Category: ECONOMICS

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Downton Abbey and a Spectator Diary

I finished the second season of Downton Abbey this evening and, whilst I don’t usually write about television on my site, this post will be an exception.

In my opinion, Downtown Abbey is British costume drama at its finest. The writing is tight and the ideas are provoking. For some, the pleasure of Downton is all in the landscape and interiors. I think this misses what Downton is really about: a journey into the heart and soul of British conservatism at a time of extraordinary change. It is written and created by Julian Fellowes with all the attention to detail and tone which only Fellowes can pull off with conviction.

In the first season, we are introduced to a family wrestling with questions of inheritance. At first blush, this might seem like a fairly superficial storyline. And it is. Inheritance is merely the tool which Fellowes uses to explore deeper themes: duty, custom, custodianship. The family at the centre of the drama is that of Lord Grantham. In one of his finer moments, Lord Grantham is found walking the grounds of Downtown Abbey talking to his eldest daughter, Lady Mary, about her future. When she speaks out against the responsibilities of carrying Downton in her older age, Lord Grantham reveals something about his own motivations. He is not the owner of a great estate, he tells his daughter. He is merely its custodian – seeking to improve on what he has been entrusted until his children and their children after him can do something better with it.

It is the sentiment of the British country Tory, something we too rarely hear about in the Australian headlines but which I think is alive in this country. Speaking to friends who have grown up in rural Australia, there is a deep sense of duty to the land and building a local family. It often explains the unusual connections in rural politics between the conservatives and those with green views. Indeed one of Britain’s finest conservative thinkers, Roger Scruton, has recently penned Green Philosophy: how to think seriously about the planet. It draws on the connection between conservatism and environmental conservation. There is a great willingness in political conservatism to nurture what is handed down to us, including the environment. This might surprise some with a less patient view of the conservative thinking and the political right.

The second series moves through the First World War and is equally fascinating (if not a little more fanciful at times) than the first season. We get relatively few shots of the Western front and far more shots from the home front. The challenges of duty at home is brought home by excellent performances from Hugh Bonneville (Lord Grantham) and Maggie Smith (the Countess of Grantham), amongst others. However, the Bates character is challenging– a stoic with a poor sense of judgment.

I’ve been meaning to publish something on the politics of Downton Abbey for a while now, and there may yet be an opportunity. The Spectator is an obvious home for such a piece, but there is so much British content in the Australian edition that it might be a bit much. However, I had a Diary in the Spectator recently which may interest. It is here. It includes thoughts from my recent book tour and covers the reflections of a young person publishing their ideas in book form for the first time. The Spectator Diary is a special piece of writing and it was an honour to be invited to write one. The British diaries are the best. They are understated in a way writing rarely is these days.

Malcolm Turnbull gave a great speech for the book earlier this month. You can read his speech here. For other recent pieces, look out for ABC local radio. I was on ABC Evenings recently with Dominic Knight. An interview I did with James O’Loghlin also recently got broadcasted a second time.

I’ll be doing an event or two at the Sydney Writers’ Festival in May. The schedule is out this week, I think, so look out in the newspapers for more details. Reframe is selling well. It was the #3 bestseller for political/social science books across the country this time last month. Let’s hope it can keep it up!

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Annabel Crabb on Reframe – ABC The Drum

As the news cycle rumbled back into action this week, it struck me that we have lost something in Australian politics. We have lost the art of communicating major political reform. The mining tax is still kicking around the Senate. Advertising to sell the carbon tax has made it back into the papers. Lots of stuff has happened, but much less has been completed. Why is that?

My view is that our politicians have been more focused on winning the news cycle than they have on bringing people along with them. They know how to spring announcements at the last minute so they get good coverage. They know how to bring out the dead in quiet times of the year, so that certain issues slip under the radar. Other tactics seem harder to explain – like dropping the carbon tax and proposing a mining tax on either side of a weekend back in 2010.

What we need are strong leaders who have the capacity to walk us through issues. That often requires time rather than just media intensity. Media technology may have changed with the 24 hour news cycle but people are still the same. They need to be presented problems in the right way and work through them bit by bit.

 I had the privilege of being interviewed by Annabel Crabb on The Drum last night about this and Reframe. See our interview here at about 34.05 minutes. Annabel is fantastically energetic and really loves Reframe! I’ll leave her to promote it in her own words. 

I also went along to the Stanton Library yesterday to give a talk to about 50 people about my story behind writing the book. It’s a fantastic library in North Sydney and I used to go to day care next door! The Constant Reader, who are the local bookshop, were there in full force as was my aunt who is one of the local councillors in North Sydney. The talk will be up on the Stanton website soon.

That was Day 1 of the Reframe road show. Today’s task  – a longer conversation on Triple J with Tom Tilley around 5.30pm about the book!

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Comment to Quarterly Essay 42: Fair Share – Country and City in Australia

In the last Quarterly Essay, the Australian historian Judith Brett took on the topic of our country’s regional politics. Her essay was called Fair Share: Country and City in Australia. It was a well written narrative, describing the changing geography of the Australian economy from life off the sheep’s back to a set of urban metropolises.

I wrote a comment to her essay, which was published in the current Quarterly Essay by Robert Manne. In the comment, I raise two points. One: Brett’s essay is tinged with nostalgia for a time when bank managers ran country towns and were the patrons of their local golf clubs. Now, she says, economic rationalization means that local country communities have been replaced by the cold, hard parsimony of ATM machines.

I am close to Brett’s sentimental attachment to country life. My grandfather and great –grandfather were both bank managers at the Commonwealth Bank. But her essay begs a question: would we be better off with a world without ATM machines? Brett blames economic rationalization, but when is this just progress. Getting the measure of this difference is important if we are to find the right way forward.

My second point is that Brett misses the full measure of what’s happening in regional Australia. True, country towns are fading. But the regions are being lit up by another kind of politics: mining. Far from being dead, regional politics is rapidly changing from agrarian power to mining power.

There are important implications which flow from this, not least the responsibility which mining conglomerates owe to local communities. This politics underpins a number of headline issues:  Chinese foreign ownership of regional mines, the encroachment of mining tenements on to prime agricultural land, amongst others. These debates can be dressed up as xenophobia, food security, or protectionism. In the end, though, I think they represent an uncertainty in the electorate with the rapid changes afoot in the economy.

To read more of my comment, buy at copy of the Quarterly Essay, subscribe online here, or get in touch with me.

I have included an extract of the opening below:

Comment by Eric Knight to Quarterly Essay #42

 In 2006, I visited a little indigenous region called Utopia on the edge of the Central Desert, NT. I hadn’t travelled to Australia’s center before but there, as I looked out on what stretched as far as the eye could see, I began to realize how empty our land really is. Utopia was desperately poor. Dogs scratched around the township looking for food, and old ladies lay in the shade of concrete dugouts to shield themselves from the sun. There was a corner shop, a few houses, and a dusty sports field. Had Utopia once been paradise? Or was it named with the hope that one day its fortunes would change? I don’t know the answer, but I did know the problem with Utopia: it was geography.

            At the time I had just finished reading Momahad Yunus’s Banker to the poor. The Bangladeshi economist and Nobel Laureate had found a way to alleviate his people from poverty by offering them microfinance. Yunus’ scheme worked because Bangladeshis were poor for lack of credit. Before his Grameen Bank, the only resources they had to start a business were what they found in their pockets. The inability to borrow condemned them to poverty, and Yunus’ intervention broke this cycle of poverty.

            As I travelled across the Northern Territory (I was there to help the Central Land Council negotiate pastoral leases), I was less sure that microfinance would work in regional Australia. Distance was our tyranny, not lack of credit. It would take hours to travel between these communities – Yuendumu, Ali Carung, Tennant Creek. Sometimes we would fly by plane, other times we would drive and camp out in a swag overnight. This was cattle country, and local people were held in employment by a piece of paper bounding the pastoralist to his local workers. Without the cattle trade, these places were lost. But with microfinance, these places were not necessarily made better.

            Fair Share: country and city in Australia forces us to confront an important reality: not all of Australia is equal. No matter how industrious we are, or how resilient, nature prevents some communities from being self-sustaining. The afflicted communities change over time: sometimes they are driven to the brink by drought and flood, other times by the flow of economic history. Brett’s essay focuses on the latter. She returns to the great promise of federation – a nation for a continent – and inspires us to our own Manifest Destiny. Her essay reflects two deep traditions within Australian political consciousness. One is conservative – the instinct to nurture local communities and protect what we have etched through history. The other is liberal – the desire to give these communities the skills and resources they need to live the life they value.

            But, at times, Brett takes these two traditions and arrives at strange, almost romantic, conclusions. At the end, she advocates for subsidizing the country and mounts a number of justifications for why – food security, aesthetic pleasure, and nation-building. “The nation needs to confront the possibility that rural and regional Australia might always need a fair degree of subsidization,” she writes “that it will always be more expensive to deliver services to many parts of the Australia than to the city….and that we do all need to share the cost”.

            These are all excellent reasons for why we must do something. But whether the answer is simply to subsidies the country, I am less sure. There is much to consider here. Perhaps I am wrong on microfinance and it would be a good option. Others have argued that we must rescue the best and brightest of regional Australia and send them to metropolitan schools on scholarships. This might create a generation of people like Charlie Perkins, but perhaps it does not solve the problem of those who are left behind.

…

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A Dangerous Idea: The Self Start Nation

Alan Noble is a classic start up entrepreneur. In his early years he got experience in one of the world’s largest tech companies, NEC, in Japan. He then left for Silicon Valley, starting up Netmind from scratch. He exited in 2000, selling the company to Nokia just as the dot com bubble burst. He is also an Australian.

By his own admission, Alan’s career is not without its bumps. He now heads Google Australia’s Engineering team and was deeply involved in the technology behind Google Wave, which was commercially unsuccessful. But it is failure, Alan told me over breakfast today, which breeds success in the world of entrepreneurship. Australians, young, fresh out of University and eager to change the world, could do a lot worse then go into business for themselves and just have a go. Not all change comes from political activism.

I fear we might have lost something of this instinct to create something from nothing in Australia. We’re too happy to let others carry the can. I was interviewed by the ABC about my views on Australian innovation yesterday. The interview will be broadcast at 7.30am on Radio National on the Saturday Extra programme and I’ll be on with Alec Cameron, Dean of the Australian School of Business. They were keen to press this point: what can government do to fix the problem. But is government the audience for this message? I’m inclined to say, in the end, no.

The government can help create an attractive investment environment – tax breaks for start ups, incentives to drive private investment into angel investing. But in the end, it requires the scientist with the kooky ideas to network with the great business brain to produce an Australian company which can lead with world.

This is not a hypothetical. Some are already doing it. But unlike our sportsmen and actors, the successes of our great entrepreneurs are rarely broadcast. Sure, we know the big business guys. But what about the small guys – those who strive from small beginnings to be the next Mark Zuckerberg? Telling their stories shows young guns how the job is done. The Americans do this exceptionally well. The British do as well – the TV show Dragon’s Den is a huge success. I’d like the ABC to start an Australian equivalent of Dragon’s Den which shows the go-to-exit on taking good ideas to market.

That, in the end, is the dangerous idea behind my Festival of Dangerous Ideas appearance tomorrow. Australia is a nation of self-starters. But we have lost that of late. And we should not just wait for the government to start it back up.

I have a piece in the Australian’s Entrepreneur magazine today on how small businesses and entrepreneurs can change the world for the better. See the hard copy.

I have another piece for Fairfax App customers today on how our investment culture can drive private investment in our best and brightest from the bottom up. Read it here

You can also tune into Radio National tomorrow here, or better still wait for the Festival of Dangerous Ideas which will be broadcast nation-wide at some point to discuss the future of Australian industry – here. The pessimists point to the cliff at the end of the mining boom. The optimists are busy building the ladders from the bottom up.

On a not entirely unrelated point, I was on ABC The Drum on this Wednesday defending the freedom of speech, which includes with freedom to make mistakes. You don’t have to agree with someone to acknowledge their right to state their view. Click here to watch it.

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SMH Opinion: Make It In Australia

Around the corner from where I live is the old Bond’s singlet factory. For decades the place employed hundreds of workers, weaving the singlets that men and women have worn proudlyin this country for over half a century. It’s shut down now. For a while it was a cafe. More recently it was an art gallery. The building has been restored. But it remains a testament to a time when Australia made stuff.

We still do make things in Australia. They just look different to before. Drugs, chemicals, and mining robotics are being produced across the country without our being fully aware of it. It’s a growth industry, but if more can be done to support advanced manufacturing in Australia, it is the private sector – venture capitalists and growth-led private equity investors – who could have greater confidence in Australian industry. Often it’s Americans who must fly down under to invest in our start up companies. And for one of the world’s largest funds under management industries, we have a remarkably small pool of VC down here.

I have written a piece in today’s SMH here which interest. Feel free to post your thoughts below. Another related piece is here.

I’ll tackle this topic at the Sydney Opera House on Saturday with Alec Cameron, Dean of the Australian School of Business, Alan Noble, head of Google Engineering Australia, and Martin Rogers, CEO of Prima Biomed. We’re sold out, but there should be links into the Festival of Dangerous Ideas event afterwards.

In case you arrive early, I’ll be adjuciating the soapbox gab fest at the Opera House forecourt from 11.45am so come up and say hello. Otherwise join us for a drink at Opera Bar after the event from 4pm

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Not Just a Lucky Country

We tend of think of Australia as a lucky country – a land rich with minerals and mining. But it imples we are just lucky. Our wealth comes from something we got for free … not hard work.

Perhaps this values us too lightly? Tonight on ABC radio (Wednesday 24th) I’ll discuss an alternative narrative with Paul Barclay on Australia Talks. Please tune in to Radio National from 6pm to listen. More details here

To my mind, we’re not as bad at innovation as you might expect. The world is changing and there are things about Australia which are to our advantage. We have a highly mobile population. We are heavily invested in public research and education ($7 billion annually). And we have deep pockets – with the world’s fourth largest funds management industry.

But if there is a problem, it’s not the lack of ideas or potential. It’s the importance we place on commercialising them. As the economic producitivty agenda makes headlines, our politicians and journalists turn to two ideas: labour market flexibility and investment in education. But what about capital investment in the hardware of the economy? In Australia Talks I’ll be talking about the widgets and gadgets which are changing our economic landscape one invention at a time.

The Americans have a grand history of venture investment and innovation. The Rockefellers were great venture capitalists after John D. made his fortune in oil. The retail family, the Waltons, are another example. In Australia, we have shown a greater proclivity towards what’s risky over what’s novel. We invest in stocks, and bonds, and property. But private investment in technology – venture capital investment – is shrinking.

Part of the job is for the hard heads of finance – men and women who talk numbers and balance books. Another part  is inspiring a generation of dreamers and entrepreneurs. Recently whilst at a Melbourne jelly to interview some start up entrepreneurs for The Australian, I was told they felt shunned as start up entrepreneurs. Their parents thought they were drop outs.

Americans treat entrepreneurs like we treat sportsmen. They respect their hard work, determination, and willingness to have a go. Maybe we are a lucky country after all. But if we don’t bank that luck wisely, we’ll be lost when it runs out.

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SMH Opinion: The price of progress

Treasury boss Martin Parkinson last week returned productivity to center stage of the political discussion in this country. At the dinner speech to the Growth Challenge conference in Melbourne, he argued that Australia’s terms of trade would “come off slowly” as the mining boom matured.

That means growth in living standards will slow over time unless we turn our minds to driving productivity improvements across the economy. There is an obvious place to look – telecommunications infrastructure – which is why it is so astonishing that the recent NBN deal with Telstra and Optus has received so little coverage.

There are political motives at play with the poor coverage. Some saw it as a Government smokescreen for the one year anniversary of The Deposal. Others believe the rural crossbenchers will buy it, no matter what the price. The most likely reason is probably internal workings within the Opposition. Rumor has it that Tony Abbott is keeping Malcolm Turnbull on a tight leash. It’s a strange strategy to adopt. Unless the Opposition can tackle the productivity agenda, their chances at the next election are significantly diminished.

This all raises an obvious question: what should we make of the National Broadband Network? For my thoughts on the subject published in today’s SMH click here.

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On a hot news day in Ultimo

Yesterday was a hot news day. President Obama announced the withdrawal of 10,000 from Afghanistan, the NBN Co was formally launched, Lord Monckton was hauled up for calling Ross Garnaut fascist, and the departing league of Australia’s 2004 Senators said farewell. Meanwhile, I found myself held up by the security guards in Ultimo, Sydney because my name wasn’t down on their guest list. I was there to appear on the ABC The Drum panel discussion but the security guards did not care one bit. “You’re not on the list so you can’t come in,” they said as I sat in my orange Toyota corolla on Ultimo Road.

I managed to get in eventually. For my take on the latest issues hitting the airwaves, catch Thursday’s (June 23rd) broadcast of The Drum on ABC iview. It’s available for the next seven or so days here. I appear with Tim Soutophamasanne, author of Reclaiming Patriotism, and John Barron, ABC journalist.

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The other kind of Australia

We tend to think of Australia as a country whose most valuable resources lie underground. I think that values what we have above ground too lightly. In The Monthly, out now, I make the case through one of Australia’s most compelling entrepreneurs. Shi Zhengrong is not a household name – but he should be. What he has produced is a template for a different kind of Australia – one that weaves its way in the global economy by the thread of its best minds and budding businessmen. Buy a copy or subscribe here to read my essay.

The Economist released a special issue on Australia last week which made a related point. I have written a piece in The Age today – click here – which begins to draw the connections. This is a question ripe for now . We are a country whose economy is booming and whose chief customer, China, is ascendant. It won’ always be, so what are we doing to invest the surplus wisely? Canberra is not giving a lot away in that respect but in my piece in The Age I begin to explore some ideas.

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Canberra Times Opinion: It’s Budget Time!

The Government has been leaking all kinds of things about the budget. It comes out next week. Most of what is being leaked isn’t very attractive. In the spirit of Flight of the Concords, they’re putting out the recycling which isn’t part of the foreplay but it’s very important. (Incidentally if you miss this reference check out their song It’s Business Time).

It’s impossible to know what’s fact or fiction until budget night. But some of the most alarming leaks have been around cuts to medical research funding and re-structuring welfare-to-work programmes. You have to wonder why Gillard would focus on these areas. The rumours don’t make any economic sense, as I try to argue in this piece in the Canberra Times from just before Easter.

The more likely scenario might be playing politics. Gillard thinks she can probably take votes from employees in the education and social sectors for granted. It’s for you to decide if she’s right. But if the market’s anywhere near efficient it might take a longer view of history.

I’ll be off regular posts and editorials for the next 6 weeks. The book is taking my full attention and I’ll but online after then. Meanwhile, I have a longer essay in the June edition of The Monthly which may interest. It’s about an untold Australian story of one of this country’s richest men. You probably won’t have heard of him.