To do More With Less

ABC News and Current Affairs has a proud tradition of excellence and impartiality in journalism.

That's why I am loath to criticise that organization. However, I regret to say that their reporting quality seems to have fallen dramatically.

In these pages I have already commented on occasions where the reporting was less than stellar (see here and here).

Again, I'm forced to comment on a quite deficient report: last Monday (29-08-2011) 7:30 segment entitled "Industry Calls for Fair Work Review", by Hayden Cooper.

The segment was introduced by Chris Uhlmann thus:

"Pressure's growing on the Federal Government for a review of the nation's workplace laws. Businesses of all sizes, industry bodies and economists have told 7.30 the system lacks flexibility and they fear Julia Gillard's re-regulation of the industrial landscape could cause serious problems in another downturn. As Hayden Cooper reports, the Reserve Bank governor says he's getting the same message."

During the segment, Mr. Cooper talks, among others, to workers from an unnamed tea house in Canberra, to Scott Norris (general manager of Norris Cleaning Company Pty Ltd), Steve Knott (Mines and Metals Association) and Chris Evans (Workplace Relations minister). I'll limit my observations mainly to Mr. Norris and to the tea house workers.

It's interesting that of all business managers in Australia, Mr. Cooper chose to talk precisely to Mr. Norris.

Don't get me wrong: Mr. Norris' opinions are as valuable as anyone else's. However, I would have thought that a long time supporter's view of Work Choices and opponent of Fair Work and would be biased... against Fair Work. But what do I know about journalism, right?

Had Mr. Cooper or his production team done something as simple as a Google search (see here) they surely would not have failed to notice the first item returned by that search was the 2007 submission (PDF format document housed by the ACT Parliament) Mr. Norris issued to the Select Committee on Working Families in the ACT in Relation to the Workplace Amendment (Work Choices) Bill 2005.

Now, if Mr. Cooper or his production team were too busy to do a Google search, it seems excessive to expect of them to actually read the submission, where Mr. Norris candidly admits not only his opposition to amendments to the WorkChoice legislation, but also to having problems with the LHMU (union currently known as United Voice, covering cleaners, among other workers) for the union's "abusive" initiative to promote a Code of Best Practice among employers and endorsement of those employers who do sign the Code:

"Over the past few years, I have found the LHMU to be more and more unapproachable, and they have made it clear that they intend to make life very difficult for companies such as ours who refuse to sign their 'Code of Best Practice' document."

But even if Mr. Cooper had known about Mr. Norris' submission, or the LHMU, would he have reported that United Voices still promotes a campaign called Clean Start? By the way the Clean Start's objectives don't seem to me to make life difficult for companies like Mr. Norris':

"Cleaners are committed to quality cleaning in order to provide a safe and pleasant environment for Australian families. However, many of us have no job security, have experienced or witnessed harassment and sometimes do not receive our proper salaries. We therefore support the Clean Start campaign as the way to improve our industry nationally and meet the high standards that are expected of our work. We deserve better."

Incidentally, given Mr. Cooper's question to Mr. Evans (Workplace Relations minister):

"Hayden Cooper: But is it [my comment: Fair Work Act] fulfilling the promise? The current Workplace minister believes it is. [my comment: Mr. Cooper asking now the minister] Do you concede that your workplace relations laws are causing real distress for many small businesses?"

The viewers are left to wonder if Mr. Cooper considers a company that employs "140 people at his four decade-old cleaning business" a small business, when even under the much more "flexible" provisions of WorkChoices a small business was defined as one employing at most 100 people.

But let's leave the cleaning contractor aside.

Mr. Cooper opened his report by representing how busy the tea house young ladies were:

"Hayden Cooper: But for the workers, it's busier than it used to be. This business was set up when there were no penalty rates on the weekend. Now, there are. And meeting the extra cost means something has got to give and the staff are doing more with less.
"Justine Lejano, employee: There has been, like, kind of a noticeable change in how many people are working and we've had to, like, cut back on the longer shifts and less people working, which has been a bit of a struggle 'cause, as you can tell, it gets kind of busy. So, it's a bit hard.
"Hayden Cooper: It's a story that's repeated in small and large businesses right across the country, as employers complain of a system that's inflexible and costly."

Mr. Cooper probably doesn't know it, and maybe it would be too much to expect he did, but when "staff are doing more with less", as he said, bosses and economists alike say "staff are being productive". See here.

And the original and generalized outcry by bosses and economists, alike, was that Australian labour productivity had fallen. I could look for examples, but Mr. Cooper kindly saved me the trouble:

"Hayden Cooper: But it's not only small business that's complaining. The mining sector fears the return of union access is crippling productivity and it worries that rising wages in some operations could filter through to others."

Thus, based on the young ladies example, I'd say that the Canberra tea house must be exceptionally lucky: it almost alone in Australia cannot complain about lack of productivity.

However, given that Mr. Cooper generalised that situation for other business, I would say that it's highly dubious that there is a genuine productivity problem.

So, maybe what bosses are demanding is not so much productivity, but "flexibility", after all. You know, the flexibility required to avoid "those rising wages in some operations [that] could filter through to other sectors".

In this sense, it's interesting to consider this fragment of the report:

"Hayden Cooper: Enter the Reserve Bank governor. In a climate of economic uncertainty, even he has now gone public, giving voice to some of these very concerns, and suggesting a review of the laws might help.
"Glenn Stevens, Reserve Bank Governor (Friday): But what people do say and, you know, this is what they say to me - I can't verify it, obviously, from their individual businesses - is they find it harder to get flexibility. They find it harder to negotiate flexibility. That is something that is - if that's true, then that I think is a matter for concern."

Curious then, but try as hard as I did, but I can't remember Mr. Stevens ever mentioning the need to review IR laws. Neither would I say he went public: that was not an statement he offered publicly without being prompted.

More curiously, though: the fragment containing Mr. Stevens answer mysteriously failed to include the following lines:

"What businesspeople say to me - and I think this would be a theme I have heard from a number of quarters - is not so much that wages are excessive and indeed at this point in time the aggregate data on wage growth which is probably fourish, a touch under maybe, is on a par with what we have seen over the years. What people say to me, I cannot verify it obviously, from their individual businesses is that they find it harder to negotiate flexibility. That is something that is said. If that is true that I think is a matter for concern... If they are wrong, then it would be good to get the heads together and show how the system is actually very flexible, because I think there are people whose instinct is that it has gone back the other way." See here. Emphasis added.

So, I'll be damned, but it's not higher wages, either!

But perhaps the most strange passage in the whole report is the statements by two of the young ladies towards the end:

"Hayden Cooper: As for the staff, it seems not everyone wants penalty rates if it means fewer hours as a trade off.
"Ashleigh Finch: I think it's a bit unfair, really, I mean, paying someone $40, $50 to wash dishes for six hours I think's not quite justifiable. I'd much rather work more hours and get paid less.
"Jess Girvan, Employee: I don't even know what I was on beforehand because I was just happy to come in and get some hours, so, it didn't really affect me that much. But now it's sort of they have to be paying people extra to stay on so now a few of us are sort of getting shifts cut, which is a bit annoying."

I may be really dumb, but I couldn't make much sense of Ashleigh's statement: I don't know anyone who'd much rather work more hours for less money. I can understand bosses liking that, but employees?

And my confusion only increases when she also complains about "paying someone $40, $50 to wash dishes for six hours": $6.67 to $8.33 an hour not quite justifiable?! Holy Mother of Christ!

So, let me ask a question, which I am sure Mr. Cooper can answer: is Ashleigh Finch an employee... or the owner of the place?

If you see the quotes above, copied verbatim from the 7:30 transcript, you'll see that 7:30 goes to great lengths to identify who the characters speaking are. But the transcript quoted above does not identify Ashleigh as an employee, although earlier she was indeed identified as such:

Screen capture from 7:30 website (30-08-2011).

So, could Mr. Cooper be misrepresenting the opinion of Ashleigh Finch as being that of an employee, when in fact she could be the owner?

Let me finish this by reminding that the need to do more (and better!) with less applies to the 7:30 journalistic team, as well, even though they work for a publicly funded organization.

And, as a taxpayer, I must say I am not impressed and I am starting to believe some 7:30 salaries might be "not quite justifiable".

Update:
31-08-2011 Added the screen capture for further evidence, corrected a mistaken reference to Fair Work act, noted that in an earlier part of the segment Ms. Finch had been correctly identified as employee and remarked that the ABC is a publicly funded organization.

To Ali, my Muslim Friend

When you migrate to another country, you need to learn some new tricks pretty quick. I had to learn some, on personal experience.

Sydney Harbour [1]

If you moved alone, the first thing you must realize is that you are, indeed, alone: you have no friends or family. Nobody knows you or cares much about you; and, let' be fair, it's not their fault.

Understanding this won't make things any easier for you: if you need help, you won't take it personally when other people refuse to help you, but understanding that won't get you any help, either.

And although I like to see myself as a self-reliant bloke, you know, the lone-wolf kinda guy, the day came when I needed help.

Let's not mince words here: some ten years ago, I was broke, days from being evicted from the place I rented. And I had nowhere to go. If I paid the utilities, I had nothing left to buy food. If I bought food, I'd had nowhere to keep it. Where would I leave my stuff?

Sydney is a beautiful city, but at times, that is not enough.

To make a long story short, the only guy who helped me was a Shiite Muslim born in Lebanon. Not the Australian Government through its social security agency, nor the University where I was studying, or Christian-inspired charities. Not my friends (whom I can't blame: they had their own problems) or my family overseas (whom I felt ashamed to trouble with my problems).

Ali did.

I am not a religious man. I am agnostic about God's existence. I, however, don't believe in hell or heaven or other supernatural things. Further, I believe all religions are rather irrational.

But I also learned this: it's not religion, nationality, skin colour, age or gender that makes a decent person, decent.

My friend, Ali, is a good, decent man. Whatever else he is, this is what matters to me. And even though I pride myself on having repaid my friend the money he lent me, there is something I can't repay: his having had faith in me.

Thank you Ali.

Update:
For those who might share the idea that the real side of the Muslim communities deserves to be represented, if not in the mainstream media, at least among individual users, to have a look at the website of My Fellow Americans.

Image Credit:
[1] Sydney Harbour shot taken from the air, by Rodney Haywood. Wikipedia

Are Capitalists Happier? Huh?

Can't hear, can't speak, can't see.
Tosho-gu shrine in Nikko, Japan. [1]

Last Friday 12-08-2011, the post "Are Capitalists Happier?" signed by professors Ronald Rotunda, Vernon Smith and Bart Wilson, appeared at Reuter's The Great Debate Blogs.

In that post the authors purport to answer, on experimental evidence, the question: "Which kind of economy ultimately works better in the long run - capitalism or socialism?"

Once I learned of that post (h/t Occasional Links & Commentary), I posted a reply (16-08-2011), questioning the experimental design.

In my opinion their design badly misrepresents both socialism and capitalism. Thus, the apparent conclusions stated in the post do not follow and could even be reversed.

I also requested a link to a formal publication, in order to produce a more accurate opinion about the research.

As of Sunday 21-08-2011 (Sydney time) no answer had been posted by the authors, and I must assume none will be posted. Maybe they haven't seen my reply, or, having seen it, they don't intend to consider my observations.

In any case, I decided to reproduce the text of my reply (see below), so that readers can judge by themselves if my criticism is fair, or whether I am missing the point.

If the readers know more about the research, where I can get it and/or would like to comment, as usual, pertinent comments are welcome.

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My Reply:
Aug 16, 2011
9:47 pm EDT

While a Marxist, my personal approach to experimental economics is rather sympathetic. I, for one, am happy to acknowledge the many positive things achieved by researchers in this field (like Prof. Smith): in my view, the flaws demonstrated in the Homo economicus view of human behaviour, underlining the broader methodological individualism paradigm.

Also, unlike most Marxists, I tend towards empiricism.

With these two things in mind, it’s easy to understand that I find intriguing and exciting the idea of applying experimental economics to the question: “Which kind of economy ultimately works better in the long run – capitalism or socialism?”

What’s more, I welcome the proposition: “Using virtual economies, we can now literally recreate, in laboratory investigations, the state of nature and are no longer left to philosophical musings of first principles.”

Considering all these things, I respectfully must say that the desire not to rely on “philosophical musings of first principles” is not an excuse for not knowing what those first principles are.

And I regret to say, with due respect, that on the evidence of the text presented, the authors seem to have a poor understanding of basic terms.

Let me put an example where no “philosophical musings” intervene. If I understand the experimental setting, each experimental subject is equally endowed with the basic means of production: a capacity to produce (i.e. labour) and a “field” (i.e. land) where they can individually produce the blue and red commodities in some proportion of their choosing. (Although capital was not mentioned anywhere, this is not necessarily an objection, unless the authors intended their demonstration to apply to Marxist socialism).

They can also steal “from each other because, in the state of nature, no legal system protects private property”. Although not explicitly stated, I take it they can steal blue and/or red commodity from each other, but not the “field” itself.

To put it all in a more succinct way: there is absolute equality (including property of the means of production)

However, it’s a basic point of all forms of socialism that not everybody is equally endowed with the property of the means of production. Incidentally, the term “communism” itself alludes to an ideal state where land and capital belong to the community (which although not identical, somehow seems to correspond to your initial setting, ironically enough).

Although the authors do not seem to have it in mind, in the capitalist mode of production, for example, the fact that capitalists monopolise capital (while workers can only provide labour) leads to conflicts. Note the inequality in the initial endowments.

Likewise, in the feudal mode of production, the fact that feudal lords/aristocrats monopolise land, while serfs provide labour in exchange for the right to use a part of the land on their own behalf, produces conflicts.

Thus, the initial experimental setting of absolute equality seems singularly inappropriate to test whether socialism improves well-being: why should people strive to achieve equality, if they are already equal?

Although a more philosophically-oriented criticism would probably be unfair and outside the scope of this reply, I would recommend a revision of the notion of individualism underlying economic liberalism, as it has deep Hobbesian roots; unlike socialism, in all its forms, that emphasises equality, collaboration and at least some degree of “collectivism”.

Finally, I understand that the post I’m replying to is not a formal research report, thus there may be things “lost in translation”. If possible, a link to a publicly available formal report (maybe the working paper version) could help clarify the situation.

Thanks.

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Image Credit:
Three wise monkeys: Wikipedia

Naomi Klein on the London Riots

This is what Naomi Klein (h/t Occasional Links and Commentary) had to say about the London (or rather UK) riots:

Naomi Klein. [1]

"This is what Cameron got wrong: you can't cut police budgets at the same time as you cut everything else. Because when you rob people of what little they have, in order to protect the interests of those who have more than anyone deserves, you should expect resistance – whether organised protests or spontaneous looting. And that's not politics. It's physics." (Emphasis added. See here)

Unusually for me, I have nothing to add.

Photo Credit:
[1] Naomi Klein. Wikipedia