New Guinea Commerce

Governance, growth and next generation leadership in the Indo-Pacific

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Menzies, Capitalism and Instant Gratification

Current advice from an old Australian leader

Sean Jacobs, Menzies House, 9 October 2014

Ask a 20-year old how to get rich, says Keith Campbell, and they will likely give you three answers: “I can either be famous on reality TV, or I can go start a dot-com company and sell it to Google in about a week, or I can go work for Goldman Sachs and just steal money from old people.”

Today the idea of instant gratification rightly faces a tough audience. Reward without effort closely resembles the entitlement culture of expectation minus responsibility found not just with young people.

In criticising instant gratification, however, it becomes easy to blame two key pillars of Western success – technology and capitalism. Paul Roberts, for example, in his recent book Instant Gratification records the downsides of coping “with a consumer culture almost too good at giving us what we want” – self-centeredness, short-termism, hyper-customisation and violating social norms like “taking calls in theaters or posting videos of others’ misfortunes.”

Roberts traces these setbacks to the rise in modern corporate capitalism. This, he says, emerged as companies recovered from the stagnancy of the 1970s through “cutting taxes and regulations, and thereby allowing the efficiencies of the marketplace to find the most direct route back to wealth.”

Rejuvenated commitments to efficiency and profit entered the 1980s and joined ranks with the microprocessor, speeding up the march to consumer satisfaction. Bringing a vehicle from conception to the showroom floor, for example, now took 18 months instead of four years. Doubling computer speeds and halving costs – otherwise known as Moore’s Law – have clearly made instant upgrades, iPhones and widgets much easier but so many other things cheaper.

Instant gratification, Roberts concludes, is thus a “consequence not of our failures but of our extraordinary successes.” So how does one make sense of this all? In one direction it appears the charges of mass consumption and short-termism are true but, at the same time, our progress seems tied to it.

Interestingly Robert Menzies – Australia’s longest-serving Prime Minister – made similar observations to Roberts prior to the fusion of microprocessors and corporate capitalism. Reflecting in his 1967 memoir Afternoon Light Menzies wrote that, “The scramble for individual wealth and prosperity will go on with all its accompaniments of selfishness. The short view, the demand for immediate and increasing personal benefits, will place great obstacles in the way of statesmanship and the steady march of civilization.”

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Lessons from Prime Ministers’ Chiefs of Staff

RAW Rhodes and Anne Tiernan, The Gate Keepers: Lessons from the Prime Ministers’ Chiefs of Staff, Melbourne University Press, Carlton, 2014

In 1990 Australian Prime Minister Bob Hawke’s office had seventeen staff. In 2010 Prime Minister Julia Gillard employed fifty three. Many view such growth in purely cynical terms – either political staffers undermine the public service or simply feed the media machine. Rarely examined are the professional skills to manage the political and administrative demands of a modern prime ministerial office.

In The Gate Keepers RAW Rhodes and Anne Tiernan provide unique insight into Australia’s machinery of government. The work of a chief of staff is obvious – know the boss, coordinate the policy agenda, manage political expectations and so forth.

The book, however, reveals other prime ministerial insights rare for a nation not usually enchanted by its political leaders. Here is Grahame Morris, for example, on the dietary habits of Liberal leaders: ‘Andrew Peacock would pretty well eat anything but, despite the playboy image, had to be in bed by eight o’clock. Hewson would eat anything providing it came from McDonald’s, and John Howard would eat anything but it had to be three times a day on time or he got glassy-eyed.’

Keeping the leader’s tummy full is one thing but managing tempers is another. Hawke’s chief of staff Sandy Hollway, for example, only saw Hawke ‘lose his temper twice.’ In both cases, he adds, ‘it was on a matter of substance that he felt strongly about, not a petty matter.’

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Bringing the Australian flag to a younger audience

A short piece to commemorate Australia’s national flag day on 3 September

Sean Jacobs, Online Opinion, 20 August 2014

‘Show me a young Conservative and I’ll show you someone with no heart,’ supposedly said Winston Churchill. ‘Show me an old Liberal and I’ll show you someone with no brains.’

Today it’s common to hear that young Australians aren’t interested in politics. This coincides with a perceived weariness toward democracy not just in Australia but supposedly increasing across the Western world.

Certainly, the unique benefits of Australia’s formal institutions, from the rule of law to parliamentary democracy, don’t always invite tender reflection among a young population charging ahead with unprecedented affluence and opportunities. Promoting national icons like the Australian Flag, therefore, has its obvious hurdles.

Designed by public competition in 1901, around 33,000 entrants answered Prime Minister Edmund Barton’s advertisement for a National Flag in the Government Gazette. A diverse cast of five, which even included a schoolboy, an architect and an 18-year old female artist, emerged as combined winners due to their virtually identical designs. Since 1901the Flag has endured as Australia’s peak national symbol – from the war-ravaged Western Front to the tranquillity of schoolyards, cultural ceremonies and sporting events across the country.

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Political Professionals: As Good as the Masters They Serve

Stephen Mills, The Professionals: Strategy, Money and the Rise of the Political Campaigner in Australia, Black Inc, Collingwood, 2014

Sean Jacobs, Menzies House, 30 August 2014

In any arena a mix between competition and technology is likely to result in growth. The demand for political professionals in Australia has been amplified by an obvious contest between the two major parties, while technology has helped in researching voter preferences, promoting political messaging and easing campaign coordination to service the political professional’s ultimate goal – electoral success.

A clear distinction between a professional and amateur is of course pay. But the type of service is key. In 1915 Archibald Stewart became Labor’s first federal secretary and, despite receiving a payment of ‘fifteen guineas’, his role contrasted sharply with today’s paid political professional.

Stewart, according to Mills, ‘literally provided secretarial services to the executive, handling correspondence and minutes, organising transport and logistics for executive meetings… and banking the meagre annual fees paid by the states to sustain the modest national operations.’ A modern political operator – cleverly interpreting data and coordinating messaging – was little use at a time when politics was an amateur sport ruled overwhelmingly by ‘recalcitrant states.’

The need for political professionals in Australia didn’t take off until after World War Two and, even then, only accelerated in the late 1960s and 70s. Labor’s Ben Chifley, after losing the 1949 federal election, complained that his team had not only been outspent but ‘suffered a terrific barrage over the radio and through the press for twelve months.’ Driving the offensive was Donald Cleland – the Liberal Pary’s first federal director – whose military background served as ‘the prototype Australian election campaign professional.’

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How Minorities Succeed

Some groups prosper, others don’t. But to blame capitalism, inequality or exploitation misses the mark.

Sean Jacobs, Hip Hop Republican, 5 August 2014

Having worked as a young professional in the South Pacific I’ve often been impressed at the commercial success of some minority groups. It’s clear some groups have, under far from ideal economic and political conditions, managed to build success and wealth from virtually nothing. In some cases this has happened in just under a generation.

In the late 1800s the British began shipping Indians to work as indentured labourers on Fiji’s sugar cane plantations. Life in these early years was tough – near suffocating humidity and grinding hours don’t suggest comfortable conditions or a bright future. But today the Indo-Fijian presence is visible in nearly all parts of the economy, from shop-fronts and taxis to the boardrooms of Fiji’s largest companies.

In neighbouring Papua New Guinea the circumstances of the Chinese population are slightly different but their patterns of economic success are similar. Rather than appearing in front-end services the Papua New Guinean-Chinese have generally enjoyed success in trade stores, gambling and real estate.

In both cases the first generation have worked hard so the next can prosper. Financial, medical or mathematical skills – obtained through formal education – ease the career path of minorities into respective professions as accountants, doctors or engineers. Affording formal education has been difficult but elements of thrift, sacrifice and wise expenditure have ensured opportunities remain within reach.

Over time the disparities between successful minorities and the rest of the population appear stark. But when examined broadly these trends are hardly new. Thomas Sowell, for example, who spent fifteen years researching and writing his trilogy on racial and cultural issues, ‘was struck again and again with how common huge disparities in income and wealth have been for centuries, in countries around the world.’

This is not just confined to the developing world. Today in the United States, for example, Japanese-Americans and Chinese-Americans enjoy incomes above the national average. As Edna Bonacich and John Modell point out in The Economic Basis of Ethnic Solidarity the first Japanese-Americans arrived on America’s West Coast in the late 1800s ‘virtually penniless.’ Within a decade, however, they rapidly immersed into entrepreneurial activity by forming trade-stores and farms. Other well-known global examples of strong minority business performance include the Lebanese in West Africa, the Chinese in South East Asia and Jews in Eastern Europe.

There are often two easy assumptions to make of this minority success. The first is that their wealth has arrived through exploitation. For example, Chinese businesses in the South Pacific countries of Tonga and the Solomon Islands are the first to be targeted when social tensions emerge. In more extreme terms Idi Amin’s purge of Uganda’s Pakistani and Indian minorities in the early 1970s was based on similar resentments and perceptions of inequality.

The second assumption is that capitalism propels these groups to do well while systematically keeping others down. In this sense capitalism is a ‘dirty word’ and viewed as an unequal game riddled with invisible ‘ceilings’ rather than a mechanism for mobility.

But the key question to ask is – what enables these groups to do well? Here there are many explanations pivoting around attitudes, priorities and behaviours that ultimately have little to do with race, income or background. In the early 1900s Max Weber, for example, suggested in his influential work The Protestant Work Ethic and the Spirit of Capitalism that elements of frugality, diligence and hard work were the source of commercial success against the rigid customs of Catholicism. Others like Margaret Thatcher have balanced these values with attitudes of ‘curiosity, imagination, ingenuity, application and risk-taking’ that ‘render a society more rather than less enterprising.’

It’s also noticeable that privilege features sparingly in the stories of minority success. These groups appear not only to reject their circumstances but adapt swiftly to their humble starts and encounters of discrimination. Exploitation or a lack of ‘access’ has, ironically, been harnessed to refine the pursuit of excellence in work, studies or business formation.

Unsurprisingly these attributes make capitalism a great deal more appealing. ‘To me,’ says wealth adviser Dennis Kimbro, ‘capitalism is not a dirty word, but it means that everything is for sale.’ Creating value, either through business formation or pursuing education, has enabled successful minorities to ultimately push through any perceived boundaries. If individuals are interested in wealth creation and upward mobility these traits are not only worthy of emulation but entirely possible.

A Tale of Two Wests

Allen West, Guardian of the Republic, Crown Forum, New York, 2014

Sean Jacobs, Hip Hop Republican, 26 June 2014

‘George Bush doesn’t care about black people,’ said Kanye West awkwardly during the Hurricane Katrina appeal. Observing the United States from afar one often hears she is ‘a nation of contrasts.’ Only in America, Chris Rock suggested a few years ago, can the best golfer be a black guy, the best rapper a white guy and the tallest basketball player a Chinese guy.

A contrast, therefore, between narrow-minded commentary and a serious assessment of America’s current state of affairs is unsurprising. Former Republican Congressman Allen West’s memoir Guardian of the Republic symbolises the difference not just between two Wests but two sides of the American political divide.

One side, it seems, favours slogans like ‘hope and change’ while the other is more grounded in traditional realities. One team thinks spend now and the other sees hazard in passing on generational costs. Some see the individual as the enduring source of prosperity while others view government as the true catalyst of progress.

These are broad generalisations but they form core themes to Congressman West’s memoirs. West, who lost Florida’s 22nd District in early 2013, peppers Guardian of the Republic with personal anecdotes and principles growing from good parents and the early disciplines of a military career. West’s parents, he says, enabled him ‘to appreciate service to our country. They taught me about fiscal responsibility, the quality of a good education, and personal responsibility. They showed me what it was like to be strong yet caring.’

West’s appreciation of family interlocks with an impressive knowledge of political science and an understanding of the ideas that shaped American democracy. Whether taking apart the competing theories of Hobbes and Rousseau, or underlining Charles de Montesquieu’s influence on James Madison, his transmission of these ideas is readable to a general audience.

A lack of appreciation, by contrast, among the wider population leaves him stunned. ‘Our electorate doesn’t have a freaking clue,’ he observes bluntly, ‘about who we are or from whence we came.’ This invites both easy politics and poor leadership. He adds, for example, that ‘Too many voters seem to be mindless lemmings who fall pretty to droning gimmicks and slogans like “Hope and Change” or “Forward.”’ Even worse, he says, is a media and intellectual class ‘who are complicit in not taking to task or challenging the empty, rhetorical, poll-tested crap being fed to our country.’

An apathy toward democracy, which is growing not just in the United States but in other Western democracies, creates a gap that’s easier filled by West the rapper and not West the Congressman. The former is of course greatly successful, talented and hard-working – accolades that no one would deny – but perhaps not the first port of call for the kinds of challenges America faces. This is not to enforce an intellectual elitism or disqualify certain points of view, but to recognise George Santayana’s observation that if we forget the past we are condemned to relive it.

A key example is the economy. ‘We have excessive debt,’ the Congressman observes of America’s current economic situation, ‘growing poverty, exploding deficits, an expanding nanny state, and an anemic economy.’ West implores Americans to rediscover the ideas of self-agency, persistence and reducing governmental reliance as a way forward. ‘Through entrepreneurship,’ he writes, ‘you develop economic freedom, not economic dependency.’

An alternative economic future where government not only crowds out the individual but is seen as the exclusive catalyst of progress is not a long-term remedy for success. He re-broadcasts the nineteenth-century Frenchman Alexander de Tocqueville’s warning that, once voters discover ‘they can vote themselves largess from the public treasury… the majority always votes for the candidates promising the most benefits.’ The turmoil Mitt Romney faced during the 2012 Presidential election after making similar comments suggests a tipping point may have already been reached.

The passion that West has for his country is not for everyone. The frenzy he can generate in some public speeches also puts many people off. Yet his memoir secures relevance in other democratic arenas beyond the United States where individuals serve as their own ‘guardians of the republic.’ Standing up for tried and tested fundamentals will remain current as long as democratic nations seek to secure liberty and create space for individuals to flourish.

Clear Political Battlelines for the Next Generation

Kim Carr, A Letter to Generation Next: Why Labor, Melbourne University Press, 2013

Sean Jacobs, Menzies House, 6 June 2014

Australian Senator Kim Carr’s A Letter to Generation Next: Why Labor is a rare addition the shallow pool of books encouraging young Australians to be more involved in politics. Carr – a federal Senator for Victoria since 1993 – clearly sees much more of a role for government in his appeal for the next generation to join the Australian Labor Party’s cause.

The role of government, Carr recalls in George Black’s words from the New South Wales Chamber in 1891, is to “make and unmake social conditions.” The barometer of progress within these pages is not individual enterprise but the state – “intervening”, “meddling”, “agitating” and challenging “the entrenched conservatism in Australian politics.”

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A Bit of Sowell

When principle trumps professional gain

Being a great fan of the American economist Thomas Sowell I recently purchased and read his autobiography A Personal Odyssey. It’s interesting to read about the experiences that shaped, in my view, one of the most prolific living economists around today.

Sowell, almost 90 years old, has written over 50 books on economics, politics, and legal and social issues. But what makes him unique is how he unpacks and places complex issues at the feet of general readers.

This skill, he notes, was built after receiving tough but warranted criticism of his early fictional writing. ‘Once I realized how little I knew about writing,’ Sowell says, ‘I could start to learn.’

‘I did acquire an appreciation of the beauty and power of plain writing,’ he adds, ‘which helped me the rest of my life when writing non-fiction.’

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Australia’s Booker T. Washington: Senator Neville Bonner

Classic conservative principles that apply across national borders, race and time.

Sean Jacobs, Hip Hop Republican, 14 May 2014

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Journeys In A Vanishing World

Theodore Dalrymple, The Wilder Shores of Marx: Journeys in a Vanishing World, Monday Books, 2012

Sean Jacobs, Menzies House, 10 May 2014

‘The most decisive thing that’s happened in my political lifetime,’ said John Howard in a 2009 interview, ‘is the collapse of Soviet imperialism. It dwarfs anything else.’ This is significant from Howard, whose political life covers nearly half a century.

His observation, however, is lost on a generation of younger Australians. Certainly, oppressive regimes exist today but are fewer in number, while command and control economics have been trounced by liberal market capitalism and globalisation. For anyone under forty the idea of growing up on a planet of rivalling superpowers with conflicting ideologies is no doubt strange.

Tearing around New Zealand on a recent trip I found time to wade through Theodore Dalrymple’s The Wilder Shores of Marx. Dalrymple first published this back in 1991 after visiting the heights and ruins of communism in Albania, North Korea, Romania, Vietnam and Cuba. With usual wit and insight, he elucidates both the absurdity and grimness of life under the banner of Marxist-Leninism.

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