Monday, September 1, 2014

The abject failure of the Institute of Public Affairs

Following on from Alan Moran's sacking from the Institute of Public Affairs for anti-Islam tweets, John Quiggin sticks the knife in by comparing the IPA to their American counterparts, the Heartland Institute.
Finally, there’s the question of how long the IPA can avoid the fate of Heartland, which has lost most of its corporate sponsors (except for a few diehards from the fossil fuel sector) and is a shell of its former self. the IPA has already gone a fair way down the same track, and is now, in large measure, a private plaything of Gina Rinehart. In return for her bounty, she has demanded the most humiliating obeisances, most notably support for Northern dam projects like the Ord River scheme. Until recently the IPA was a reliable critic of such boondoggles.
Similarly, Andrew Elder details the flimsiness of Dick Warburton's review into the Renewable Energy Target, and how the agenda from the right is to abandon economic rationalism in favour of killing off entrepreneurialism and disruptive innovation of companies like Silex and ARENA, and handing money over to established monopolists.
The government's anti-RET position means that current electricity provider(s) will be able to buy the intellectual and other property rights for the proposed solar facility at a fraction of the cost that it would have been worth as a going concern. This means that the incumbency of existing providers will be maintained without them having to do the hard work and take the risk that Silex/ARENA took, while reaping the rewards properly due to Silex/ARENA. 
Are we starting to see a pattern yet? How about the cost-benefit analysis of the National Broadband Network, yet another rubbish report prepared by expensive external consultants to produce exactly what the government wants to hear: specifically, that the Internet doesn't have exponentially expanding bandwidth demand and Australians aren't going to want any more bandwidth in ten years than they already do now. This is patently stupid, but nothing more than can be expected from the Minister for Ill Communication, Malcolm Turnbull.

David Walker at Club Troppo runs interference for Turnbull, which is understandable because Turnbull pushes all the buttons of a high-level wonk. The Minister sounds like he's well briefed and in command of all the facts; a cursory glance at the Delimiter story stream on Turnbull - culminating in an apology by Renai Lemay for ever thinking Turnbull was on the level - shows that his position is a Potemkin village that only impresses those who don't know the hollowness of the Liberal policy platform. Just as Henry Ergas believes his economics credentials qualify him to blog about politics without justification, David Walker thinks that as a journalist, consultant and policy wonk that he can grok broadband technology just like that, and wave through Turnbull's cunningly constructed consultancy conclusions.

Now, allow me to set out my credentials in this one: I was originally a technology journalist, starting in 1997 on weekly newspapers and then moving to bi-monthlies including Internet World Australia where I covered a lot of ISP and Internet industry stories during the dot com boom. Additionally, I spent a year or two in the mid 2000s doing sales for Neighborhood Cable, so I have some direct knowledge of what regular customers want out of their broadband connections.

Walker's justification for agreeing with Turnbull is that we don't need broadband for anything other than pirating video content.
Trouble is, most of the innovations we have come up with recently don’t use all that much bandwidth. Facebook and LinkedIn and Instagram are only medium-bandwidth even at their most intensive. Twitter and smart electricity grids are low-bandwidth. Networked games like Halo 3 use surprisingly little bandwidth too, with local hardware doing most of the work. And beyond a certain point, the speed with which you see Web pages has little to do with bandwidth; it’s mostly about server responsiveness and network latency.
Most projected e-health applications, including your latest x-rays, won’t use that much bandwidth either. Even fairly decent video-conferencing for education and medical consultations and business meetings uses perhaps 2 megabits per second, according to the demand document. To the extent that something is limiting growth in the use of such technologies, that something is generally not bandwidth.
The real policy problem with the NBN is that high-speed broadband just isn’t that much of a revolution. And to justify the cost of universal provision, it needs to be.
There are all sorts of things wrong with this mode of thinking. Correlation does not imply causation; perhaps the applications recently developed are low-bandwidth because they have to deal with crappy networks that don't enable innovation of more bandwidth-heavy content?

The assumptions in the demand document are slanted towards broadcast media. For instance, the 2Mbps quoted for videoconferencing is just for one-on-one calls, yet videoconferencing is made for more than two callers at a time, for collaboration in business and family or party calls in private usage. The one-on-one model is a relic of the broadcast media era, and that's the revolution that the NBN promises: the disruption of the one-to-one or one-to-many modes of communication, and the enabling of many-to-many modes.

With these things, it's always instructive to follow the money. Who stands to lose the most from the rise of the Internet and its disruption of existing businesses? If you look at the bandwidth usage, it's video content that eats up a lot of it. Foxtel is the major provider of paid video content in Australia. News Corp is the entity most at risk if the Internet is used to bypass its paywall to access content-that-wants-to-be-free. (In previous years I would have included Telstra in this part of the rant, though they don't really care as much as they used to about this stuff, since they have started to give up on owning content and focus on getting paid to operate the networks no matter what runs over it.)

I got questioned recently on why I don't join much of the rest of the left in bemoaning the supposed dominance of the IPA, its ubiquity on ABC platforms, its frequent appearances at The Conversation, its infection of Liberal Party processes, etc etc. My contention is that the original aims of the IPA - to be the intellectual arm of the Liberal Party and guide its policy development along ideological lines - have comprehensively failed. These days, as Quiggin rightly notes, the IPA is a cheerleading outfit for Gina Rinehart, Rupert Murdoch and the tobacco lobby, at the expense of any policy credibility they might once have enjoyed. As Elder goes through, the IPA is no longer a defender of entrepreneurialism, but a paid shill of crony capitalists. They actively lobby against Schumpeterian creative destruction, because they are paid by the people whose businesses' destruction would be caused by healthy capitalist competition. They have almost completely abandoned Menzies' founding principles, as evidenced by their recent dabbling with anti-Islam bigotry.

The reason I am ambivalent about this situation - the IPA's continued success of getting their message out to the public, combined with the poisonous nature of that message - is summed up by Harry Clarke in a comment on the Quiggin piece:
The IPA has been spectacularly successful at getting its extremist message across. I congratulate them. The difficulty is that people don’t like their message. I think the great Australian descriptor “ratbag” describes them well. Fundamentalist economics that perverts what economic theory instructs. I agree with you – the CIS relies more on reason.
In the words of John Williamson, Australians revel in our ability to "tell our leaders to go jump in the lake (but we'll never knock Australia, you make no mistake)". Yeah, we're fair dinkum in this country about recognising galahs when we see them. I believe in democracy, and the capability of the Australian public to work out who is on their side. The more the IPA's message is disseminated, the more Australians jeer and laugh at it. I know enough about the IPA to conclude that it is a failure, a folly, a flailing flinger of falderol, a figure of fun... the rest of the nation is just catching up on the news.

By the by, it should be pointed out that Moran's "sacking" from the IPA hasn't stopped him from posting on Catallaxy Files. This suggests a schism developing between John Roskam, still lurking about in the race for preselection for the Victorian seat of Hawthorn being vacated by Ted Baillieu, and Sinclair Davidson, who runs Catallaxy Files and has done nothing to stop its strong shift to becoming a secular freak show of anti-Islamic hatred, to the extent where Davidson ran a guest post this week tying a possible Australian conspiracy by public servants around a Rotherham-style Muslim child sex ring to the abandonment of the repeal push for s18C of the Racial Discrimination Act. The cognitive dissonance of holding the belief that the appalling Rotherham case presages a global epidemic of Muslim-on-white-teen rape after having defended the Catholic Church against allegations of a global epidemic of organised Catholic-priest-on-white-teen rape does not seem to bother anyone there. It is at the point right now where many Cat commenters would be welcome to speak at a Catch The Fire Ministries event, since their ideologies are functionally identical. With the abandonment of ideological principle, the IPA and its blog Catallaxy Files don't have much left to talk about, so they are in danger of descent into contagious conservative fear.


  1. What has annoyed me about Walker is that he always avoids my question. If the existing government position is better than the previous governments it all hinges on the quality of the copper network between the optic fibre and the house yet the committee said nought about this.
    No-one but no-one can answer this question not even Telstra so how could any person of integrity say there is any social benefit?

  2. I am waiting for the cost to renegotiate the Telstra NBN contract. It's going to be a doozy. Most of the extra cost will be the albatross of the ongoing maintenance of the POTS, which I would expect would blow out to well beyond $1 billion per year. There's no way Telstra haven't been drawing down expenditure on maintenance in preparation for selling it to NBNCo, it's the rational thing to do for a company run by accountants. It's going to be a rustbucket white elephant, and all too predictable.

  3. I have mentioned ( and linked you) in dispatches today