 715) wrote: “The theory that races are virtually equal in capacity leads to such monumental follies as lining the valleys of the South with the bones of half a million picked whites in order to improve the conditions of four million unpicked blacks.”

What a wonderful concept – something that I can clearly see having as much currency as ever, even while the ordinary Malthusianism of population control has just wandered off to the Sierra Club types.

The seminar ought to be very enjoyable. I’m a big fan of picking through the effects of standard Graham Greene characters (the harm one can do with good intentions always impresses me). Grab some of his papers that are available and read them over your breakfast, or lunch, or whatever. Beats talking about baseball, or football, or whatever elses masquerades as a sport, ’round here.

Start saving up for the future health care burden of the un-SCHIP’ped

Or, rather, the non-SCHIP’ped.

House Democrats were unable Thursday to override President Bush’s veto of their pre-election year effort to expand a popular government health insurance program to cover 10 million children.

The bill had bipartisan support but the 273-156 roll call was 13 votes short of the two-thirds that majority supporters needed to enact the bill into law over Bush’s objections. The bill had passed the Senate with a veto-proof margin.

The expansion by another 4 million young people of the State Children’s Health Insurance Programme (SCHIP) fails. Implications? First, 30-40 years from now, the US health care system (such as, or however, it will exist) will be treating these people as much sicker – and more expensive – adults.

In the case of health, an ounce of prevention most certainly is, generally, worth a pound of cure. The human is more or less able to accumulate health and maintain a given stock of health. But. There is a social gradient to this. Poor people don’t tend to nourish their children as well. They have less income, live in worse areas, they tend to smoke and drink more. They eat and feed their kids high-caloric, low-nutrient diets. Those kids don’t develop as well. Those kids, packed with sodium and high-fructose corn syrup, won’t benefit as much from education (of any standard) – they won’t turn into adults that are efficient at building and maintaining health, they won’t earn as much, etc. It’s not called a ‘trap’ for no good reason.

So to SCHIP. It has been opposed on the grounds of the ideology of welfare, but that was just plain asinine. SCHIP was intelligent not because it expanded socialised medicine, or because market-based solutions for health care are inefficient, wasteful and fraught with terrible distributional outcomes. SCHIP was intelligent because for relatively little money now the government could have (a) saved a lot of money by not having to sort these people out once they’re (more likely to be) poor, sick adults, and (b) ensured greater economic growth through the increase in human capital and social capital that would have resulted from increased health status.

Not for nothing does the US have such terrible health status. The US government, unlike those of the rest of the OECD, does not pursue health. We’re so caught up in the debate about universal health care (or insurance) that we miss the actual difference. The US government (or the politicians posing thereas) does not pursue health for the American people. If it did it would invest in SCHIP, invest in school lunches, invest in sports programmes, ban shitty advertising of crap food to children. It would have a No Child Left Behind policy that made some goddamn sense.

The rest of us employ broader bases of/for socialised medicine as part of a greater pursuit: equality of opportunity to reach this basic health-producing/maintaining level of health in our citizens. Make them healthy enough that their bodies can basically take care of themselves until they get cancer and need our primary care sectors again.

Here, not so much. Here, we use emergency rooms for basic care – or for emergency care that could easily have been avoided with some relatively inexpensive preventive health interventions by the state. SCHIP would have done that – it already does that, for Cliff’s sake. It only makes sense to save more money by doing it for more people.

The whole affair just angers me, as a health economist (the more so, as a welfarist one).

The second issue was, of course, that which likely contributed to bringing it down:

To pay for the increase, the bill would have raised the federal tax on cigarettes from 39 cents to $1.00 a pack.

“This is not about an issue. It’s about a value,” House Speaker Nancy Pelosi, D-Calif., said just before the vote. “For the cost of less than 40 days in Iraq, we can provide SCHIP coverage for 10 million children for one year.”

I had to make this point to an audience last night. Our countries don’t pay for our socialised medicine by taxing people to hell and back. We do it by not letting our government waste our money on nonsense we don’t want (to as great a degree, shall we say). Governments exist because we invented them. We invented them to do things that we could not, efficiently, do. That includes health care and providing incentives to certain sections of the population to engage in healthy behaviours with positive externalities for the rest of us.

Expanding SCHIP should not be done via increasing the burden of government (certainly not in this country, where each level of government acts without any due regard for the overall burden of all three levels of government on taxpayers). It should be done by making our government a government once again – a body of elected representatives (not leaders. Not politicians) who provide administration for our chosen allocation (and, in the case of SCHIP, investment) of resources.

Like Hillary Clinton’s old shot at universal health insurance, this was done, foolishly, in a manner that just invited opposition. Pelosi should not have been saying this “just before the vote” – it should be the catch-cry of all such legislation. The democrats should trot Ben Cohen out onto the floor of both houses with a box full of Oreo cookies.

The last thing the US government needs is more of our money. What it needs to do (or, what we need to start re-learning how to make it do) is spend it on the things for which we hired this government in the first place.

Opinions differ, of course.

Conspicuous compassion and wicked problems

Boyd Hunter, Fellow at the Centre for Aboriginal Economic Policy Research at the Australian National University (and, full disclosure, former employer of me as an RA), has put together a great article concerning the Northern Territory National Emergency Response Bill. This is the scam discussed here, previously – but it happens to be Boyd’s area of expertise.

He discusses the idea of the ‘wicked’ problem – one with multiple dimensions, incomplete and contradictory requirements and, ultimately, rarely a solution – or rarely one that does not generate another wicked problem of its own.


Indigenous policy is one of most complex areas facing governments, as it involves many issues that do not exist for other Australians: a dynamic cultural life; a need to change social norms; unique forms of property rights, such as native title; and the intergenerational transmission of disadvantage, sometimes arising from problematic historical government interventions (such as, the stolen generation).

Indigenous policy is easily characterised as a wicked problem. Obviously, mainstream Australian society has a different perspective on the problem from Indigenous stakeholders, who are more likely to emphasise land rights, cultural difference and injustice. One of the main debates for the NT intervention is whether the trade-off between Indigenous rights and socioeconomic status is being taken into account. The existence of this trade-off means Indigenous Australians must own both the problem and solution (Henry 2007).

If behavioural and attitudinal change is required, then an adequate process of consultation with Indigenous people is obviously crucial to securing their cooperation. Imposing solutions from above is both profoundly illiberal and unlikely to produce real solutions at all.

“Issues that do not exist for other Australians” is some kind of understatement. I could learn a thing or two of politeness from Boyd.

The article’s discussion of the context of the intervention (such as rates of child abuse not actually exceeding non-indigenous rates) is very enlightening (for those affiliated; I’m not suggesting international readers are so wonk-ish as to care, greatly), as is the critique of the rhetoric surrounding the policy.

While the analogy of war provides good copy for the media, and hence has utility for politicians, it is a singularly inappropriate term for constructing a positive and informed debate about complex social issues. If Indigenous child abuse and community dysfunction are wicked problems, then the oversimplification of the issues diminishes our capacity to construct effective policy options.

If one is serious about Indigenous policy, one needs to attempt to build a long-term consensus rather than construct a heroic-style conflict between competing policies where one policy is invariably portrayed as a failure and the other as the solution.

As well as a great criticism of the absence of any sort of structure for evaluation of the programme, going in (deliberate?):

One of the most disappointing aspects of the NT intervention is that there was virtually no lead time to prepare or think about an evaluation framework. Some ex ante planning with Indigenous leaders and relevant bureaucracies would have both lessened the public resistance and facilitated evaluation. It will now be very difficult to evaluate the outcomes of the intervention because no groundwork was laid to establish credible benchmarks for what existed before the policy shift.

The paper is forthcoming in Agenda, the quarterly journal of the Faculty of Economics and Commerce at The Australian National University.

The Heavily Indebted Poor Countries initiative vs. vulture funds

The Guardian today has a wonderful article dissecting the – typically ass-ish – behaviour of vulture funds towards the world’s poorest countries.

Vulture funds buy up sovereign debt issued by poor countries at a fraction of its face value, then sue the countries in courts – usually in London, New York or Paris – for their full face value plus interest.

Donegal International, an offshore vulture fund, burst into the spotlight this year when it won an award for $15m from impoverished Zambia in the UK High Court. Donegal paid $3m for some old Zambian debt, then sued for $55m, although the London judge reduced the award to $15m.

But that was the tip of the iceberg. A paper prepared for the IMF/World Bank meetings this week shows there are now $1.8bn of lawsuits against poor countries where people typically live on less than $1 a day. Eight cases were launched in the past year – five against Nicaragua, two against Cameroon and one against Ethiopia. But the report warns the figures are far from complete and the real totals could be higher still.

It shows that of the 24 countries that have received debt cancellation under the Heavily Indebted Poor Countries initiative, 11 have been targeted for legal action by private creditors. And they have already seen awards in courts of just under $1bn – money that could have been spent on schools and hospitals.

Always an interesting debate – I am a smash-the-IMF-er type, generally (by way of full disclosure). The arguments for personal (even sovereign) responsibility don’t hold for me. Distressed debt, wether it belongs to shitty countries or shitty incomes/mortgages from sub-prime suckers, should be – somehow – protected. Not exploited.

Exploitation of distressed debt perpetuates, as the poverty trap never could, poverty. In our communities, in our so-called ‘global village’, etc., the principle of ‘catch-up’ will never work in practice while funds circle the globe poleaxing poor countries at every turn.

An enjoyable article to read. Also, the wikipedia entry for vulture funds contains a bundle of worthwhile references.

This is not to suggest there is ‘a’ solution – it is attitudinal. For example:

Gordon Brown has criticised vulture funds and called for international action to ensure that they cannot thrive. He wants the World Bank to help poor countries eliminate their commercial debts and creditors to establish a legal fund to help countries defend themselves. “We are determined to limit the damage done by such funds,” he says.

Can he honestly do this, without altering his own government’s alterna-function as international arms broker? I don’t think so. Well may we say, in our paternalism, that these countries could spend this money on health and education. They may just as easily spend it on the lifestyle of Charles Taylor – in which case our government would be just as happy to arrange trade shows.

Won’t somebody just default on Zimbabwe?

I can only think Zimbabwe, formerly the bread basket of its region, is deliberately pushing the accepted definitions of sovereignty.

Zimbabwe’s bakeries have shut and supermarkets have warned there will be no bread for the foreseeable future as the government admitted that wheat production has collapsed after the seizure of white-owned farms.

Last week, the government said it plans to import 100,000 tonnes of wheat but acknowledged that a shipment of 35,000 tonnes is held up in Mozambique because of a shortage of hard currency to pay for it. The agriculture minister, Rugare Gumbo, blamed the food shortages on black farmers who have taken over formerly white-owned land.

Nice – you mean those former soldiers with nothing but poverty and anger, whose support you won by pushing white farmers out of the economy and country, not even all that long ago? Rush Limbaugh would indeed be proud, the snivelling, hypocritical drug addict.

Who honestly thought that utterly non-trained people would assume entire farms and be able to reproduce harvests? Still less in the face of political tribalism that has not only superceded government, but gone almost completely (short of Lord of War caricatures of Charles Taylor) apeshit.

So: kicked out the skilled work-force (ooh, now where does that failure of intelligent planning ring a bell?); infrastructure disappearing from theft by hungry people; crops dying from failing infrastructure; food and electricity drying up because country’s out of currency; government planning on taking away 51% (minimum) of every foreign-owned company; government blaming black people, promising more and saying they’ll start a new currency.

The funny thing is, it isn’t even as though this is irrepairable – Russia managed. The trouble is this sort of shit just invites bankruptcy, penury, starvation and the arrival of the IMF to deliver far more foreign and white ownership than any post-Rhodesian-born Zimbabwean could imagine.

I’ll consider no age an enlightened one until tribalism (including religion) has no place in government.

How to create mega-farms in 2 easy steps

Crikey has an excellent perspective running on the recently announced plan for our government to under-write, with our money, the getting-out by farmers of a game with moving goalposts.

The Murray River irrigation system was installed to maintain a constant supply of water to a huge agricultural area to maintain crops, orchards, dairies, and to drought proof agriculture in the region. And it worked, up until now.

Initially water quotas were hopelessly over-allocated to everyone in the system by a burgeoning bureaucracy keen for income from each unit traded and in which the bureaucracy determines the costs. The idea is that the “most efficient” would have the capital to buy water in lean times and they would yield the most dollars profit per unit of water.

The corporate sector was drawn to higher catchments in Queensland where allocations could be caught and stored from reliable wet season rain. In dry years this leaves little for downstream, and now every flow is captured by a complicated system of lochs, weirs and dams in an effort to sell water to customers, some of whom also capture water for resale.

Any water savings made by piping water do not go back into the river – they have to be traded. That brings us to the package announced by the federal government this week, aimed at buying out “inefficient farmers on marginal land” — it will see even these farms put into more intensive production.

This runs with the same logic that “if you make guns criminal, then only criminals will have guns.”

This, by the by, is another contributor to the crops actually grown – this idea that financial yields are the big payoff. Crikey writer Lionel Elmore comments on the land/water ‘problem’ being a fault of government, rather than farmers. I still think farmers have a responsibility to use resources wisely. Amongst other things, profitable crops do not prepare one for purchasing water during bad times, if those same crops require tonnes of water more than others.

The fault of the government lies in the fact that the current system of water allocation was set up to maximised government revenue, at each level, while taking advantage of the irrationality of individual agents in the market. Eco 1 students, this is Bad Government: government’s intervene to correct irrationality in a market for common resources, not secure money and votes (this is what comes of replacing government with politics).

So to the point of the government’s two recent moves which, embarassingly, I had not connected myself: first, cut off all water allocations to zero – including, along the way, left-over allocations that farmers had thought they’d paid for and secured; second, start offering cash and other incentives to self-identifying ‘inefficient’ farms – those who see into their own future, and see they will not manage to keep their heads above the water they won’t be getting anymore.

Result? Instant horizontal integration. After a fashion. Because ordinary farms will not have the capital, either, to start expanding out over farms far downstream, to which they can apportion the water they’re taking upstream. Who, one wonders, would have that sort of clout? Corporations. The bane of Adam Smith and sensible economic markets everywhere.

With reasonable food prices, it is unlikely that family farmers, with diversified and existing infrastructure, will not be automatically replaced by the corporate sector.

Yet the Victorian and Federal Governments are looking to severely cut water allocations to accelerate this “reform” with zero allocations. It will kill off orchards and vineyards established over decades. This “economic reform” in the form of cash payouts is precisely what taxpayers are being asked to subsidise.

Yes, mega-farm corporations, foreign or existing, or any other corpoation, foreign or existing (or, God help us, Private Equity), can probably anticipate a few deals handing them enormous, horizontally-integrated agri-businesses, in a few months. Economics implications?

First: farms fall into fewer but larger and wealthier hands. Political power also increases. The result will be not less burden of these enterprises on our taxes, but greater. This time, though, our money will given, like the increases in your water and electricity bills this year, to shareholders, banks, etc. Enjoy.

Second: out the other end, will food prices decrease? No. For a start the margins demanded by a family farm are far less than those demanded by fascist suits in air-conditioned offices in Sydney or New York, or their silent partners or shareholders. Half of the reward for a farmer is being on the farm.

Will water allocations become more sensible? Also no. They will appear to become more lucrative, and more efficient, when in fact they will also, like military aid to countries who buy our gunships, be under-written by our tax money. Will ‘the land’ be safer, or used more sustainably? Also, probably, no. Political power of ordinary re-election-chasers, in the face of large agri-businesses, will not be sufficient to halt, or even lessen, the tragedy of our commons (again – this is why Adam Smith did not want corporations ruining his invisible hand).

Which is efficent, if you think about it. Just not, really, in any of the ways we would choose, if given the choice.

There are no basic principles of good economic management that Zimbabwe will not break

That, at least, is my understanding. Sadly, because I’m a naive tool, when I saw the headline, “Zimbabwe will grab foreign firms”, my response was positive. ‘Ooh, great’, I thought. ‘Zimbabwe is investing in foreign enterprises.’

I’m still a little sleepy, is my only excuse.

Zimbabwe’s parliament has passed a bill giving local owners majority control of foreign-owned companies including mines and banks, threatening to drive the fragile economy deeper into crisis.

President Robert Mugabe’s ZANU-PF party, which enjoys a majority in parliament, pushed through the legislation today after members of the main opposition Movement for Democratic Change (MDC) walked out in protest.

Mugabe’s government – which critics accuse of plunging Zimbabwe into turmoil by seizing white-owned farms and handing them to inexperienced black farmers – says the bill is part of its drive to empower the country’s poor majority.

“We cannot continue to have a skewed economic environment where our people are not able to fully participate,” Paul Mangwana, the Indigenisation and Economic Empowerment Minister told parliament during the debate.

A few things: first, Zimbabwean voters must be dumber than ours. Mugabe’s been in power (actually in power – not like Republicans are in power) for 27 years now. Who in the hell else ought to be considered responsible? I don’t think the IMF has even done that much damage to Zimbabwe.


Mugabe … has accused some foreign-owned firms of working with his Western opponents to topple his government by unfairly hiking prices and stashing foreign currency proceeds abroad.

That would, of course, also be known as doing business in a country with countless-digit inflation and a habit of the government’s of mandating prices for everything.

Third: fortunately at least one opposing spokesperson understood one of the key rules of developing economies.

MDC legislators argued the law was designed to enrich a few powerful individuals and win votes for ZANU-PF in parliamentary and presidential elections due next March.

“As far as we are concerned, this bill is cast in concrete but I want to urge the minister to reconsider because our economy needs foreign direct investment,” MDC MP Innocent Gonese said during heated debate in which an opposition member was ejected.

Stanbic Zimbabwe – a subsidiary of South Africa’s Standard Bank noted in a presentation to a parliament committee yesterday that only four of the 28 banking institutions in the country were foreign owned, proposing that “the current status be retained.”

Don’t get me wrong – I believe in people over profits, but understand that Mugabe’s policy is precisely the opposite. Poor developing countries, especially utter basket-cases like Zimbabwe, need to follow the few basic rules of stabilisation and attracting foreign capital:

  1. Increase savings and investment
  2. Increase investment in education and health
  3. Stop internal unrest
  4. Enforce the rule of law

Given that Zimbabweans can’t even afford food, these days, even inflation does not affect the absence of savings. Nor, it seems, can they manage investments in education and health. What remains? Attracting foreign capital that can do that for them. Which will not happen without recognition of property rights and enforcement of the rule of law.

Anyone who thinks my attitude equals colonial paternalism, drop me a line – I have a business in Zimbabwe in which I’d like you to invest.

Meanwhile, of course, the rest of us (Prime Minister Brown notwithstanding), just don’t give a shit. The President in this country cheerfully goes around talking about all the Mandela’s that Saddam Hussein killed (gassed them with all that US aid money and political cover, I suppose). God forbid we could do something about the 2008 Iraq War Budget of USD198bn (and that’s just what they’re admitting to) and start improving Africa. Hell, even the current administration’s criminal Trade Not Aid (they do prefer style over any substance whatsoever, don’t they?) bait-and-switch would still be an improvement.

Farmers paid to “exit with dignity”

This is yesterday’s news, but I’m its yesterday man (my friends, that’s what I am).

The plight of drought-ravaged farmers has become so dire that the Federal Government will pay the most severely affected $150,000 each to walk off their land and another $20,000 for retraining and the cost of moving.

The “exit with dignity” and relocation grants will be available to up to 1000 farmers at a cost of $170 million.

Very interesting. It comes among a steady stream of news about the declining fortunes of Australian agriculturalism – such as there being no water anymore. Meanwhile:

The head of the National Farmers Federation, Ben Fargher, said he did not know how many farmers would take up the exit payments. “It’s very hard to have a drought of this nature without there being structural impacts on the industry,” he said. But he denied that it was time for some land to be declared unsuitable for farming.

“We don’t see a vacant landscape as the answer,” he said. “We haven’t been sitting on our hands waiting for the drought to end … We have been doing a lot in terms of environmental sustainability on farms.”

Last week the federation released a pre-election policy document calling for more to be spent on preparing farmers for the effects of climate change.

What was it called? “Teach Farmers How To Water Their Crops With Hot, Dry Air”?

If I might end by making fun of the government, the Sydney Morning Herald does provide this timeline:

Last year Mr Howard refused to countenance suggestions by scientists and environmentalists that up to 5 per cent of Australia’s farms might be rendered unworkable by climate change.

In October he quashed suggestions that farmers could be paid to leave land made unproductive by climate change, saying fewer farmers would damage the country’s psyche.

I would suggest a single man in Australia (maybe his deputy, too) is doing more damage to our psyche than anything, or anyone, else in a generation or two. Then there is the motivation for the about-face:

“We are going through a terrible time and what this package will do is give people some hope and it will tell them their fellow Australians are with them, they have not forgotten them and they feel for them,” John Howard said.

“We are acting for them in their hour of need.”

I’m the sure the Indigenous, the drug-addicted, the Poker-machine-bankrupts, the single-working-mothers,… all appreciate how we feel for farmers and their need to move on with dignity and billions in government support when circumstances go thoroughly against them.

I’m not saying farmers deserve no help. I am saying John Howard is a disgusting hypocrite.