The Asia & Pacific Policy Society has recently launched a new online magazine for exploring big policy challenges and ideas in Australia and around our region. In what I hope will be the first of many pieces for the site, I've explored international approaches to regulating the sharing economy, and the lessons we might learn here in Australia.
Sharing the benefits of the sharing economy, Policy Forum, 29 January
With nothing but a smartphone, I can order up an Uber car to whisk me to my next meeting or find a bargain bed for the night through AirBNB. If I lived in one of the major US cities, I could also tap on an app to hire a pair of skis for the weekend through Spinlister, find someone to assemble my flatpack furniture on TaskRabbit, leave my dog with a pet-lover for the weekend via DogVacay, or even get roaming WiFi from Fon.
Often gathered under the banner of the ‘sharing economy’, ‘collaborative consumption’ or the ‘peer to peer market’, these services are all about linking people who have surplus goods to those who can make use of them. They provide a means for us to make more efficient use of the world’s existing stock of bedrooms, cars, tools and other goods, and help cut down on the need to continually produce more.
Recently, I had the pleasure of being invited to open Harry Hartog bookstore in Woden. Here's my launch speech:
Opening of Harry Hartog Bookstore
Woden, Canberra, 24 October 2014
It is a delight to be at a book store opening in the era of book store closings.
I acknowledge that we are meeting on the traditional lands of the Ngunnawal people and pay my respects to their elders, past and present.
I’d like to thank Robert and David Berkelouw for inviting me, and James and Michelle for their hospitality – and for generously placing a few copies of my books at the front, so you can’t possibly get out of the store without tripping over them.
As Groucho Marx observed: outside of a dog, a book is man’s best friend – and inside a dog it’s too dark to read anyway.
In the latest edition of The Spectator, I've reviewed Gordon Peake's Beloved Land: Stories, Struggles and Secrets from Timor-Leste. The book which paints a very different picture of the country than the one most Australians are familiar with; read on to find out how:
Guilt trip, The Spectator, 9 August 2014
If you had to pick one emotion to characterise Australia’s attitude towards East Timor, it would be guilt.
We are right to feel guilty about 1942, when Australian troops retreated from Timor, leaving many of the East Timorese who fought alongside us to be killed by the Japanese. We should feel guilty about 1975, when we failed to speak up about the invasion of East Timor. We ought to feel guilty about 1978, when we extended de jure recognition of Indonesian sovereignty over East Timor. And we should feel guilty too about 1999, because we could have done better in the process that led to the referendum and the many thousands who lost their lives.
And yet, most of the time, Australians don’t think about East Timor at all. Between cricket and celebrity cooking, Barack Obama’s latest speech and Lady Gaga’s latest outfit, there isn’t much space in the Australian news cycle for a nation of 1.2 million people sitting 700 kilometres off the coast of Darwin.
Inside Story is currently featuring an extract from my new book 'The Economics of Just About Everything', which looks at the unexpected benefits of Australia's gun buyback scheme. Read on...
THE UPSIDES OF THE BUYBACK
On the chilly Melbourne evening of Sunday 9 August 1987, nineteen-year-old former army cadet Julian Knight drank several beers at the Royal Hotel in Clifton Hill then packed a bag with an M14 semi-automatic, a Ruger 10/22 semi-automatic, and a Mossberg pump action 12-gauge shotgun. As he later told the police, “I wanted to see what it was like to kill someone.”
Most bullets are less than a centimetre wide, but when they enter a person’s body they make a far larger hole. One reason for this is that, once inside your body, a bullet begins to “yaw,” or tumble. Because bullets are a few centimetres long, the tumbling effect is far more destructive than if the bullet had continued to travel in a straight line.
In addition, a cushion of air known as a “pressure wave” precedes the bullet, temporarily creating a cavity inside the body that can be much wider than the trajectory of the tumbling bullet. The combined impact of a tumbling projectile and a pressure wave means that the entry wound can be as small as a fingernail, while the exit wound can be as large as a tennis ball.
The Australian Financial Review was good enough to publish an extract from my new book 'The Economics of Just About Everything', which you can read here.
If you like what you see, why not support your local independent bookstore by buying a copy?
AN ECONOMIST'S GUIDE TO ONLINE DATING
What’s a desperate and dateless economist to do? The economics of dating comes down to three simple rules:
1. There is no perfect match, but some matches are definitely better than others.
2. You won’t know how well suited you are to someone until you get to know them.
3. Time is scarce, so a decision based on limited information is probably better than no decision at all.
The challenge of dating is that you don’t have enough information and you don’t have enough time to get it. To give you an idea of just how severe the problem is, let’s imagine that you’re aged 18 to 25, and you’re trying to find the person you’re best suited to in that age range.
To begin, there are about 1.5 million men and 1.5 million women to choose from in Australia. If you picked a sex, and spent only three minutes with each of those people, then it would take 25 years of speed dating to find the person you liked the most. Things are harder still if you want more than three minutes to assess each person, if you’re bisexual, if you want someone older or if you think true love resides overseas.
Fortunately, economic theories are rarely deterred by problems involving large numbers. Better yet, economists are familiar with precisely this kind of problem. It’s called an “optimal-stopping problem”.
My latest opinion piece in The Australian looks at how increased diversity in our community can enrich Australians socially, culturally and economically. Here's the details:
Urgent case for a diverse nation, The Australian, 24 July 2014
PROGRESSIVES are often most comfortable making a political or moral case for diversity: that it is a necessary corollary of liberalism in a multi-ethnic society or, more optimistically, a social good in itself.
This is no longer enough. Our ideas must expand beyond platitudes about multiculturalism giving us good places to eat. We need to recognise the real economic and social benefits that flow from diversity and acknowledge the challenges so we can find ways to maintain cohesive societies in the face of these.
To see the positive impact of diversity, go to Silicon Valley. Half of all start-up teams include a first-generation migrant, from Russian-born Sergey Brin at Google to Hungarian-born Andy Grove at Intel.
Today, the Australian Financial Review published my opinion piece on economic growth.
Since the industrial revolution, modern economies have been in a perpetual state of transition. Indeed, economist Paul Collier once likened economic growth to ‘running across ice floes’.
But sometimes the transitions are particularly fragile. Right now, risks to global growth include potential disruption to European gas supplies, fragility in the Chinese shadow banking sector, and the possibility that structural reform in Japan will falter. Domestically, there is significant uncertainty about how much mining capital expenditure will drop.
So what should a responsible government do in uncertain times? Earlier this month, the OECD’s Economic Outlook recommended that ‘heavy front loading of fiscal consolidation should be avoided’.Read more
My Chronicle column this month offers a bit of advice to those finishing high school this year.Read more
Crowning glory would be our own head of state, Canberra Times, 26 March 2014
Walter Scott once wrote: ‘Breathes there a man with soul so dead / Who never to himself hath said / This is my own, my native land.’
Alas, these fine words have never been uttered by any Australian head of state about Australia. Under our Constitution, they never could be uttered.
That is because - while no British citizen can ever be Australia’s head of government - only a British citizen can ever be Australia’s head of state.
In 1999, Australia held a referendum. It was a three-cornered contest between bipartisan parliamentary appointment Republicans, direct election Republicans and Monarchists.
As Malcolm Turnbull has pointed out, the monarchists ‘delightedly, if cynically, exploited the division by promising the direct electionists that if the parliamentary model was defeated at a referendum they could have another referendum on a direct election model within a few years’.
We have waited half a generation since then.
Some counsel patience. They argue that the push for an Australian as head of state should wait until King Charles III ascends the throne.
This fundamentally misunderstands the argument for an Australian Republic. Republicans’ quibble is not with Queen Elizabeth II, Prince Charles and their heirs and successors. Each of these individuals has done their jobs diligently.
Indeed, a belief in the Republic does not lessen our respect for them as individuals. In 2012, when Prince Charles and the Duchess of Cornwall visited Canberra, I was pleased to welcome them on the tarmac of Canberra airport (wearing my Australian Republican Movement cufflinks). Respect and politeness for the royal family sits alongside my passionate belief that Australia should have one of our own as head of state.
Last year, Prince William and Kate Middleton welcomed their baby George into the world, and today, at least 800 babies will be born in Australia. I congratulate William, Kate and all their parents. To be a parent is one of the greatest blessings we can receive.
But I cannot for the life of me see why Baby George is better suited than every Australian baby to grow up to be an Australian head of state. The 800 children born in Australia will grow up around gumtrees and sandy beaches. They will call their friends ‘mate’ and barrack for the Baggy Greens, the Wallabies and the Socceroos. Their success in life will not be decided by their surname. If they say they live in a castle, it’ll be because they’re quoting Darryl Kerrigan.
In short, those 800 babies born today will be Australians. And every one of them should be able to aspire to be our head of state.
Those who disagree with this view sometimes claim that the Governor-General is the head of state. At best, a contentious, strained protestation. All members of the Australian Parliament swore or affirmed our allegiance to the Queen, not to the Governor-General.
At state dinners visiting Heads of State toast the Queen of Australia. Her image is on our currency. Australian Government websites say: ‘Australia’s head of state is Queen Elizabeth II.’
The slogan ‘Don’t know? Vote no’ has never been more powerful in Australian public life. Tony Abbott used it when he was campaigning for the monarchy in 1999, and has deployed it relentlessly in recent years, including against a market-based solution to climate change, fibre to the home broadband, and fiscal stimulus to save jobs.
It is a seductively simple line, but one that is more dangerous than ever as Australia grapples with complex challenges.
In the Asian Century, how do we think it looks to our Indonesian, Chinese, Korean and Japanese friends that we cannot shrug off the anachronism of having a member of the house of Windsor as our head of state? How does it sit with our claimed belief in the ‘fair go’ when the qualification to be our head of state is that one must be British, white and preferably male? Is this really the image we want to project?
In parliament this week, I moved a motion calling on the government to hold a referendum to make Australia a Republic.
In so doing, Australia would make it clear to ourselves and the world that instead of a foreign child in a foreign land, we trust an Australian child to grow up and be an Australian head of state. Such a child will be more appropriate for us, more representative of us and more worthy of us – a child who knows their own, native land in their living, Australian soul.
Andrew Leigh is the federal member for Fraser, and his website is www.andrewleigh.com.
The Daily Telegraph today publishes an extract from my population speech at the Lowy Institute.
Don't be scared, let's populate and prosper, Daily Telegraph, 20 March 2014
If there’s one thing that’s really big in the population size debate, it’s the size of the scare campaigns made by both sides. One side tells us that a big Australia is a ‘catastrophe’, while the other says that slow population growth will hurt share prices and drive up debt.
Australians comprise just one in 300 of the world’s population. We have the third-lowest population density of any country. Only Mongolia and Namibia have fewer people per hectare than Australia. Yet we also have one of the highest urbanisation rates. Nearly nine in ten Australians live in urban areas.
An unusual feature of the Australia’s population debate is how much it is sparked by population projections. This is especially odd given the record of past projections. In 1888, the Daily Telegraph predicted that the population in 1988 would be 60 million. The Australian Treasury recently updated its population forecast for the 2040s from 26 million to 35 million.
And while you might think that the government has two population levers: one marked ‘more babies’ and one marked ‘more migrants’, only one of them really works. Government can control migration, but its policies have little impact on whether or not people have babies. So the population debate is really a migration debate.
In the debate over a larger Australia, there are dud arguments on both sides.
Advocates of more migration argue that size will reduce the per-person cost of government, and give us much additional heft on the global stage. I don’t think there’s much evidence for either of these.
But it does seem likely it will get us better cultural goods, such as international sporting events and great entertainers. If you want to host a World Cup or attract the world’s best musicians, size helps.
Perhaps the best argument for a larger population is that it means more entrepreneurs. One channel for this is simply scale: if extraordinary people like Albert Einstein and Steve Jobs are one in a million, then it follows that they are also an argument for another million people. Innovators may also be over-represented among migrants. Some evidence suggests that bilingualism raises intelligence, and a global outlook is good for business (half of Australia’s exporters are foreign-born).
How about the claimed costs of migration?
It is often said that a larger population will mean more traffic congestion. Over the past decade, Sydney’s population has grown by 12 percent, while commuting times have grown by 4 percent. And yet while gridlock is one of the most serious problems faced by Sydneysiders today, the best way to address it is through good city planning and economically sensible policies, not population control. Even if we stopped all population growth tomorrow, cars would still become cheaper to buy and use. We should tackle congestion efficiently and directly, not via population policies that could harm Australia in other ways.
A similar argument applies to house prices, where the best approach is to focus directly on housing affordability, by removing unnecessary supply constraints, and ensuring that housing policies are as effective as possible. Even if we adopted a zero population growth strategy, rising incomes and higher marriage ages would still drive up the demand for housing, creating a good argument for getting housing policies right. Likewise for the natural environment, where market-based policies can do far more than population control to address the challenges of water supply and climate change.
Population growth has the potential to get us things we cannot obtain in other ways: better cultural goods and a more productive, more entrepreneurial culture. A larger nation has more mouths, but also more minds. Size has potential costs, but economics teaches us that these are best addressed by good policies to reduce congestion, increase housing supply and protect the environment.
Over the past decade, three in ten permanent immigrants have been family reunion, six in ten have been skilled migrants, and one in ten have been refugees. Skilled migrants are more likely to compete with high-wage workers, making the Australian immigration system quite different from the US immigration system. Some evidence suggests that the Australian skilled migration system reduces inequality.
The skilled migration system can surely be improved – for example, through harmonising occupational requirements with source countries, or better exchanging data on applicants’ labour market history. But overall, it should be a source of pride.
Skilled migration will remain the largest component of our permanent migration program, and it is vital that we don’t just focus on ‘how many?’, but also on ‘who?’. If we want to have a healthy migration debate, then ensuring that our migrant mix reflects our national values and priorities matters more than fretting about the next set of demographic projections.
Andrew Leigh is the Shadow Assistant Treasurer, and his website is www.andrewleigh.com. This is an edited extract of a speech delivered at the Lowy Institute.