Richard Pratt has passed away. As we saw with Kerry Packer, an enormous media effort has gone into memorialising him. Typically, billionnaires, tycoons and magnates are lauded for their contributions as philanthropists. There seems to be a slight reluctance to engage directly in the worship of wealth.
I find it quite remarkable that Pratt’s recent legal problems are described (and this is one of the more restrained descriptions) as a “blemish”. Pratt was charged with perjury. The issue will never be decided in court, but one does wonder about the contrast with the treatment of Marcus Einfeld, who was convicted of the same offence.
I am not defending Einfeld, or seeking to cast aspersions on Pratt, but I do think it’s quite remarkable that business tycoons are lionised even in the face of alleged misdeeds. With Packer, there was some sort of (failed) attempt to mobilise a sense that he was a popular hero. But with both gentlemen, I think that what we are seeing is the sort of personality type the pollies and the media idolise, not any sort of icon for the rest of us. The pilgrimages to Pratt’s deathbead at Raheen might also be contrasted with those to the obsequies of a previous owner of that house, Archbishop Daniel Mannix.
The personal attacks on Graeme Samuel also strike me as jarring. Obviously there’s an undertone of intra-Jewish community politics, but I think it’s very revealing that the political, business and media classes are so concerned to defend someone who piled up so much money and was accused of stuffing over consumers with his supposed competitors. I don’t think the so-called ideology of the free market has much purchase in Australia at all – lip service, at best, is paid to competition and consumer protection while the dirigiste classes engage in mutual celebration.
Yes, I’ve wondered about the different treatment the establishment and the media have accorded Einfeld and Pratt. After all, Einfeld’s was a victimless crime involving a few dollars and dishonesty of the kind that many of us could have committed. Reprehensible, of course, and particularly in a judge. I would have condemned him more had he been found guilty of racial villification or something which clearly demonstrated hypocrisy rather than a very common human frailty. In Pratt’s case he admitted to perjury and to being guilty of fraud involving millions of dollars taken from Australian consumers. Both men, in different ways, had contributed hugely to society before these offences – so why should either of them be stripped of recognition for those contributions which had no relationship to the offences?
How many of the lives of decorated or otherwise honoured citizens would bear scrutiny and not reveal the kind of frailty demonstrated by Einfeld? Or how many captains of industry who have achieved fortune, fame and honorable reputations do not have uncovered pecadillos, scandals or even crimes like Pratt’s somewhere in their past? I have found the rationalising around Pratt’s “crime” distasteful too, coming so soon after Einfeld’s public disgrace and the stripping him of his public awards for services and achievements which still stand and deserve recognition. Pratt’s crime also still stands and deserves recognition! As does his generosity of course.
And yes, I feel for Graeme Samuel too. He doesn’t stike one as a vindictive man. Without knowing the details of any personal issues between the two men one can only assume he felt it right to prosecute this issue as a matter of principle. Who knows what more would have emerged had there been a trial?
Yeah. But Pratt engaged in manipulating a great ill of capitalist society, instead of revealing the grubbiness of that society, the way Einfield did. I mean, did anyone think the capo pigs weren’t going to punish Einfield if they got the chance?
Remember Murphy? They went after him for years and drove him into his grave.
I think you are casting aspersions.
Agreed. And the moral judgement of an extraordinarily rich person who, despite lack of either existential need or intellectual impairment, chooses to break the law and take from society you would think would be harsher than that made in respect of drug addicted thieves, or dirt poor Indonesian fishermen…
*I am not defending Einfeld, or seeking to cast aspersions on Pratt*
Bollocks.
Tut, tut, Kim – it should be there not ‘their’. Your age is showing!
An unusually intelligent contribution from Mark Hill @ 5.
What Kim is trying to do, and what you obviously don’t understand, is to point out the strange double standards that exist in some sections of our society.
Why is one man hounded and vilified, and another lauded and praised, when they have committed arguably a similar offence? Is it just because one has died?
On the general problem of wiping away the sins of the dead, see the Chaser’s generally insightful summary (if slightly off in its specific celebrity targets).
As for the lionization of business people for their acts of charity, I wonder what lifestyle sacrifices Pratt ever made in the course of his philanthropy. I’ll presume the answer to be “none”, and contrast that with, say, a volunteer for the CFA.
No. You have to do better than that. “are arguably the same” is slippery and you know it casts aspersions on Pratt and defends Einfield.
Enfield was a compassionate man and his heart was in the right place. So was Pratt.
Now tell me why legally, what each of them did and why they are the same.
Kim, what the hell is “intra Jewish….etc”?
@6 – thanks, Peter!
@7 – Adrian, yep.
@9 – Mark, there were some weird suggestions from Isi Leibler (who nominated Pratt for an AO again yesterday – he surrendered the award last year) that Samuel was (a) somehow motivated by some politics within the Melbourne Jewish community in pursuing action against Pratt; (b) betraying some sort of solidarity since both men are Jews.
No doubt there’s more to this story. But I thought it was quite weird that it surfaced in public.
“I am not defending Einfeld, or seeking to cast aspersions on Pratt,”
Gosh. Heaven forfend that anyone might draw that conclusion Kim.
Australia’s superannuated A-listers have worn a furrow into Pratt’s deathbedroom axminster to share his last earthly oxygen.
Whereas, Einfeld has been shunned. Perhaps if Einfeld had contracted a wasting disease things may have been different, but I doubt it.
Alleged perjuror Pratt is persona grata for many unfathomable reasons. Perhaps it’s because he has thrown so much loose change around in the name of philanthropy, perhaps it is because he has that undefinable yet essential Australian thing — the “common touch” — as evidenced by his association with one of Australia’s foremost crime syndicates, the Carlton Football Club.
No one could ever accuse Einfeld of having the “common touch”.
Perhaps if Marcus were to attach himself to the Collingwood Football Club…
“Perhaps it’s because he has thrown so much loose change around in the name of philanthropy’
40 million a year is a lot of loose change.
“Perhaps if Marcus were to attach himself to the Collingwood Football Club…”
He’s already widely disliked.
Shoring up profitable duopoly through bureaucratic capture and cartelism? If it’s not on the coat of arms, it should be.
Einfeld was convicted for perjury while Pratt had the charge withdrawn. As i understand it, the charge was withdrawn because a key piece of evidence was ruled out by a judge as much as because he was dying.
Einfeld perjured himself to not pay a fine of $77 and to avoid the demerit points going on his license. Pratt allegedly perjured himself in relation to a cartel that has illegally swindled an estimated $700 million.
Pratt died at home with cancer. I believe that Einfeld has cancer and may die in jail.
I couldn’t tell you much about each man’s contribution to charity and charities (not meaning to say their contributions would be insignificant.)
Marcus Einfeld was an officer of the Supreme Court and you think his being jailed for perjury is what exactly. I suggest you revise your post.
We’re still talking about energy policy here aren’t we Liam?
Wait, I though we were talking about the IR club. Or was it airlines? Or telcos?
Ambi @ 3,
I assumed that remark was directed at Kim, not me, but – if it was me, I’m always casting aspersions at capitalists and 99 times out of 100 I’m right. The one time I would be wrong would be if it was Frederic Engels.
After thinking about “philantropist” billionaires in general I’m reminded of the old fable concerning a certain pirate who returned a small portion of the money he had stolen to his victims. Given the strange quirks of human nature they were often more grateful to the pirate than if he hadn’t robbed them at all.
Comparison of Einfeld and Pratt around the issue of perjury is just a bit confusing IMHO, remembering that the latter will now never be convicted of that crime.
For a judge perjury is the worst of crimes. For a CEO, scamming with your supposed competition to organise a price deal is at the top of the list of “do nots”. The only real comparison, if one needs to be made, is that the two men clearly abused their position of power.
Actually I described his support of the Carlton Football Club as a blemish.
Charles Waterstreet said this of his friend recently:
“First, a sense of proportion; at the time Marcus Einfeld wrote a false name for the driver of the Lexus at the heart of the sorry case that saw him taken into custody this month, the maximum, I repeat, the maximum fine for making a false declaration of that nature was $1000.”
http://www.brisbanetimes.com.au/opinion/the-mob-shows-no-mercy-20090328-9ew3.html?page=2
Alternatively, Mr Pratt was fined 36 million dollars for price fixing, cheating customers and companies out of around $700 million – and did have not go to jail, and would not have gone to jail because the evidence which would have convicted him – was declared inadmissable anyway. Even though he was clearly guilty of lying.
On the eve of his admission of price fixing, he said:
“I feel very angry — Visy is seen as Richard Pratt’s company — there is a certain amount of character assassination for me personally because I am a tall poppy in the community; it’s a big scalp (for the ACCC),” he said.
“My reputation is something I have been building for 50 years and so I am worried that the general public will now see me as a rich person who has made his money doing something that is wrong in the eyes of the law.”
http://www.theaustralian.news.com.au/story/0,25197,22539478-601,00.html
There was some hubris and a lot of stupidity in what Einfeld did. The resulting jail term was indeed because of who he was and not what he did. But get a load of Pratt’s pathalogical hubris. How do you proceed to admit you price fixed on an extraordinary scale and then get to be aggrieved about it as well?
“Even though he was clearly guilty of lying”
Actually I retract that. The matter never proceeded, so it is not clear at all. Richard Pratt was not guilty of perjury, he was only ever an alleged perjuror in the matter.
Apparently the cartel turned out it had a public benfit:
“Price increases during, before and after the alleged Visy/Amcor cardboard box cartel conspiracy (2000-2004) were significantly less for paper box container products than for pulp and paper products overall. After the end date of the alleged conspiracy, the products’ prices rose moderately. This perhaps reflects the cartel having been a veil behind which one of the two firms, Visy, disarmed its rival’s competitive response while continuing to seek to win market share.”
from http://www.ipa.org.au/publications/1645/the-adverse-effects-of-government-actions-against-cartels
Can someone please elaborate on how Pratt & subsequently Visy and Amcor therefore “ripped off” anyone?
Mark, you’ll have to do better than quoting the IPA’s defense of duopolistic cartels…unless you’d be interested in reading a treatise I have from Greenpeace called ‘Whales Are Nice’?
Personally, I’d prefer that people at least wait until the funeral’s over before all this talk begins. But human nature being what it is…
“This perhaps reflects the cartel having been a veil behind which one of the two firms, Visy, disarmed its rival’s competitive response while continuing to seek to win market share.”
This was, word for word, Visy’s argument to the ACCC, before they admitted everything and pled guilty in the Federal Court. Judge Peter Heerey’s judgment is worth reading
http://www.austlii.edu.au/au/cases/cth/federal_ct/2007/1617.html
Below are some highlights of the judgment, which go straight to Mark Hill’s comments at 24. They’re well worth the effort of reading them.
317 I shall say something about remorse in the context of consideration of the individual respondents. In the meantime, I note that the principal positive defence pleaded, and maintained until recently, was that any communications between Visy and Amcor were “commercial tactics” against Amcor aimed at “camouflaging” what Visy was doing and a means of obtaining “market intelligence” from its rival (amended defence par 222 (c) and (d)).
318 In light of what is now admitted to be the facts, it may be doubted that this John Le Carré defence had any prospects of success. Section 45 prohibits contracts, arrangements or understandings containing provisions of a specified kind, whether or not a party harboured a secret intention to cheat. Moreover, entering into a prohibited contract, arrangement or understanding is a free-standing contravention in itself, whether or not it has been given effect. In any case, a contract, arrangement or understanding can still be given effect even if there is some cheating between the parties (as distinct from cheating the customers, which is the raison d’être of a cartel) or the cartel does not work as well as some of the parties might have hoped.
319 The corporate culture of Visy in relation to its obligations under the Trade Practices Act was non-existent. None of the most senior people hesitated for a moment before embarking on obviously unlawful conduct. There was in evidence a Visy document entitled “Trade Practices Compliance Manual” dated February 1998. It was signed by Mr Pratt. It bears a distribution list, signed by Mr Debney, with the names of 50 or so personnel covering every State and Head Office. On the front cover it is said:
This is an important document. It is essential that it be read and understood by you. Visy Industries requires strict compliance with its policy on the Trade Practices Act.
The document includes the stern warning that price fixing and market sharing are “strictly prohibited” and that readers of the document “must never make (such) arrangements with a competitor”. Further, it is said Visy personnel
should avoid all contact with competitors or their employees other than contact approved by senior management or Visy Industries’ Legal Counsel. All necessary contact with competitors should be conducted in formal settings.
I doubt that Westerfolds Park and the Cherry Hill Tavern could be regarded as formal settings. The Visy Trade Practices Compliance Manual might have been written in Sanskrit for all the notice anybody took of it.
Hmm, I would have thought that given what we now suspect of the ACCC’s behaviour that the original case and judgement might be unsafe. A Royal Commission into the whole sordid affair would sort the wheat from the chaff.
Let’s look at an article published in The Age!
http://business.theage.com.au/business/deceit-could-haunt-the-accc-20090428-am0o.html?page=-1
Sinclair – I don’t think proceedings can be stopped unless there’s evidence about illness, though I’m no lawyer so I won’t assert that as a certainty. But I’m a bit puzzled about why the ACCC actually seeking to prosecute someone where there is a strong enough prima facie case that they’ve broken the law can be reasonably characterised as a “pursuit”, “too enthusiastic” or the action of “zealots”.
Is it being suggested that the ACCC normally doesn’t prosecute to enforce the law and that Pratt was an exception?
There’s nothing about the ACCC’s behaviour in pursuing Pratt for perjury that has any bearing on the earlier civil cartel case. To recap, Amcor went to the ACCC admitting that it and Visy had formed a cartel. Being the first to confess, Amcor got immunity from prosecution but Visy of course did not. For a while Visy put up what Heerey J cslled its “John Le Carre defence” of deception and double cross, faithfully reproduced by Mark Hill. But then Visy approached the ACCC and cut a deal where it pled guilty to breaches of the Trade Practices Act. no doubt in exchange for lower penalties. In doing so, Visy told all about the cartel; who met with whom, where and when, which customers they decided to rip off and by how much.
Graeme Samuel isn’t running a local version of Guantanamo Bay. No one at Visy got waterboarded or had the confessions beaten out of them. In fact no one has alleged any wrong doing by ACCC in the cartel case. In law it was a standard cartel case, the only unusual factor being that one of the respondents was a rich and powerful celebrity, the late Mr Pratt.
But if Visy wants to retract its guilty plea and re-argue that there was no cartel it will have plenty of opportunity to do so in the forthcoming civil damages cases being brought by its customers. The evidence against Visy and Ancor will be will well tested, no doubt.
First, as others have already pointed out, Pratt was never actually convicted of a crime, although he did concede that he and his company were liable for a civil penalty (which is an entirely different thing). By contrast, Einfeld pleaded guilty to a crime, and unlike Pratt, he had actually sat in judgment on a person who committed perjury and spoken of the heinous nature of that crime.
Secondly, there were problems with the evidence relied upon by the Prosecution in the criminal proceedings against Pratt.
Ryan J ruled that the primary piece of evidence against Pratt was inadmissible, namely, the Agreed Statement of Facts filed by the party in the civil hearing. Pratt’s lawyers allege the ACCC represented that the material in the Agreed Statement of Fact was not going to be used in any other proceeding, but that while the ACCC was saying this in the civil proceedings, it was concurrently planning a criminal proceeding against Pratt.
It is worth noting that para [1] of Heerey J’s 2007 judgment states:
Further, Pratt’s lawyers alleged that Pratt’s health affected his judgment when he entered into the settlement, and that even while he signed the Agreed Statement of Facts, he protested to the arbitrator that he had not met Mr Jones as alleged. In the end, he agreed to the Statement of Facts because he wanted the proceedings to be finalised and thought that would be the end of it. The arbitrator was Mr McHugh (former High Court justice) and spoke to the prosecution about this, who then notified the court.
So there were massive problems with evidence concerning the perjury allegations. After Ryan J had thrown out the material contained in the Agreed Statement of Facts as inadmissible, it would have been very difficult for the prosecution to prove contravention of s 155 of the TPA. (Remember, too, that in a criminal proceeding it is necessary to prove something beyond reasonable doubt)
This is not to say that Pratt’s conduct in the Visy-Amcor cartel was to be applauded. Heerey J’s judgment contains a damning indictment of his conduct and of his protests that it was all some kind of a Machiavellian scam on Amcor.
I think the ACCC would have been much better off leaving things where they were, with a victory in the civil penalty proceedings. They would have given a clear message to the corporate world, and Pratt had been punished by the civil penalties. By continuing against Pratt (particularly given the allegations of personal enmity between Samuel and Pratt), the ACCC made themselves look vindictive. This article has a bit of the history of the reactions and factions within the Jewish community.
Ultimately, I think both Einfeld’s and Pratt’s cases are tragic. Both are men who have done good things in their lives, but have tarnished their reputations with stupid actions. How far do good actions outweigh bad? That’s always a difficult question.
Mark, the ACCC runs a Star Chamber. It can call people in and cross-examine them under oath. There are good reasons why this type of legal approach is frowned upon. Normally we’d expect people to be cross-examined in open court with their lawyer present etc. I disagree with Sam’s second comment (immediately above). We have (potentially) just witnessed the corporate equivalent of water-boarding. The thing that concerns me a lot, it that the government has never proven in open court that Pratt is guilty of any wrong doing. All we have is his guilty plea (should that be no contest plea?). At the time of the judgement (Sam’s post above) I was surprised at how aggressive the judge was in his judgement. To be sure, Pratt may well have ebeen guilty of running a cartel etc. But that is one hypothesis. When we live in a world of plea bargaining and settlements etc. we have no way of knowing why people plead as they do in court.
Aspersions should be cast. Pratt played a part in a cartel that ripped off people to the tune of $700 million dollars. His philanthrophy to his favourite football and the ‘arts’ in no way make up for the money he screwed out of everyone in this country. His reputation is rightly soiled and anyone claiming that Grahame Samuel acted improperly, in actually enforcing the laws of this country should be damned for the hypocrites they are.
“Mark, the ACCC runs a Star Chamber.”
Hyperbole ‘r’ us, learn some history before you make any more ridiculous statements.
Sinclair, I agree that’s undesirable in the extreme. I assume you condemn the regulator for the building trades on the same grounds?
The law is such a wonderfully plastic thing isn’t it? The arbitrariness of it has really struck me lately.
Clearly it meant a great deal to Pratt to have his name ‘cleared’, as he died very shortly after, the charges were withdrawn, if not that very night. He probably was a decent and honorable sort of person and I don’t doubt that he made many personal sacrifices building up his large empire, at least in the early days. But price fixing is illegal. Or at least it used to be but I guess it depends on who you are.
But FFS he can afford to pay for his own funeral. State sponsored funeral parties really ought to be means tested.
Yeah I dunno about these state sponsored funerals for the very, very rich. Seems like they should be the last people whose funerals should be paid for by the state.
“The thing that concerns me a lot, it that the government has never proven in open court that Pratt is guilty of any wrong doing.”
Why is this concerning? Pratt settled. Sorry, scratch that. Visy/Pratt and Amcor got caught – by way of audio recordings, mind you – unlawfully conspiring to rip-off their customers. Amcor came clean. Visy/Pratt (unaware of the once-in-a-liftime rock-solid nature of the recorded evidence) chose to deny everything. Then it became crystal clear to Visy/Pratt and their lawyers that they were going to lose. Badly. Then Pratt settled.
BBB
“But FFS he can afford to pay for his own funeral. State sponsored funeral parties really ought to be means tested.”
I do not think Brumby has offered a state funeral. He carefully spoke of a “Memorial”. This, I guess, will be an opportunity, post funeral, for his public friends to get together presumably at taxpayer expense but less in overall cost.
I haven’t followed the building regulator, but if they run a star chamber, then yes.
Just on Pratt’s funeral – the actual burial will be a modest affair if conducted as a religious ceremony. So I expect he will be buried in a plain coffin etc. Jewish funerals are austere and utilitarian affairs. What happens after that, of course, is a different matter.
“So I expect he will be buried in a plain coffin etc.”
Simple packaging ideas are a family specialty, no doubt about that.
Bingo Bango Boingo – your statements are far from the truth where they concern Pratt (as I understand it). Pratt has always denied involvement (his executives were involved) but he signed the statement as a means of finishing proceedings – civil proceedings at that (not criminal). That was its only purpose (as the Judge pointed out in the last day or so). Pratt has never admitted guilt and has never been convicted in a court of any criminal offence (as opposed to Marcus). He deserves to be treated as an innocent.
Ian Verrender’s article in today’s SMH makes interesting reading for those claimimg that Pratt was little more than an innocent bystander in the biggest “price-fixing racket this country has seen.”
Some key quotes:
Gaols are full of innocent persons. Just ask Bondy.
>>>>>>He personally colluded.
I’d like to see the proof of this statement and not just somebody’s opinion. I have not heard anybody actually allege this before. Disgusting stuff to write about somebody who is no longer able to defend themselves.
Will Pratt’s second (Sydney) family will be invited to the funeral too? Or is it just for the first (Melbourne) family, with shallow celebrities and cynical politicians publicly parading their admiration for the fine upstanding citizen that he was.
grace pettigrew – if you read today’s OZ you will see that his daughter will be there but not his mistress. Hope that satisfies your curiosity (sounds more like jealously though).
Barge, see Sam’s link @ 26 to the Federal Court Hearing, and read Reasons For Judgment 6.1.57, 12.0.294, 17.0.323 – or just search on the page for ‘All Nations Hotel’.
grace, I’m sure that’s none of our business.
Kim included:
“Mark, there were some weird suggestions from Isi Leibler (who nominated Pratt for an AO again yesterday – he surrendered the award last year) that Samuel was (a) somehow motivated by some politics within the Melbourne Jewish community in pursuing action against Pratt; (b) betraying some sort of solidarity since both men are Jews.
No doubt there’s more to this story. But I thought it was quite weird that it surfaced in public.”
I agree, Kim: very weird indeed. But it surfaced several months ago on the front page of The Australian in a meandering, gossipy story. The suggestions seemed to be
i) Jews owed each other solidarity that should override any job requirements (such as investigating, prosecuting without fear or favour)
ii) Pratt was a generous donor
iii) Samuels was being simply horrid
etc
etc
Whatever the deficiencies of our legal system and the particularity of the admissibility of Pratt’s words in this case, it seemed to me an extraordinary attack on a prosecutorial body. Misconceived, wrong-headed, with a dollop of Melbourne Jewish community bitching as a garnish. I wondered whether the Editor might have been away from the desk the night before, so the sorry concoction slipped through.
Somewhat reminiscent of Mr Howard’s Attorney-General dropping a bucket on some High Court judges years ago.
Then the theme was repeated last week (by Lindsay Fox?) saying that because Graeme Samuel had broken bread with Mr Pratt at “Raheen”, the prosecution should never have occurred! Are we living in a loose tribal agglomeration of desert fiefdoms and gorgeously tented potentates?? Is this how some prominent business persons see the society?
Yes: weird……
[OT]
Paul Burns said “I’m always casting aspersions at capitalists and 99 times out of 100 I’m right. The one time I would be wrong would be if it was Frederic Engels.”
Latest from Washington, Paul:
* A Specter is haunting US *
[/OT]
Legal Eagle @30, the deal that Pratt cut with the ACCC about the agreed statement not being usable elsewhere was aimed squarely at it not being usable in the damages cases being pursued by Visy’s competitors. Nobody at the time thought about a perjury case, including Pratt’s lawyers, who were caught by surprise. They really should have explicitly got it ruled it out at the time, but it didn’t occur to them.
Unfortunately for the ACCC’s case Ryan J took an expansive view of what the deal ruled out.
“We don’t like the IPA”…but they’ve only made observations.
Can anyone disprove what the IPA said about the price movements in Visy and Amcor’s sub sector relative to all other paper manufacturers?
Their words, not mine:
“Price increases during, before and after the alleged Visy/Amcor cardboard box cartel conspiracy (2000-2004) were significantly less for paper box container products than for pulp and paper products overall. After the end date of the alleged conspiracy, the products’ prices rose moderately. This perhaps reflects the cartel having been a veil behind which one of the two firms, Visy, disarmed its rival’s competitive response while continuing to seek to win market share”
If you can’t then there is a solid example of cartel behaviour being beneficial for society, why the TPA is misguided based on a very simplistic model (perfect competition) of the economy and the idea that Pratt ripped anyone off is ridiculous.
“What Pratt did was terrible…” except that his cartel didn’t do anything to hurt consumers or downstream businesses.
Mark (Hill), claims about the size of the damages from the cartel are about to get a thorough airing in the Federal Court. Visy and Amcor will no doubt argue that the cartel was not successful in putting prices higher than they would have been a free market. We’ll see if the judge buys it.
From what I understand, the discovered documents show that the ACCC was thinking about a perjury case from the very beginning in relation to the evidence from Russell Jones. Pratt, his lawyers and the arbitrator did not consider it.
It is pretty disingenous to say “we won’t use this in any other proceedings” (when really it was “we won’t use this except for the criminal proceedings we’re about to launch”). It starts to look like entrapment. It seems that they also misled the arbitrator of the civil proceeding, who said:
I think the advice the arbitrator would have given to Pratt would have differed significantly if he had known there was a criminal proceeding in the pipeline.
No one comes out of this smelling like roses, in my opinion.
Mark Hill, I’ll be fascinated to see if the plaintiffs in the class action can prove any losses, or alternatively show any gains by Visy and Amcor which should be disgorged.
Mark Hill @52, what is there to “disprove”? The IPA haven’t “proved” anything other than half of a sector is below the average price for the sector (duh!).
The IPA’s “finding” that one sub-sector’s price movements were below that of the entire sector is like the ’shock! horror!’ finding that half the population is below average intelligence (perhaps you are one?).
Price movements across a whole sector (pulp & paper) are a statistical artefact and, moreover an average. *Of course* some types of paper/cardboard products experienced price rises below the average — so it’s a pure syllogism for the IPA to then assert that as proof the cartel didn’t “hurt” anybody.
Has it occurred to you, or the IPA, that without the cartel, the price of cardboard boxes (and the *average* for the whole pulp/paper sector) would have been lower still? Is that even a consideration?
Look, he was a businessman. I don’t think it’s helpful or interesting to try and dump on him as an individual. What I think is more important and useful is to reflect on why some sectors of the media and high society are in such a rush to exonerate a business leader whose company, by his own admission, engaged in a cartel. You’d almost think they don’t want the general populace to question the natural order of things, in which the rich and powerful are wealthy because they deserve it, and everybody else is in their position of relative disadvantage because *that* is all they deserve too…
…it just wouldn’t do to have people asking uncomfortable questions about that state of affairs now, would it?
—-
In any event, the IPA’s observations cannot simply be accepted as unproblematic assessment of facts, due to the compromised nature of the IPA’s affiliations with the business sector.
If you won’t accept that IPA research is so compromised, then I expect you’ll also be in complete agreement with Phillip Morris’ research into the benefits of smoking, and Greenpeace’s well footnoted and referenced finding that Whales Are Good For The Planet.
“No one comes out of this smelling like roses, in my opinion.”
That may be so, but the idea that Graeme Samuel was just going after Pratt because of some ancient squabble over opera politics, or because of some intra-Melbourne Jewish community feud, and that the other ACCC commissioners and the DPP would passively go along, is just ridiculous.
“Has it occurred to you, or the IPA, that without the cartel, the price of cardboard boxes (and the *average* for the whole pulp/paper sector) would have been lower still? Is that even a consideration?”
Can you prove it though? The contrary seems true – prices for that sub sector rose when the cartel was meant to have ended.
We don’t need to discuss if research or researchers are compromised or not if we just look at the figures – both for the health effects of smoking, or the social losses and gains from oliogopoly.
Says Mark Hill:
“prices for that sub sector rose when the cartel was meant to have ended.”
BZZZT: Post hoc ergo propter hoc.
In 2004-5, prices for *everything* rose — fast — Mark, remember? 2004-5 was the beginning of the last cycle of inflation and interest rate rises (just after Howard won re-election on the premise that interest rates would also be lower under a coalition government — I expect you fell for that too?)
To repeat: there is no need to “disprove” the IPA’s statements because they don’t prove anything. To summarise my previous two posts on this thread, the IPA’s position is syllogistic (shock! half the sector’s prices were below average!), compromised (friends of business find business is friendly) and also based on a post-hoc fallacy (prices rose after the cartel, therefore there was no cartel).
Maybe the IPA are able to baffle you with their bulldust Mark, but you’ll have to do better than that to convince anyone here.
Sorry, I would normally be more courteous in dealing with someone new to the forum, but to come here quoting the IPA as gospel is just not the way to make friends.
Best,
Mercurius
He’s not new Merc, and not terribly thin-skinned either.
The IPA relied on ABS data – are they corrupt too?
“In 2004-5, prices for *everything* rose — fast — Mark, remember? 2004-5 was the beginning of the last cycle of inflation and interest rate rises (just after Howard won re-election on the premise that interest rates would also be lower under a coalition government — I expect you fell for that too?)”
Prices rise almost every year (given our monetary policy preferences for 2-3% inflation). The cartel’s market prices rose slower than other related industries – which would infer that the cartel had a gain for consumers of their products. All that matters is real prices – which relative prices basically are, presented differently. The realtive price of Visy and Amcor products was less than related industries during the cartel (given their prices didn’t increase as much) and rose after the cartel.
To me, this infers the cartel did not create monopoly style deadweight (and social welfare)losses as a by product of monopoly pricing and profits, since such pricing did not exist. Furthermore, I am not arguing that a cartel did not exist. This is your own creation. I am pointing out that the evidence infers that the cartel was beneficial for society, contrary to the assumptions underpinning the TPA.
“To repeat: there is no need to “disprove” the IPA’s statements because they don’t prove anything.”
I think you do have to prove something, but not the IPA’s observations, and here’s why: I inferred, contrary to the underlying modelling of the assumptions that the TPA uses, that the cartel was beneficial for society. On this I protest to people declaring Pratt ripped people off.
To this you ask the sensible question if I knew what the prices would be if not for the cartel. But here’s the rub: you can only prove this by simulation and the fact that prices rose after the fact seems to be contrary to the idea that prices would have been lower without the cartel (along with the lower relative prices for the cartel’s existence for that sub industry).
Sinclair:
“The IPA relied on ABS data”
Not for its conclusions. Is this deliberately obtuse? For your sake I hope so.
Mark:
“I think you do have to prove something, but not the IPA’s observations, and here’s why: I inferred, contrary to the underlying modelling of the assumptions that the TPA uses, that the cartel was beneficial for society.”
Well, usually it’s those who would argue against orthodoxy to show their working. The prima facie assumption is that cartels are bad, using the standard economic arguments. If you want to say that a cartel has been good, you’ll need more than some completely decontextualised and isolated pricing figures, puffed up with ideology.
But FDB, be fair. Ideology’s all they’ve got.
“Not for its conclusions.”
Explain how.
“Well, usually it’s those who would argue against orthodoxy to show their working. The prima facie assumption is that cartels are bad, using the standard economic arguments”
The law as it is, is not the orthodoxy with regard to theory. It may have been in the earlier half of last century but not anymore. The evidence on MNE and Industrial Organisation showed that cartel coordination or monopoly can reduce costs far enough to deliver a net social welfare gain even if monopoly prices are charged. Perfect competition was attacked as a paradigm from the outset for ignoring institutions and entreprenuerial activity.
You’re asking me to prove something the empirical evidence shows – I think I’ve proven as far as it can be shown for this specific case, save for proving the counter assertion that the cartel made society worse off than the alternative – which is counterintuitive to the price rise at the demise of the cartel.
” adrian
Apr 30th, 2009 at 2:42 pm
But FDB, be fair. Ideology’s all they’ve got.”
Christ, why did I bother being civil?
From the IPA’s study you can only conclude one thing, that amcor and visy colluded to keep prices low… sure thing…
“Christ, why did I bother being civil?”
I didn’t realise it was a bother to be civil.
Seriously though, that wasn’t an uncivil comment – I believe that most hard right libertarians first and foremost base every judgement on their ideological disposition, and manipulate the facts to fit this ideology. Most are incapable of judging an issue on its merits.
Even a cursory glance at Catallaxy, for example will make this obvious.
Shorter neoliberals: Pratt was an incompetent (alleged) cartelist.
Wonderful eulogy line: “Richard was a giant among unsuccessful white-collar criminals.”
Not according to the CDPP, which made it clear – in court – that the charges would have been withdrawn even if the evidence had stayed in, purely on the grounds of Pratt’s health.
“I believe that most hard right libertarians first and foremost base every judgement on their ideological disposition, and manipulate the facts to fit this ideology.”
Bigot.
You can call me whatever names you like, Mark Hill but I stand by that statement 100%. If that makes me a bigot in your eyes I couldn’t give a f*ck.
I was surprised to read in the SMH this morning that Kevin Rudd, had made a deathbed visit to Dick Pratt:
http://www.smh.com.au/opinion/politicians-should-defend-the-public-interest-not-pratts-reputation-20090430-aore.html
I heard about that Sans Blog@73 before it was reported in the paper. It is probably just as significant that Rudd didn’t attend his funeral.
Which reminds me …John Howard looks stunning in a yamaka.