Today I thought I’d take some time to unpick those rubbery carbon reduction figures.

Let’s take a closer look at page 22 of the Coalition policy document, which contains a table outlining the emissions reductions a Coalition government would buy from polluters, which I’ve reproduced below:

Coalition carbon emissions reduction figures. Source: "Rewarding a Greener Australia", p.22

As you can see, the bulk of the emissions reductions are slated to come from so-called “biochar” technologies in the agricultural sector, which, as I reported for New Matilda last year, are highly speculative and relatively untested at any large-scale level.

The other  interesting thing this table tells us is what the shadow price for carbon abatement under the Coalition plan is likely to be. While the price the Coalition is planning to pay polluters is not spelt out in the document, it is possible to use these figures to calculate an overall average carbon price, which I’ve done in the table below:

As I pointed out yesterday, the Coalition’s own figures suggest that not only will the actual funds disbursed by ERF be less than the $2.55 billion budgeted, they will also result in a shadow carbon price of only $12.50 a tonne – far less than the $23 a tonne that the Treasury’s CPRS modelling says is consistent with a 5% national carbon reduction target.

There are plenty of smart people on this blog so I welcome comments if you think I’ve stuffed up the methodology. But I think we can agree that the price signal is weak, and that therefore so will the incentive for decarbonisation.

Though the chief opponents of PIR have been the large book chains and their tame flacks, the main game in terms of radically cheapening and improving the flow of information and culture should be the abolition of territorial controls altogether.

History shows new and wider modes of circulating knowledge, debate and information are the means by which entrenched power and unquestioned authority is challenged. Just as the printing press destroyed the monasteries, and made possible the Reformation.

This seems genuinely liberatory, so why are so many of the cultural left against it?

In Australia, it’s because the cultural left has long seen progress as a coalition between left-liberal intellectuals, the state, and regulation and subsidy. In a backward postwar society that was accurate enough. Not only has technology changed our relationship to the world, but state regulation has become the barrier to wider cultural growth. In the meantime, a left-liberal clique have come to control the cultural institutions now being threatened – and find themselves in the position of defending a system that retains no logical basis whatsoever. Their progressivism has become the conservative status quo, linked to their cultural power.

It’s a valid point, and as always with Rundle, argued with his cutomary flair and elan. It’s true that the executives and cultural managers running Australia’s cultural institutions – and I’m guessing here that Rundle means the big cultural businesses and organisations such as the ABC, Fairfax, the major performing arts companies, state-funded libraries and art galleries and so on – are predominantly “left-liberal” in their political outlook, if only by a kind of default owing to neo-liberal assault on non-market cultural institutions and expressions and the general perspective of many conservatives and economic libertarians that state support for the arts is unjustifiable.

But has state regulation reallly come at the expense of “wider cultural growth” in Australia? On the whole, it’s difficult to argue that it has, especially at a time when many of the most vibrant organisations in Australia’s mixed cultural economy are the state-owned or funded ones, like the ABC and the big city cultural festivals.

Of course, the heavy hand of state regulation is certainly felt in copyright law, where western legislatures (including Australia’s) have enthusiastically enclosed the cultural commons at the bidding of multi-national music and movie industries – not to mention Communications Minister Stephen Conroy’s quixotic tilt at internet regulation .

But does this mean Australia’s comparitively low trade barriers and liberal publishing regulations are really holding back Australian publishing? The evidence from the sector says they are not. In fact, if anything, Australian publishing appears to be thriving under present conditions. This may mean that the industry is healthy enough to survive in a liberalised trade environment. Or it may mean, as the Productivity Commission report on the subject suggests, that the meagre trade protection afforded by parallel importation restrictions has provided a small but valuable cross-subsidy, particularly to the sorts of smaller publishers that support interesting Australian novelists and non-fiction writers. If that is so, then why unilaterally liberalise PIR?

It’s interesting that Rundle finds himself to the right of the Productivity Commission (which ironicallly recommended a public subsidy as a more “efficient” solution to retain the “positive cultural externalities” provided by PIR) on this issue. He is normally quite suspicious of neo-liberal solecisms like the “left-liberal clique” or the “stone-cold absurdity” of cultural protection, and in other contexts, Rundle has railed against the damage wrought on the American middle classes by pro-market, deregulatory policies. Perhaps in this case, his cultural libertarianism is trumping his far more collectivist and radical views on economics.

As for the monastaries, political action by the state was far more influential in their decline than the printing press.

Cross-posted at my blog.

Salt is the master of the sweeping generalisation and throw-away insult.  Today’s comments in the Murdoch press are a good example:

“Migration figures out this week show Australia’s population is still growing at record rates, and these people must live somewhere. They go to the most affordable areas, and the fastest growing area at the moment is Melbourne’s western front – places like Werribee, where you can still pick up a house and land package for less than $260,000,” Mr Salt said.

“The urban elite think that if something is more than walking distance from their terrace house boundary, it must be unsophisticated and uncivilised.

“It’s the modern version of the cultural cringe that you need to be near cafes, bars and restaurants for this culture to rub off on you. People are living just as meaningful lives going to little athletics, to church and the local sausage sizzle. This satellite existence is the new Australia.”

Actually, no it’s not.

The first paragraph is at least an assertion of fact, which can be checked against ABS figures for accuracy. I did, and found that Werribee (in the City of Wyndham) is not actually the fastest-growing area in Australia, in either absolute or percentage terms; while Wyndham is growing fast, adding nearly 9000 residents in the 12 months to June 2008 for a growth rate of 7.2%, other local government areas are growing even faster, including the Shire of Serpentine-Jarrahdale south-east of Perth, and the City of Perth itself.

In fact, the ABS figures show the whole thrust of Salt’s comments are inaccurate. To quote the ABS report:

The LGAs with the largest and fastest population increases in Australia in 2007-08 were both inner-city LGAs. The largest increase (17,400 people) occurred in Brisbane (C), Australia’s most populous capital city LGA. Perth (C) was Australia’s fastest-growing LGA, increasing in population from 13,600 to 15,100, an annual growth rate of 10.8%. This is the fifth consecutive year in which Perth (C) has been the fastest-growing capital city LGA.

Salt’s final two paragraphs barely deserve discussion. Attacking that venerable straw man, the “urban elites”, plays well with Murdoch journalists eager to file some supporting “expert opinion” in their copy, but this particular assertion is completely unsupported by any data. And as for “this satellite existence” being the “new Australia”, the last time I checked, outer-suburban housing development has been going on in Australia for at least a century.

Got any more fallacies and outrageous generalisations from Bernard Salt? Post them here, and we’ll attempt to exert at least some scrutiny of Australia’s most-quoted and least accurate “demographer.”

UPDATE 18th August 2009:

Salt exchanges more groundless speculation on “Gen Y” with the ABC’s Geoff Hutchison.

It was certainly a fascinating experience that gave me some really interesting insights into the Australian political process and the nature of the Parliamentary press gallery. Flying into Canberra on a 7.20 Qantas flight, I sat in a planeful of Budget travellers – journalists, lobbyists, bureaucrats and businesspeople in suits. I recognised Steven Long, the ABC’s economics correspondent, who later asked the most telling question in Wayne Swan’s press conference.

 Disgorged from thhe plane, this sombre-clad cargo then made straight for a unique taxi queue equipped with flatscreens, where Sky News kept people up to date with the latest budget leaks while they waited, seemingly interminably, for a cab. Meanwhile I joined a few scruffy backpackers and one pensioner waiting for Canberra Airport’s only concession to public transport, a half-hourly bus. If you needed a simple explanation of the shape of class distinction in this country, here it was. Still, for a $9 ride to the city, I was only too happy to get on. 

Canberra, for those who haven’t been there (and I hadn’t since a sight-seeing trip to the War Memorial with my parents in the 1980s), is a city entirely planned around the car. Seemingly devoid of street life, the city is instead a series of tidy clover-leaves which house overly neat office buildings surrounded by acres of carparks (and the occasional child-care centre). The ADF complex at Russell also features a rather ridiculous Imperial eagle on a self-important column, the better to assert whatever military dominance the ADF might project down the hill towards Lake Burley-Griffin. The people of Canberra, of course, live elsewhere, away in the suburbs of Tuggeranong and the like, most of them in fact in the state of NSW.

 Finding myself a cafe in the wind-swept Canberra CBD, I ordered a coffee and worked on my laptop until the time came to travel to Parliament House. Catching a bus to Parliament House is an interesting experience in itself – you roll through the national capital precinct past the High Court,  National Library and National Gallery before I alighted out the front of the Prime Minister and Cabinet building. From here it was another lonely walk up the hill to the entrance of Parliament House, while big white Comcars containing white-haired men in dark suits whizzed past.

I’m not the first person to remark on the abject lack of human scale to this pompous po-mo tribute to Versailles, but walking up the hill brings home the experience in a very personal way. At noon, as I trudged across the desolate forecourt towards the entrance, there was not a single other person on the vast piazza and one almost expected the proverbial tumbleweeds to blow by. I realised that almost no-one actually enters Parliament House by the front door.Inside Parliament House, of course, it was rather busier. As I wandered up the stairs to the lock-up, I could already see the hyper-kinectic little clusters of gossip that are so often a hallmark of any gathering of journalists.

Signing in early, I took a seat near the door of the lockup and watched the media arrive. It’s interesting, for example, how the News Limited types keep to themselves. Paul Kelly, Michael Stutchberry, Lenore Taylor and Robert Gottleibson stood in a tight-knit little circle talking to themselves, while the Fairfax types flitted about the increasingly crowded lock-up in pairs. I had time to introduce  myself to the journalist next to me, a lovely fellow from the Newcastle Herald, before the doors opened and a rolling maul formed at the table contained the budget papers.

From there it was off to the little committee room I had been assigned. While AAP had a big bank of computers already set up, and Fairfax had sandwiches brought in at regular intervals, at New Matilda’s Canberra bureau we had a desk and a powerpoint for my laptop – which only goes to show that however much technology advances, the essence of journalism is still relatively simple.  Mind you, I did very much appreciate the PDF version of the budget papers being provided.From there a couple of hours flew by as I grappled with the four printed books of the formal Budget Papers, the glossy Infrastructure brochure, another big glossy report on Pension Reform, the myriad of press releases and of course the Portfolio Budget Statements themselves (except for Defence, which to the chagrin of the journos from the Australian Defence Business Review, had not managed to get its Portfolio Budget Statement ready in time).

I had barely looked up from my screen when a fresh-faced young Treasury officer popped her head in and informed us that Wayne Swan’s press conference was about to start.So up I ambled to the “presso” to see Wayne swan present to the gallery. He looked nervous early and didn’t speak well, but warmed up as he went along. As Bernard Keane has remarked, the questioning was fairly tame although Stephen Long did try to pin him down on the very optimistic Treasury growth forecasts, which say Australia will return to 4.5% growth in only a couple of years.

The conference  itself was quite an interesting thing in terms of media watching; it’s interesting who watches impassively (more than you expect), who exchanges earnest whispers with colleagues (Lenore Taylor), who takes notes (Kerry O’Brien) and who just wanders in and out looking well-tailored (Tony Jones).

By the time I got out of the press conference, it was time to start writing my articles. Suddenly it was only a short two hours before I had to file my reports and so then it was the usual touch-typing sprint to formulate and arrange my paragraphs. Before I knew it I could hear ABC types doing piece-to-cameras outside my committee room, and then it was 7.30, the division bells were ringing and I was rushing to the desk to retrieve my mobile phone.

The post-budget media antics are in a way even more interesting. I walked upstairs to the offices of the press gallery, where a vast ruck of journalists, lobbyists, spokespeople and politicians swirled and jostled in a narrow corridor as Heather Ridout, Don Henry, Joe Hockey and seeminggly eveyr other lobbyist in the country took turns to do their 30second grabs in response. Meanwhile, Guy Rundle was running around randomly insulting people about their suits.

From there, it was off the Holy Grail Hotel, but you can read all about from Guy Rundle himself.

Hellicar’s career tells us a lot about the ethics of Australia’s business leaders. Despite her pivotal role in one of the most immoral corporate acts in Australian history, Hellicar was a popular member of Australia’s business elite. 

First, the context. Asbestos has killed more than 7,000 Australians, many of them workers for James Hardie Industries. Many workers have now successfully sued James Hardie for the asbestos exposure that has caused mesothelioma and other lethal cancers.

In early 2001, James Hardie’s board of directors hatched a plan to try and escape from the company’s massive asbestos liabilities. They stripped most of the company’s assets and placed them in a new holding company based in The Netherlands, where they wouldn’t be legally liable for the dying workers in Australia.Then they lied to the Australian Stock Exchange, claiming that their Australian operation was “fully funded” to meet the asbestos claims of dying workers. James Hardie even tried to write off its payments to asbestos victims as a tax refund.

The Chairwoman of that board was Meredith Hellicar.

You would think that this woman, the person in charge of a company that has killed thousands of its workers and then systematically tried to avoid facing up to its responsibilities, would be a pariah in Australia. You would think that no government or corporation would want to be associated with her.

You would be wrong. Meredith Hellicar was a popular member of Australia’s business elite. She was on the board of AMP, the Sydney Institute, the Sydney Airport, even cancer research centre The Garvan Institute. She was a member of the federal government’s Takeovers Panel. John Howard gave her a Centenary Medal for “services to business.”

Last Thursday a judge found she had acted illegally as a Director of James Hardie. But  while former James Hardie workers continue to die, all Merdith Hellicar faces is a fine. 

 I took a trip to visit Facebook because I was interested in the way it is remaking social groups of old friends, so I mostly wanted to talk about that, but all these executives wanted to talk about was sharing. And privacy. And control. (Although I did learn the biggest user complaint on the site: the inability to remove unflattering photos of themselves posted by friends.) 

They said this kind of stuff: “People have been traditionally too scared to share on the web,” that from another executive, Chris Kelly, the company’s chief privacy officer at the moment, though he is widely rumored to be leaving soon to run for attorney general of California. “They lost all control because they were too open with sharing information,” he continued. “We give them back that control, so they will share again, and we think people will soon be much more comfortable about sharing more with more people.” He cleared his throat. “Ultimately, human beings are very social,” said Kelly. “They want to share. They just want to share with people that they know and trust.”  

 For all the talk of sharing, it was a slightly tense environment, a little like being in a capsule, hurtling into the great unknown, which is the future of the web. It was all a little vertiginous. In our conversation, we marveled at Facebook’s runaway growth of about a million new members a day, which Kelly called an “explosion.” It’s an astonishing number, but things are moving and changing incredibly fast on the web right now. They know that Facebook’s massive cultural footprint could be washed away tomorrow by forces not yet understood, not least by the micro-choices and preconscious perceptions of its users.  

Grigoriadis’ graceful prose  is effortlessly, enviably stylish:

If there were one word to describe what Facebook has added to my life, I would use it. It’s a multidimensional pleasure: It’s given me a tool for exceptionally mindless, voyeuristic, puerile procrastination; crowd-sourced pesky problems like finding a new accountant; stoked my narcissism; warmed my heart with nostalgia; and created a euphoric, irrational, irresistible belief in the good in men’s hearts among the most skeptical people I know—people who should know better. As the dominant social network on the web (the Internet began, essentially, as a social network, with Usenet in the late seventies) Facebook has created a space similar to a college quad, where members can check each other out, talk about culture, gossip, and pass mash notes. Users really like Facebook; they believe in it so strongly that they want to protect it from itself. That much is clear from the anger over the redesign …  

Also at New York and also on faces, Jonathan Van Meter delivers an in-depth examination of changing notions of beauty, and their visible impacts on the faces of celebrities. Van Meter’s piece is first and foremost a fascinating investigation of contemporary cosmetic surgery, whose frontiers are advancing as rapidly as certain actors’ lips. But it is also a kind of mirror image of Grigoriadis’ piece, probing not the changing social expression of friendship but something we could think of as its flip-side: the changing tastes of mass-media constructs of facial beauty. 

… the Mount Rushmore cheekbones, the angular jawline, the smoothed forehead, the plumped skin, the heartlike shape of the face. Their faces didn’t seem pulled tight in that typical face-lift way; they seemed pushedout. Looking at Madonna, I kept thinking of the British expression for reconditioning a saddle: having it “restuffed.” Perhaps that’s where she got the idea to have some work done. After the hunt, Madge dismounted her trusty steed and thought, My saddle needs restuffing. And, by George, so does my face!  

Van Meter uncovers all sorts of fascinating and illuminating factoids: the celebrity obsession with youth is relatively recent, the Jolie-inspired lip craze is nearly over, and the newest “injectables” are not Botox but based on hyaluronic acid.  It’s also, in a relentlessly depressing way, a story about the eclipse of a certain utopia which dared to dream that humans (both women and men) would one day emancipate themselves from the judgmental gaze.  

The two key elements of the plan are: 

• Legacy Loans Program: a program to combine an FDIC guarantee of debt financing with equity capital from the private sector and the Treasury to support the purchase of troubled loans from insured depository institutions.

 • Legacy Securities Program: a program to combine financing from the Federal Reserve and Treasury through the Term Asset-Backed Securities Loan Facility (“TALF”) with equity capital from the private sector and the Treasury to address the problem of troubled securities.

Okay, so what does all this mean exactly? The best description-by-analogy I’ve seen is Economist’s View’s toxic car analogy, which begins like this:

Imagine a car lot that has 100 cars on it. However, some of these cars have problems. Half of them will have engine troubles that total the cars – the engines blow up and the cars are then worthless – and this will happen just after purchase. The other half are perfectly fine. Unfortunately, there is no way to tell prior to purchase which type of car you will get no matter how hard you try. Thus, half of the assets on the car dealer’s “balance sheet” – the cars on its lot – are toxic, and lack of transparency makes it impossible to tell which ones are bad prior to purchase.    

The Geithner plan works in the following way: the government offers a subsidy to private sector buyers. Depending on what the sellers of these toxic assets are prepared to sell them for, the government will have to top up the amount that purchasers are willing to pay by an extra amount. As EV notes (WARNING: a supply-and-demand curve follows):

the government will not know if it is getting this right or not. Suppose it offers a $1,000 subsidy thinking that is generous enough. In this example, that won’t bridge the gap between the highest offer of $6,000, and the reservation price of $7,500. Thus, the subsidy would be too small to restart the market and the plan would fail. So the answer is to make the subsidy large enough to encourage buyers, but the problem is that if it is too large, the government will be giving money away unnecessarily.    

And there’s another problem. If there’s a large gap between what people are willing to pay and what dealers are willing to accept(the gap between $6,000 and $7,500 in the example), this would be problematic politically since it would require subsidies that are unacceptably large.

And I should note that it doesn’t have to be a subsidy. That’s one way to do this – as a giveaway – but another way is through a no recourse loan (what is being called a partnership). Suppose that the government gives (up to) a $3,500 loan to a private sector buyer to purchase the car for $7,500. If it’s a good car and the value rises above $7,500, say to $15,000, then government will get paid back (with interest) since the asset can be sold profitably (another option is for the government to demand a share of this profit through warrants or other means). But if it’s a bad car, the price falls to zero and the loan is forgiven – it does not need to be repaid. So the private sector agents only have to put up a fraction of the price to control the asset, and their losses are limited to the amount they put up while the gains are potentially large.

This is, in essence, the Geithner Plan. If many of the loans are not repaid, or if the subsidy is too large, it could lose a lot of money, but it could also make money too.

Okay, back to the real world for those of you who find supply and demand curves just a little bit fake. As Paul Krugman notes, the real issue here is how toxic these assets are.  The substance of the Geithner plan is that hese assets are not really toxic, but merely mispriced. Which means that by re-financing the banks, they can eventually sell these assets and the crisis will pass. As Krugman points out, 

early on in this crisis, it was possible to argue that it was mainly a panic. But at this point, that’s an indefensible position. Banks and other highly leveraged institutions collectively made a huge bet that the normal rules for house prices and sustainable levels of consumer debt no longer applied; they were wrong.     

Atrios via Kevin Drum makes the same point (as does Naked Capitalism):

Aside from setting up an overly complicated plan to try to disguise what they’re really doing, the utility of the Geithner plan rests (or pretends to rest, not sure) on one fundamental premise: that Big Shitpile is greatly undervalued by “the market” and that these mortgage securities really have expected revenues which justify higher prices. One could have reasonably believed this months ago, I have no idea why anyone would believe this now. The housing bubble burst, and now recession is here. There’s a lot of shit to be eaten, the question is who will eat it? Timmeh wants to make sure it’s not the banksters.      

Drum makes the point elsewhere that the crticism of the liberal bloggers is fairly simple:

banks aren’t willing to sell their mortgage-backed assets at market prices because they think the market is panicked and only willing to buy at fire sale prices. And fire sale prices will ruin them. But if the government buys at the price banks value this stuff at, they’re almost certainly paying too much. It might rescue the banks, but only by essentially giving away lots of free money.     

Not everyone is anti-Geithner, of course. Cautious supporters of the plan include conservatives like Gregory Mankiw and venerable liberal economist Brad DeLong, who argues that 

I think the private-sector players in financial markets right now are highly risk averse–hence assets are undervalued from the perspective of a society or a government that is less risk averse. Paul judges that assets have low values beceuse they are unlikely to pay out much cash.     

Okay – so – will it work? That depends, of course, on how toxic these assets really are.

If they are actually worth something in the long term – as surely some of them must be – then, with time and more government liquidity, the institutions can eventually sell them, round out their losses, refinance their balance sheets and begin to lend money again. The massive extra liquidity sloshing around the world will then move slowly (or perhaps rapidly) back out of defensive plays and into wealth-generating assets, US consumers will regain confidence and start spending again, and economic growth in the rich world may restart. Even so, we will have experienced a very nasty recession indeed.

But if enough of the assets are truly toxic, eg. worth nothing, then institutions like Citi, AIG, RBS et al are truly insolvent (which, given how much US government money they have all accepted, is not a long bow to draw).  In this case, Krugman is right: many of the pillars of global finance are in fact zombie banks. And zombie banks which do not die can limp on for years, soaking up liquidity and not lending it out to anyone. See: Japan in the 1990′s.  In which case the global credit squeeze will continue in the medium term, and economic growth in rich countries will continue to stagnate. And, in any case, consumers in much of the rich world will have to repair their balance sheets after decades of under-saving.

Which is why I think the current equities rally is just a bear market or “suckers” rally, and will soon be eclipsed by more market pessimism.

As Westbury writes, “this decision is one that is so staggeringly out of touch with the realities of cultural policy at the moment that it is scary.”

As usual, I find myself in agreement with much of what Marcus writes (more of that below). However, I think there is every reason to be far more optimistic about this decision than the initial outrage from the various unfunded parts of the arts community suggests. It may be that this decision will actually materially advance the cultural policy debate in Australia, by motivating the various forgotten voices in the arts community to finally coalesce into a coherent movement for change.

Westbury writes:

The billion dollars offered up for the opera house renovations is stark reminder of how the norms of one world clash with the realities of the other. For that much larger community of artists outside government run arts centres and organisations this represents more than will be invested in them for decades or perhaps hundreds of years.    

He’s right. The annual ongoing funding budget for the NSW cultural grants program is $22 million – which means this infrastructure commitment would fund around 45 years of NSW’s current arts grants programs. Of course, this is not an apples and oranges comparison, given that one is capex and the other is recurrent. And the NSW government spends $222 million a year on cultural institutions like the Art Gallery of NSW, the State Library, Australian Museum, Historic Houses Trust of NSW, Museum of Applied Arts and Sciences, NSW Film and Television Office, and the Sydney Opera House Trust itself. (Figures from the NSW Department of the Arts, Sports and Recreation Annual Report). So this decision needs to be placed in that broader context.

But will this renovation even happen?

To begin with, let’s exert a little political analysis to the debate. The NSW government is not exactly flush with cash. Like all the states, it faces a worsening recession and deteriorating fiscal position. Many of its already-announced infrastructure priorities are dependent on the successful privatisation of NSW’s electricity generation assets, not to mention wads of cash from the Commonwealth. The Commonwealth money is in itself no certainty, given that the Building Australia Fund is dependent on future budget surpluses that have now evaporated. Further, state-based bond issues are being squeezed by the expanding need for the feds to issue bonds to cover the suddenly large and looming Commonwealth deficits – as Western Australia has recently discovered. In short, the global financial crisis has set tight new limits on the scope of state governments to build expensive new  infrastructure projects - a major topic of the recent Queensland election.

Secondly, there is every reason to believe this decision might actually cause a large groundswell of opposition from within the arts community itself. Part of this is the eye-popping figure of $1 billion – or around 6 times the annual budget of the entire Australia Council. But another part of this is the likelihood that any spat about the project may uncover the weakness of the far-from-unified lobbying effort in favour of this decision. Rather than a monolithic lobbying force, the forces of conservatism and vested interest in the Australian arts that drive the current policy paradigm (described by prominent academic Jennifer Craik as “elite nurturing“) are actually quite thin – although generally well represented in parts of the mainstream media.

Cultural policy-making as actually practised in Australian arts ministries is generally far from rigorous, and can often be swayed quite quickly by the whims of the relevant Minister in charge (witness, for instance, the $15 million Victoria Rocks program promised by then-Premier Steve Bracks after a well-timed serve from Claire Bowditch at the ARIA’s.)

It is the relative thinness of the cultural policy debate as currently undertaken in Australia that suggests a decision like this could lead to real opportunities to advance a more progressive vision in the contemporary cultural policy debate.

Cross-posted at my blog.

In the article, Darnton begins by describing a mythologised but historically extant “Republic of Letters” – the Enlightenment, if you like – inhabited by men like Voltaire and Rousseau, Jefferson and Madison. This Republic wasn’t always a wonderful thing, confined as it was to those rich and educated enough to gain entry, but it none-the-less represented a vision of free-and-frank intellectual exchange and discussion which has endured:

One way to understand this system is to draw on the sociology of knowledge, notably Pierre Bourdieu’s notion of literature as a power field composed of contending positions within the rules of a game that itself is subordinate to the dominating forces of society at large. But one needn’t subscribe to Bourdieu’s school of sociology in order to acknowledge the connections between literature and power. Seen from the perspective of the players, the realities of literary life contradicted the lofty ideals of the Enlightenment. Despite its principles, the Republic of Letters, as it actually operated, was a closed world, inaccessible to the underprivileged. Yet I want to invoke the Enlightenment in an argument for openness in general and for open access in particular.

Darnton argues there is a similar tension between the principles of free access and open information embodied by many libraries and educational institutions, and the money and power at stake in the information they generate, distribute and control. He points out that copyright is specifically set down in Article I of the United States Constitution ‘”for limited times” only and subject to the higher purpose of promoting “the progress of science and useful arts.”‘ In the 1780s this meant a 14 year term with one extension. Now, of course, copyright has lengthened to 70 years after the death of the author – which in practice means more than a century.This long and interesting article is in many ways an elaboration and commentary on Lawrence Lessig’s work, but contains many fascinating observations of the contentious interface between the public and private spheres of knowledge. For instance, did you know that relatively obscure journals charge tens of thousands of dollars to public and university libraries?

… the Journal of Comparative Neurology now costs $25,910 for a year’s subscription; Tetrahedron costs $17,969 (or $39,739, if bundled with related publications as a Tetrahedron package); the average price of a chemistry journal is $3,490; and the ripple effects have damaged intellectual life throughout the world of learning. Owing to the skyrocketing cost of serials, libraries that used to spend 50 percent of their acquisitions budget on monographs now spend 25 percent or less. University presses, which depend on sales to libraries, cannot cover their costs by publishing monographs. And young scholars who depend on publishing to advance their careers are now in danger of perishing.

But now, of course, one corporation is changing that business model: Google, with its ground-breaking settlement known simply as the Google Book Settlement. Although there has been some in depth commentary on this topic – most notably from Siva Vaidhyanathan – there has been surprisingly little attention paid to it in cultural and economics circles. When Darnton takes the time to read through the entire 134 page settlement, he is dumbfounded by the scale of the settlement:

… here is a proposal that could result in the world’s largest library. It would, to be sure, be a digital library, but it could dwarf the Library of Congress and all the national libraries of Europe. Moreover, in pursuing the terms of the settlement with the authors and publishers, Google could also become the world’s largest book business—not a chain of stores but an electronic supply service that could out-Amazon Amazon.

The problem, Darnton realises, is that Google is not just creating the world’s largest library: it is also creating the world’s largest research infrastructure monopoly, one controlled in the end by the board of a for-profit corporation – for good or evil.The money quote in Darnton’s article is this, which makes you realise the scale of the opportunities missed by the 1990’s IP gold-rush:

Looking back over the course of digitization from the 1990s, we now can see that we missed a great opportunity. Action by Congress and the Library of Congress or a grand alliance of research libraries supported by a coalition of foundations could have done the job at a feasible cost and designed it in a manner that would have put the public interest first. By spreading the cost in various ways—a rental based on the amount of use of a database or a budget line in the National Endowment for the Humanities or the Library of Congress—we could have provided authors and publishers with a legitimate income, while maintaining an open access repository or one in which access was based on reasonable fees. We could have created a National Digital Library—the twenty-first-century equivalent of the Library of Alexandria. It is too late now. Not only have we failed to realize that possibility, but, even worse, we are allowing a question of public policy—the control of access to information—to be determined by private lawsuit.

Perhaps even more saliently, a similar situation exists for many common genetic traits and diseases. 

The title of this post, by the way, comes from a blog by Siva Vaidhyanathan – the author of The Anarchist in the Library