Economics and witchcraft in the ALP and elsewhere

Dr. Andrew Leigh MP is a former Professor of economics at the ANU and is now the Labor member for Frazer. During his university career he was awarded the Economic Society of Australia's Young Economist Award which is given to honour that Australian economist under the age of forty who is deemed to have made a significant contribution to economic thought and knowledge. He has published over 50 journal articles in the disciplines of economics, public policy and law, and over 100 opinion pieces. His research findings have been discussed in, amongst others, the Australian, the Australian Financial Review, the Christian Monitor, the Economist, New York Times, the Sydney Morning Herald, Time and Washington Post. He has also written a number of books, perhaps the best of which is titled Battlers and Billionaires, which weaves together vivid anecdotes, interesting history and powerful statistics to tell the story of the growing inequality in this country. It is not as hard hitting as Thomas Piketty's book Capital which has a similar theme but a different conclusion, arguing that increased growth will not prevent the spiral into global inequality. Andrew's book on the other hand tells us that inequality can fuel (economic) growth, almost implying that the end justifies the means.

In other words Andrew is no slouch and is probably the most academically qualified person in the federal ALP, which suggests his ideas will translate into ALP policies. And this is alarming since it appears that someone as obviously influential as Andrew does not have his papers peer reviewed, allowing him to use sources for his arguments that suit his theme but are scarcely very reliable. This is unfortunately not an uncommon practice. There are so many articles produced by the so called think tanks that you can find written justification for almost any absurdity. Don't like wind turbines? Well search around and you will find a paper that tells you the low frequency noise from the blades will make you sick. Ditto for odd ball fetishes like vaccinations, garlic as a cure for AIDS, or the dangers of male circumcision, but most of the think tank literature is written for their paymasters so, while the health benefits of cigarettes are no longer promoted, you can find plenty on stuff defending fast food, alcohol, mining, gambling, and of course, growth.

Faith and overpopulation

Which brings me to a paper Andrew published in 2014 called “The Pro-Growth Progressive”. Growth has been religion for the ALP even before Paul Keating embraced Milton Freedman’s economic ideas and is the weapon of choice for most economists. In his introduction Andrew stated that in relation to population growth,

“he defaulted to an optimistic faith in humanity's ability to innovate”.

But faith is just the default position for those who wish to believe when no evidence is available or, to quote from Hebrews 11.1, faith is the substance for things hoped for. There is a wealth of evidence, (or at least a book load, Why Things Bite Back by Edward Tenner, former executive editor for physical science and history at Princeton University) that humanity's innovations have unintended consequences far beyond what could ever have been contemplated. Just two interrelated examples: the invention of pesticides and antibiotics both lead to the acceleration of the evolution of super bugs. Alarmingly this development of resistant strains became obvious very early but humanity had become too dependent on both to halt or even modify their use, leaving us with a growing number of antibiotic resistant bacteria like MRSA and pesticides that are killing the bees, our food pollinators.

Life expectancy claims

Andrew, in his in praise of growth article, claims that we are living longer and healthier. And while it is true that many diseases have been eradicated or are treatable, obesity has more than doubled in the last 20 years, with 14 million Australians overweight or obese. Obesity is now the biggest single threat to public health. On the basis of current trends, our life expectancy will start to decline because of this disease which is, unlike most other epidemics that plagued humanity, a man-made problem, largely due the food industry's dependency on growth. ( Would you like fries with that?)

Happiness

His next claim is also controversial: he challenges the theory that once incomes reach a certain threshold, more money doesn't buy more happiness. This theory, the Easterlin Paradox, is named after the author, USC professor Richard Easterlin, carried out studies in nine countries on the relationship between happiness and income. Happiness is of course hard to qualify. Apparently frogs are happy in water hot enough to kill them, a bit like some Beijing residents apparently. However Andrew uses a later study done in 2006 that expanded the original Easterly one to 131 countries and concluded that the relationship between satisfaction and GDP was almost linear suggesting that money did buy you more happiness. Like some new age churches he is seemingly enthused by this prospect, linking it to an increased love life and suggesting that Paul McCartney's song should be “money can buy me love”

The argument against this study is twofold. Expanding the study to 131 countries ensured that it included many developing nations where the people on lower incomes would be happier with an increase. The results of this study were presented as graphs which displayed per capita income against levels of reported life satisfaction and the result was indeed a straight line, with satisfaction rising with income. Except that the charts were plotted on a logarithmic scale and, in reality, it meant that an income increase generated a lot more happiness for a poorer person that a rich one - a rather logic conclusion and one that ties into the Easterly theory.

From longevity and happiness, the article moves into environmental concerns, where Andrew argues that we are not running out of non-renewable resources, nor are we making more pollutants. Peak oil is a fantasy and air pollution is reducing. Incredibly, the entire output of the US “weighs” only marginally more than it did a century ago. This, according to his theory, is because most workers, doctors, barristers, don't produce goods from non renewables, so their product doesn't weigh much – its called the weightless world. Well its an extraordinary claim, given the huge growth in metal production to build the cars, planes, machinery that we didn't have a century ago. All those “weightless” people had cars, homes computers, used power and water, took holidays, and someone provided the materials to do all that.

Pollution

When it comes to air pollution, Andrew's claims are refuted by a report from the Organisation for Economic Co-operation and Development, called "The Cost of Air Pollution: Health Impacts of Road Transport." This report shows Australia has failed to halt the dangerous rise in air pollution. It estimates that the economic cost of that failure has run into the billions. The report shows that between 2005 and 2010, the number of deaths from air pollution in Australia jumped from 882 to 1483, representing a 68 per cent rise, despite cleaner car technology, which was overwhelmed by the growth in the number of vehicles.

And that is just one aspect of the pollution that plagues us.

No one has addressed the plastics in our oceans, or the space junk that clutters the heavens, the disarray of the world's nitrogen cycle or the number of untested chemicals that come on the market every year. In the US the EPA estimated there were not only 62,000 untested chemicals in the market but it was almost impossible to test for the combined impact of multiple chemicals, even though there was grave suspicions that these were linked to many diseases.

Neocon doctrine

Being an experienced and well qualified academic, Andrew provides references to his claims, 12 of them in fact. Arnold Kiling and Nick Sachultz get two mentions, both referring to their co authored book Poverty to Prosperity. Which also gets a wrap from the Cato institute and the former Republican House Speaker Newt Gingrich, a duo that should be as politically popular as pornography to the ALP. Nick Schulz is the DeWitt Wallace Fellow at the neoconservative American Enterprise Institute (AEI), where he serves as editor of AEI's in-house magazine The American, and a columnist for Forbes.com. Schulz has also worked as an editor at Foxnews.com and served as a policy analyst for the now-defunct Empower America, a right-wing pressure group founded by William Bennett.

It would be difficult to cover all the intrigue and skulduggery done by the AEI but here is some : They were one of the leading voices that pushed for a “Regime Change” in Iraq, they helped fund pro tobacco studies, they support climate change deniers ( In February 2007, The Guardian (UK) reported that AEI was offering scientists and economists $10,000 each, "to undermine a major climate change report" from the United Nations Intergovernmental Panel on Climate Change (IPCC). AEI asked for "articles that emphasise the shortcomings" of the IPCC report, AEI visiting scholar Kenneth Green made the $10,000 offer "to scientists in Britain, the US and elsewhere, ). Not the sort of people a nice boy like Andrew should be using as his references.

Neocon theory referenced for peak oil

Andrew also refers to Michael Lynch, The "Peak Oil" Scare and the Coming Oil Flood for his thesis that Peak oil isn't peaking.
Which just about says it all, except that his book is full of errors including a claim that the earth has 10 trillion barrels of oil, a figure well beyond any quoted by geologists.

Which leaves the question as to why an intelligent person such as Andrew would be so loose with facts and casual with his choice of references. When incorrect ideas gain widespread acceptance they become false knowledge and are difficult to dislodge. False knowledge gains credence because it suits the religious, political or emotional feelings which have given us climate change deniers. Some other notable examples of spurious ideas that gained acceptance were the conviction that the earth was the centre of the universe and that the world was only about 6 thousand years old. Looking back they seem rather quaint ideas but they weren't dangerous ones as long as you didn't contradict them in public. Which puts them way ahead of the modern day conventional economists.

An alternative view to the growthist one

The alternative view: One of the most profound changes affecting the Australian economy and society over the past 12 years has been the massive lift in Australia’s net immigration, which surged from the mid-2000s and is running at roughly twice the pace of long-run norms.

http://www.macrobusiness.com.au/2016/08/the-great-immigration-subterfuge