7th &27th June 2005.
LETTER FROM PARIS -
My friend David from Paris has been reading some of my diary entries on
the death of
Capitalism, and wrote:
I’m willing still to
debate your assertion of the demise of Capitalism because I can see it
the very large generating force of world production and is not running
steam. .... the economic system under
employ capital (raw materials and tools used in the production of
goods) and employees to produce wealth. Corporate America
it has become a monstrous mechanism, in China it has become a
the form of a dragon. It is a non sequitur to say “economy of scale
capitalism” and now that “economy of scale is vanishing” it is the
David's letter is a warning to me that I must define my
terms. Capitalism is the employment of CAPITAL in the production
of goods. His declaration that "it
is a non sequitur to say "economy of scale produced capitalism"
is the crux of what I think is his misapprehension of my
argument. The fact is, only those entrepreneurs who could afford
the enormous expense (i.e. had the capital) to set up a production line
(think cars, liberty ships, canned tuna, cotton clothing) could produce
goods at a competitive price in the nineteenth and twentieth
century. I believe that David has fallen into the error of
thinking that "lassaiz faire economy" means the same as "capitalism
Quite simply, the investment of large amounts of capital was, until
recently, a requirement to obtain "economy of scale".
Now the economy of scale is disappearing. The requirement for
capital as an
ingredient of a lassaiz faire economy is diminishing rapidly.
From that the results predicted in "death of capitalism" follow.
In the last few weeks the French people (followed by the Dutch) have
given a sharp lesson to their President (who is pretending that they
weren't actually revolting against him, but against European
union.) My two cents advice to the French people is, your
solution in the 18th Century was the correct response.
Politicians are about as bad as the nobility,except they base their
elitism on political manipulation rather than birth.
Perhaps (on second thoughts) the guillotine is a bit drastic.
Maybe the French can take control of the political process (much like
the Swiss & the Californians and the Venezuelans already have) by
enacting a constitutional amendment that permits the people to dismiss
the government. Not in three or four years when an election is
due, but NOW, in the next few weeks.
Come to think of it, something like that is what Australia's opposition
(Kim Beazley's Labour Party) should offer as a constitutional amendment
to set the cat among the electoral pigeons.
MIDDLE EAST -
Lebanon, Iraq and Palestine are in the throes of establishing liberal
government. True, there are hiccups. In Iraq the different
parties refused to form a government until their preconditions are
satisfied. In Israel the incipient Palestinian police force is
being weaned from committing terrorist acts, and taught instead that it
must arrest terrorists. In Lebanon the Syrians are learning that
their overlordship was resented.
The opponents (loosely grouped as Al Qaida or Jemah Islamia) are
reduced to complaining that somebody in Gautanamo is peeing on the
Qran, while Islamic fundamentalists meanwhile (lets get things in
perspective here!) bomb historic Islamic
shrines and murder women and babies. Are those guys for real?
On the other hand, Australian Engineer Douglas Wood had the great good
fortune to be sprung after being kidnapped in Iraq. The problem
of his kidnapping is part of the mosaic which includes the difficulty
that the USA is having in recruiting for the military. Basically,
anybody who has a skill and is prepared to work in Iraq can command a
high income. This includes professional military people. So
any US soldiers see civilians getting several times their money for
less risk, how would you feel?
Not that I ever felt much sympathy for Douglas Wood. My thinking
was, He was in Iraq to make lots of
money, and the reason that there was lots of money to be made was
because the terrorist risks were high. So he lost the gamble. So
what? That is the risk he took for the money he made.
The Chinese have problems. Their interference in their own
birthrate has produced a population profile more extreme than that
Europe and Japan, and to a lesser extent Australia. Consequently
they will have problems dealing with their aged "baby boom"
population. They are also having some difficulty coming to terms
with their new superpower status. Most of the world wingers about
the USA, which is not to say that it would like to see the USA
supplanted by the Chinese.
TELSTRA AND TRUJILLO -
The Australian government has over the past few years sold nearly half
of it's privately owned telephone corporation (Telstra) to the
Australian people. The trouble is, they are probably not going to
be able to sell the remaining 51% at anything near the price that the
last investors paid. That seems to me to be politically
unacceptable. So what other options exist?
The reason for the catastrophic drop is thought to be the management
skills (lack) of the last manager, Ziggy Switskowski, MBA.
Consequently, the government has purchased a new broom, called
Trujillo. Trujillo apparently specializes in
"rationalization". I still believe that the final solution will
be to split Telstra, giving the last mile (local loop) of copper to
local government. (The federal government do not actually want to
give the local loop away, but unfortunately, the federal government
does not have the constitutional power to enforce purchase by local
Another option would be to suddenly discover that it was in the public
interest for the local loop to be treated as "infrastructure" and
bundle it all up and sell it to Macquarie bank like Sydney airport.
HARRADINE & MEG LEES -
The Senate changes over at the end of June, and with it go the best and
the worst of Australia's politicians. Senator Harradine refused
to support the GST, Meg Lees did support it even though she had
promised not to. If there is a private hell for politicians, let
us hope that is where Lees is sent.
Some time ago, Queensland's chief magistrate Di Fingleton was found
guilty of blackmailing and bullying magistrates under her control, and
was jailed for six months. Australia's high court has reversed
that sentence, on the grounds that administrative decisions were not
subject to review.
Well I don't know what the High Court is on about. She was jailed
for writing a threatening letter to one of her subordinate magistrates
because he gave evidence that she did not like. I would want to
see such a magistrate jailed. I think that she was behaving most