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Eisenhower’s Farewell Address – The Military-Industrial Complex

President Dwight Eisenhower’s Farewell Address to the nation January 17, 1961

In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists and will persist.

We must never let the weight of this combination endanger our liberties or democratic processes. We should take nothing for granted only an alert and knowledgeable citizenry can compel the proper meshing of huge industrial and military machinery of defense with our peaceful methods and goals, so that security and liberty may prosper together.

….

The prospect of domination of the nation’s scholars by Federal employment, project allocations, and the power of money is ever present and is gravely to be regarded.

Yet, in holding scientific research and discovery in respect, as we should, we must also be alert to the equal and opposite danger that public policy could itself become the captive of a scientific-technological elite.

It is the task of statesmanship to mold, to balance, and to integrate these and other forces, new and old, within the principles of our democratic system-ever aiming toward the supreme goals of our free society.

 

Transcript of President Dwight D. Eisenhower’s Farewell Address (1961)

My fellow Americans:

Three days from now, after half a century in the service of our country, I shall lay down the responsibilities of office as, in traditional and solemn ceremony, the authority of the Presidency is vested in my successor.

This evening I come to you with a message of leave-taking and farewell, and to share a few final thoughts with you, my countrymen.

Like every other citizen, I wish the new President, and all who will labor with him, Godspeed. I pray that the coming years will be blessed with peace and prosperity for all.

Our people expect their President and the Congress to find essential agreement on issues of great moment, the wise resolution of which will better shape the future of the Nation.

My own relations with the Congress, which began on a remote and tenuous basis when, long ago, a member of the Senate appointed me to West Point, have since ranged to the intimate during the war and immediate post-war period, and, finally, to the mutually interdependent during these past eight years.

In this final relationship, the Congress and the Administration have, on most vital issues, cooperated well, to serve the national good rather than mere partisanship, and so have assured that the business of the Nation should go forward. So, my official relationship with the Congress ends in a feeling, on my part, of gratitude that we have been able to do so much together.

II

We now stand ten years past the midpoint of a century that has witnessed four major wars among great nations. Three of these involved our own country. Despite these holocausts America is today the strongest, the most influential and most productive nation in the world. Understandably proud of this pre-eminence, we yet realize that America’s leadership and prestige depend, not merely upon our unmatched material progress, riches and military strength, but on how we use our power in the interests of world peace and human betterment.

III

Throughout America’s adventure in free government, our basic purposes have been to keep the peace; to foster progress in human achievement, and to enhance liberty, dignity and integrity among people and among nations. To strive for less would be unworthy of a free and religious people. Any failure traceable to arrogance, or our lack of comprehension or readiness to sacrifice would inflict upon us grievous hurt both at home and abroad.

Progress toward these noble goals is persistently threatened by the conflict now engulfing the world. It commands our whole attention, absorbs our very beings. We face a hostile ideology-global in scope, atheistic in character, ruthless in purpose, and insidious in method. Unhappily the danger it poses promises to be of indefinite duration. To meet it successfully, there is called for, not so much the emotional and transitory sacrifices of crisis, but rather those which enable us to carry forward steadily, surely, and without complaint the burdens of a prolonged and complex struggle-with liberty at stake. Only thus shall we remain, despite every provocation, on our charted course toward permanent peace and human betterment.

Crises there will continue to be. In meeting them, whether foreign or domestic, great or small,there is a recurring temptation to feel that some spectacular and costly action could become the miraculous solution to all current difficulties. A huge increase in newer elements of our defense; development of unrealistic programs to cure every ill in agriculture; a dramatic expansion in basic and applied research-these and many other possibilities, each possibly promising in itself, may be suggested as the only way to the road we which to travel.

But each proposal must be weighed in the light of a broader consideration: the need to maintain balance in and among national programs-balance between the private and the public economy, balance between cost and hoped for advantage-balance between the clearly necessary and the comfortably desirable; balance between our essential requirements as a nation and the duties imposed by the nation upon the individual; balance between action of the moment and the national welfare of the future. Good judgment seeks balance and progress; lack of it eventually finds imbalance and frustration.

The record of many decades stands as proof that our people and their government have, in the main, understood these truths and have responded to them well, in the face of stress and threat. But threats, new in kind or degree, constantly arise. I mention two only.

IV

A vital element in keeping the peace is our military establishment. Our arms must be mighty, ready for instant action, so that no potential aggressor may be tempted to risk his own destruction.

Our military organization today bears little relation to that known by any of my predecessors in peace time, or indeed by the fighting men of World War II or Korea.

Until the latest of our world conflicts, the United States had no armaments industry. American makers of plowshares could, with time and as required, make swords as well. But now we can no longer risk emergency improvisation of national defense; we have been compelled to create a permanent armaments industry of vast proportions. Added to this, three and a half million men and women are directly engaged in the defense establishment. We annually spend on military security more than the net income of all United State corporations.

This conjunction of an immense military establishment and a large arms industry is new in the American experience. The total influence-economic, political, even spiritual-is felt in every city, every state house, every office of the Federal government. We recognize the imperative need for this development. Yet we must not fail to comprehend its grave implications. Our toil, resources and livelihood are all involved; so is the very structure of our society.

In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists and will persist.

We must never let the weight of this combination endanger our liberties or democratic processes. We should take nothing for granted only an alert and knowledgeable citizenry can compel the proper meshing of huge industrial and military machinery of defense with our peaceful methods and goals, so that security and liberty may prosper together.

Akin to, and largely responsible for the sweeping changes in our industrial-military posture, has been the technological revolution during recent decades.

In this revolution, research has become central; it also becomes more formalized, complex, and costly. A steadily increasing share is conducted for, by, or at the direction of, the Federal government.

Today, the solitary inventor, tinkering in his shop, has been over shadowed by task forces of scientists in laboratories and testing fields. In the same fashion, the free university, historically the fountainhead of free ideas and scientific discovery, has experienced a revolution in the conduct of research. Partly because of the huge costs involved, a government contract becomes virtually a substitute for intellectual curiosity. For every old blackboard there are now hundreds of new electronic computers.

The prospect of domination of the nation’s scholars by Federal employment, project allocations, and the power of money is ever present and is gravely to be regarded.

Yet, in holding scientific research and discovery in respect, as we should, we must also be alert to the equal and opposite danger that public policy could itself become the captive of a scientific-technological elite.

It is the task of statesmanship to mold, to balance, and to integrate these and other forces, new and old, within the principles of our democratic system-ever aiming toward the supreme goals of our free society.

V

Another factor in maintaining balance involves the element of time. As we peer into society’s future, we-you and I, and our government-must avoid the impulse to live only for today, plundering, for our own ease and convenience, the precious resources of tomorrow. We cannot mortgage the material assets of our grandchildren without risking the loss also of their political and spiritual heritage. We want democracy to survive for all generations to come, not to become the insolvent phantom of tomorrow.

VI

Down the long lane of the history yet to be written America knows that this world of ours, ever growing smaller, must avoid becoming a community of dreadful fear and hate, and be, instead, a proud confederation of mutual trust and respect.

Such a confederation must be one of equals. The weakest must come to the conference table with the same confidence as do we, protected as we are by our moral, economic, and military strength. That table, though scarred by many past frustrations, cannot be abandoned for the certain agony of the battlefield.

Disarmament, with mutual honor and confidence, is a continuing imperative. Together we must learn how to compose difference, not with arms, but with intellect and decent purpose. Because this need is so sharp and apparent I confess that I lay down my official responsibilities in this field with a definite sense of disappointment. As one who has witnessed the horror and the lingering sadness of war-as one who knows that another war could utterly destroy this civilization which has been so slowly and painfully built over thousands of years-I wish I could say tonight that a lasting peace is in sight.

Happily, I can say that war has been avoided. Steady progress toward our ultimate goal has been made. But, so much remains to be done. As a private citizen, I shall never cease to do what little I can to help the world advance along that road.

VII

So-in this my last good night to you as your President-I thank you for the many opportunities you have given me for public service in war and peace. I trust that in that service you find somethings worthy; as for the rest of it, I know you will find ways to improve performance in the future.

You and I-my fellow citizens-need to be strong in our faith that all nations, under God, will reach the goal of peace with justice. May we be ever unswerving in devotion to principle, confident but humble with power, diligent in pursuit of the Nation’s great goals.

To all the peoples of the world, I once more give expression to America’s prayerful and continuing inspiration:

We pray that peoples of all faiths, all races, all nations, may have their great human needs satisfied; that those now denied opportunity shall come to enjoy it to the full; that all who yearn for freedom may experience its spiritual blessings; that those who have freedom will understand, also, its heavy responsibilities; that all who are insensitive to the needs of others will learn charity; that the scourges of poverty, disease and ignorance will be made to disappear from the earth, and that, in the goodness of time, all peoples will come to live together in a peace guaranteed by the binding force of mutual respect and love.

Transcription courtesy of the Dwight D. Eisenhower Presidential Library and Museum.

The Strange, Difficult Questions CEOs Ask in Job Interviews

I like these… good for provoking a reaction…

https://www.linkedin.com/today/post/article/20140807094555-20017018-13-ceos-share-their-favorite-job-interview-questions

 Influencer

Ghostwriter, Speaker, Inc. Magazine Contributing Editor

The Strange, Difficult Questions CEOs Ask in Job Interviews

Interview questions: Everyone has them.

And everyone wishes they had better ones.

So I asked smart people from a variety of fields for their favorite interview question and what it tells them about the candidate.

1. Why have you had X number of jobs in Y years?

This question helps me get a full picture of the candidate’s work history. What keeps them motivated? Why, if they have, did they jump from job to job? And what is the key factor when they leave?

The answer shows me their loyalty and their reasoning process. Do they believe someone always keeps them down (managers, bosses, etc.)? Do they get bored easily?

There is nothing inherently wrong with moving from job to job — the reasons why are what matters.

— Shama KabaniThe Marketing Zen Group founder and CEO

2. If we’re sitting here a year from now celebrating what a great twelve months it’s been for you in this role, what did we achieve together?

For me, the most important thing about interviews is that the interviewee interviews us. I need to know they’ve done their homework, truly understand our company and the role… and reallywant it.

The candidate should have enough strategic vision to not only talk about how good the year has been but to answer with an eye towards that bigger-picture understanding of the company — and why they want to be here.

— Randy GaruttiShake Shack CEO

3. When have you been most satisfied in your life?

Except with entry-level candidates, I presume reasonable job skill and intellect. Plus I believe smart people with relevant experience adapt quickly and excel in new environments where the culture fits and inspires them. So, I concentrate on character and how well theirs matches that of my organization.

This question opens the door for a different kind of conversation where I push to see the match between life in my company and what this person needs to be their best and better in my company than he or she could be anywhere else.

— Dick CrossCross Partnership founder and CEO

4. If you got hired, loved everything about this job, and are paid the salary you asked for, what kind of offer from another company would you consider?

I like to find out how much the candidate is driven by money versus working at a place they love.

Can they be bought?

You’d be surprised by some of the answers.

— Ilya PozinCiplex founder

5. Who is your role model, and why?

The question can reveal how introspective the candidate is about their own personal and professional development, which is a quality I have found to be highly correlated with success and ambition.

Plus it can show what attributes and behaviors the candidate aspires to.

— Clara ShihHearsay Social co-founder and CEO

6. What things do you not like to do?

We tend to assume people who have held a role enjoy all aspects of that role, but I’ve found that is seldom the case.

Getting an honest answer to the question requires persistence, though. I usually have to ask it a few times in different ways, but the answers are always worth the effort. For instance, I interviewed a sales candidate who said she didn’t enjoy meeting new people.

My favorite was the finance candidate who told me he hated dealing with mundane details and checking his work. Next!

— Art PapasBullhorn founder and CEO

7. Tell me about a project or accomplishment that you consider to be the most significant in your career.

I find that this question opens the door to further questions and enables someone to highlight themselves in a specific, non-generic way.

Plus additional questions can easily follow: What position did you hold when you achieved this accomplishment? How did it impact your growth at the company? Who else was involved and how did the accomplishment impact your team?

Discussing a single accomplishment is an easy way to open doors to additional information and insight about the person, their work habits, and how they work with others.

— Deborah SweeneyMyCorporation CEO

8. What’s your superpower… or spirit animal?

During her interview I asked my current executive assistant what was her favorite animal. She told me it was a duck, because ducks are calm on the surface and hustling like crazy getting things done under the surface.

I think this was an amazing response and a perfect description for the role of an EA. For the record, she’s been working with us for over a year now and is amazing at her job.

— Ryan HolmesHootSuite CEO

9. We’re constantly making things better, faster, smarter or less expensive. We leverage technology or improve processes. In other words, we strive to do more–with less. Tell me about a recent project or problem that you made better, faster, smarter, more efficient, or less expensive.

Good candidates will have lots of answers to this question. Great candidates will get excited as they share their answers.

In 13 years we’ve only passed along one price increase to our customers. That’s not because our costs have decreased–quite the contrary. We’ve been able to maintain our prices because we’ve gotten better at what we do. Our team, at every level, has their ears to the ground looking for problems to solve.

Every new employee needs to do that, too.

— Edward WimmerRoadID co-founder

10. Discuss a specific accomplishment you’ve achieved in a previous position that indicates you will thrive in this position.

Past performance is usually the best indicator of future success.

If the candidate can’t point to a prior accomplishment, they are unlikely to be able to accomplish much at our organization–or yours.

– Dave Lavinsky, founder of Guiding Metrics

11. So, what’s your story?

This inane question immediately puts an interviewee on the defensive because there is no right answer or wrong answer. But there is an answer.

It’s a question that asks for a creative response. It’s an invitation to the candidate to play the game and see where it goes without worrying about the right answer. By playing along, it tells me a lot about the character, imagination, and inventiveness of the person.

The question, as obtuse as it might sound to the interviewee, is the beginning of a story and in today’s world of selling oneself, or one’s company, it’s the ability to tell a story and create a feeling that sells the brand–whether it’s a product or a person.

The way they look at me when the question is asked also tells me something about their likeability. If they act defensive, look uncomfortable, and pause longer than a few seconds, it tells me they probably take things too literally and are not broad thinkers. In our business we need broad thinkers.

— Richard FunessFinn Partners managing partner

12. What questions do you have for me?

I love asking this question really early in the interview–it shows me whether the candidate can think quickly on their feet, and also reveals their level of preparation and strategic thinking.

I often find you can learn more about a person based on the questions they ask versus the answers they give.

— Scott DorseyExactTarget co-founder and CEO

13. Tell us about a time when things didn’t go the way you wanted — like a promotion you wanted and didn’t get, or a project that didn’t turn out how you had hoped.

It’s a simple question that says so much. Candidates may say they understand the importance of working as a team but that doesn’t mean they actually know how to work as a team. We need self-starters that will view their position as a partnership.

Answers tend to fall into three basic categories: 1) blame 2) self-deprecation, or 3) opportunity for growth.

Our company requires focused employees willing to wear many hats and sometimes go above and beyond the job description, so I want team players with the right attitude and approach. If the candidate points fingers, blames, goes negative on former employers, communicates with a sense of entitlement, or speaks in terms of their role as an individual as opposed to their position as a partnership, he or she won’t do well here.

But if they take responsibility and are eager to put what they have learned to work, they will thrive in our meritocracy.

— Tony KnoppSpotlight Ticket Management co-founder and CEO

Outsource physician behaviour change to the experts: Big Pharma

So pay for performance doesn’t work. This is hardly surprising when you see the compromise and mediocrity forced upon policy makers to get ideas through. There have been instances of success in health care. Indeed, one could argue that the exemplary success of big pharma in changing physician behaviour has provided a rod for its own back. Why not harness this expertise in getting under the skin of doctors, and pay big pharma sales outfits to guide physician practice in constructive directions, rather than being distracted by flogging pills that don’t really work that well anyway, and potentially harm? Might have a chat with Christian.

http://www.nytimes.com/2014/07/29/upshot/the-problem-with-pay-for-performance-in-medicine.html

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“Pay for performance” is one of those slogans that seem to upset no one. To most people it’s a no-brainer that we should pay for quality and not quantity. We all know that paying doctors based on the amount of care they provide, as we do with a traditional fee-for-service setup, creates incentives for them to give more care. It leads to increased health care spending. Changing the payment structure to pay them for achieving goals instead should reduce wasteful spending.

So it’s no surprise that pay for performance has been an important part of recent reform efforts. But in reality we’re seeing disappointingly mixed results. Sometimes it’s because providers don’t change the way they practice medicine; sometimes it’s because even when they do, outcomes don’t really improve.

The idea behind pay for performance is simple. We will give providers more money for achieving a goal. The goal can be defined in various ways, but at its heart, we want to see the system hit some target. This could be a certain number of patients receiving preventive care, a certain percentage of people whose chronic disease is being properly managed or even a certain number of people avoiding a bad outcome. Providers who reach these targets earn more money.

The problem, one I’ve noted before, is that changing physician behavior is hard. Sure, it’s possible to find a study in the medical literature that shows that pay for performance worked in some small way here or there. For instance, a study published last fall found that paying doctors $200 more per patient for hitting certain performance criteria resulted in improvements in care. It found that the rate of recommendations for aspirin or for prescriptions for medications to prevent clotting for people who needed it increased 6 percent in clinics without pay for performance but 12 percent in clinics with it.

Good blood pressure control increased 4.3 percent in clinics without pay for performance but 9.7 percent in clinics with it. But even in the pay-for-performance clinics, 35 percent of patients still didn’t have the appropriate anti-clotting advice or prescriptions, and 38 percent of patients didn’t have proper hypertensive care. And that’s success!

It’s also worth noting that the study was only for one year, and many improvements in actual outcomes would need to be sustained for much longer to matter. It’s not clear whether that will happen. A study published in Health Affairs examined the effects of a government partnership with Premier Inc., a national hospital system, and found that while the improvements seen in 260 hospitals in a pay-for-performance project outpaced those of 780 not in the project, five years later all those differences were gone.

The studies showing failure are also compelling. A study in The New England Journal of Medicine looked at 30-day mortality in the hospitals in the Premier pay-for-performance program compared with 3,363 hospitals that weren’t part of a pay-per-performance intervention. We’re talking about a study of millions of patients taking place over a six-year period in 12 states. Researchers found that 30-day mortality, or the rate at which people died within a month after receiving certain procedures or care, was similar at the start of the study between the two groups, and that the decline in mortality over the next six years was also similar.

Moreover, they found that even among the conditions that were explicitly linked to incentives, like heart attacks and coronary artery bypass grafts, pay for performance resulted in no improvements compared with conditions without financial incentives.

In Britain, a program was begun over a decade ago that would pay general practitioners up to 25 percent of their income in bonuses if they met certain benchmarks in the management of chronic diseases. The program made no difference at all in physician practice or patient outcomes, and this was with a much larger financial incentive than most programs in the United States offer.

Even refusing to pay for bad outcomes doesn’t appear to work as well as you might think. A 2012 study published in The New England Journal of Medicine looked at how the 2008 Medicare policy to refuse to pay for certain hospital-acquired conditions affected the rates of such infections. Those who devised the policy imagined that it would lead hospitals to improve their care of patients to prevent these infections. That didn’t happen. The policy had almost no measurable effect.

There have even been two systematic reviews in this area. The first of them suggested that there is some evidence that pay for performance could change physicians’ behavior. It acknowledged, though, that the studies were limited in how they could be generalized and might not be able to be replicated. It also noted there was no evidence that pay for performance improved patient outcomes, which is what we really care about. The secondreview found that with respect to primary care physicians, there was no evidence that pay for performance could even change physician behavior, let alone patient outcomes.

One of the reasons that paying for quality is hard is that we don’t even really know how to define “quality.” What is it, really? Far too often we approach quality like a drunkard’s search, looking where it’s easy rather than where it’s necessary. But it’s very hard to measure the things we really care about, like quality of life and improvements in functioning.

In fact, the way we keep setting up pay for performance demands easy-to-obtain metrics. Otherwise, the cost of data gathering could overwhelm any incentives. Unfortunately, as a recent New York Times article described, this has drawbacks.

The National Quality Forum, described in the article as an influential nonprofit, nonpartisan organization that endorses health care standards, reported that the metrics chosen by Medicare for their programs included measurements that were outside the control of a provider. In other words, factors like income, housing and education can affect the metrics more than what doctors and hospitals do.

This means that hospitals in resource-starved settings, caring for the poor, might be penalized because what we measure is out of their hands. A panel commissioned by the Obama administration recommended that the Department of Health and Human Services change the program to acknowledge the flaw. To date, it hasn’t agreed to do so.

Some fear that pay for performance could even backfireStudies in other fields show that offering extrinsic rewards (like financial incentives) can undermine intrinsic motivations (like a desire to help people). Many physicians choose to do what they do because of the latter. It would be a tragedy if pay for performance wound up doing more harm than good.

Media redux

 

Media world ‘in chaos’ as journalism, publishing and agencies face grim future, according to US commentator

Media world ‘in chaos’ as journalism, publishing and agencies face grim future, according to US commentator

B-Garfield-AThe future of traditional journalism, particularly at a regional level, is “fucked”, as are legacy publishers and even agencies, with all becoming obsolete in the digital age, according to a media commentator.

Veteran US journalist Bob Garfield painted a picture of near-armageddon with out of work journalists, a defunct advertising model and agencies who are no longer relevant.

He also had strong words for creatives who “like to give trophies to one another for their creative genius and parade like Tony the Tiger down Madison Avenue every Fall during ad week,” warning “if they think people love their ads they are sorely, tragically mistaken”.

Speaking at the Association of Data Driven Marketing and Advertising (ADMA) conference in Sydney yesterday, Garfield, a columnist for Media Post, said the Internet has spawned “billions of journalists on the ground and camera phones in hand in search of a story”.

“I represent the last generation of journalists whose vocation was a handsome livelihood,” he told delegates.

Asked about the future for a 30-something journalist, he said: “You are fucked,” adding that a journalist friend with years of experience now waters plants in offices for a living.

“Many say we are in the golden age of content. Which is true unless you want to discuss journalism, particularly local journalism which has suffered greatly at the hands of digital chaos,” he said. “Except for search, gaming and porn, nobody is making mony of any consequence online.

“As audiences fragment the amount of revenue coming in for any particular piece of content goes down eventually to the point when the publisher or broadcaster can no longer afford to produce the thing.

“So if you were looking forward to a great career in media and marketing it might be a good idea to remove your belt and shoelaces.

“This isn’t about digital verses legacy it’s about the growing obsolescence of the advertising supported media model.”

While accepting that “more choice is wonderful”, Garfield warned that the impending demise of the large media companies and proliferation of amateur journalists will lead to a splintered industry and reduction in quality reporting.

“What will be lost is critical mass, the ability for anyone to have a strong enough voice to make a difference amid all the deafening noise of the crowd,” he said.

Traditional media organisation commanded the attention of, and held to account, governments, industry and other institutions, he continued.

“We can have a separate discussion about how responsible and intrepid the media were with this power, but that power was undeniable,” he said. “In general, those organisations attracted the best talent with the most professionalism and the greatest access. In a word, they had clout and professionalism mattered.

“We didn’t offer perfection but we came with a frame of reference.”

Overall, the newspaper industry is “tragically circling the drain”, with asset values decimated, profit margins eradicated and print subscriptions plummeting.

“The result has been vastly diminished journalism, and increasingly desperate measures by publishers such as so-called native advertising, which we can discuss later provided you want to talk about prostitution,” he said.

Garfield said the traditional advertising model has fallen apart in such a fragmented, digital market, while viewers fast forward through adverts like never before.

“Why do they they skip past the commercials? For the same reason he puts spam filters on his computer and refuses to click on any banner ad ever for any reason at any time,” he said.  “Advertising people like to give trophies to one another for their creative genius and parade like Tony the Tiger down Madison Avenue every Fall during ad week. But if they think people love their ads they are sorely, tragically mistaken.

“For more than three centuries consumers have put up with ads. Some ads are funny and clever and some even worm their way into our heads and popular culture. But they are and have always been a nuisance. To most people all advertising is spam. The proof being that the moment technology afforded us the ability to skip them, skip them we have.”

He said the “next bloodbath will be in TV”.

Agencies did not escape the gloomy outlook with Garfield predicting they will become obsolete in such a changing media landscape.

“The agency business is toast because no matter what anyone tells you, it derives its income from creating and placing large ad campaigns . The larger the more lucrative but mass is going away and the agency business does not adapt to micro.

“The entire media universe is in chaos.”

Steve Jones

Thanks CT.

This is bang on. Good to see some good people agreeing. I don’t feel nearly as mad.

http://www.afr.com/Page/Uuid/1fec72e4-07d2-11e4-a983-9084720e3436

ROSS GARNAUT AND PETER DAWKINS

Melbourne forum aims for politics-free economic thought

Melbourne forum aims for politics-free economic thought

The discussion of necessary reforms is dominated by special pleading by vested interests. Photo: Gabriele Charotte

ROSS GARNAUT AND PETER DAWKINS

Australia needs rigorous, independent economic policy debate and analysis to inform economic policy. The Melbourne Economic Forum seeks to contribute to meeting that need by bringing to account the considerable analytic capacity in economics based in the city.

A joint endeavour of the University of Melbourne and Victoria University, this new forum will bring together 40 leading economists, from or with institutional connections to Melbourne to discuss the great economic policy issues confronting Australia and the world.

The forum is independent of vested interests and partisan political connections. It will not support the position of any political party or campaign of any group. It will focus on analysis of policy in the public interest. Almost any policy proposal has implications for the distribution of incomes and wealth and income amongst Australians. Our objective will be to make these implications explicit and to point out their implications for wider conceptions of the public interest.

It would be surprising if high quality analysis of policy choice for Australia does not, from time to time, earn the criticism of participants from all corners of the political contest and from many groups with vested interests in particular uses of public resources and government power. The test of the forum’s value will be its success in illuminating the consequences of policy choice and not its immediate and direct influence on government decisions.

Through the final four decades of last century, dispassionate economic analysis and debate played a major role in illuminating government decisions on economic policy. Rational economic analysis became more important in underpinning serious discussion of policy choice. It emerged from interaction of economists in some of the universities with the predecessor to the Productivity Commission, the national media and later the public service and some parts of the political community. This interaction gradually built support for an open, competitive economy. The ideas preceded their influence, but eventually were of large importance in guiding the reform era under the Hawke, Keating and Howard governments. The resulting reform era laid the foundations for 23 years of economic growth without recession.

CHANGE IS A NECESSITY

 

Business organisations and the trade union movement joined the consensus and joined the discussion in constructive ways. The Business Council of Australia was formed to develop policy positions that were in the national economic interest, though not necessarily in the commercial interests of every one of its members.

Both rational economic analysis in the public interest and Australia’s high standard of living have been weakened by developments in the early twenty first century and are now under threat.

As mineral prices fall, productivity growth languishes and our population ages, Australia needs a new program of economic reform. Yet the discussion of necessary reforms is dominated by special pleading by vested interests.

Of course there is room for disagreement about the size of the challenge Australia faces if it is to maintain high levels of employment and prosperity. And different policy prescriptions will have different consequences for the distribution of the burden of adjustment to a more sombre economic outlook. A lazy policy response would shift the burden onto the shoulders of those Australians who lose their jobs or cannot find one.

Yet a budget that is viewed by the community as unfair is inimical to the task of building a consensus for reform.

The Melbourne Economic Forum will contribute to these debates, starting with a session on the economic outlook for Australia and the impacts of alternative policy responses. In September we will take on the international policy challenges most pertinent to the G20 meeting in Australia later in the year.

In November, we will venture into the hazardous territory of tax system reform and federal-state financial relations.

Bi-monthly forums in 2015 will tackle issues such as infrastructure, investment, foreign investment and trade policy.

Reviving the tradition of rigorous, independent policy thinking is not a hankering for the past but an essential precondition for a new wave of economic reform to secure employment growth and rising prosperity for all Australians in a far more challenging global economic environment.

Professor Ross Garnaut is professor of economics at the University of Melbourne. Professor Peter Dawkins is vice-chancellor at Victoria University. For more details on the Melbourne Economic Forum see melbourneeconomicforum.com.au.

The Australian Financial Review