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John Quiggin

John Quiggin

He is an Australian economist, a Professor and an Australian Research Council Laureate Fellow at the University of Queensland, and a former member of the Board of the Climate Change Authority of the Australian Government.

Articles by John Quiggin

Big business in Australia faces less competition than almost anywhere else – and likes it that way

14 days ago

My latest in The Guardian

Supermarkets are the public face of inflation. Every time we go shopping, we are reminded that just about everything costs more than it did before Covid. And shrinkflation, once subtle and insidious, has become blatant. A standard chocolate bar is now what used to be called “fun size”. A natural response, particularly for politicians seeking to divert attention from themselves, is to blame greed and monopoly power.

Explanations based on greed are rather naive. Corporate executives are paid by shareholders to be greedy – that is, to maximise profit subject to a somewhat hazy concept of “social licence” regarding the treatment of customers, employees and other stakeholders. And there is no reason to think that Coles and Woolworths were any less greedy

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Of the making of books there is no end

15 days ago

That’s what the Bible (or at least, the preacher in Ecclesiastes) says, and sometimes I feel as if that’s right. But right now, I’m basking in the glow of having returned final proofs for Public Policy and Climate Change: Politics, Philosophy and Economics, a text to appear in the Lecture Notes in Economics and Policy series put out by World Scientific Publishers.

As well as approving the proofs, I produced an index, using a program with the self-explanatory title PDF Index Generator (this is different from the index function in Acrobat, which indexes every word for search purposes). As with lots of software, it’s not as good as what a professional editor would produce, but much cheaper and faster. I plan to write about the economic implications some time, but this kind of thing

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Monday Message Board

22 days ago

Another Monday Message Board. Post comments on any topic. Civil discussion and no coarse language please. Side discussions and idees fixes to the sandpits, please.

I’m now using Substack as a blogging platform, and for my monthly email newsletter. For the moment, I’ll post both at this blog and on Substack. You can also follow me on Mastodon here.

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Daniel Kahneman has died

25 days ago

Daniel Kahneman, who was, along with Elinor Ostrom, one of the very few non-economists to win the Economics Nobel award, has died aged 90. There are lots of obituaries out there, so I won’t try to summarise his work. Rather, I’ll talk about how it influenced my own academic career.

When I was an undergraduate, in the late 1970s, economic analysis of decisions under uncertainty was dominated by the expected utility (EU) theory of von Neumann and Morgenstern. The mean-variance approach, still popular in finance, was regarded as, at best, a special case of the correct EU theory. Some early theoretical challenges, notably from French theorist Maurice Allais around 1950 had been thoroughly refuted, at least to the satisfaction of most in the field. (A more fundamental critique by

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Towards deliberative Parliaments: Greens success at recent elections points the way

29 days ago

Elections over the last week have seen some pretty good outcomes for the Greens and some very bad outcomes for both Labor and the LNP.

Here’s what ChatGPT came up when I asked for a representation of Green Labor

In the Brisbane Council elections, the Greens got 23.1 per cent of the vote, barely behind Labor on 26.9. The combined total of exactly 50 per cent wasn’t reflected in terms of seats, mainly because of preference leakage and exhaustion, but I want to focus on the longer term implications here.

In Tasmania, the incumbent Liberals suffered a 12 per cent swing on primary votes, falling to 37 per cent, after a series of elections in which they received an absolute majority, or very close to it, on first preferences. Most of the aggregate loss went to independents and

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Monday Message Board

29 days ago

Another Monday Message Board. Post comments on any topic. Civil discussion and no coarse language please. Side discussions and idees fixes to the sandpits, please.

I’m now using Substack as a blogging platform, and for my monthly email newsletter. For the moment, I’ll post both at this blog and on Substack. You can also follow me on Mastodon here.

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Monday Message Board

March 18, 2024

Another Monday Message Board. Post comments on any topic. Civil discussion and no coarse language please. Side discussions and idees fixes to the sandpits, please.

I’m now using Substack as a blogging platform, and for my monthly email newsletter. For the moment, I’ll post both at this blog and on Substack. You can also follow me on Mastodon here.

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From micro to macro, Andrew Leigh’s accessible history covers the economic essentials: My review from The Conversation

March 10, 2024

Andrew Leigh’s The Shortest History of Economics is the latest in a series of such histories, mostly focused on particular countries.

It begins with a striking mini-history of household lighting, focusing on the amount of labour required to produce the light now given off by a standard lightbulb: 58 hours for a wood fire, five hours for a candle based on animal fat, a few minutes for an early electric lightbulb, and less than one second for a modern light-emitting diode.

The Shortest History of Economics – Andrew Leigh (Black Inc.)

Importantly, what is true of labour hours is also true of material inputs. Older technologies required felling a tree or killing an animal, but an LED uses the photoelectric properties of common crystals. It only needs tiny quantities. The input

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Monday Message Board

March 10, 2024

Another Monday Message Board. Post comments on any topic. Civil discussion and no coarse language please. Side discussions and idees fixes to the sandpits, please.

I’m now using Substack as a blogging platform, and for my monthly email newsletter. For the moment, I’ll post both at this blog and on Substack. You can also follow me on Mastodon here.

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Old

March 8, 2024

In a few days time, I’ll be lining up in the 65-69 category for the Mooloolaba Olympic triathlon (1500m swim, 40km cycle, 10km run)[1]. People in this age category are commonly described as “aging”, “older”, “seniors”, “elders” and, worst of all, “elderly” (though this mostly kicks in at 70). The one thing we are never called is “old”. But this is the only term that makes any sense. Everyone is aging, one year at a time, and a toddler is older than a baby. Senior and elder are similarly relative terms. And “elderly” routinely implies “frail” (a lot of old people are frail, but many more are not.

What accounts for the near-universal squeamishness that surrounds the term “old”? Apart from the obvious fact that you are a bit closer to death, it’s not that bad being old. Even if not

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Dutton wants a ‘mature debate’ about nuclear power. By the time we’ve had one, new plants will be too late to replace coal

March 3, 2024

My latest in The Conversation via my Substack

If you believe Newspoll and the Australian Financial Review, Australia wants to go nuclear – as long it’s small.

Newspoll this week suggests a majority of us are in favour of building small modular nuclear reactors. A poll of Australian Financial Review readers last year told a similar story.

These polls (and a more general question about nuclear power in a Resolve poll for Nine newspapers this week) come after a concerted effort by the Coalition to normalise talking about nuclear power – specifically, the small, modular kind that’s meant to be cheaper and safer. Unfortunately, while small reactors have been around for decades, they are generally costlier than larger reactors with a similar design. This reflects the economies

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Monday Message Board

March 3, 2024

Another Monday Message Board. Post comments on any topic. Civil discussion and no coarse language please. Side discussions and idees fixes to the sandpits, please.

I’m now using Substack as a blogging platform, and for my monthly email newsletter. For the moment, I’ll post both at this blog and on Substack. You can also follow me on Mastodon here.

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Back to the office: a solution in search of a problem

February 27, 2024

Managers need to recognise that the best way to dissipate authority is to fail in its exercise

My latest in Inside Story

Authority is powerful yet intangible. The capacity to give an order and expect it to be obeyed may rest ultimately on a threat to sanction those who disobey but it can rarely survive large-scale disobedience.

The modern era has seen many kinds of traditional authority come under challenge, but until now the “right of managers to manage” has remained largely immune. If anything, the managers’ power has increased as the countervailing power of unions has declined. But the rise of working from home and, more recently, Labor’s right to disconnect legislation pose unprecedented threats to the power of managers over information workers — those employees

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Light-touch competition policy hasn’t helped Australian mortgage holders. It’s time to get tough

February 26, 2024

My latest in The Guardian

Just two weeks after Prof Allan Fels reported on the extent of monopoly power and resultant price gouging, Australia’s supreme body on competition law has delivered its answer.

The Australian competition tribunal has determined that the banking industry has all the competition we need and that no harm will be done by allowing ANZ to swallow one of the few competitors to the Big Four by acquiring the banking operations of Suncorp. This was the latest in a string of defeats for the Australian competition and consumer commission (ACCC), the regulator formerly headed by Prof Fels.

In effect, the tribunal reversed the burden of proof. Whereas the ACCC said it was not satisfied that the merger would not reduce competition significantly, the tribunal said

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Monday Message Board

February 26, 2024

Another Monday Message Board. Post comments on any topic. Civil discussion and no coarse language please. Side discussions and idees fixes to the sandpits, please.

I’m now using Substack as a blogging platform, and for my monthly email newsletter. For the moment, I’ll post both at this blog and on Substack. You can also follow me on Mastodon here.

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Monday Message Board

February 18, 2024

Another Monday Message Board. Post comments on any topic. Civil discussion and no coarse language please. Side discussions and idees fixes to the sandpits, please.

I’m now using Substack as a blogging platform, and for my monthly email newsletter. For the moment, I’ll post both at this blog and on Substack. You can also follow me on Mastodon here.

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Some good news from Oz (crosspost from Crooked Timber)

February 15, 2024

Over the last few years, the Australian and UK Labor/Labour[1] parties, have followed strikingly parallel paths.

A better-than expected result with a relatively progressive platform (Oz 2016, UK 2017)

A demoralizing defeat in 2019, followed by the election of a new more conservative leader (Albanese, Starmer)

Wholesale abandonment of the program

Failure of the rightwing government to handle Covid and other problmes
Because we have elections every three years, Australia is now ahead of the UK and we now have a Labor government led by Anthony Albanese. In its election campaign and its first eighteen months in office, Labor ran on a platform of implementing rightwing policies with better processes and minor tweaks to the most repressive aspects. This is, AFAICT, what can be

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For corporations, greed is good – so how can Australia really tackle price gouging?

February 11, 2024

My latest piece in The Guardian.

The long-running debate over “price gouging” should have been settled yesterday by the release of a report by Allan Fels, the former chair of the Australian Competition and Consumer Commission (ACCC). The report, commissioned by the ACTU, found that a wide range of Australian industries are characterised by limited competition, giving powerful firms ample scope to extract large profit margins.

Consistent with international evidence, most of the inflation observed in the wake of the pandemic was captured in the form of increased profit margins. Contrary to the dominant economic model – in which inflation begins in the labor market, with higher wages being passed on to prices – the recent inflation has seen wages lag far behind prices. In some

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Sandpit

February 11, 2024

A new sandpit for long side discussions, conspiracy theories, idees fixes and so on.

To be clear, the sandpit is for regular commenters to pursue points that distract from regular discussion, including conspiracy-theoretic takes on the issues at hand. It’s not meant as a forum for visiting conspiracy theorists, or trolls posing as such.
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Monday Message Board

February 11, 2024

Another Monday Message Board. Post comments on any topic. Civil discussion and no coarse language please. Side discussions and idees fixes to the sandpits, please.

I’m now using Substack as a blogging platform, and for my monthly email newsletter. For the moment, I’ll post both at this blog and on Substack. You can also follow me on Mastodon here.

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Labor’s fuel-efficiency standards may settle the ute dispute – but there are still hazards on the road

February 10, 2024

My latest piece in The Conversation, looking at Australia’s belated move to adopt fuel efficiency standards for light vehicles

Australia looks set to adopt fuel-efficiency standards after the Albanese government on Sunday revealed options for the long-awaited policy. The government says the reform would lead to more cars that are cheaper to run, eventually saving Australians about A$1,000 per vehicle each year.

The announcement comes a decade after the Climate Change Authority first proposed such a standard for Australia. The United States has had such a policy since the 1970s and the European Union implemented mandatory standards in 2009.

The Coalition has already sought to stoke fears among tradies and regional voters by claiming Labor’s policy threatens to take utes off

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Irresistible Force meets Immovable Object

February 6, 2024

I’ll be presenting a talk at the Australasian Agricultural and Resource Economics Society conference. Title Irresistible Force* meets Immovable Object**

* Massive expansion in production of low-cost solar PV

** Entrenched resistance to deployment.

Shorter JQ: Irresistible force will win in the end

Presentation is here
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The end of maritime power

February 2, 2024

Noah Smith has posted an interesting interview with Sarah Paine who looks at the distinction between maritime powers (in modern history, Britain and the US) and continental powers (everyone else). Paine sees maritime powers as beneficent creators and upholders of a peaceful and rules-based international order

It’s a distinction I’ve discussed in the past, but with very different views. Here’s a full-length response

The maritime/continental distinction is crucial, but not in the way suggested here. The era of maritime dominance is over.

That’s partly because the UK is now negligible as a power, and the US isn’t as dominant as it was.

But it’s mainly because ships are an old technology that hasn’t advanced much over the past century or so, either in commercial or in

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Monday Message Board

January 22, 2024

Another Monday Message Board. Post comments on any topic. Civil discussion and no coarse language please. Side discussions and idees fixes to the sandpits, please.

I’m now using Substack as a blogging platform, and for my monthly email newsletter. For the moment, I’ll post both at this blog and on Substack. You can also follow me on Mastodon here.

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Won’t somebody think of the old people?

January 18, 2024

Continuing my discussion of the recent upsurge in pro-natalism, I want to talk about the idea that, unless birth rates rise, society will face a big problem caring for old people. In this post, I’m going to focus on aged care in the narrow sense, rather than issues like retirement income, which depend crucially on social policy.

Looking at Australian data on location of death, I found that https://www.abs.gov.au/statistics/research/classifying-place-death-australian-mortality-statistics”>around 30 per cent of people die in aged care, and that the mean time spent in aged care is around three years, implying an average of one year per person.

Staffing requirements in Australia amount to aroundone full-time staff member per residents. So the “average” Australian requires

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Monday Message Board

January 14, 2024

Another Monday Message Board. Post comments on any topic. Civil discussion and no coarse language please. Side discussions and idees fixes to the sandpits, please.

I’m now using Substack as a blogging platform, and for my monthly email newsletter. For the moment, I’ll post both at this blog and on Substack. You can also follow me on Mastodon here.

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Mute inglorious Miltons

January 12, 2024

This Crooked Timber post on declining population has prompted me to get started on what I plan, in the end, to be a lengthy critique of the pro-natalist position that dominates public debate at the moment. My initial motivation to do this reflected long-standing concerns about human impacts on the environment but I don’t have any particular expertise on that topic, or anything new to say. Instead, I want to address the economic and social issues, making the case that a move to a below-replacement fertility rate is both inevitable and desirable.

I’m going to start with a claim that came up in discussion here and is raised pretty often. The claim is that the more children are born, the greater the chance that some of them will be Mozarts, Einsteins, or Mandelas who will contribute

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Australia’s cost-of-living crisis isn’t about the price of groceries. It’s about wealth distribution

January 11, 2024

In my latest Guardian piece, I argue that, unless we pay attention to the purchasing power of wages, talk about the “cost of living” is like the sound of one hand clapping

The policy debate about the cost of living is among the most confused and confusing in recent memory. All sorts of measures to reduce the cost of living are proposed, then criticised as being potentially inflationary. The argument implies, absurdly, that reducing the cost of living will increase the cost of living.

The issue here is that the “cost of living” is an essentially meaningless concept, rather like the sound of one hand clapping. The problem isn’t the cost of buying goods, but whether our income is sufficient to pay for those goods. For most of us, that means the real (inflation-adjusted) value of

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Monday Message Board

January 8, 2024

A day late, but Monday Message Board is back! Post comments on any topic. Civil discussion and no coarse language please. Side discussions and idees fixes to the sandpits, please.

I’m now using Substack as a blogging platform, and for my monthly email newsletter. For the moment, I’ll post both at this blog and on Substack. You can also follow me on Mastodon here.

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The gallon loaf

January 6, 2024

I’ve been working a bit on inflation and the highly problematic concept of the ‘cost of living’ (shorter JQ: what matters is the purchasing power of wages, not the cost of some basket of goods). As part of this, I’ve been looking at how particular prices have changed over time, focusing on basics like bread and milk.

One striking thing that I found out is that, until quite late in the 20th century, the standard loaf of bread used to calculate consumer price indexes in Australia weighed 4 pounds (nearly 2kg). That’s about as much as three standard loaves of sliced bread. Asking around, this turns out to be the largest of the standard sizes specified in legislation like the Western Australian Bread Act which was only repealed in 2004, AFAICT.

Going back a century or so further,

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