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Imagining Australia: Ideas for our Future
By Macgregror Duncan, Andrew Leigh, David Madden and Peter Tynan
Sydney, Allen & Unwin, 2004, 324pp, $24.95,
ISBN 1 741114 382 9

Reviewed by Michael Walsh

The young authors of Imagining Australia, like many contemporary political commentators, bemoan the lack of vision and leadership in Australian politics. Unlike some of their grandstanding counterparts, Macgregor Duncan, Andrew Leigh, David Madden and Peter Tynan have also offered a constructive response. Fuelled by ideas and confidence developed during stints at American Ivy League universities, their efforts are a daring, shoot from the hip, approach to Australian public policy.

The idealistic generation X-ers could be described as having hard heads but soft hearts; hard heads, because they support proven policy winners like lowering trade barriers, economic liberalisation, greater foreign investment, innovation and entrepreneurship; soft hearts, because they recognise economic liberalisation produces losers and they aspire to share the benefits of economic growth with all Australians.

Over the last decade, the Australian economy has gone from strength to strength and Australians in general are wealthier than at any time in their history. Does this success mean that Australia can rest on its laurels? While there is more than a little truth in the saying ‘if it ain’t broke, don’t fix it’, Imagining Australia gives an emphatic ‘no’. Australia is a work in progress and there are many situations where social policy interventions and further economic reform are likely to yield significant benefits without great risk. The authors argue for continued economic reform, but also for the implementation of innovative policy to address social problems.
So, what ideas are propounded in Imagining Australia? The authors address social policy issues like long-term unemployment, indigenous health, low retirement savings, struggling schools and declining social capital in the classical liberal tradition. They recognise that incentives matter and argue that there should be less reliance on government and greater reliance on communities. Some of the solutions they propose are innovative; others draw on good ideas which have been successful overseas. An example of the latter is their support for US style earned income tax credits that have helped to ‘make work pay’ for low income earners.
One of the most interesting chapters deals with national identity. The authors portray Australia’s current national identity as largely a blank slate which has not been progressed much past its formative stage. They view the national identity we do have as partly derivative from Britain, and partly the exclusive domain of Anglo-Australian men. It is time, they argue, for political leaders to forge an inclusive national identity which reconciles the competing visions of urban elites and ordinary Australians.

The debate about national identity is also a debate about values. In the lead-up to the federal election, we’ve all heard hundreds of arguments about values; however, Imagining Australia offers something different. Unlike urban elites who seek to replace traditional values with abstract politically correct concepts like diversity and pluralism, the authors look for the middle ground. They propose we build upon values that ordinary Australians identify with, like egalitarianism, mateship and a ‘fair go’. They would like to see the Eureka uprising take its place as the central legend of Australia’s nationhood because it represents those distinctly Australian values as well as democracy, freedom, republicanism and multiculturalism.
This book could never have been written by a politician in office, which is one of the reasons it is such an interesting read. Could you imagine a party politician advocating the introduction of an inheritance tax, the adoption of the Eureka flag as the Australian flag, an annual Eddie Mabo day or massively increased immigration? There is an ocean of difference between the ideas presented in the book and those presented by party politicians. The authors’ arguments are grounded in principle rather than focus group pragmatism and they take a long-term view rather than a short-term election wary one.

The authors realise that many of their ideas may not be immediately achievable, in fact they go so far as to describe some of them as ‘political suicide’. And herein lies one the disappointments; many of the proposals seem impractical.

It is implicit in the ideas presented that reform is a top-down phenomenon, with change being lead by politicians. But one might struggle to find heroic politicians amongst the various reactionary, inoffensive and chameleon characters who currently hold office. When our current political leaders debate values, they rarely seek to change views or risk offending voters; rather they seek to reflect the views held by the electorate. In this context, the reader is left wondering how the ideas on each page could make the transition to the ‘real world’ in the near future. While I loved the authors’ imagination, it seems likely to remain as a utopian dream for the foreseeable future.

All up, Imagining Australia promises to make a valuable contribution to public policy debate in Australia. Many prominent Australians from across the political spectrum are already singing its praises, from Gareth Evans and Mark Latham to Nick Greiner and Christopher Pyne. With any luck the next generation of Australian leaders will take up the challenge and some of the ambitious ideas in the Imagining Australia will be put into practice.

A World Out of Balance: American Ascendancy and International Politics in the 21st Century
By Coral Bell
Sydney, Longueville Books, 2003, 220pp, $24.95,
ISBN 1920 681 1078

Reviewed by Professor Chris Reus-Smit

There is a certain poetry to the writing of a scholar who has cast a discerning eye over world affairs for over half a century. In her most recent book, A World Out of Balance, Coral Bell writes with a lightness of touch and subtlety of thought that can derive only from long-accumulated knowledge and experience. Bell’s world view has been well honed through decade after decade of analytical encounters with the vicissitudes of world politics, and her ability to traverse the terrain of international history to the confusing landscape of contemporary global politics can only be envied.

Bell’s project is to understand ‘how politics between nations operates in the absence of a central balance of power’ (p.13). Here she returns to one of the central themes of her life’s work—the idea, so central to realist thought, that international order depends, in a deep and fundamental way, on the maintenance of a balance of power among predominant states. What is the fate of international order in a unipolar world, when a single superpower stands head and shoulders above the rest?

In pursuit of an answer, Bell begins, in classic realist fashion, by mapping the relative capacities of the leading states. Comparing their territory, population and resources, economic and technological competence, political and social cohesion, governmental and administrative capacity for crisis decision-making, military muscle, and ability to secure bandwagoning from other states, she concludes that we are indeed within a long ‘unipolar moment’, one that she expects to last as long as the Cold War that preceded it.

Bell is sensitive, however, to the complexities of contemporary global politics, to the way in which the system of great powers is embedded within webs of wider social processes and normative developments. She is attuned, for example, to the effects of economic and communications globalisation, and to the patterns of political dissent and conflict these produce. She identifies key contradictions between the politics of sovereignty and identity, between the needs of growing populations and the distribution of resources, and between old ‘realist/rationalist’ international norms and emergent ‘cosmopolitan’ standards of international and national conduct.

Bell’s realism is of the classical variety, more indebted to Carr and Morgenthau, and departed friends in the English School, like Martin Wight and Hedley Bull, than to the more rarefied writings of Kenneth Waltz and the ‘neorealists’. Hers is not the realism of simple conclusions. She predicts that unipolarity will persist for several decades, but that global complexities will demand that Washington relearn the art of diplomacy if it is to conscript the kind of international support needed to manage crises in a world economic globalisation, transnational violence and the cosmopolitanisation of international norms. Her hope, again betraying her classical realist sympathies, is that eventually a new concert of powers will emerge, instilling some stability and adroit crisis management to the system.

Bell’s book is a good example of the common ground now occupied by many classical realists, liberals, and constructivists. This having been said, though, I would like to push Bell on a number of issues.

The first concerns the relationship between unipolarity and America’s political influence. For realists, the polarity of an international system determines patterns of political influence, and, given their logic, we should expect unipolarity to yield American hegemony, defined as the ability of its policy-makers to dictate the rules of international society. But this is clearly not the world we live in. America’s material lead on its nearest competitors is noteworthy, but so too is Washington’s frustration translating this lead into sustained political influence. Bell’s strategy here is to assert the analytical value of the concept of unipolarity, but to argue that hegemony is too high a bar to expect of any state in the contemporary world order. But this dodges the central issue: if unipolarity does not deliver hegemony, then power is being conditioned by very substantial forces that lie outside the standard realist lexicon. We must even ask how analytically valuable the concept of unipolarity is if it leaves the dynamics of contemporary power politics substantially occluded.

A second concern relates to the issue of complexity. As we have noted, Bell is sensitive to a range of new forces conditioning world affairs, from globalisation to normative shift. And when each of these arises in her discussion, they receive subtle and thoughtful treatment. Bell’s home territory, however, is the world of state power, and it is this that always retains primary causal significance. My point here is not the extreme one of ‘the state is dead in the face of globalisation or transnationalism’. Rather, my concern is the analytical one of whether we should grant these forces independent salience and how we should judge their transformative potential. Here we see the down side of Bell’s style of analysis. There are now substantial literatures on the constitutive power of social norms, on the strengths and weaknesses of institutions, and on the many faces of globalisation. Yet Bell barely gives these literatures a sidewards glance, which leaves her unable to say something of a deeper nature about the relationship between these forces and global power.

Finally, Bell’s work bears the mark of a core realist anxiety. Namely, that realists purport to identify the true underlying dynamics driving international politics, yet they are constantly confronted by policy-makers who act in ways contrary to these dynamics. For Bell, this anxiety permeates her discussions of the Bush Administration. I remember a conversation with her when the Bush team came to office, when she noted the extraordinary, and undeniable, foreign policy experience of the group. It is clear from the book, though, that the team has failed the diplomatic test, that they have failed to understand the importance of legitimacy in undergirding American power. For many of us, ideologically driven irrationality is the root of this failure. Bell is reluctant to reach such conclusions though, occupying instead a more ambivalent stance toward the current administration. This seems, in part, to be because of her own past assessment of Rumsfeld, Cheney, Rice and others as sober, policy-hardened realists, but it also derives, I think, from a general realist reluctance to call ideology by its name and to acknowledge the central place of irrationality in international relations.

These quibbles aside, Bell’s A World Out of Balance is a fine contribution to contemporary debates about unipolarity and world politics. It is also a tribute to her long career as one of Australia’s most important and much loved analysts of world affairs. She has been a voice in almost all of the key debates animating Australian international relations scholars for decades, and I will not be the only one who learns much from this most recent intervention.

The Power of Speech: Australian Prime Ministers Defining the National Image
By James Curran
Melbourne University Press, 2004, 304pp, $35,
ISBN 0522850987

Reviewed by Gregory Melleuish

This excellent book illustrates two major features of political life that tend to be forgotten in an age of generalisations and ideological conflict. The first is the importance of particularity; that individuals are moulded by particular circumstances and cannot be accounted for by reference to general Zeitgeists. The second is that things are not always as they seem and one should beware of using individuals, even highly significant individuals such as Prime Ministers, as emblematic of their age.

This book seeks to explore the development of Australian nationalism over the past 50 years through the words of Australian Prime Ministers, with a particular emphasis on Whitlam and his successors. In a sense the title is misleading; it does not really engage in a close analysis of the rhetoric and language of these men. Rather, it explores their ideas through an exploration of their lives, upbringing, influences, careers and public statements.

The theme of the book is that every Prime Minister since the 1960s has had to deal with the fact that the old Australian identity of what Keith Hancock once called ‘independent British Australians’ has largely faded away but that it has not been a simple case of replacing it with an ‘Australian identity’. The response of individual Prime Ministers has largely depended on their particular upbringing and experiences. These have been various, illustrating that any idea of an Australian ‘national culture’ must be understood in a relatively loose way.

Gough Whitlam was the product of a classical education, a father who was an internationalist and advocate of human rights and the tradition of British parliamentary government. His ‘new nationalism’ was not that of Don’s Party but of a man who, in the tradition of Evatt, was really a liberal internationalist. Only in retrospect, seen through the eyes of nationalist and radical authors and historians, does Whitlam become confused with Barry McKenzie.

Malcolm Fraser equally emerges as a much more complex figure in Curran’s hands; no mention of Ayn Rand but rather of Gilbert Ryle, post-war Oxford and Arnold Toynbee’s A Study of History. Curran emphasises that Fraser ‘maintained a deep suspicion of nationalism’ and was animated by a genuine fear of communism and a desire that individuals be left alone to make their own way in the world. Likewise Bob Hawke experienced the world of Oxford in the 1950s but his primary influence, according to Curran, was his Congregationalist upbringing and the emphasis that this placed on the need for consensus. It was somewhat uplifting to read one of Hawke’s university professors refer to the ‘maturity’ of his character and it is clear that Hawke, like Whitlam and Fraser before him, was driven by deep moral concerns.

Only with Paul Keating do we reach what might be described as a ‘vulgar nationalism’. Hawke, Whitlam and Fraser were all highly educated men; Keating received his view of the world from Jack Lang, who had been dismissed from office in New South Wales during the Depression and who was a good hater. This was later reinforced by Melbourne left-wing historian Don Watson, who introduced him to the slogans, if not the substance, of the work of Manning Clark. Unlike his predecessors Keating spent little time attempting to reconcile the new emerging Australia with the established British traditions that underpin much of its political and legal structures. He preferred an aggressive anti-British Australian nationalism. But even here all is not as it seems; despite his Irish roots, Keating, in shades of Jim Hacker, was a great admirer of Churchill and prone to striking Churchillian poses.

Perhaps Churchill is what links Keating to John Winston Howard. Howard has again attempted to reconcile a form of Australian nationalism with Australia’s British heritage. He is an unashamed nationalist who wants to take the country beyond the ‘problem’ of Australian identity. He has his own version of Australian nationalism that is linked to his father’s and grandfather’s involvement in World War 1 and seeks to defend what he sees as traditional Australia.

All of these Australian prime ministers have had different versions of Australian nationalism and with the exception of Keating they have not espoused an aggressive and belligerent form of that nationalism. Perhaps this has been because that form of nationalism in Australia has largely been the domain of extremist intellectuals, both of the Left and of the Right. Prime Ministers live in the real world where they have both the world outside Australia, as well as that inside it, with which to deal.

Curran also argues that these men were products of a time, and an intellectual culture, that was suspicious of nationalism in the wake of its excesses in World War II. It is interesting that all were born before 1945 and had finished their formal education prior to 1960. Whatever we might think of them individually it is clear that they have all been motivated by powerful moral drives, that they have been and remain ‘true believers’ in their individual creeds.

Australia has yet to experience a Prime Minister who is baby boomer. It is yet to experience a Prime Minister who is the product of the ‘progressive’ education system that was ushered in by the ‘swinging’ 1960s. In that sense Curran’s study tells us a lot about the values held by a generation of political leaders whose time is almost at an end. What we now need to know about now are the values and understandings of a new generation of leaders who were born into, and educated in, a rather different, and less morally solid, world.

Skepticism and Freedom: A Modern Case for Classical Liberalism
By Richard A. Epstein
University of Chicago Press, 2003, 320pp, US$39,
ISBN 022 621 3048

Reviewed by Jonathan Crowe

Human ignorance has played a prominent role in modern arguments against extensive government. As F. A. Hayek writes in a classic passage from The Constitution of Liberty, ‘it is because every individual knows so little and, in particular, because we rarely know which of us knows best that we trust the independent and competitive efforts of many to induce the emergence of what we shall want when we see it’ (CL, p. 29). However, some authors have argued that this same ignorance means we are unable to claim objective moral priority for any particular conception of legal order. In Skepticism and Freedom, Richard A. Epstein explores these contrasting appeals to skepticism in debates about law and government.

Epstein seeks to defend the moral priority of the classical liberal view of the state through an appeal to human intuitions about ethical behaviour. He situates his work within the ‘natural rights’ tradition of classical liberalism, while rejecting crude characterisations of this approach as a form of ‘social Darwinism’ (p. 76). In Epstein’s view, it is because humans share basic ideas about right and wrong conduct that we should trust ‘repeated, ordinary interactions between individuals’ to give rise to moral wisdom (p. 86). It follows that we should scrutinise government attempts to override the moral preferences of individual agents. For Epstein, the proper role of government can be identified through careful, incremental reasoning from fundamental human ideas about value.

Epstein is at his most persuasive in refuting the moral relativism of prominent American lawyers such as Oliver Wendell Holmes and Richard A. Posner. In Epstein’s opinion, Holmes’ and Posner’s views reflect a perverse desire to ‘give the comeuppance to the commonsense ways in which ordinary people both behave and talk about their behaviour’ (p. 66). He is particularly scathing about Posner’s refusal to acknowledge the existence of cross-cultural norms that can be used to criticise genocide or the involuntary immolation of widows in some Hindu cultures. For Epstein, such indifference involves ‘a determined form of moral blindness open only to the totally inept or the devilishly brilliant’ (p. 78).

Epstein goes on to defend the possibility of cross-cultural moral communication, pointing out that all cultures recognise presumptive legal and moral injunctions against such acts as killing, rape, theft and fraud. He then uses these prima facie moral rules as the basis for an incremental approach to normative reasoning designed to withstand skeptical challenges. For Epstein, a probative moral system is not based upon ‘pure deduction’, but involves ‘successive approximations to some greater understanding of right and wrong’ (p. 93). One begins by examining the tried and tested rules that govern routine dealings between individuals, then extends those rules incrementally to more difficult scenarios.

Epstein’s careful examination of the presumptive moral rules that make everyday human interactions possible is insightful and compelling. He reminds us that moral standards do not exist at an arm’s length from everyday situations, but represent humankind’s response to the challenge of creating a social environment that allows individuals with varying beliefs and purposes to cooperate in order to achieve their diverse ends. However, Epstein’s vision is sometimes undermined by a lack of attention to detail in developing the fundamental elements of his moral framework. For this reason, his attempts to apply his ‘moral incrementalism’ to specific problems are not always convincing.

For example, Epstein’s discussion of the moral status of abortion is undermined by his unwillingness to consider the fundamental issue of how ‘personhood’ is to be defined for moral purposes (p. 104). He prefers to first assume that abortion involves a prima facie wrong, then consider what excuses or justifications might be relied upon to defend such a ‘wrongful’ procedure. However, abortion rights advocates are hardly likely to be convinced by an argument that concedes the central point in the debate to the other side. In such difficult cases, Epstein’s moral framework sometimes appears to offer little more than a vague utilitarianism.

Epstein recognises that humans do not always view moral decisions as calculations of utility. Nevertheless, his utilitarian outlook sometimes begets an excessive rationalism about human choice. For instance, he takes Joseph Raz to task for analysing certain moral decisions in a way that ‘leaves us with no explanation as to how that choice was or should have been made’ (p. 160). However, it is hard to see why an analysis of human decision-making that reduces ‘all components of choice to a single metric’ (p. 158) is necessary to defend classical liberalism. Moral decisions that cut across incommensurable domains may nevertheless hold personal significance for individual actors, constituting an arena for moral self-expression within which governments should be loath to intervene.

Esptein also adopts an overly simplistic analysis about social coercion. In criticising economist Robert Lee Hale’s argument that market transactions involve coercion, he notes the difficulty of identifying a specific coercive agent in such scenarios. ‘When a worker does not get a job, he has either received no satisfactory offer or has been turned down by all the firms to which he has applied. To which firm do we attach our disapprobation and why?’ (p. 113) Plainly, however, the fact that no individual firm can be blamed for coercing the jobless worker does not mean she or he is not coerced, for the coalescence of repeated rebuffs in the job market may have implications that transcend any individual rejection. The classical liberal does better to admit the possibility of such coercive circumstances, then show that the benefits of the free market outweigh these potential pitfalls.

Epstein is to be applauded for his self-declared willingness to ‘take on all comers’ in defending classical liberalism from its modern critics (p. 8). His confident engagement with diverse critiques is impressive, even if the range of objections canvassed sometimes lends a disjoined feel to the enterprise. One occasionally suspects Epstein has sacrificed depth of analysis for breadth of coverage and rhetorical impact. For all its shortcomings, however, I much enjoyed Epstein’s book. Epstein is an engaging writer with a clear passion for his subject matter. At his best, he offers an inspiring and persuasive moral defence of the classical liberal outlook. We need more of those.

The Progress Paradox: How Life Gets Better While People Feel Worse
By Gregg Easterbrook
New York, Random House, 2003, 376pp, US$24.95,
ISBN 0 679 46303 8

Reviewed by Andrew Norton

Gregg Easterbrook’s ‘progress paradox’ is that objective and subjective indicators of American life don’t match. Despite improvements in Americans’ standard of living, people aren’t feeling better about themselves or about America. To the contrary, recorded cases of depression are ten times as common now as half a century ago, and polls report large numbers believing that America is going downhill.

In two chapters at the start, Easterbrook puts the case that in almost every material sense life is improving for the average American—more rooms per person, enhanced heating and cooling, superior medical treatments, safer and more comfortable cars, and so on.

Social trends are mostly positive as well, Easterbrook argues. Crime has dropped very considerably since the early 1990s, and environmental indicators are generally less concerning than in the past. Even family structure seems to improving, thanks to lower divorce rates and fewer teenage pregnancies. Some things are getting worse, but Easterbrook successfully makes the case that these are the exceptions.

He offers us much less information on the perception that things are getting worse. As I argued in the Summer 2003 issue of Policy, it is well worth taking a close look at the polls on whether things are getting better or worse.

What we find is that if the poll asks about how things are for other people now compared to the past it is common to find at least a plurality, and often a majority, saying things are getting worse. But if we ask about the respondent’s own life, or that of his or her family, a plurality and often a majority will prefer the present time to the past. The same pattern is found in Australia, the United States, and other Western countries.

Easterbrook needs to explain a narrower phenomenon than he thinks. Most people do perceive positive trends in their own circumstances, so while he is right to note that news reports, intellectuals and entertainment media often focus on bad news and overstate risks, this doesn’t fully explain why people can reach reasonably realistic conclusions about themselves, while being overly pessimistic about other people.

At least two factors explain relatively rosy self-assessment. For information about their own lives, poll respondents need not rely on what third parties tell them. They can see their prosperity for themselves. Importantly, for the themes that dominate later chapters of The Progress Paradox, most people are inclined to be positive about themselves most of the time. In the jargon of the subjective well-being literature, they have a ‘positive cognitive bias’.
This gives rise to what we could call the ‘doom paradox’. Though there is a widespread belief that things are getting worse for the average American, most individual Americans tell pollsters that they are personally happy. In a typical year, around 90% will say that they happy. In 1972, the most miserable year since polling began in 1946, 82.7% said that they were happy.
Strangely, Easterbrook doesn’t give us these figures. It is almost as if he too cannot resist the lure of bad news. Instead he relies on an argument he attributes to Robert Lane, author of The Loss of Happiness in Market Democracies, that there has been a decline in the proportion of people saying they are ‘very happy’ since 1950.

Lane does make such an argument (though I cannot find Easterbrook’s figures in Lane’s book). While Lane’s book is a very interesting literature survey, on this point he is wrong. The differences are due to a change in the survey question, not a change in happiness.
Most of the earlier US polls gave as happy options ‘very happy’ and ‘fairly happy’. In later surveys, the choice was between ‘very happy’ and ‘pretty happy’. The negative connotations of ‘fairly happy’ boosted ‘very happy’. In the two years in which both questions were asked, 1957 and 1963 (though at different times in those years), a ‘pretty happy’ alternative reduced the ‘very happy’ result by 18% and 15% respectively. On a consistent question basis, the proportion of ‘very happy’ people has fluctuated without trend since 1957.

Though most Americans still say they are happy, more people are being diagnosed with anxiety or depression. It’s true of Australia as well. To what extent this is better diagnosis and reporting, and to what extent qualitatively different unhappiness compared to the past, is hard to say.
Assuming that it is a real change, drawing on Martin Seligman’s work Easterbrook offers some familiar, and not so familiar, explanations. Like many, Seligman sees ‘individualism’ as part of the problem. People who don’t see themselves as part of larger groups are more likely to become depressed by personal setbacks. Seligman is critical of ‘victimology’, which makes people feel helpless in the face of events or circumstances. The self-esteem movement can cause harm, by giving people unrealistic expectations about their own performance. Seligman also blames ‘consumerism’, since shopping rarely produces lasting pleasures, but can lock people into indebtedness and working excessive hours.

While there are social and cultural explanations for increasing ill-being, Easterbrook believes that personal solutions are possible. Drawing on the relatively new sub-discipline of ‘positive psychology’, a balance to psychology’s traditional emphasis on disorders, he argues that (for some people at least) happiness requires effort. People can slip into unhappiness ‘simply because it is the path of least resistance’.

As part of this happiness effort, the misery-prone need to be more forgiving and grateful. Easterbrook reports findings in positive psychology that these attributes make people healthier, happier, and more successful. (This chapter is called ‘Selfish Reasons to Become a Better Person’). He also thinks that increased ‘spiritual awareness’ would be good for us, and certainly better than the nihilism and existential despair he finds in aspects of Western culture.
In his last two chapters Easterbrook heads off into public policy. I found these to be the least satisfactory of the book. Particularly for US domestic policy, Easterbrook’s pet issues seemed to prevail over anything that would improve how Americans feel. There are many pages on corrupt and/or ridiculously overpaid CEOs. I take his point, as most readers will, but I doubt added probity and more modest CEO pay packets will add much to general well-being. And haven’t we just been told to be more forgiving?

Unlike lower CEO salaries, better health and less poverty in the non-Western world, the main suggestion of his chapter on global issues, would directly improve happiness. Here, too, though Easterbrook meanders into a topic-of-the-day, relations between Islam and the West.
Easterbrook is a journalist, and in The Progress Paradox he for the most part does a good job of reporting trends in American life and summarising the academic psychological literature. There is enough there to make it a generally interesting read, but there are too many weak links for it to offer a convincing argument.

Free Culture: How Big Media Uses Technology and the Law to Lock Down Culture and Control Creativity
By Lawrence Lessig
New York, Penguin Books, 2004, 240pp, US$24.95, ISBN 159 42000 68

Reviewed by Teresa Fels

Intellectual property laws—in particular patent and copyright—aim to strike a balance between providing incentives for efficient investment in innovation and for disseminating the material flowing from such investment. Lawrence Lessig, the author of Free Culture, is part of a growing school of US academics who argue that IP laws have swung too far in the direction of producer interests. Such a school still doesn’t exist in Australia—but more on this later.

The economic arguments about the problems associated with excessive IP protection are well known, and Lessig covers these briefly. He focuses principally on copyright, and argues that current levels of protection reduce competition, ultimately raising the prices that consumers pay for IP products in circumstances where it is not only doubtful that there will be significant off-setting benefits from increased innovation, but where the opposite may in fact occur. In this regard Lessig is particularly critical of Congress granting existing copyright products successive increases to term, making the familiar but valid argument that there can be no dynamic benefits flowing from such changes.

Lessig argues IP rights may impose costs on society in four broad ways. First, he focuses on increased copyright term—for most products, now available for 70 years after the author’s death, arguing this directly increases the market power of copyright holders. Second, he makes the less familiar but convincing claim that the lack of certainty associated with the current copyright system, in particular users’ lack of knowledge about whether a particular work is subject to copyright and who its owner is, increases the transaction costs of using works, and may consequently impede future improved generations of innovation based on such work.
Third, he argues the penalties associated with copyright misuse are excessive, in particular compared with penalties associated with more heinous wrongs; this he argues not only imposes disproportionate penalties on wrongdoers in circumstances where they could not necessarily have averted the harm but perhaps more seriously deters people wishing to build on and improve such works. Finally Lessig argues that the current legal system enables putative copyright owners with deep pockets to launch specious legal actions which reinforce all of the above effects.

Lessig is a lawyer rather than an economist, and hence much of his book focuses on what can be loosely termed the non-economic costs of the current system, the greatest of which he believes is the potential for current arrangements to lead to a concentration of creative goods in the hands of a small number of established (and perhaps unadventurous) players. Lessig argues this is a real challenge to a free society. He makes a distinction between commercial and other uses of creative goods, and argues that the latter are being unjustifiably strangled by the current system.

Lessig recounts his legal challenge in the US Supreme Court to Congress’s decision to increase copyright term, which was rejected by the Court. Lessig blames this result partly on a misjudgment on his part in not addressing the social costs flowing from the current system, but he also appears to be critical of the Supreme Court. Not that judges or even lawyers are viewed by Lessig as the principal wrongdoers; this role is reserved for the politicians who he argues are captive to established producer interests.

While many of Lessig’s arguments are powerful there are a number of questionable points in this book. First, he fails to explain why increased copyright term is necessarily one of the most serious problems. It seems reasonable to accept that if large numbers of people each hold copyright in differentiated but broadly substitutable products (such as crime novels by different authors), then one person’s ownership right would not necessarily create competition concerns. Term is likely to be more problematic in the case of patents, in relation to which there is usually much less substitutability, but this issue is not examined in as much depth.
A related question is why Lessig is so concerned about increased term when he accepts that the commercial life of many products is short relative to term. Further some of the problems he highlights in regard to specious legal claims—while deleterious—appear to be not so much the fault of the IP system, but rather caused by general features of the US legal system, which for example does not require unsuccessful litigants to pay the other side’s legal costs.
Another issue that is not fully explored is that of penalties. Under the theory of optimal deterrence, the law should respond to the increasing ease with which IP rights may be infringed these days by increasing penalties, thereby raising the expected cost of engaging in piracy. However, high sanctions may not always be necessary as greater scope for technological protection measures exist.

More seriously, Lessig fails to address adequately the fact that despite increasing levels of IP protection there is a proliferation of innovation at the present time, which may imply the current system is not stifling activity to the point he implies, or that ‘technological opportunity’ (i.e. the well of ideas that are capable of being exploited at reasonable cost) has expanded even more. Such issues are hard to resolve, but do deserve more discussion.

Lessig’s argument that the current system prevents people building on current valuable pieces of work to create better versions of the product is one of the best points in the book. The economic literature suggests that bargaining between parties often breaks down, so potentially efficient bargains will not be made. It is also true that the current system probably enables the same owners to own subsequent generations of the same product, which serves to concentrate some IP.

In the final chapter of Lessig’s book he puts forth a mixed bag of law reform proposals, some of which may be sensible but others of which appear less so. One such idea for example is to create a central repository of copyright so that doubts about ownership can be attenuated. It is hard to see how such a system would do that unless it also involved some testing of the right (as in patents)—the costs of which would be enormous.

Lessig’s book is the third that he has written questioning the increasing levels of IP protection. The broad messages are particularly pertinent in Australia—a country where IP is still viewed as an arcane field. What is particularly worrying in Australia is the fact that negotiators appear willing to sign us up to increasingly higher levels of protection, most recently in the US-Australia Free Trade Agreement, which limit our ability to set levels of IP protection in our national interest. The book’s approachable tone and its many entertaining anecdotes will hopefully heighten public attention in this important sector.

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