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"...public opinion deserves to be respected as well as despised" G.W.F. Hegel, 'Philosophy of Right'

Digital Adelaide revisited « Previous | |Next »
May 13, 2003

The good Bunyip professor with a great literary style has generously given up his precious time to respond to my earlier post on digital Adelaide. I'm seen as a confused, delusional lefty clinging to the old Keynesian state. So I'm stripped bare by the professor of the bilabong. Have a look here. Its a good read.

But a bit of dust must have landed in the Professor's eye. He did not address the gap between the rhetoric and reality of the SA government around IT, SA becoming a part of the knowledge economy, or Adelaide reinventing itself as the education city. There needs to be some sort of policy framework for regional economic development.

I read the professors' public policy advice to the state parliamentarians to be this: trust the dynamism of the self-organizing market and reject any attempts by bureaucrats and politicians to suppress competition. He celebrates the decentralized decision-making of market capitalism and those quick-thinking, street-savvy entrepreneurs who take risks and use the unique knowledge they possess to take the opportunities open to them. And our good professor has a radical edge----he uses his vision of a society of independent, self-employed producers to criticize the concentration of power in capitalist society. He really is deepy critical of the reality of liberal society in which the new forms of corporate organization and hierarchy (eg., major media players) act to make individuals subordinate to higher authority. So we should dismantle these concentrations of political and economic power and then distribute power and property as widely as possible to ensure that Australia becomes a nation of dynamic entrepreneurs.

Behind the conservative mask of Bunyip sits a revolutionary. Dont ya just love the way dialectics works away in the background. Yep I'm giving a strong interpretation of the Bunyip's text; it is no more than the interpertation the good professor gave to mine. His strong reading dug up my commitment to the state as facilitating the building of IT infrastructure for the public good.

The Professsor is really a closet Straussian. Not in the sense of preferring premodern to modern philosophy; it is in the sense of their being two levels in his text: the surface one for the mass audience and the secret one for those in the know.

If we take the Bunyip Professor's libertarian vision of a good society seriously (the secret reading), then clearly the car industry in Adelaide has to be broken up along with all transnational comapanies including the IT ones. All employers should be encouraged to dump their dependence and become entrepreneurs.

Or would the Professsor reject this as lefty mischief making and say that his faith in the invisible hand of the market leads him to accept as benign whatever evolves spontaneously? If GMH or EDS is to be accepted, then what happens to to the decentralised character of knowledge and the moral character of participation in the marketplace?

As far as I can see the good professor has a bit of a problem here. Is oligopoly---nay monopoly with EDS, NRG Energy & United Utilities---a minor problem because of the power of these large companies will be constrained by competition. Hence there is no need for anti-trust and anti-monopoly legislation.

Yet, on the other hand, the good professor is deeply troubled by the rise of such powerful bureucratic organizations (eg. media companies such as The Sydney Morning Herald and the tendency for the dependency of their employees to undermine the moral basis of the market.These employees (eg., Margo Kingston) do not have to face the uncertainities of the market, do not take responsibility for themselves and are unable to learn the necessary virtues that are needed to sustain a free market culture. They cannot become independent sovereign individuals and go-getting entrepreneurs. Their life experience leads them to embrace collectivism.

Since most of us are employees so the chances of breaking the back of collectivism are slim indeed. And what is worse for the good professsor, the moral ethos of the free market becomes ever more difficult to preserve the more succesful and developed capitalism becomes.

As the Mayne man says do ya best prof.

| Posted by Gary Sauer-Thompson at 10:41 AM | | Comments (2)


It's interesting that the examples of oligopoly which you cite are largely manufactured by poor government policy.

A friend of mine who tried to set up a start-up IT company in SA some years back was shocked to learn that the bloke running the SA Government office which is meant to help out people like him was actually seconded from EDS. Essentially, the office was designed to help EDS get its finger into any promising new IT pies in SA.

It is certainly harder to set up competition in the case of power companies; access regimes for the distribution networks seems to be the only feasible answer. But the SA Government's decision to impede the construction of interconnectors to NSW just so it could build a power station at Pelican Point is a fine example of how to screw up competition deliberately.

Regardless of whether you are a "Chicago-school" opponent of regulation or a Fels style supporter of pro-competitive legislation, you should still be opposed to the SA Government approach of legislating to CREATE monopolies, subsidising favoured companies with taxpayer funds and actively trying to prevent the free market from functioning.

I think you are drawing too long a bow here to stir up some trubble. Bully for you, a bit of a stoush is good for the blogosphere.

The Professor's insults aside, his point about technology per se are on the money- government 'infrustructure initiatives' in the technology sphere usually don't work because of either or both of

1) The policymaker doesn't understand the business dynamics or the technology involved. or

2) The technology gets superseded.

For example, the Govt could have paid 5 years ago for the CBD to be wired up with cable- which is rapidly becoming obsolete thanks to the magic of 'wireless'.

What the government can do though is to create an attractive climate for people to invest and innovate.

For once in my life I sympathise with the government here. It's hard for them to change the cultural factors that make Adelaide so unsuitable for the "IT Hub" that the government appears to be groping for.

Just as a further point your counterpoint examples of the utility companies point to the problem- the actual generation of power and its delivery into people's home and places of work doesn't have the technological dynamics that IT does; so policymakers can actually work with technology that they understand and won't become obsolete in 5 years.