Can we ever get road user charging to work?

PART 1 – WHY ROAD PRICING ISN’T WORKING

I’m an economist – I think I understand markets and am tempted to use them when they can do a good job.  Road user charging would do a good job of keeping people off roads at peak times and, used properly, could kill traffic congestion.

I’m reluctant to endorse road-building sprees before we even try to manage the use of the infrastructure we have. Taking, say, the least useful 10 per cent of traffic off roads could kill congestion for a while and mean we can wait another few years before making huge billion dollar infrastructure investments. That has big value to society.

(A small drop in traffic can make a big difference: While slow but steady traffic can be efficient, there is a tipping point where congestion is too high, the system overloads and it fails. At that point the effect of another road user joining the road is negative sum. We really want to be below that point. Also, a surprising share of trips are ones that could be moved around – less than a fifth of trips are commutes.)

However. Road user charging has serious problems. The big one is fairness.

Charging people to use existing roads is seen as unfair – and what’s worse, it probably is. (Perhaps not the most unfair policy in all of the Australian history but enough to pose an insurmountable political challenge to implementation.)

Yes: we charge for food, we charge for electricity, we charge for water, and nobody would deny those are more fundamental. But roads are different in a key way.

The big factor is that a group of people who are below and around the average wage consume a lot of road time, and they do so in ways they can’t avoid. Remember, most jobs are in the suburbs, which are not well served by public transport.

(This is not to deny Joe Hockey’s ‘controversial’ point that the very poorest people own cars less and drive less. He is right. I’m kind of displeased with this ABC fact-check that rates the comment misleading. It’s plainly fricking true, and he was pointing it out in the service of raising the petrol excise, which is good policy. n.b. All this is not to deny that Joe Hockey was a bad Treasurer. Also, he blocked me on Twitter for making a joke about the aforementioned debacle. The joke, shown below, is totally innocuous.)

Alack, I digress. The key point is that less well off people live further out and consume a lot of road time, so road user charging is seen as pure sadism. I wrote about it recently at Crikey and a commenter asked why I wanted to “penalise” people. I read the comments on these sort of pieces a lot and I very often see charging for roads described as a penalty or punishment.

If your policy solution is perceived as cruel, you have a big problem. I’ve written previously about a PR strategy for congestion charging (and gee it’s a good one) but I’m still not seeing much progress for the idea. Maybe, just maybe, we need more.

2. BREAKING IT DOWN

My Crikey piece tried to sort through the ways in which a market mechanism works to sort out why the market is seen as unfair.

A market mechanism rations demand, yes – and encourages supply too. It also incentivises suppliers to be efficient; tempts competitors who may do a better job to enter the market; encourages people to consume things that are cheaper; and also, reveals who wants or needs something most.

Well, it does that last one in theory. In reality, the buyer is not always the person who wants the thing most in any sort of objective sense. Budget constraints are the deciding factor: Rich people can afford lots of things while poorer people have to make a lot of tough decisions.

Of course, it is not just roads. Many consumer goods go to rich people even though poorer people would get more subjective value from them. This, we implicitly say in a capitalist world, is fine because the reason the system works at all is by rewarding the people doing the highest value work with a life of being able to afford more things and facing fewer tough trade-offs. (this implicit choice is an issue for another time.)

But work is not something we consume like other goods. Getting to work is not a reward for work, it is an input. If you make getting to work more expensive, you risk putting some people off going altogether.

If there is literally no other option for how to get to work, and no way to bargain with your boss for another start time, and you don’t think you can find another job, and all the more fuel efficient cars cost more than your current car would fetch second hand, then the effect of a higher road use charge is 100% income effect / 0% substitution effect and you can see why it might seem punitive.

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When household budgets are tight due to child care and high effective marginal tax rates, a road user charge might actually prevent a person from commuting. If we dissuade someone from working now, it can not hurt them only now, but damage their lifetime earnings, and the lives of the generations that follow them.

Even if most people are not at these extreme cases, the trade-offs that a road pricing mechanism forces are difficult ones over things that already seem hard.

So you can make a good case for a road rationing mechanism that tries to ration road use without putting a cash price on roads. I have previously proposed a system that might do that.

A recent article in The New York Times describes a food donation network that used a kind of pricing mechanism to solve an allocation problem. It created a big range of efficiencies via a points system — local food banks used points to bid for various items from each other.

A similar points system could overcome the fairness problem in pricing roads. People could be allocated points based on, for example, how far from the CBD they live, or their lack of access to public transport. Unwanted points could be sold off.

This system would totally eliminate congestion if few enough points were given out. It would also create incentives to use other kinds of transport. And it would do so fairly.

What it doesn’t do is reward the owners or operators of roads, or provide a funding stream for roads. Public provision and funding would still be necessary.

But perhaps waiting for the perfect market mechanism that can deliver all the potential upsides is unrealistic. Can road pricing advocates choose not to let the perfect be the enemy of the good?

The more I think about this, the more I see the devil is in the detail. Who would get the points?

This goes to another of the points I made in the Crikey piece. Market allocations of goods may not be fair, per se, but they are a sort of Schelling point – a way of allocating scarce resources that society generally tends to land on in lieu of other ideas.

I like the idea of giving them to households with worse public transport options or lower access to jobs. “I have no other options” is one of the big reasons road user charging is seen as unfair. Having no other transport options is also sometimes a proxy for socio-economic deprivation, although an imperfect one.

But an allocation based on geography would be tough for any government to operate without causing a fuss and furore that would see them voted out.

traffic

While society doesn’t agree to market distribution of road space, yet, that doesn’t mean it agrees to some other rationing plan either. We have a few non-market rationing models in place in other parts of the economy: Income testing and asset testing are both known ways of allocating scarce, government-provided goods. Neither is an obvious fit for allocating road space.

So a geography-based allocation model would be wholly new. And in our geography-based political system, very much open for abuse. New allocations of road use credits would not be safe from the electoral cycle, although whether congestion would rise to previous levels is not clear.

We should also consider the unintended consequences of such a system. Would it reward sprawl if you gave road access credits to people with low public transport access? And punish people who’ve bothered to make the trade-offs to live in smaller spaces closer in?

The whole thing starts to look very difficult indeed. Is there another way to make a non-market rationing system work? Please leave your ideas below!

How the media gets things wrong. A mea culpa

The other day, I encountered a report from ABC’s Radio National that just didn’t look right to me.

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That claim, that expense entitlements are costing taxpayers more than half a billion dollars a year? I was pretty sure that wasn’t strictly accurate.

I’d looked into this myself. For an article for Crikey, back in 2015.

Here’s the headline on that article. See if you can spot the problem.

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That’s right. My article seems to be making the exact same claim as the Radio National piece.

I remember writing the article. I knew I had some interesting information – that the total cost of running all our MPs was $500 million a year, and that was a substantial multiple of their salary costs. The implication was that there was some fat in the system.

I didn’t know exactly what share of the $500 million was “entitlements” and what was other things, because the categories are partly bundled together. I didn’t claim all the $500 million was for entitlements. It definitely includes some things most people wouldn’t deem “entitlements”, notably MP salaries. I guess I could have been a lot more explicit on that fact.

Here’s what I wrote.

—–

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Whatever interpretation readers might be left with after reading, I don’t know, but the headline above was put on the article. The headline turned out to be very powerful online and the piece was widely shared.

Including by this guy.

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(If you don’t recognise Paul Barry, he is the anchor of an Australian TV show called Media Watch, dedicated to keeping the media on the straight and narrow.)

The factlet embodied in the headline has apparently since become accepted truth. (Even though it isn’t strictly speaking, a fact). I’m pretty sure this is what the Radio National reporter drew on for the report above, although perhaps indirectly, as it seems to have been repeated in various places since.

I feel guilty. I actually remember looking at the headline at the time, and thinking  “that’s not quite right.” But I did not ask for the headline to be altered, using the bad faith justification of “people will read the article and know the truth, rather than relying on the headline.”

I suspect I’m not alone in having a slightly guilty feeling about some of the headlines that have accompanied some of my stories. In the modern environment, headlines play a role far greater than simply summarising the content, and that creates a tension.

I’ve sent an email to my pals at Crikey asking if we can get the headline changed. It’s obviously pretty late for that, but it might make me feel slightly better at least.

I asked the general public to contribute their ideas about Australia’s productivity challenges. You won’t believe what happened next.

The following is a submission I made to the Productivity Commission’s big new review of productivity.

Productivity is normally addressed top-down. Concepts are defined in the abstract and the debate proceeds from theory to practice.

I wanted to test inverting that approach. Could a wider than normal group could be made interested in the conduct and outcomes of this productivity review? And would they have much to offer?

On Wednesday 7 December 2016 I had published an article at news.com.au, entitled “What’s the stupid, inefficient thing that makes you mad?” It introduced the concept of productivity and the Productivity Commission’s rolling five-year review process. It then called for readers to contribute examples of inefficiencies in the Australian economy they’d like to see eliminated.

The responses were many (over 400 responses in various online forums) and diverse. (The most frequently mentioned was to get rid of politicians, which was amusing at first but paled somewhat upon repetition.) Nevertheless, the process turned up a large number of illuminating suggestions. I don’t propose to repeat them all here, but certain topics kept coming up in ways that suggested a pattern.

1. Centrelink. Few had anything nice to say about the administration of the government’s welfare services.
2. Australia Post. Delivery services were pretty much uniformly reviled.
3. Transport issues. The dispersed wisdom of the crowd has developed some suggestions for traffic flow that seem clever.
4. Duplication of levels of government. Not popular.

Notably, most of these relate to user-facing regulated entities. The ATO, Medicare and various license-issuing entities also came in for criticism. That represents a clue that for many Australians, an obvious location for productivity improvements might be in the non-market and quasi-market parts of the economy where productivity is hardest to measure.

I discuss each of the topics below.

1. CENTRELINK

“I waited twenty minutes for a duplicate form to be printed – that does not include the time to line up to be told the form they sent was incorrect so I needed a new one. I’m sorry but if any business was run the way centerlink is they would go broke in under a week.”
-Rachael Harvey

All organisations rely on the time and effort of their clients. When you shop for something you may have to learn about their offerings, attend their premises, wait in line and go through check-out processes. This is generally appropriate and efficient.

A problem only develops when the marginal value of the client’s time is higher than the marginal value of the provider’s time. In a free market scenario, this problem can be rectified via the entry of a competitor providing a better service.

In a government scenario, entry is not possible and so knowing how much client time and effort to demand is a challenge.

The results of this informal survey suggest the performance of Centrelink is considerably below that of a large, regulated private entity. Centrelink was mentioned approximately 30 times, banks only three times, Telstra once.

“I had to wait 1hr40 mins just to change my income amount ! This is not fun !! I actually have work to do but still have to wait a minimum 1 hr to talk to someone.”
– Jenni Pin

“Centrelink phone calls and waiting times the fact that you have to go in there 100 times before they sort out the issue”
– Beth McDonald

I have personally led a very fortunate life that has meant I never crossed paths with a Centrelink office. I suspect the same is true for many public representatives. This risks creating an out-of-sight, out-of-mind situation. Policy-makers doubtless prefer to consider the value of welfare payments and their targeting rather than the administration that delivers those payments to the targeted populations. Furthermore, it is easy to imagine that the people navigating the tortuous administrative processes are undeserving of better service.

Indeed, making the use of Centrelink services extremely inconvenient can serve a policy purpose if it deters over-use of welfare. But while the deterrent effect applies only at the margin, the burden of poor administration falls upon a wider group.

Unwieldy administration is likely to have the most material effect on deeply disadvantaged people for whom Centrelink services are vital. In many such cases, the person dealing with the challenges of administration is likely to be a relative or case-worker doing so on behalf of the beneficiary. These people have other responsibilities and the productivity advantages of lightening their workload is obvious.

“You ring to notify them of changes, spend hours on hold, use all your credit so you go to the office and get told to go use the phones and ring through… Why in the hell can’t you just sit with someone and say hey “I’ve got a job, yay me! Can you change my file accordingly please”? It takes 10 minutes!”
– Shylah Mundy

“I thought I had a miracle yesterday it only took seven, yes seven minutes to get hold of someone on the phone with Centrelink “
– Aaron Cosier

Spending public money to save the time of private citizens is considered an investment in the case of expenditure on public assets like roads. In the case of Centrelink administration it is accounted for as a recurring expenditure. This creates a categorical distinction that may be an impediment to raising Australia’s productivity performance.

Productivity enhancing reform for Centrelink might therefore require more measurement of customer satisfaction, better benchmarking to best practice, and balancing the marginal cost of public financial inputs with that of private time inputs.

2. AUSTRALIA POST

“We’ve caught posties just putting cards in the letter box without even coming to the door.”
– Paige Wiles

Australia Post, like Centrelink, relies on making demands on customers’ time to conserve its own resources. The practice of dropping off a card that announces the presence of a parcel – in lieu of attempting to deliver the parcel – is now infamous Australia-wide.

“Never get a card or notification, i just have to regularly go to the post office and check.”
-Nick Seam

This is a simple example of KPIs being ill-defined and incentives poorly implemented. Australia Post faces competition in parcel delivery and in theory, market forces should sweep the problem away.

Australia Post can get away with not demanding higher performance from its contractors because of cost advantages associated with the legacy letters monopoly, and its lack of downside risk – it knows it won’t go broke. This suggests even corporatised government-owned entities can fail to perform optimally and may be a place where productivity enhancements can be found.

3. TRANSPORT

The “obvious” solution to Australia’s transport problems is road user charging. Among the policy-making class at least. There is, however, no indication such a policy is yet obvious to most Australians. It was not mentioned once in several hundred replies to the above-mentioned article. Of course, there is some marginal benefit in another government-funded .pdf recommending the idea. A journey of a million miles must start with a single step, etc, etc.

But in the absence of a charismatic political leader committed to market-based solutions (and what an absence it is proving to be) permitting such a politically challenging policy proposition to crowd out other proposals might be unwise. In that case, the following suggestions from the comments section may be useful.

“In the US you can turn right on a red light which would[be] left on red here! Makes so much sense“
– Jade of Vic

In the domain of transport, time costs are often traded against safety. Uniform, unbendable rules contribute to a strong understanding of the law and so help ensure the law is followed.

But there remain ways in which transport administrations use the time of travellers to achieve their goals without perhaps placing enough value on that time.

“Waiting at traffic lights in the middle of the night when there are no cars around.”
– Athan Pittakis

Optimal access to public transport is one. The placement of entrances to stops and stations is rarely optimised. While transport operators aim to minimise travel time once passengers are aboard, they rarely consider the entirety of the passenger journey. This may especially be the case where rail services are provided by private operators but stations are owned and operated by government.

“Racing to catch the train and you have to run the entire length of a car park then half a station to the entrance. Or having to walk back through the length of a car park in the dark at night.”
-Peita Orlowski

4.DUPLICATION OF LEVELS OF GOVERNMENT

If Australians learn to be upset about their interactions with public entities, they will tend to become more upset as the entities, and so the interactions, multiply in number. This may explain the general sense expressed that collapsing Australia’s levels of government to a number less than three would yield advantages.

“Get rid of local Councils. They are petty, bureaucratic wastes. Full of pen pushers and people who have nothing better to do then lord it over the communities they are supposed to serve.”
– Therese Theil

The legacy of Australia’s federation has complex interactions with Australia’s productivity performance. While overlapping administrations create potentially wasteful static effects, competition between states and the possibility of experimentation create the potential for beneficial dynamic effects.

“Instead of three levels of government, how about just two. The federal govt can look after defence, health, education, anything that affects the country as a whole, and local councils can look after local issues. Less politicians, less duplication, less waste.”
– David Lewis

It may be possible to obtain some of the benefit of both if policy parameters can be varied while user-facing elements can be standardised. For example, national registers of licenses could be made compatible with different license requirements.

CONCLUSION

The productivity-enhancing reforms of Australia’s past have focused on the private sector. Micro-economic reform of the 1980s was a powerful enabler of prosperity.

However, much low-hanging fruit has been harvested in this field. The best options that remain are land tax (aka taxing grandma’s house) and road user charging (aka taxing people’s drive to work). It would be fair to expect that several five yearly reviews will pass before those two policies garner bipartisan support.

The responses collected in this process indicate that people are keen for better quality public service provision. They want it to be more efficient and more respectful of their time. Assuming for a moment that people know what they want, the question then arises of how to do so.

Reforming the delivery of public services faces a different set of challenges -conceptual, measurement challenges and political ones too. The political challenges only multiply if approaches that rely on outsourcing and competition are applied in popular public domains (see: “Mediscare”). In some cases, more competition will be the answer. In other domains, an alternative approach, and one worth contemplating, might be to design and fund the public delivery of higher-quality services.

House price omens

UPDATE DECEMBER 2016:

This post is miles off! It was all predicated on the numbers coming out of the ABS. What  I didn’t realise was the extent to which they would be revised. Because sales of dwellings are reported late, the data get revised up. Generally 3 months afterward.

So. Here we are three months later and I can tell you the number of houses sold in the 3 months to June 2016 got revised up by 26 per cent. The scary looking charts below represent missing data.  Sales have barely trended down at all.

I leave the post below for the sake of completeness.

When it comes to house prices, people usually just focus on the average price for sales in the last period. But a market is about more than just prices.

It is also about sales volume. And luckily, there is lots of detail in today’s official data on volume.

The market has suddenly turned skinny. Not so many homes are trading hands compared to recent history.

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That is a pretty steep drop, and when you break down the data you find that it is mostly centred on detached houses (as opposed to attached dwellings, which include units, flats and terrace homes.)

The fall in sales is concentrated mostly in Melbourne and Sydney, but also Brisbane.

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Now, there are reasons to not trust the newest, lowest datapoint. It will get revised upward as real estate agents hand in their data to the ABS. (Update in December: In retrospect this paragraph is the best part of the whole post.) Last year’s June quarter was revised up almost 50 per cent! If that happens again the results look less dramatic. But the fall is not all about the latest data point – it looks to have been going on since the start of the year.

If the apparent trend survives, this looks like a serious shift we should pay attention to.

The question is whether this information has any value. My quick analysis suggests it just might.

In previous times, plunges in the volume of houses sold have indicated the start of periods where prices faded away. The yellow periods in this graph go from the start of a fall in volumes traded to the end of the slide in median house price. You can see a house trading volume fall can mark a period of house price stagnation.

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For another look at those yellow periods, here’s the RBA’s housing prices graph. 2008 was a shorter sharper dip and mid 2011 was a longer one.

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Might we be about to see the lines head back below zero? And if so, how far below zero will they go?

Gun advocates: say what you mean, and mean what you say.

Originally published in the Australian Financial Review, December 2012 after the shooting at Sandy Hook Elementary School, which killed 27, including 20 children.

Following the school shooting in Newtown, Connecticut, there have been lengthy screeds arguing for more gun control legislation in the United States.

In response, the comment feeds and Twitter streams parrot one idea above all others: “If guns are outlawed, only outlaws will have guns.”

When I first saw this phrase, it rocked me back on my heels. It’s a strong argument, immediately powerful. It took me a long time to see it for what it is. Flourish.

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The original. I like it, but not the headline an anonymous subeditor put on it!

It invites one to think of a world where the law-abiding are defenceless. It suggests that arming the law-abiding inhibits crime. There is little or no evidence this is true. 

The reason it is so hard to see the emptiness of this phrase at first blush is, I reckon,

its structure. It’s what’s called an “antimetabole” – a symmetrical phrase that has been a rhetorical device since humans first began to write. The second clause is a mirror image of the first.

It has a peculiar effect on the human brain, short-circuiting reason and going straight to deep reserves of feeling.

Antimetabole is the device of choice for some of the best-known leaders of all time.

“Ask not what your country can do for you, but what you can do for your country.”

– John F. Kennedy, 1961.

“It is not even the beginning of the end but is, perhaps, the end of the beginning.”

– Winston Churchill, 1942.

“People the world over have always been more impressed by the power of our example than by the example of our power.”

– Bill Clinton, 2008.

“The first will be last and the last will be first.”

– Jesus of Nazareth, circa 0 AD.

But if they pay speechwriters well, the device is also available to lesser lights.

“In politics there are some candidates who use change to promote their careers, and then there are those, like John McCain, who use their careers to promote change.”

– Sarah Palin, 2008.

An antimetabole is an example of a chiasmus – a broader grouping of phrases that have “symmetry”.

These go back to ancient Greek writings: the word chiasmus comes from the Greek word for the letter X. Imagine two arrows crossing as they depict the structure of the second clause reversing the order of the first.

For example:

“In peace sons bury their fathers, but in war fathers bury their sons,”

– Croesus, circa 600 BC.

Australian politicians, operating in an environment deeply suspicious of rhetorical flourish, aren’t big users of the chiasmus, but there are Aussies deploying the antimetabole structure for their own ends.

Christos Tsiolkas, author of the best-selling novel The Slap, cites his authenticity using antimetabole: “You can take the boy out of the suburbs but you can’t necessarily take the suburbs out of the boy.”

What does this really mean? It doesn’t matter. In the work of persuasion, little lifting is done by logic. In fact, logic needs a little lifting. (See what I did there?).

Like an MC Escher painting, an antimetabole can join up concepts we wouldn’t normally be open to connecting.

Psychology professor James Williams in his 2002 book Visions and Revisions argues that antimetaboles fit right into the grooves of our thought patterns.

“Given what we know about the mind, it would be weird in the extreme if antimetabole were not legion,” he argues.

The human mind is apt to conflate beauty with truth. When Watson and Crick finally lit upon the idea of the double helix structure for DNA in 1953, Watson knew they had the answer to their riddle. The double helix was too beautiful not to be true, he argued.

Pop culture loves the antimetabole. It can be found on internet fan sites about washed up martial artists: “Chuck Norris doesn’t dodge bullets, bullets dodge Chuck Norris.

Football coaches rev up an inferior team with it: “A champion team will always beat a team of champions.”

Schmucks use it making small talk in the lift “Working hard, or hardly working?

But as fun as antimetabole might be in everyday life, we ought to be suspicious of it as part of persuasion. Fair is foul and foul is fair, when it comes to political communication. Antimetabole is part of the fog and filthy air.

How memes show us the future of news.

News stories were once true and substantive.* Now they often aren’t.**

Who chose this? Why has it happened? Who can we blame?

To begin the answer, let us take a quick detour into the world of memes. For a meme to spread, what matters is its shareability. Whether a chain letter or a Facebook video about sloths, certain characteristics of memes make them highly shareable. They go viral. They splinter and are adapted. The most memetically fit versions perpetuate and grow stronger.

In memes we can see very easily that shareability need have little to do with truth, little to do with substantiveness.

Our collective future is being crushed in the shrinking blue ellipse like rebels in a trash compactor
Our collective future is being crushed in the shrinking blue ellipse like rebels in a trash compactor.

News is just the sharing of information. So why would we expect truth and substantiveness to be important in News?

Well (you may say) the history of the 20th Century! In that period, news sources that thrived – one could mention the New York Times here – were ones that invested in reputations for truth and substantiveness. There is precedent.

And, obviously, the human brain is adapted to crave true things. Mostly. This is evolutionarily adaptive on the whole. (It is worth pointing out that memetic fitness is not about the memes in isolation. The environment in which the memes live and die – the human brain and surrounding culture – is vitally important. )

So there is good reason to think truth, substantiveness and news can go hand in hand in hand. But they needn’t, if other incentives in consumption or production are more important.

For example More copies of Soviet newspaper Pravda were printed than the New York Times during the 1970s. (It may have been substantive but it was not always true.) And of course there have always been gossip magazines – which sold more copies than the Times, Washington Post, and Wall Street Journal put together.

The truth and substantiveness of those key western news sources in the 20th century seemed so crucial they would stay like that forever. But those features were actually always fragile, never universal, and only ever contingent on a happenstance combination of incentives.

What were those incentives coerced major news sources to be true and substantive? I don’t purport to know for sure, but I can think of several plausible candidates.

On the production side:

  • Time. Newspapers came out generally only once a day, or perhaps once a week. Facts could be checked. Re-using other outlets stories was simply a way to be a day late.
  • Money. There was no other good way to get people ads.
  • Advertiser influence: They wanted a credible environment to carry their spruiking.
  • Access. Politicians would not talk to newspapers that were non-credible.
  • Niches. A large profitable market meant gossip and political journalism were not all bundled in together under one masthead. Brands were clear.

On the consumption side:

  • A select readership. Over the 20th century, literacy skyrocketed. But reading the ‘important’ newspapers was still the preserve of the educated (and those who could afford them) for decades.
  • Your paper of choice was public knowledge. It lay on your front lawn each morning and on the train anybody could see what you were reading. The stories you knew about also depended on what paper you read. Reading a ‘serious’ paper was a status symbol.

Some readers may look at this list of little reasons and deem them beside the point – yes, yes but the fourth estate has a vital role in holding the mighty to account!

But the lesson of memes is we don’t get what is vital – we get what incentives allow.

“Any human with above room temperature IQ can design a utopia. The reason our current system isn’t a utopia is that it wasn’t designed by humans. Just as you can look at an arid terrain and determine what shape a river will one day take by assuming water will obey gravity, so you can look at a civilization and determine what shape its institutions will one day take by assuming people will obey incentives.”

-Slate Star Codex

We can fund the Press Council, lionise the ABC’s Media Watch program, read the remaining journalists we think are credible, cry at the Walkley awards, rant about clickbait in the comments and so on. But that won’t be more than a sandcastle against the tide. If we want to bring back large volumes of very good journalism we need to change incentive structures.

All this is why I try to avoid bashing individual journalists for the fate of the media. Some people – with the finest of intentions – try single-handedly to reshape the incentive structure of the entire industry. They use the internet to shame and berate journalists and outlets for producing what they perceive as low-quality content.

It’s a valiant attempt. In some ways these people are heroes. They are making themselves very angry and quite unpopular in an attempt to uphold the common good. I thank them. But they cannot do it alone.

The incentives are what matter. The question is whether the incentive change that came with the rise of the internet is permanent. I am hopeful that the recent dislocation is fleeting. Technology is not done changing.

COME-BACK?

A revival of news may even be inevitable. We may see experimentation in news production, distribution and consumption of news until someone hits on a model that pays for itself. This is why we have capitalism – if a product exists that people want, the market will reward handsomely anyone that can find a way to package and deliver it.

One possible form news could take is the trade press – boutique outlets for paying clients who absolutely want only the facts.  Alternatively, perhaps Facebook will fund reporting and investigations. Or online classifieds will add content to bring in more eyeballs and thereby accidentally reinvent the newspaper from the other side. (Or a combination of this second two – online selling groups on Facebook are seemingly huge now.)

More likely it will be something else entirely that brings back serious news. On the production side, the profit motive is an incentive that gives us reason to hope.

However. This will only be the case if technology hasn’t also changed something about the environment in which memetic fitness is determined – i.e. human brains. If we have been so affected by frolicking in the internet’s content fountain that we actually secretly don’t want news any more, then the party is pretty much over.

*Is this true? It seems to be but I admit to having no data.

** Is this true? If it’s not true and substantive, is it a news story? Is it worth comparing a buzzfeed listicle to a news story if all they have in common is being comprised of words? These questions are not pursued any further in the work above.

Bring back core and non-core promises

The election is no longer “on the horizon.” It’s close enough to smell the sausages. Everyone involved in politics is working hard, trying to get us to listen, trying to get us to believe, trying to get us to vote.

Most of what they are saying is lies. Or to be a little kinder, false predictions about what they will do in the future.

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Labor’s policy list

Labor has set out 100 positive policies on its website.They’re really quite interesting and I recommend having a look.

But will it do them all? No way.

Take its plan to cut capital gains tax and negative gearing. These are very bold reforms any party would struggle to get  through the Senate.

And – despite recent reforms – the coming Senate is going to be a particularly mixed one.

Psephologist Anthony Green predicts eight Greens, three Nick Xenophon Teamers, either Glenn Lazarus or Pauline Hanson, Jacqui Lambie and an associated senator, plus probably one other odd-bod from Tasmania.

It’s a volatile mix that would wreak havoc on the most carefully-planned legislative agenda and laugh heartily at the very idea of a mandate.

And there is no guarantee of a mandate, for anyone. A hung parliament is quite possible, with independents and Greens set to make good runs in a range of lower-house seats. Nick Xenophon Team is a huge factor because it is competitive in some classic Coalition seats in SA. One expert tips six cross-benchers.

The odds of a hung parliament are 4:1 against and the closer the two major parties get, the better the chance a couple of independents (Yes Tony Windsor, I’m thinking about you) could have the parliament in the palm of their hands.

What all this means is that words spoken before the election – however earnestly meant  – cannot all come true.

Why don’t politicians admit that?

Instead of having broken promises littering the field of battle, creating the impression  “they’re all liars”, why not explicitly admit some outcomes are state-contingent?

They could make promises contingent on election outcomes:

“If we win a Senate majority we will pass all our policies. If not we will make health and education our top priorities.”

Promises contingent on Budget outcomes.

“If company tax revenue rises above $100 billion, we will fund a new hospital in Launceston.”

Or promises contingent on other promises.

“If we can get our negative gearing reform bill through, we will fund the building of submarines in South Australia.”

Politicians demur on hypotheticals for a reason – adherents of the more cynical schools of political communication will insist the complexity is too high for voters. And I’m sure the first few weeks after adopting this approach would be full of mocking.

The Leader of the Opposition is a maybe man, a possibly politician, an if-then individual,” the PM would jeer. “He’s built an escape route into every promise!”

Perhaps most politicians would wilt immediately under such ripostes – and the bad press that would follow. Gallery journalists – whose expertise in reading the tea leaves might be slightly less valuable in such a scenario – might be unwilling to give the approach a decent chance.

But maybe, just maybe, a  contrast would eventually become apparent between one side explaining their priorities and the risks and contingencies while the other side baldly claims things that can’t all come true will all come true. It just takes one politician floundering when asked, “But what will you do if you don’t control the Senate?” for that to become the favourite question of press-packs everywhere.

If so, the pressure for truth-telling would ultimately fall on the party that over-simplifies their plan. If that party won an election and then failed to keep their promises the consequences would likely be harsher, given the good example set in advance.

There would still be plenty of opportunity for broken promises. Sometimes politicians simply do the opposite of what they say they will, as Tony Abbott demonstrated after the last election.

But without the cover of all those things promised that were only really deliverable under very particular circumstances, the flat-out lies would be much easier to see.