blogorrhoea
Wednesday, February 26, 2003
 
SCHUMPETERRHOEA

Gary Sauer-Thompson and Ken Parish are bewailing the preponderance of monopolies in Australia's political economy. The book I'm reading (Dutch Keynesian Jan Pen's excellent, if rather old, *Modern Economics*) points in some interesting directions in this respect, but I've not had time to ponder unto decision on this stuff yet, so for the moment I offer a sliver of something I once wrote by way of criticism of Australian communications policy in the nineties.

I am no uncritical admirer of Schumpeter, but I do suspect his most critical insights into matters capitalist have been forgotten (that these thoughts occur in the very chapter - nay, on the very pages - today's market-struck technoboosters mine for rhetorical back-up reflects rather poorly on the state of policy debate in our time, imho). I submit lessons we may take from these passages include (a) that monopoly is inherent in the capitalist dynamic; (b) that, pace the Austrian strand in neoclassical economics, competition is fundamentally problematic at this stage in the trajectory of capitalism; (c) that monopoly need not be a bad thing, but that monopoly suggests a pro-public-sector policy strategy; and (d) that 'technobooster' claims that 'the information age' has got rid of the tyranny of 'old' economics (indeed old wisdom in general) and put in place the conditions for perfect competition and right-wing libertarian nirvana are a complete nonsense.

Anyway, here goes:

... John Button's Department of Industry Technology and Commerce sponsored a Service Industries Research Program report on digital video communications. Published in April 1992, it rang with urgency.

"Australia has missed the policy bus before, at great cost. This has invited
calls for the clever country. The existing transition from analog to digital
communications provides a once-only opportunity … DVC provides a once-only
opportunity for Australia to be a technological leader rather than a follower and
to enjoy all the benefits that flow from it." (Free et al 1992: 1.1.2)

It is not surprising that DITAC should frame communications as a strategic sun-rise industry. That is its brief. What is significant is the degree to which tone and content were set by the technology-as-revolution rhetoric that was contemporarily festooning the US press. Alvin Toffler's 'third wave', George Gilder's 'telecosm' and Nicholas Negroponte's 'digital man' appear, implicitly as main theme and explicitly in the index. Blindly accepted were the propositions that change was coming, that it was coming quickly, that its opportunities were 'once-only', that an international race was effectively already in train, and that there would be winners and losers. That the winner's prize would derive from competition-fuelled innovation was also unquestioned. That the loser's fate was the destruction that invariably attended creation was reinforced with reference to Schumpeter's theory of business cycles (Free et al 1992: 3.2.1). All this was just as it was in the US 'debate', where Schumpeter's long forgotten but ringing phrase 'gales of creative destruction' had come back into fashion. The phrase, at once full of promise for the virtuous and doom for the rest, suited the religious fervour of the new prophets admirably. It also betrayed a profound ignorance of the designated gospel. The Research Industries Report cites the origin of the phrase, Schumpeter's Capitalism, Socialism and Democracy, in its index. What neither the US technoboosters nor their apostles in Canberra gave any indication of knowing was that the argument which spawned the phrase culminated in the insistence that:

"an ever-widening sector of industrial activity tends to enter the sphere of
public management, such as means of communication … simply because these
industries become increasingly amenable to the methods of public administration."
(Schumpeter 1987: 120)

This, Schumpeter argued, is because:

"Monopoly prices are not necessarily higher or monopoly outputs smaller than
competitive prices and outputs would be at the levels of productive and
organizational efficiency that are within the reach of the type of firm
compatible with the competitive hypothesis." (Schumpeter 1987: 101)

It would be tendentious to the point of mendacity to conscript Schumpeter for the cause of corporatisation, never mind competition, for he showed that:

"perfect competition is not only impossible but inferior … It is hence a mistake
to base the theory of government regulation of industry on the principle that big
business should be made to work in perfect competition." (Schumpeter 1987: 106)

Given the dynamics of the Schumpetarian business cycle:

"Monopoly … may make fortresses out of what otherwise might be centers of
devastation (Schumpeter 1987: 95) … a perfectly competitive industry is much more
apt to be routed - and to scatter the bacilli of depression - under the impact of
progress or of external disturbance than is big business." (Schumpeter 1987:
106)

Thus, on their own terms, might Malone, Gilder, Negroponte, Hawke, Keating and Button have been taken to task when it mattered most, in 1992. Nowhere in the mass media and policy papers of that year could this writer find any evidence that anyone did. Rather, the 'information exceptionalism' of the technoboosters permeated policy discourse in general and the 1992 Service Industries Report in particular. So revolutionary were our times that history had nothing to teach:

"In this information age, in which technological change in
communications is occurring rapidly, decision-making based only
on historical information and knowledge of existing conditions
would seem to be inadequate." (Free et al 1992: 4.2.2)

ETC



 
 
SELF-DISCLOSURRHOEA

Both Jason Soon (one of the few followers of Hayek as human as his hero - invariably right in the ways Hayek was right and wrong in the ways Hayek was wrong) and James Russell (a nascent comrade coming unto full flower, I happily suspect) have challenged the geeks of Ozplogistan to expose themselves. Almost as deeply immersed in Jan Pen's *Modern Economics* (if you haven't read this little beauty and you have Tim Dunlop, Max Sawicky, John Quiggin and D-Squared in your suggested links column, you're at least one book short of happiness) as I am in a dirt-cheap bottle of Seagram's 100 Pipers (if you haven't drunk this little beauty, the ash from your Longbeaches is probably landing IN the ashtray, your bloodshot eyes are probably not stinging in moist tribute to the exquisite agonies poor Janis shares on Cheap Thrills, and four hours from now you probably won't have to endure the ill-disguised contempt of a seven-year-old with his school shorts on back-to-front as you croak your pleas for a litre of Sustagen and a chamber pot) I find myself sufficiently emboldened to accommodate them.

Well, after a fashion, anyway.

I look almost exactly as I sound (an unmade bed with glasses), so there's no need for a photo. So my contribution shall be disclosure by way of likes and dislikes. Having spent eight months making my political proclivities a matter of quasi-public record, I shall confine my 'sharing' mostly to the level of aesthetics.

LOATHINGS

- Internet fridges, ads about internet fridges, and the people in ads about internet fridges.
- The pastorally idyllic sarker family in that other LG ad.
- Every shampoo ad ever made
- Boy Groups and their hiplets.
- Girl Groups and their hiplettes.
- Tactical groin-to-groin synthetic-bass-drum-beats murdering samples of perfectly good guitar and vocal samples from better days.
- TV news headlines delivered in the staccato manner of press headlines avec gratuitous deployment of the present-tense to imply misleading immediacy.
- Anyone who uses the words 'un-Australian', 'anti-American', or 'idiotarian' without fairly dripping with indulgent irony.
- Lefty scholarship: Judith Butler (everyone knows she can't write, but that 'subversive performativity' shite is surely the wet lettuce leaf in the left's arsenal)
- Rightie scholarship: Thomas Sowell (easier to fisk than Sheridan, and that's gotta be as damning as an insults can get)
- In the mass media: S. Spielberg (cloying sentimentalism), Oprah W. (cloying 'sharing' and sensitivity), G. Sheridan (just plain awful at every level) and J. Oliver (nauseatingly ersatz-quasi-faux street cred)
- 'Ebony and Ivory' and 'We Built This City on Rock'n'Roll' (can't split 'em, but they're both worse than 'Love and Other Bruises', which is clearly the third worst song ever warbled)
- Campari
- Carlton
- Ioan Gruffudd's Hornblower (too wet, too emotionally candid, too swashbuckling and just too damned cute to get anywhere near the essence of the great man)
- Blogging
- Pretty Woman (the film)

LOVES

- Pretty Woman (the song)
- Blogging
- Lindsay's Pellew and McGann's Bush (There's nothing Lindasy can't do, and, sans that northern accent, McGann woulda been a perfect Hornblower - as he shoulda been the perfect Maturin- no offence to the marvellous Bettany, but WHAT WAS WEIR THINKING!)
- Literature: Patrick O'Brian's epic Aubreiad
- TV Series: *The Monocled Mutineer* (in which Paul McGann proves he is the world's greatest actor)
- In the mass media: FF Coppola and Sergio Leone (every scene a vignette), HG & Roy (having passed even the test of commercial telly - a transition no other comedy act has ever survived, for mine), John Pilger (for many reasons, not least that he brings Ken Parish out in hives) and Nigella Lawson (well, I'm a boy).
- Lefty Scholarship: EP Thompson's *Making of the English Working Class* is the best history book ever written
- Rightie scholarship: Michael Oakshott's *Rationalism in Politics* is yet more proof no interesting philosopher can get by without dealing with Hegel, and a wise-making collection so beautifully written no lefty can put it down without s/he's substantially deLeninised.
- Stout, Jamesons and Cascade Green
- North Melbourne, Bradford City, Brumbies, Raiders and the Tassie Toigs
- 'Waterloo Sunset' by the Kinks (poignant pop section), 'You Don't Have To Say You Love Me' by Dusty Springfield (anthemic - albeit also achingly poignant - pop section), 'Alright Now' by Free (bluesy cock-rock section), 'Hot Love' by T-Rex (glam section), 'Dock of the Bay' by Otis Redding (soul section), 'One Bourbon, one scotch and one beer' by JL Hooker (anthemic blues section), 'Pretty Vacant' by Sex Pistols (punk section), 'Jesu meine Freude' by JS Bach (filling the atheist's god-shaped hole section), 'Satisfaction' by Rolling Stones (salient riff section), 'Whole Lotta Love' by Led Zeppelin (heavy metal - if also mightily riffed - section)', 'You'll Never Walk Alone' by Gerry & the Pacemakers (singing when you're drunk section), and 'Since I been loving you' by Led Zeppelin (best 7 minutes and 25 seconds in human history section).

I dare say a comment or two may ensue …
 
political economic and cultural observations in the register of dismal dilettantism

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