Review by Gary Sturgess

Seeing Like a State: How Certain Schemes to Improve the Human Condition Have Failed
by James C. Scott
Yale University Press, New Haven, 1998, 464pp, US$35.00.
ISBN 0-300-07016-0

 
As it fell with a crash they looked that way, and the next moment all of them were filled with wonder. For they saw, standing in just the spot the screen had hidden, a little old man, with a bald head and a wrinkled face, who seemed to be as much surprised as they were. The Tin Woodman, raising his axe, rushed toward the little man and cried out, 'Who are you?' 'I am Oz, the Great and Terrible,' said the little man in a trembling voice.
- L. Frank Baum, The Wizard of Oz

For some years now, politicians and public officials have talked about returning government to its core business. And yet with the exception of a 'Policy Letter on Inherently Government Functions' published by the Office of Management and Budget in the US Federal Register in 1992, not one has made a serious attempt at trying to understand the role of government in modern society.

Why is that? Why has there not been a deeply insightful analysis of the proper role of government for the past hundred years or more. The explanation, perhaps, is that the state now permeates our sense of self-identity so thoroughly, that the question is no longer meaningful.

The totalising influence of the state means that modern men and women find it almost impossible to penetrate the veil and see how the state works. It is only when Toto knocks the screen over or part of the stage lighting comes crashing to the ground that Dorothy or Truman thinks to peek behind the curtain.

In Seeing Like a State, James C. Scott takes us backstage, pointing out the wires and the pulleys which enable the state to transport itself effortlessly through the air. Like Michel Foucault, Scott is not so much interested in what government does in society but how it does it. Indeed, his primary interest is even narrower than this. As the title of his latest book suggests, Scott wants to understand how Leviathan experiences the world.

Of course, states can't see. People see – except that, when we are dealing with social organisations as complex as states, markets and even large-scale firms, people can't see either. As Scott puts it:

The functionary of any large organization 'sees' the human activity that is of interest to him largely through the simplified approximations of documents and statistics: tax proceeds, lists of taxpayers, land records, average incomes, unemployment numbers, mortality rates, trade and productivity figures, the total number of cases of cholera in a certain district.

These typifications are indispensable to statecraft. State simplifications such as maps, censuses, cadastral lists, and standard units of measurement represent techniques for grasping a large and complex reality; in order for officials to be able to comprehend aspects of the ensemble, that complex reality must be reduced to schematic categories. (76-7).

One of the most important ways, then, by which Leviathan comprehends the complexity of life is through statistics. As the derivation of the word suggests, statistics is the science of the state. Statistics emerged with the modern state in the second half of the eighteenth century - unsurprisingly, the first national bureau of statistics was established in Sweden, in 1749.

In some countries, statistics was initially looked upon as a liberal science which would help to throw government open to public scrutiny. On the other hand, early attempts to establish a national census in Britain were rejected by a parliament concerned at the growth of government.

Scott only deals with it in passing, but there is also some evidence to suggest that Leviathan finds it easier to recognise individuals than peoples. The state relates best to 'a uniform, homogeneous citizenship' (32). It might be argued that this is a refusal to recognise competing social institutions rather than a problem with perception, but this concept of the 'unmarked citizen' lies at the very heart of the modern state's relationship with its population.

As Hamilton explained in The Federalist Papers, this relationship is the fundamental difference between a federation (which is recognised as a state) and a confederation (which generally is not): 'We must extend the authority of the Union to the persons of the citizens - the only proper objects of government' (Federalist No. 20).

Rabbi Jonathan Sacks has recently pointed out what this meant for the Jews - they were allowed to become citizens of the newly-emerging nation states but they forced to surrender much of what gave them their collective identity.¹ Throughout late nineteenth century America, much the same was true of other distinct communities - native peoples, the Chinese and the Mormons.

Scott also argues that Leviathan is blind to cultural diversity and historical anomaly. In order to be transparent to the state, people had to be settled, named and counted. Such fundamental social conventions as law and time had to be standardised and nationalised. Over the late eighteenth and the nineteenth centuries, there were a number of writers who described this process, but Scott quotes Benjamin Constant:

The conquerors of our days, peoples or princes, want their empire to possess a unified surface over which the superb eye of power can wander without encountering any inequality which huts or limits its view. The same code of law, the same measures, the same rules, and if we could gradually get there, the same language; that is what is proclaimed as the perfection of the social organization. . . . The great slogan of the day is uniformity (30).

Scott clearly understands - and here he is getting close to the position of classical liberals such as Adam Smith and Friedrich Hayek (as Scott himself recognises) - that this need to reduce the level of complexity, carries with it the temptation to intervene radically in the natural and social environment: 'The utopian, immanent, and continually frustrated goal of the modern state is to reduce the chaotic, disorderly, constantly changing social reality beneath it to something more closely resembling the administrative grid of its observations' (82).

Liberals will be most at home with this critique of central planning, and yet read carefully, Scott's book poses a profound challenge for liberalism. While he deals with it only in passing, Scott also raises questions about how it is that markets see.

Like the state, markets demand a high level of standardisation. It was the merchant guilds (and not the state) that first standardised weights and measures in the commercial towns, and the chambers of commerce which pressed for national uniformity. It was the (largely private) railways that nationalised time.

Markets rely on cadastral surveys and standardised property rights as much, if not more than governments. And capitalism has been equally unforgiving of local or regional traditions which stand in the way of the free circulation of skills, commodities and capital. Industrial capitalism was dependent on the standardised consumers and standardised workers, at least as much as the state.

What Scott describes in his book is the emergence of large-scale social organisation, the upward shift of economic and political power from the local to the national. National markets were part of that phenomenon. And so was the state. A more honest title for his book - and a more insightful basis for analysis - might have been Seeing Like a Nation.

Moreover, many of the changes which he criticises have resulted in vastly improved economic and social efficiency and have done much to relieve human suffering. By placing so much emphasis on the efficiency gains associated with biological, cultural and institutional diversity, Scott has failed to recognise that there are also trade-offs. The existence of scarcity is not recognised.

While it is poorly written and badly organised, Seeing Like a State has a great deal of merit. In exploring 'the sensorium of a Leviathan', Scott is standing on the shoulders of Michel Foucault, but he has opened up an important issue to popular debate. I suspect that his illustration where he challenges the reader to imagine a lawgiver who tried to codify custom (35) will come to be frequently regarded as a classic.

Given my own professional background, I was impressed by his final chapter where he lays down some of the implications of his ideas for policymakers and institutional engineers: (i) Take small steps; (ii) Favour reversibility; (iii) Plan on surprises; (iv) Plan on human inventiveness.

1.  Jonathon Sacks, The Politics of Hope, London: Jonathon Cape, 1997, pp.99ff.

Asians in Australia: Patterns of Migration and Settlement
edited by James E. Coughlan and Deborah J. McNamara
Macmillan Education, Melbourne, 1997, 338pp, $32.95.
ISBN 0-7329-4562-3

Reading through this new volume on Asian migration, one can't help but wish that it had been published three years earlier and that all Australians had been forced to read it. Dispassionate and thorough in its analysis, it provides detailed studies of Asian migration and settlement in Australia. In a concluding essay, the editors note the woeful lack of accessible analysis of the realities of Asian migration to date. They suggest that this has been a factor in the resurgence of controversy and misinformation among the public over the last few years. Their book is aimed at filling that gap and it does so admirably.

Drawing upon detailed statistics from the Australian Bureau of Statistics, the Department of Immigration and Ethnic Affairs, and some disparate academic studies, the contributors interpret the demographics of the major Asian communities in Australia with a sharp eye to the main points of popular contention and misperception. In doing so, the great demographic differences between Asian communities and the sheer difficulty of generalising about Asian migration are highlighted. Similarly, the book reveals that changes to migrant selection criteria have a highly differential impact upon migrant flows from particular Asian countries in the short to medium-term.

Despite Pauline Hanson's claim in her maiden speech of Australia being 'swamped by Asians,' Asian-born people still constituted slightly under five percent of those resident in Australia at the last national census. On even a very broad definition of Asia, migrants from the 'region' have not accounted for even half of the total annual intake for quite a number of years. This is despite the fact that the countries in this region are some of the most populous, and most likely to have strong demand for emigration, of anywhere in the world. On that basis one could conclude that Asians are in fact under-represented in Australia's current migrant intake.

The various studies included by McNamara and Coughlan show that a higher proportion of migrants from both North-East Asia and South Asia are skilled than those from Europe or North America, although the overall figure for South-East Asian migrants at the present time is somewhat lower. The book shows that Asian migrants are of a similar median age to other groups, are better educated on the whole than both other migrant groups and the Australian population, and show a generally high propensity for inter-marriage. A high proportion of Asian migrants have taken up citizenship and a significant number identify themselves as Christians; facts evidently not known by some One Nation supporters. However, it also confirms that there is a minority of poorly educated Asian migrants, often from Indo-China, with limited English ability that are more likely to be unemployed and unmarried.

The Howard Government has been criticised by some migrant community organisations for its attempt to shift the balance of the migration program away from family reunion to a greater emphasis on skilled migrants. Several studies in this book highlight how growth in the family reunion category from a particular country tends to follow a number of years after growth in the skilled intake. Consequently, any discussion of the 'balance' in the intake needs a longer term perspective. Most importantly, while the proportion of Asian migrants in the family reunion category in the decade to 1996 had been growing, the actual numbers of such migrants were roughly constant. The decisions of both the Keating and Howard governments to substantially reduce the overall size of the migrant program led to this ostensible lack of balance.

Valuably, several contributors to Asians in Australia note the growing size of temporary resident Asian communities as Australia deepens its relationship with the region. The majority of Japanese in Australia, for instance, are but temporary residents. Curtis Andressen contributes an interesting chapter on Asian overseas students. Popular misunderstandings of the real size of Australia's Asian migrant intake may be due to Australia's successful development of the education services and tourism export sectors. The uninitiated might be mistaking clients for migrants.

A chapter on the politics of immigration by Jamie Mackie that provides a good overview of the ending of the White Australia Policy and the development of a basic consensus between the major parties on a non-discriminatory policy by the mid-1970s. Professor Mackie also discusses the controversies over Asian migration associated with Professor Geoffrey Blainey in 1984, then Opposition leader John Howard in 1988 and Pauline Hanson from 1996. While concurring with the view that 'political correctness' has diminished legitimate public discussion of immigration issues he is also scathing in his criticism of Hanson, saying that she had triggered a 'racist backlash.'

Stung by criticism that Prime Minister Howard should have been more forthright in his criticism of Pauline Hanson's statements on immigration, it has been increasingly argued by some Coalition supporters that community support for Hanson's views is due to the Hawke and Keating governments' 'politicisation' of immigration. Professor Mackie and the other contributors have little to say on party politics and the various Asian communities; an important issue that hopefully will soon attract academic attention.

The contributors to Asians in Australia could also have better addressed the fundamental issue of why a new political consensus has emerged between the major parties to maintain a historically small migrant intake. It is unfair to fault books for not doing what they don't set out to but we still do not have a definitive study of the politics of Australian immigration policy. As Professor Mackie does show, the history of Australian immigration policy has been characterised by periods of policy consensus between the major political parties, punctured by attitudinal shifts that have then led to a new policy equilibrium. The political drivers of debate and renewed consensus still need to be explicitly examined.

An overarching commitment to a non-discriminatory policy aside, there is too much of a consensus between the major parties on immigration policy today. Very few political figures have recently made the case for a higher migrant intake, for less onerous administrative requirements upon applicants, or examined the operations of the Department of Immigration and Ethnic Affairs. Media and academic commentators should raise questions about the direction of policy if the Opposition of the day is not interested or prepared to. Dramatic increases in visa fees in recent years, to the point where application for a spouse, fiance, or skilled migration visa now costs a minimum of $1500, should be queried and the efficiency of the Department's operations subjected to very close scrutiny.

Furthermore, a range of ostensibly minor changes that have been made by the Keating and Howard governments to the regulation of migration and residence add up to a substantial policy shift. The making of access to the Higher Education Contribution Scheme conditional upon Australian citizenship establishes a precedent for withdrawing a range of entitlements from permanent residence status. Until recently, the only things that people had to forgo by not taking out citizenship were the right to vote and the right to employment in the armed forces and in certain positions in the public service. Even then, long-established non-citizen British residents are a privileged enfranchised exception.

A further sharpening of the distinction between citizens and permanent residents has been made under the Howard Government in the administration of immigration itself. The right to sponsor a migrant – a spouse, fiancŽ or family member – has been restricted to Australian citizens. These changes have attracted little attention and there has been remarkably little interest shown by Australian policymakers and academics in how other countries deal with the rights and responsibilities of residence vis-a-vis citizenship. There is also little appreciation of how the rules of migrants' home countries in relation to dual citizenship have a substantial impact on their preparedness to become Australian citizens.

A focus upon the entitlements of residence and citizenship would also help to explain why immigration policy is always potentially contentious in Australia. A system of relatively high taxes and a wide range of social entitlements, requiring permanent residence status for their enjoyment, means that existing residents are more likely to fear the economic burden of new arrivals. The Howard Government's imposition of a two year waiting period upon new migrants for access to the full benefits of the social security system is a, perhaps cynical, recognition of this. At the same time those on the Left seem not to have made the connection between the rather generous entitlements system that they champion and community mistrust of immigration.

But these are broad matters of policy and politics. It remains to note that one striking thing lacking from this book is any discussion and evidence of whether Asians who have migrated here end up feeling glad that they have done so. It is a disconcerting thought that most Australians would probably assume that the answer would be a resounding yes. The actual answers need to be identified forthwith.

Review by Paul Martyn

Two Nations
by Robert Manne and others
Bookman Press, Melbourne, 1998, 194pp, $14.95.
ISBN 1-86395-177-6

The recent federal election results send mixed messages about the survival of Pauline Hanson and her One Nation Party as a political force in this country. On the one hand, the fledgling party has elected only one senator, and lost its leader. But on the other, One Nation polled 8.5% of the national vote, an excellent debut for a new entrant. In analysing the ability of the Hanson Party to survive as a political force in the future, we must examine what caused its rapid rise. If those factors are enduring, then presumably the party will survive; if not, then it will fade away.

Two Nations is a collection of articles on the causes and effects of the rise of One Nation. While the quality of the pieces varies, the book contains some extremely insightful commentary that provides interesting views on the One Nation phenomenon. This would assist in any assessment of the Party's future viability, as well as providing a useful historical guide.

In the early days of the Australian Democrats, Ian McAllister, one of Australia's most eminent political scientists, wrote an article investigating the rise of the Democrats asking 'Protest Vote or Portent of Realignment?'. One can broadly classify the views of the writers in Two Nations as falling into one of these two categories.

The protest vote analysis centres on voter cynicism and distrust feeding into One Nation. According to this thesis, most One Nation voters are not interested in what the party stands for, but simply see it as a vehicle for expressing dissatisfaction with politics as usual. This ranges from a reaction to Paul Keating's alleged detachment from the people (Ron Brunton) to the far differing occupational status of politicians to their constituents (Judith Brett).

If this is indeed the case, then the continued survival of One Nation as a political force depends very much on the behaviour of others in the institutions of mainstream government. Politicians must be seen to be more upright, honest and dedicated to service. However, even if politicians become paragons of virtue overnight, the attitude of the media will be crucial in restoring faith in the system, and minimising the need of voters to turn to radical alternatives.

After all, it is the media who have consistently fuelled voter cynicism. Recently in Queensland, Premier Beattie was painted by the local paper as leading some sort of privileged existence because he had a book collection worth $5,000. One would think that a political leader being an avid reader of books would be most reassuring, but the media chose (and I emphasise the choice in the matter) to paint it differently.

On the other view, One Nation represents a new alignment in our political system. This alignment is attributed to three cleavages in voter beliefs.

The first is that of winners and losers of economic change (Paul Kelly, Henry Reynolds) Those who have been left behind by globalisation, deregulation, and restructuring were looking for a new alternative to the liberal consensus offered by the major parties. Murray Goot's empirical analysis of One Nation voters paints a picture of people who have been the victims of economic change supporting the Hanson alternative.

However, our vulnerability to external forces is hardly new – these problems have been present in Australia for a century. It is our response that has changed. The best analysis I have seen of these responses is Frank Castles's Australian Public Policy and Economic Vulnerability. His analysis offers a guide to why things have suddenly changed on this issue, and a way to deal with the problem.

Castles argues that for a century Australia adopted policies of Domestic Protection – tariffs, white Australia, arbitration – to protect people from externally forced economic change. These policies were based on an historic compromise between economic actors. This compromise has been progressively abandoned since the 1970s but not replaced. Castles argues for a new compromise based on Domestic Compensation – an open economy in which policies are directed towards moving workers from declining industries to new industries, rather than propping up old inefficient sectors. We would roll with the punches.

This is similar to the approach of social democratic thinkers like Robert Reich in the US and Mark Latham in Australia. It entails government action in areas like training, education, and research and development to facilitate orderly restructuring in response to market signals. Thus if this is the case, the way to stop One Nation is to move public policy towards domestic compensation (as was occurring in the last years of the Keating government). Simply leaving the economy open and letting the victims sink or swim will perpetuate Hansonism.

The second cleavage is socio-cultural: a reaction towards the changes in our society associated with globalisation and multiculturalsim (Michael Wooldridge, Nicholas Rothwell, P.P. McGuiness). White Anglo Males revolt against the cultural elites and their policies. This cleavage is very much related to the first, and also to the decline of the historic compromise that Castles describes. Perhaps this is much more difficult to deal with. Such cultural matters are largely beyond the control of governments (unlike, I would argue, the economic changes), and, if this is the case, one would expect One
Nation to persist until the older generations pass on.

A third cleavage is views on Race and Multiculturalism (Phillip Adams). I would suggest that this is simply a manifestation of tensions along the economic and social fault lines discussed above. While racist views may be latent in some Australians, these views are better seen as scapegoating for other pressures. Nonetheless, if race is a genuine cleavage amongst Australian voters, and One Nation continues to play this card, then it could be expected that voter support will continue.

I would recommend Two Nations to those who are thinking seriously about Pauline Hanson. The book will date (though it was written post-Queensland state election) but the insights it offers make for interesting reading on what is one of the major political developments of the 1990s. How this force is stopped must merge into our thinking about the role of government and institutions as a whole.

Review by Richard Salmons

Measuring Progress: Is Life Getting Better?
edited by Richard Eckersley
CSIRO Publishing, Collingwood, 1998, 382pp, $34.95.
ISBN 0-643-06296-3

This book has attracted some positive reporting from the mainstream press, so it was unfortunate that most of that attention was focussed on the book's weakest chapter. The latter is a contribution by Dr Clive Hamilton of the Australia Institute in Canberra, proposing a 'Genuine Progress Indicator' that might be better than Gross Domestic Product as proxy measure of quality of life in Australia. As this is a book about the measurement of progress and living standards, and Hamilton's chapter has been taken as the centrepiece of the book, it is worth dealing with this chapter immediately.

Hamilton calculates 'GPI' by taking the consumption component of the national accounts and adding or subtracting elements in order to value the costs of 'defensive expenditures' – 'expenditures undertaken by consumers and governments É to offset some decline in social welfare' (75) – and negative externalities caused by economic activity. These range from the costs of unemployment to the costs of noise pollution, commuting and depletion of the ozone layer. The idea is that GPI grows as a function of consumption, like GDP, while being modified by those costs or externalities, ultimately providing a quantitative model explaining qualitative concerns about living standards.

However, several of the components of Hamilton's GPI have a disproportionate effect on the final index. Hamilton measures only 'non-defensive' government spending; expenditure on defence, public order and safety, and social security is defined as defensive and therefore excluded. Hamilton argues that 'increases in these expenditures are generally responses to a deterioration in national well-being – increasing insecurity or rising unemployment' (79). Hamilton also measures only half of health and education spending, both public and private, on the basis that these are defensive, or are investments in 'human capital' (74). In addition, net foreign debt and income inequality are both subtracted from GPI.

There must be grave doubts about this methodology. On the one hand, there what seems like double counting: high unemployment is already reflected by slow economic growth, yet Hamilton counts it again as an additional negative. On the other hand, Hamilton claims to be concerned about 'real' living standards, but counts foreign debt as a negative even if it contributes to short-term economic growth. A further serious concern is that social security, much of which is directed to aged and disabled pensions, is allowed to count as a negative. There is a predictable outcome from counting as negative so many expenditures that have grown quickly in recent decades: GPI either stops growing or retreats from the 1970s onwards.

Hamilton is straightforward in attributing this trend to 'unsustainable levels of foreign debt', growing costs of unemployment and increased environmental problems. In the final paragraph to his chapter, he identifies the culprit:

The 1970s saw some historic changes in the world economy and economic policies in the leading economies, including the floating of major currencies, the development of often unsustainable international capital markets, the emergence of stagflation and persistent high unemployment in OECD countries, the oil shocks, and a range of policies based on a belief in the virtue of 'small government'. These are summarised in the term 'globalisation', a process that may explain the divergence between continued GDP growth and perceived declines in living standards reflected in the GPI.

I would not be the first person to sound a note of scepticism about any measure of progress that finds the early 1970s to be the high point of 'genuine progress', and that scepticism is only compounded by Hamilton's logical leap to identify 'globalisation' as the cause of the supposed lack of subsequent progress.

Fortunately, Hamilton's is just one chapter in this book; the contributions of 24 other authors, sourced from a CSIRO conference in July last year, make the volume as a whole quite defensible and in parts quite useful. Richard Eckersley himself provides a balanced overview of the literature regarding perceptions of quality of life and the debate over whether economic growth is compatible with concern about the natural environment. Other chapters include very useful papers on the critique of GDP, the Australian Bureau of Statistics' search for indicators of national progress, measurement of well-being and quality of life, surveys of subjective well-being, and measurement of poverty and income inequality. To be sure, other contributors make predictable statements of the obvious, for example that 'despite Margaret Thatcher's famous dictum to the contrary, there are such things as community and society' (41). But these should not overshadow the majority of the text, which is solid social science research.

Indeed, there is as much to rebut the GPI as to support it in the book itself. Ted Halstead, who runs a US think-tank called Redefining Progress, also sets out a wide range of arguments about why the public may be unhappy even when the economy is growing strongly. Importantly, he takes time to set aside GPI as an interesting concept for testing the limits of cost accounting, while remaining inadequate as a public policy tool. As he points out, it is impossible to reach agreed economic valuations for many of the components of GPI, the economic valuation of qualitative factors is ethically doubtful, and much of the qualitative data tends to be out of date. A section of the book devoted to responses to the papers presented also sets out some of the concerns of practicing policymakers. Meredith Edwards, a former deputy secretary of the Department of Prime Minister and Cabinet, notes that 'As a policy person, I have to say I would not find it (GPI) particularly useful' (332). She is supported by other bureaucratic respondents. As a result, despite the publicity given to the GPI idea, the contributors to this book do reach the consensus that it is impossible to measure happiness on a single index.

Many readers of Policy, I suspect, will agree that GDP has been such a popular measure of progress for the excellent reason that it can in fact be measured. They will also likely agree that it is impossible to determine where expenditure ceases to be 'productive' and becomes 'defensive', and indeed that it may be undesirable for government to try to define well-being.

Having said that, Measuring Progress is useful for its considered critique of GDP. Eckersley focuses in particular upon environmental issues, and he sets out an interesting case regarding the link between economic growth and the state of the environment. He considers the argument that growth is good for the environment, and cites evidence for an 'inverted-U' relationship, in which 'environmental degradation increases with income up to a point, after which environmental quality improves with increasing income'(16). Eckersley goes on to say that this evidence should be examined cautiously, especially in terms of stocks of resources such as soils and forests. This sort of critique is valuable because it presents an overview of the literature and would help inform a defence of economic growth as a goal of public policy.

An important issue arising from books such as Eckersley's, and Fred Argy's recent Australia at the Crossroads: Radical free market or a progressive liberalism? (Allen & Unwin, 1998), is the need for a strong new statement of the case for economic growth as a major objective of public policy. Concerns such as Eckersley's fears for the environment need to be borne in mind, and his book will help us do so. But policymakers would be deeply mistaken to accept the view of Mike Salvaris that 'economic growth continues as a universal panacea – even though it seems increasingly illogical or counter-intuitive'(41).

Of course growth is not a panacea; there is no reason why it needs to be. To paraphrase Isaiah Berlin, growth is growth, not happiness or democracy or a happy sense of community, even though each of those are good things as well. But economic growth has created the most fundamental transformation in the way we live. As Peter Travers and Sue Richardson point out in an excellent book on similar themes, Living Decently: Material Well-Being in Australia (Melbourne: OUP, 1993), fifty years ago most people entered the workforce at 13 or 14, there was little leisure, holidays or sick leave were rare. 'Today we have a new leisured class: instead of comprising the rich aristocracy whom most people could only envy, it now comprises the retired'(Travers & Richardson, 67).

Travers and Richardson go on to enumerate the tangible effects of economic growth, ranging from life expectancy to home ownership, education, health care and quality of the housing stock. They doubt that Australia is becoming more unequal, but even disregarding that, there is little argument about the effect of economic growth on the absolute standard of living of the worst off. As a result, while concerns about the negative effects of growth – especially on the environment – should not be ignored, there should still be a powerful assumption in favour of economic growth as a central objective of public policy.

Review by Hugh Morley
Competitive Enterprise Institute, Washington DC

In Praise of Commercial Culture
by Tyler Cowen
Harvard University Press, Cambridge, Mass., 1998, 288pp, US$27.95.
ISBN 0-674-44591-0

Jeff Koons, eminent American conceptual artist with a controversial reluctance to actually make things, did not earn his millions hawking his ready-made vacuum cleaners in uptown New York, but trading bonds in downtown Wall Street. Koons's unrepentant embrace of capitalism clashes with the well-founded perception that artists and intellectuals have little enthusiasm for market institutions.

A new book by American economist Tyler Cowen reveals that Koons in fact bears the mantle of a long and venerable tradition where the distinction between 'artisan' and 'artist' has little meaning. Cowen's In Praise of Commercial Culture argues convincingly that Mozart, Michelangelo, Shakespeare, Haydn, Bach, Beethoven were entrepreneurs. Mozart declared that money is the next best thing to health, Bach once complained in a letter that the decline in Leipzig's death rate had cut off his cash flow from playing at funerals.

Most broadly, Cowen's book seeks to determine whether free markets help or hinder producers and consumers of culture, whether they foster a vibrant cultural landscape, or suffocate and homogenise creative expression. Cowen breaks the discussion into three principal areas – literature, beaux arts and music. In each corresponding chapter he makes a study of the general economic effects of the selected medium (e.g. the low cost of poetry allows the artist to cater to niche markets, the high cost of film forces the director to be more utilitarian), relates the impact of technological change on artistic production (e.g. sheet music, the printing press), and charts the changing controls of the artistic means of production (historically, a wrestling match between state and market).

Cowen's research is thorough (50 pages of endnotes follow the text) and digestible. The book is replete with memorable trivia nuggets (e.g. William Faulkner worked in a power plant), and pleasant two page excursions to explain why contemporary compositions are so marginal, or to reject the thesis that the culture market is 'winner take all'. Such vignettes do not displace robust analysis and thick historical documentation. Cowen's unmasking of the economic undercurrents of the Renaissance is possibly the most powerful section of the book. Here, he narrates the incredible transformation of institution and tradition, the process which delivered the artist from the tutelage of the state to the freedom of the marketplace. This is exemplified by the difference between those who remained trapped in the patronage system, forced to pander to their overlords (as Vasari did to the Medici family in his Lives of the Artists), and those for whom the growth of independent wealth tamed a once invasive state into just another customer.

The book is also philosophically agile – consider his response to the defence of government funding for the arts. The National Endowment for the Arts, its proponents argue, costs every American no more than 70 cents a year, and it is critical to the health of American artistic expression. Cowen gibes: how can it be both? But Culture's most distinguishing feature is its ambitious breadth – covering 400 years of art history, drawing from analysis well outside the scope of economics, and probing the depths from within. And he almost pulls it off.

In The Third Man, Orson Wells's character, Harry Lime, snarls

'In Italy for 30 years under the Borgias they had warfare, terror, murder, and bloodshed, but they produced Michelangelo, Leonardo da Vinci, and the Renaissance. In Switzerland they had brotherly love – they had 500 years of democracy and peace, and what did that produce? The cuckoo clock.'

Culture does not solve Harry's riddle, but it does show us that overstates his case. It was not the ferment of revolution and war which fueled the Renaissance, but the economic environment, and hard nosed dealings of the free Italian artists. Indeed, as Cowen tells us, the institutional changes so liberated Michelangelo from the controls of the church and the state, that the Pope was forced to beg the artist to return to Rome to complete the Sistine Chapel.

A few things might rub the fur of some readers of Culture the wrong way. Cowen's uncritical acceptance of rock'n'roll hagiography, and persistent references to the Beatles as a universal yardstick of pop music can be grating (personal disclosure: I loathe the Beatles). Another is style. C.P. Snow has identified that curious phenomenon of a scientist talking culture –remarking on the unselfconscious and untutored use of terms like 'subjective' or 'modern.' Though not as egregious, Cowen uses 'deconstruct' when he really means refute, and snooty academics might find his prose too journalistic for his subject.

Cowen is also overly promiscuous with analogies to totalitarianism as a means of tarring all state involvement in cultural production. There is little doubt that Communist-Fascist states strangled free expression (Stalin banned jazz, Mao banned everything but his wife's operas). The more interesting counterpoint to a market driven culture is contemporary France and its 12,000 cultural bureaucrats. Cowen does deal briefly with the French Ministry of Culture, noting that it bureaucratises cultural production. But bureaucratisation is vastly different from outright banning, and it is misleading to collapse this distinction for rhetorical effect. Finally, though ostensibly defending commercial culture, and explicitly rejecting the distinction between high and low art, Cowen is loath to revel in The National Enquirer, Michael Bolton and Sister Act 2. His tepid defence of the nether regions of today's cultural spectrum is more apology than apologia, and this seems quite inappropriate.

Culture dodges some hard questions. This is evident in the surplus of attention Cowen grants to right wing criticism of commercial culture. The value of addressing culturally conservative critics seems perfectly otiose to this reviewer, and would probably strike non-US readers in a similar way. To wit, Dean Wormer in Animal House does not require serious intellectual rebuke. What should be no more than a footnote, winds up crowding out the more interesting challenge to commercial culture – the left. The leftist critique of market culture is more philosophically sophisticated than the conservative response, which is typically anti-obscenity and does not pretend to disguise the mechanism or aim of its project: censorship.

It also matters more. With few exceptions, universities teach art and history in the mode of what American philosopher Richard Rorty calls 'victim studies'. This radical egalitarian position will ignore, underplay or excoriate the role of markets in the emergence of art forms. This purchase on commercial culture has leached into popular wisdom far more deeply than the bogus fear that 'gangsta rap' and Lolita will corrupt children. Cowen does give us a clue why the slant exists when he concedes his own exhaustion with persuading the left – 'some people just don't want to hear that free markets are the best environment for art, all things considered É'

Culture is a tour de force in Richard Posner's sense of the term, in that it is ingenious and unpersuasive. In this respect it most closely resembles one of its many inspirations – the interminable debate, or lament really, among Hayekians over the intellectual's hostility to capitalism. Cowen's book is the first truly substantive rejoinder to F.A. Hayek's initial musings, but like those musings, it is ultimately unsatisfying. While a brilliant idea and an empirical powerhouse, the text is dislocated theoretically. Cowen tries to please everyone and that leads him to nervously shift weight around the various fronts of his theses. He balances the placating of conservatives while addressing concerns of New Feminism. He blends arcane rock references (so as not to come across too stuffily) with refined analysis (so as not to be dismissed by academics), he denies that his is a 'reductive' (because economic) history of art, when it really is, and that is a good thing. After all this fidgeting, reader is left simultaneously impressed and unsure.

Elvis Costello once remarked that writing about rock music is like screwing about architecture. Ludwig Wittgenstein lends this quip philosophical legitimacy with his paradox that it is easy to distinguish, but impossible to describe the difference between the sounds of the flute and the clarinet. Cowen's achievement is that he has anchored our reflections on art into the prehensile territory of economic thought, and this does much to bridge what Elvis and Ludwig might have otherwise persuaded us to be incommensurable activities.

Review by Michael Warby

Australian Poverty: Then and Now
edited by Ruth Fincher and John Niewenhuisen
Melbourne University Press, Melbourne, 1998, 376pp, $24.95.
ISBN 0-522-84829-X

Australians should certainly be concerned above poverty. We are a rich country. If people cannot afford the necessities of life – as Australians understand them – then they are poor. Beyond the irreducible minimum produced by human folly, there should not be any poverty in this country.

Income inequality is a different matter. If the rich are getting richer faster than anyone else, that might be cause for concern, but is clearly a less important issue. There is far more of a consensus about eliminating genuine poverty than there is about lessening inequality.

It is therefore relatively easy to get people concerned about poverty. It is rather harder to get them as concerned about inequality. So, if you are worried about inequality, it is clearly a great temptation to label inequality 'poverty'. Which leads to the modern ignoble tradition of claiming poverty is primarily a relative concept and measuring poverty in ways which do not measure poverty – the inability to afford the necessities of life – at all, but instead measure inequality.

The strategic value of this is obvious. In a market society, inequality of income is always with us. So, if you define poverty as a relative concept, then poverty is also always with us. So the poverty industry has a secure future. The welfare system can never succeed – there will always be irreducible poverty, haunting the social conscience and justifying an ever-bigger welfare budget.

Or, rather, appearing to justify it since, if inequality is inevitable, then no welfare system can eliminate inequality, so it can never eliminate poverty defined in such terms. Its labour is that of Sisyphus – so why should we play that game?

Between 1974-75 and 1995-96, GDP per person grew almost 90%, taxes more than doubled, government transfers went up more than 160% Average household income net of taxes grew by almost 50%, after transfers they grew by almost two-thirds. Income grew significantly: that proportion of national income (re)directed via government grew far more significantly. Yet the authors of this volume tell us poverty in Australia increased by about 50% in that time – from about 20% of Australians to about 30% (p. 4).

That suggests there is something seriously wrong with the measures of poverty being used, or the welfare system, or the fundamental operation of the economy or some mixture of the above.

There have been a couple of things wrong with the economy. Unemployment grew – from 4% to 8.5% of the labour force. Even worse, the average duration of unemployment grew from 6½ weeks to 52 weeks – so those locked out of employment are locked out for far longer. Unemployment is cited as a reason why poverty has grown, despite increased welfare expenditures (see in particular the contribution by Bob Gregory and Peter Sheehan).

Another thing wrong with the economy is a massive drop in saving – net national saving per head fell 37% while household saving fell 56%. People who do not save are far less insulated against life's shocks. The collapse in saving is cited as a reason why the present situation is not sustainable (32).

But why has saving fallen? Lower income growth – making it harder to save – is one reason; higher taxes – making it less rewarding to save – another; a stronger safety net – making it less necessary to save – is a third. The expansion of government transfers (in income and in health, education and welfare services) from 12% to 21% of GDP is implicated in all three effects. It is also partly implicated in the increase in unemployment, by reducing the incentive to seek work – though the operation of the arbitration system as a gatekeeper preserving the interests of organised 'insiders' against outsiders is far more implicated.

So we are back to what the alleged measures of poverty are really measuring and what do we mean by 'poverty'. I have many young friends on Austudy or unemployment benefits. They have low incomes – I can more than double the household income by walking in the door. Yet, they cannot, in any meaningful sense, be called 'poor'. They do not run short of the necessities of life. On the contrary, they have lives full of entertainment and activity. If you are young, in good health, have no family responsibilities and have somewhere to live, the concept of 'poverty' has no relevance in contemporary Australia. (It means even less if one is studying for a university degree which will greatly enhance one's future earnings prospects.)

This problem of what are we measuring goes right back to the late Professor Henderson himself. He originally (in 1966) set a poverty line as basic wage plus the child endowment payable for two children – which was certainly a community-based standard, but not self-evidently a measure of poverty, of the lack of ability to afford the necessities of life. The Royal Commission into Poverty (the so-called Henderson Inquiry) set the 1973 line at the same value as the 1966 line relative to average earnings. But that shows precisely the problem. 1966 to 1973 were boom years – GDP per head and average household income net of taxes both rose by more than 40% and household saving per head more than doubled. If income inequality increased, the measure would show increased poverty – but this is a nonsense. Even the actual finding of very similar rates of poverty is severely questionable, particularly given unemployment was still very low.

If the 'poverty industry' was seriously about poverty, there would be a basket of the necessities of life, open to public scrutiny, whose prices would be tracked. The basket would be adjusted for various family situations. We would be able to see what was happening regarding poverty in Australia, as distinct from inequality.

But this is precisely what is not done. Indeed, it is not even seriously discussed in this book. Instead, we have inequality measures passing themselves off as poverty measures. It is not a happy situation when 'poverty' is one of the most dishonest words in the Australian political lexicon – after 'genocide' and 'racism'. Poverty is not primarily a relative concept, it is primarily an absolute concept – that is what gives it its emotive power. It is about genuine deprivation.

One area of genuine deprivation in Australia is amongst indigenous Australians. But even here things are ambivalent. Many of the illnesses of indigenous Australians that contribute to their remarkably poor health profiles – including life expectancies 15 to 20 years below the national average – are diseases of modernity, such as obesity and diabetes. One can talk of cultures of poverty, of replication of modes of behaviour down the generations that frustrate getting the full benefits from the surrounding society. Families can have such cultures, even in the midst of plenty. The problems are not simply ones of income, of more money. They are much more complex and insidious than that. Indeed, reducing the pain of folly can encourage its persistence.

One of the themes in this book is a critique of 'economic rationalism'. It continues the habit in Australian public life of economic reformers and their critics talking past each other. Reading the critics of reform talk about economic reforms, the reformers and their animating ideas one enters a surreal world, where familiar ideas are twisted strangely out of shape into two-dimensional caricatures of themselves.

Thus public choice theory is characterised as saying public servants will divert funds primarily to their own comforts (28) – a grotesque simplification of critiques of information loss and perverse incentives. Outsourcing is seen as 'double administration' (29) with no reference to benefits from competitive pressures. The contributors sometimes mention the growth in transfers, but the reality of it never seems to properly inform their commentary: the poverty industry must cry poor even when it has been by far the biggest growth industry in share of GDP since 1970. OECD data released at the same time as this volume showing poverty in Australia decreasing by 21% between 1975 and 1995 (from 12% to 9á5% of Australians) is far more plausible than the claims of this volume.

There are some interesting discussions in this book – the 'voices of poverty' contribution by Janet Taylor and Michael Challen is a useful corrective to complacency, for example. But the failure to properly deal with the question of what are the necessities of life in Australia in the 1990s and what income (depending on family circumstances) is required to afford them is the central failing of this book and of the poverty industry in Australia.

By Charles Richardson

A Plague on Both Your Houses: Minor Parties in Australia
by Dean Jaensch and David Mathieson
Allen & Unwin, Sydney, 1998, 248pp, $29.95.
ISBN 1-86448-421-7

Allen & Unwin has tried to capitalise on the One Nation surge by highlighting it in the cover blurb of this book. Unfortunately, that is the only place that it or Pauline Hanson is mentioned; there is not a single reference in the text, a remarkable omission for a book published in August 1998.

The failure to anticipate One Nation is far from this book's only problem. The history of minor parties in Australia is an interesting and important topic, but Jaensch and Mathieson do their best to make it incomprehensible. The heart of their book is an enumeration of all minor parties recorded in Australia since 1910, but this potentially useful material is spoiled by the patchy and inconsistent way it is presented.

For each party, there is a list of elections contested and votes received, but there is often nothing else about its existence, history or structure. Although seats won are noted, sitting members acquired through defections from major parties are not. Each party is given a four-letter abbreviation which plays no further role other than to confuse the reader (e.g. Defence of Government Schools, know universally as 'DOGS', is here abbreviated to 'DEFS'). The classification of parties is unnecessarily complex, and sometimes displays gross ignorance (the Henry George League is not a social credit organisation; 'family, morality' is hardly an adequate description of the LaRouchites).

Some of the accompanying commentary is sensible, if unexciting. There is some interesting statistical material, but much space is wasted in references to the ACT, whose forest of minor parties have no more significance than groups in local government elections. The number of errors and misprints does not fill the reader with confidence as to the accuracy of the more recondite information. All in all, not one of Dean Jeansch's better efforts.

War on the Wharves: A Cartoon History
edited by Christopher Sheil
Pluto Press, Sydney, 1998, 158pp, $19.95.
ISBN 1-86403-050-X

John Howard called last Easter's waterfront dispute 'a defining moment in Australia's industrial relations history,' and so perhaps it was. For weeks the country was spellbound at the spectacle of a government apparently caught out in a conspiracy to subvert its own industrial relations legislation. This book provides a pictorial record of the dispute, seen through the eyes of the cartoonists of Australia's major daily papers.

Whatever one's view of the underlying politics (and one did not have to be a union partisan to be deeply concerned at the government apparently fomenting and taking sides in an industrial dispute), it is hard to deny that there was plenty of material for humorists on the waterfront. Australia has some very fine cartoonists, and, although the standard is not uniformly high, they have done their job well. The book is well presented, and the notes and reference material are unusually comprehensive.

Given the sponsorship of the union-backed Evatt foundation, it is not surprising that the perspective offered in this book is rather one-sided.  Its old-fashioned unionism tends to come across as quaint rather than menacing, not unlike Stuart Macintyre's presentation of early communists as 'lovable rogues and scallywags' (in David Lovell's words - see page 54 above). To complete the circle, the book even comes with an endoresment from Macintyre on the cover.

Nonetheless, many of the cartoons show the dispute as an affair from which neither side can take much credit. And Alan Moir wonderfully captures the end result when union chief Coombs, having taken responsibility for trading Patricks out of insolvency, tells his colleagues 'If we want this to be a going concern, we're going to have to do something about these ridiculous work practices.'

A good read and more than a few good laughs.

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