Harry Clarke On economics, politics & other things

August 13, 2014

Distortions in the patent market

Filed under: economics,information,media — hc @ 3:21 pm

Distortions in the patient market for new drugs mean that drugs are overwhelmingly being developed for people who will die anyway from conditions the drugs are designed to address. There are few incentives to provide preventative medicines and this distortion costs lives.

As the Economist states:

“The data paint a bleak picture. The economists find that pharmaceutical companies conduct 30 times more clinical trials for recurrent cancer drugs than for preventive drugs (the effect persists even after adjusting for market size). The authors also show that firms divert their R&D expenditures away from more curable, localised cancers and focus on incurable metastatic and recurrent cancers instead. The patent system encourages pharmaceuticals to pump out drugs aimed at those who have almost no chance of surviving the cancer anyway. This patent distortion costs the U.S. economy around $89 billion a year in lost lives.

A one-size-fits-all patent system does not cater to the specifics of innovation in the pharmaceutical industry. But tailoring patent law may encourage lobbying and corruption. A careful reform of the patent system is necessary: outright abolition of patents will not be enough to save cancer patients’ lives”.

The paper that provides the basis for these views is available gratis from the Journal of Economic Perspectives. As its authors Michele Bodrin and David Levine conclude:

The case against patents can be summarized briefly: there is no empirical evidence that they serve to increase innovation and productivity, unless productivity is identified with the number of patents awarded—which, as evidence shows, has no correlation with measured productivity. Both theory and evidence suggest that while patents can have a partial equilibrium effect of improving incentives to invent, the general equilibrium effect on innovation can be negative. A properly designed patent system might serve to increase innovation at a certain time and place. Unfortunately, the political economy of government-operated patent systems indicates that such systems are susceptible to pressures that cause the ill effects of patents to grow over time. Our preferred policy solution is to abolish patents entirely and to find other legislative instruments, less open to lobbying and rent seeking, to foster innovation when there is clear evidence that laissez-faire undersupplies it. However, if that policy change seems too large to swallow, we discuss in the conclusion a set of partial reforms that could be implemented.

June 25, 2014

Pricing the ABC’s shows

Filed under: media — hc @ 9:34 pm

The suggestion that the ABC should levy pay-for-view charges on the TV shows that it records wouldn’t win top grades from the viewpoint of standard economics.  To the extent that the marginal cost of supplying an extra copy of a show to a customer is zero the ideal charge for gaining an extra customer is also zero – it should be provided for free with costs being met from the public purse via taxes.  It is a standard public goods argument.  If it was sought to implement a “viewer pays” policy then the more sensible way of recovering costs would be to levy a fixed charge per year from gaining access to the recorded shows – then the shows are being treated as a club good rather than a pure public good.   I do favour a fixed licence charge for gaining access to the ABC but never a per use charge.

The idea of charging per view is an instance of right-wing ideology and culture wars fanaticism dominating good economic sense.  The same type of nonsense gets recycled periodically over proposals to use the private sector to provide weather/meteorological information. For general weather information the proposal is just as silly as the proposal to charge for individual TV shows.

Is the publicity given to this per view pricing policy yet another expression of the self-interest of The Australian newspaper?  Its a major obsession to penalise the ABC presumably because the ABC provides a much better quality news and entertainment service than the trash Murdoch media does.  Along with The Australian’s trash promotion of campaigns too limit plain packaging and to deny the reality of climate change the attacks on the ABC have become a repeated theme.  The Australian might argue that the ABC gets unfair public funding which disadvantages those private media suppliers who must make a buck.  There is some truth to this but The Australian anyway services a different market to the ABC. The Australian services primarily  - the right-wing loony market of cretinous IPA/libertarian types.  The ABC has a more balanced view of the world.

I’ll wait to see if the wonky economics of Henry Ergas and Judith Sloan can latch onto this one.


June 1, 2014

Right-wing think tanks & the press

Filed under: media — hc @ 11:04 am

Groups such as the  Institute of Public Affairs play a dominant role in providing newspaper commentary in Australia, particularly via the Murdoch press but also in some of the better quality Fairfax papers.  Partly, no doubt, when it comes to papers like The Australian this is so because the propietor endorses the views.  But I wonder too whether it is also because groups such as the IPA provide a way of getting copy on an outsourced basis at much lower cost than using full-time journalists.  The newspapers are experiencing well-known financial problems and a major cost is full-time journalism. It is better to get copy from those with an ideological axe to grind who are willing to accept low rates of pay in order to get their ideology across.  In support of this I notice Fairfax also publishes a lot of stuff from the IPA and both Fairfax/Newscorp publish outsourced material from groups such as the Australia Institute. Rupert Murdoch’s notoriously fickle politics might make sense if you assume his attention is mainly on the bottom line – he likes to back winners but also keeps his journalism bills down.

Of course this suggests that social democrats could make a bigger impact if they combined to form a think tank that supplied copy on a regular basis to the media.  To some extent groups such as the Australia Institute and the non-aligned Grattan Institute do this but I think not as effectively as the IPA although I certainly believe the quality of the research done at Grattan far exceeds the low level prejudice generated by the IPA


January 30, 2014

Muzzling the ABC

Filed under: Australian politics,media — hc @ 9:37 am

The Coalition-Newscorp campaign to muzzle the ABC seems to be gathering force with proposals to cut the ABC’s Asian news services.  As a means of promoting Australia in Asia I think this news service is very good and not expensive – far better than the BBC.  The premise that pursuing “soft diplomacy” by means of a news service is sound but that can be advanced by identifying poor reports and working with the ABC to correct them. I do not believe for a minute that the Australian military tortured “asylum seekers” (and apparently now neither does the ABC) but hammering the ABC’s foreign news services into oblivion is a short-sighted way of dealing with such problems.  People in Asia like the ABC because it has credibility. This means believing that the ABC will tell the truth about issues and not just provide propaganda.  The “torture” story did have serious adverse implications for Australia and seems to be both incorrect and based on sloppy journalism. It is this incorrectness that should be the target of policy not shortsighted actions that disadvantage Australia and promote the interests of the Newscorp propaganda machine.

October 29, 2013

New Corp’s attack on the ABC

Filed under: media — hc @ 1:14 pm

Crikey gets it right on the reasons for the venomous attacks by News Corp on the ABC – they are placing their news and TV program content behind paywalls and face competition from a better-quality ABC news and entertainment service. Of course News Corp’s commercial interests are particularly exposed  because its stable of newspapers have become trash right-wing blog-sites.  News Corp supported the Coalition during the recent election campaign through its trash Bolt-Ergas-Sloan commentary and editorial team. Now it is payback time.  If the Coalition give in to the News Corp demands and privatise or defund the ABC then freedom of expression and a decent news service will be almost wiped out in Australia.  Only the troubled Fairfax press will remain.

This is a big issue that threatens basic Australian freedoms and access to key information and quality entertainment.


October 8, 2013

What I am reading – Murdoch

Filed under: media — hc @ 7:49 pm

I read too much serious stuff.  Condensed economic or other arguments that I have to read for work – the sort of stuff that furrows your brow and makes you feel your age.  For pleasure I am now reading Paul Barry’s cheeky “Breaking News: Sex, Lies & The Murdoch Succession”.  It is well-written and interesting. I have always had a soft spot for Barry’s cheekiness and, indeed, for Rupert Murdoch because he is a super-smart businessman.  The Barry book shows that that is about all he is. After reading Barry I think Murdoch is a pathetic, dangerous person. I don’t trust his progeny either.

Rupert Murdoch is a powerful, successful creep.  He will probably emerge as a victor too.

May 18, 2013

All the news that’s fit to print

Filed under: media — hc @ 11:51 am

Business groups oppose increased company taxes. Disabled citizens support the national disability scheme. Big miners oppose increased mining taxes. Unemployed demand an increase in work start benefits. Universities oppose cuts in university funding.Labor savages Coalition policies.  Coalition targets Labor policies. Families oppose reduced childcare benefits.  Schools support Gonski reforms. Graziers support grazing in native forests. Farmers demand drought relief and interest subsidies. Housing industry demand higher immigration quota. Trade unions oppose higher immigration. Tourism groups support lower Australian dollar. Registered clubs oppose moves to restrict access to pokies. Crown Casino executives decry our nanny state. Trade unions oppose increased salaries to corporate high fliers. Corporate high fliers criticize the “tall poppy” syndrome. Retailers oppose parallel imports.Retailers demand GST on imported products. Car industry says it will exit unless more public assistance provided. Business claims high wage costs are making it unviable. Trade unions see higher wages as driving productivity gains. Doctors support increased Medibank rebate. Super-funds support an increased superannuation levy. Property developers oppose environmental red tape. Doctors oppose measures to limit their charges.

I am not getting enough and you are getting too much.


March 4, 2013

Aussi media lynch mob

Filed under: crime,media — hc @ 10:09 am

The man who shot himself in a burning house that had been attacked with tear gas rather than go back to jail was described as a “Mad Dog” by most of Australia’s press.  Certainly by newspapers such as The Age.  He had assaulted his girlfriend and faced the prospect of returning to jail after already experiencing a long stint there.  I don’t condone his past crimes but I wonder if the inflammatory language (he was described last night in one media outlet as the “dead rapist”) used by the media and the police tactic of blearing a siren outside the house he was holed up in helpede drive this situation to a helpful conclusion.  Did calling him a “Mad Dog” encourage this man to believe he would receive fair treatment if he surrendered.  Did he deserve to die on account of the assault? The crime reporter John Silvester comments that television reporters enraged the victim him by calling him “Mad dog” – it wasn’t only television reporters however  that used this label, so too did The Age as the sub-editors did on the online version of Silvester’s story.

I noticed the press over the weekend self-righteously criticized the Chinese Government for displaying a group of prisoner’s prior to their execution by lethal injection.  I wonder if the aussi media behaved that much better in relation to this man. I find the judgementalism in their language unfortunate, inaccurate and dangerous.

The same judgmentalism is arising not only with respect to those judged by the media to be criminals.  It also extends to our Prime Minister. There is literally nothing Julia Gillard can do that makes sense. The press treat the recurring polls as a cheap source of news and feed off them offering advice on who should replace her and why she should be replaced.  Of course they help drive them as well. As she has done in the past (here) again Anne Summers sums up the campaign against Julia Gillard accurately.  It is exaggerated, sexist and vicious and impolite. Its the same essential issue as for the so-called “Mad Dog” namely a bunch of nobody reporters making judgments about people and attempting to foist these judgements on the Australian people.

June 24, 2012

Foolish assaults on the AFR

Filed under: media,Uncategorized — hc @ 9:19 pm

I always enjoyed John Quiggin’s columns in the AFR.   They were thought-provoking. I was disappointed when his column was terminated. More generally I get  much of my news from the AFR.  The articles there are punchier and better quality than the mainstream non-bogan press in Victoria such as The Age.   The Australian has lost all credibility in recent years and bogan tabloids like the Herald-Sun never had much to begin with.

But the AFR now seems to be following the course of The Australian and the bogan tabloids even if, as yet, to not quite the same extent.  This nonsense by Garth Paltridge misrepresenting the science of climate change is an example*.   This insidious article argues without a shred of evidence the standard Quadrant/IPA/looney right claim that climate science provides a distorted alarmism.

More generally the number of op eds in the AFR by the IPA nitwits seems also to have increased. Is the IPA dominance because  it has created an industry of preparing poorly-written unreasoned critiques of every environmental ands social policy?

The changed tone at the AFR and the ending of the Quiggin column seems to have been associated with the appointment of M. Stutchbury as editor-in-chief of the AFR.  Stutchbury has always struck me as one of the better journalists on the  right and I would be disappointed if the associations I am suggesting here are real.  But there do seem to be persistent campaigns of disinformation being launched in the AFR that do seem out of character. A recurrent thread in editorials and news articles is the alleged high cost of the government’s carbon tax.  For example the front page Saturday had the bold claim ‘Threat to energy security. Generators raise alarm on carbon tax’.  Generators are getting compensation, can pass higher electricity costs onto customers and face no possibility of carbon leakages through trade.  None of this gets mentioned. There is however reference to one ‘unnamed’ company shifting investments to other countries**.

Many of us are focused on the implications of Gina Rinehart taking control of Fairfax and vandalising it with Andrew Bolt-style shock jock journalism.  But has a destructive program already begun at least, at AFR? I hope not as it would be a significant reduction in Australia’s quality print media provision.

* The claim is that uncertainties in climate science lead to an inevitable overstatement of the problem – particularly because the ‘left’ of politics can use this campaign as a pretext for global domination.  Hence ‘cherry picking’ occurs in valid science that serves international socialism.  Scientific journals become biased against politically incorrect contrarian science  and the output of sceptics on weblogs becomes undervalued.  Moreover, commercial incentives to gain access to funding dominate the ideals of science.  It is all a priori claim but then the clinching assertion based on claimed demonstrated truth “But why do mainstream scientists go along with the inevitable overstatement associated with the activism business?” . Who has suggested that they do? Terrible stuff by someone who describes himself a scientist.

** (Update). Here is a response by Sinclair Davidson to this issue.  He claims I don’t understand the “impact on the carbon tax on business”.  I have (at least) a better understanding than Davidson (not that this says much) because I have at least used GE models to analyse these effects.  Here is a short analysis in Australian Economic Review – a more complete analysis is in the forthcoming Economic Record.  But the nits at Catallaxy (and the IPA) would prefer to believe the tales of woe from the interest groups that fund the IPA than to think about issues in terms of evidence.   The comments on the Davidson Catallaxy post are moronic.


June 18, 2012

Media ownership by buffoons

Filed under: media — hc @ 10:29 pm

It is a tragedy  that the Fairfax group have fallen on hard times and seem destined to be run by the right-wing philistine Gina Rinehart. The Fairfax press – despite imperfections associated particularly with The Age – still represents the best quality media in this country. This will mean that most of the print (and a large part of the electronic media) in this country will express the views of NewsCorp and Gina Rinehart.  Newscorp’s The Australian and The Telegraph see Andrew Bolt (and his feeble-minded ilk in the IPA) as a major force for social intelligence in Australia.  Rinehart sponsors the mad Lord Monckton to deliver his version of climate change denialist madness to the Australian people.  A society which informed by the ignorant will necessarily fail to realise its potential.

We need to somehow preserve freedom from government control of the media but simultaneously insure that a diversity of  media views based on rationality (not narrow right-wing prejudice) are expressed.  Its a tricky one but the moves now in play with repeat to Fairfax and Rinehart  will mean that very soon the Australian media will be ruled by a bunch of buffoons who espouse crass ignorance.  We need intelligence and diversity.  I would introduce laws now to thwart Rinehard’s ownership ambitions and introduce policies which encourage competition and diversity in this vital sector of the economy.

April 26, 2012

The Project, Channel 10

Filed under: current events,media — hc @ 11:45 pm

I watch almost no TV these days.  I used to watch the ABC but can’t even be bothered doing that. I used to watch some top golf tournaments on Foxtel but (generally) find that I’d prefer to play my own lousy game than to watch others play it really well. I have been inadvertently trapped into watching segments of Channel Ten’s The Project which screens at 6-30 weeknights because I get home while others in my household are watching it.   I use the word ‘trapped’ with care – its got to be the most stupid current affairs show of all times and I watch it with a morbid fascination.

The Project is current affairs repackaged as yuk-yuk humour provided by low-level commentators, stupid word plays and teenage-level sexual innuendo.  The presenters try to encourage the humorous atmosphere by grinning constantly and laughing aloud at each other’s dumb jokes and tedious repartee.  I wonder who watches this nonsense and what they get from it. So I searched for ratings and, yes, it is doing well circulation-wise alongside the other ‘low brow’ news commentary offerings, A Current Affair and the truly despicable and dishonest Today Tonight.  The latter comprise mainly muck-raking, low-level, ‘gotcha’ journalism rather than attempts to repackage the daily news as comedy.

We are expanding the university system and our living standards are among the highest in the world but, in terms of its appetite for news, Australia is becoming a nation of morons.  It is common to attack The Australian for its anti-science irrationalism but the electronic media make The Australian seem high brow.

February 1, 2012

Gina Rinehart & Fairfax

Filed under: media — hc @ 9:32 pm

Gina Rinehart’s $200m foray into Fairfax is deeply troubling to me but I don’t much idea of what should be done about it.  Ms. Rinehard sees Fairfax at historically low prices as it switches from print to electronic-based journalism. The 15% stake she will end up with does not give her control of Fairfax but it will give her a board seat and it will give her influence at a cost which is only about 1%b of her latest wealth estimate of $20b. When she took a 10% stake in Channel 10 a new feature of its journalistic offerings was the shock-jock journalism of Andrew Bolt.  Fairfax has a 171-year tradition of reasonable independence but Rinehart has, in the past, proved determined in getting her own way. Rinehart’s endorsement of climate change denialism and her staunch interest-group-based views of mining tax reform raise fears that she might be tempted to use her comparatively low cost stake in Fairfax both as a cheap investment and as insurance against policies that may adversely impact on her commercial interests.

It is a worrying prospect that almost all the print media in Australia will soon be controlled by either Rupert Murdoch or by the Fairfax group with Gina R. sitting on a substantial stake.   Australians do not have a lot of sense in recognising interest group arguments.  Its not just the concentration of  control that worries me but also the ability to distort and control political debates in Australia.  The  Murdoch press does not have strong truth credentials on issues that vitally affect our nation’s future such as climate change. If the Fairfax media are exposed to influence by someone who puts great weight on the views of ragbags like Lord Monckton then we do have real problems ahead.

But hey! This is capitalism. Why should she not have a 15% stake in Fairfax?

July 3, 2011

Mr. Dominique Strauss-Kahn & Ms. X , the maid

Filed under: media,Uncategorized — hc @ 2:57 pm

As I remarked in an earlier post the media have totally abandoned the principle of “presumption of innocence” in relation to the claimed rape of a hotel maid.  This outrage was fostered by the New York prosecutors and the police who treated him publicly as a criminal. Commentary in the press was written and constructed to assume guilt even if it was acknowledged that he had not had his day in court.  Now an equally reprehensible story is going around that the maid in question is a liar who concocted the allegations in order to secure a monetary gain.  She is not a defendant in this case but it still seems to me that she too has been denied a “presumption of innocence”.

What is the truth in this situation? I have not got a clue but should we not wait for the issue to go to court rather than participate in this horrendous trial by media.  Strauss-Kahn was apparently an excellent head of the IMF – he certainly got the seal of approval from Joe Stiglitz – and regardless of the outcome of this case his career has been irreparably damaged.   Discussions in the press about his past alleged philandering reflect a philistine puritanism to the extent these past liaisons were based on mutual agreement. His accuser remains largely anonymous but she too has a life and deserves her day in court to make her allegations.  Currently she is being identified as a conniving prostitute.

We love to be titillated by scandals but this is silly behaviour. It sells newspapers and that is about all.

January 3, 2010

Global warming & the issue-attention cycle

Filed under: climate change,media — Tags: , — hc @ 6:14 pm

The Pew Climate Centre have shown that over the last year or so a decreased proportion of US citizens believe climate change is a serious public policy issue and a reduced number believe there is solid evidence that anthropogenic warming is occurring.   Climate change delusionists might be credited with inducing these changed opinions but the role of the media is also important.   (more…)

April 18, 2009

Propaganda & scepticism toward climate science

Filed under: climate change,media — hc @ 8:30 pm

I subscribe to The Australian – I like its business sections and detest the low journalistic standards at Melbourne’s Pravda, its main Melbourne-based competitor. But I feel more than irritation at The Australian’s ongoing war against climate science.     This is an organised campaign that I have remarked on before.  The mix of scientific claims, philosophical arguments for scepticism in science and the outright stupidity of certain columnists mean that the casual reader might believe that there is serious scientific doubt about the case for controlling GGEs. If there are such doubts this is not established by the types of arguments put forward in The Australian. (more…)

March 25, 2009

Visualising the financial crisis

Filed under: macroeconomics,media — hc @ 10:58 am

Jonathon Jarvis provides this exceedingly clear view of the global financial crisis.  One of the best I have seen.

March 21, 2009

Long pictures

Filed under: media — hc @ 2:18 pm

I enjoyed this oldie from BoingBoing.

March 12, 2009

Newspaper futures

Filed under: media — hc @ 10:56 pm

A lot of printer’s ink has been spilt on the issue of the future of newspapers.  I buy three each day (The AFR, The Australian and (on a discount offer) The Age), My wife likes the Herald-Sun.  Our families’ purchases are a ridiculous exception to the standard view that newspaper demands are collapsing.  This NYT article claims – in relation to the US:

For more than two centuries, newspapers have been the indispensable source of public information and a check on the abuses of government and other powerful interests. And they still reach a vast and growing audience. Daily print circulation has dropped from a peak of 62 million two decades ago to around 49 million, and online readership has risen faster, to almost 75 million Americans and 3.7 billion page views in January, according to Nielsen Online.

This is a remarkable decline in print and surge in online patronage.  What is happening? One of the difficulties is that a lot of advertising is going online.  Another is that ‘entrepreneurial’ newspaper bosses have laden newspapers with a stack of debt from their purchasing binges around 2005-07 when news media prices were at peak levels.  The Fairfax family has problems in this regard in Australia and Murdoch has massive debt everywhere.

On the consumer side attitudes are changing too.  I read the main articles in the NYT almost every night online. This has the effect of reducing my interest in the Australian media. It is also time-consuming – I have less time to read newspapers.  My newspaper arrives around 6-00am and if I am up earlier I go online to see what they are saying.  This represents my gradual shift away from the printed media - its a shift that I think is likely to be widespread.

And newspapers are expensive - the online reads are free – even if they are not provided you can get the title of the article you are ofter – this is normally available – you can Google that and dig up the article somewhere.  (The exception to this is the AFR – it is expensive and I must buy it to gain the very selective information I want from it).

I have no objection to a pure online service but I don’t see how the economics will pan out. Charging is difficult since there is so much free competition.  The online providers deliver a lot of social value but I don’t see how that will yield a buck for them.

Interesting futures here…..

December 14, 2008

Keith Windschuttle on acceptable climate change papers for Quadrant

Filed under: climate change,media — hc @ 12:05 am

My paper criticising what I saw as the foolish climate change ‘denialist’ views that have been repeatedly put forward in Quadrant magazine was rejected by its editor Keith Windschuttle on the grounds that an earlier draft of the paper had been published on this blog. This seemed to me a totally spurious grounds for not publishing the paper – there may have well been non-spurious grounds not set out in the email to me by Keith – so I emailed Keith requesting a rethink. Everything I publish in academic and popular journals I pre-circulate first in working paper form or as a post on a webpage. Most academics I know do the same. For whatever reason Keith did not respond at all to my email.

Now I learn from Tim Lambert’s Deltoid that Keith has rejected another paper by David Karoly criticising the same ‘denialist’ climate change views without any apparent review or consideration on the grounds that:

…at the moment Quadrant is focusing on offering a platform for the sceptical position on this issue. We find that the pro-IPCC position is very well represented in almost every media outlet in the country, including academic journals and websites, but it is very difficult for sceptics to find any outlet for their voices to be heard. Hence, in the interests of balance, we believe the sceptics deserve a fair go in a little journal like ours. If the current position changes, we will be glad to consider pro-IPCC articles such as yours. 

But, as a fellow conservative, I am really just really disappointed in Keith Windschuttle. The disappointment goes well beyond not having my article reviewed and considered for publication in Quadrant. It is the festive season so I’ll simply say to Keith that his behaviour seems to me appalling and short-sighted and hope that eventually he will see this and allow Quadrant in the future to present a more truthful, balanced and accurate picture of the consequences of anthropogenic climate change. I wonder had I not published the draft on my website whether Keith would have applied this alternative reason for rejecting my article. If he had I would still have rejected his view as inappropriate. Journals such as Quadrant are misleading the public by presenting only climate change ‘denialist’ views and ignoring the overwhelming alternative views of mainstream science. Moreover, the consequences of Quadrant getting it wrong are serious.

September 24, 2008

TV Advertisements

Filed under: media — hc @ 8:42 pm

During a 15 minute interval of the show Underbelly on Channel 9 last night I counted 8+9+13 = 30 advertisements over 3 successive ad-breaks. The period was between 9-15pm and 9-30pm. I noticed most of the ads were of short duration but was still astounded at their sheer volume. How anyone can question the value of commercial-free ABC TV is beyond me.

Why should we pollute a major source of information and entertainment with lies and bad taste? Even if you do support the hideous quality commercial TV shows is it sensible to plaster them with such a huge volume of advertising even from the perspective of commercial interests?

Surely the incentives are to pre-record material and delete the advertising during playback. I have slipped into doing this almost unconsciously with the pay-TV service I subscribe to.

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