Articles

TradeTech and the problem of international policy coordination

[Together with Chris Berg, Sinclair Davidson, Mikayla Novak and Jason Potts this article was published at Cryptoeconomics Australia]


International trade is an information problem.

As goods move between firms and across borders, information about the provenance, characteristics, and compliance liabilities (whether they are subject to taxes or tariffs) of those goods move alongside them.

Handling companies need to know which goods are going where.

Regulators and trade authorities need to know whether the goods crossing a national border are compliant with domestic regulations.

(Does a good need an import permit? Does it require any special documentation? In Australia the Minimum documentary and import declaration requirements policy is a 27 page document.)

And end-users increasingly demand information about where their goods came from and how they were produced.

(Consumers want to know where their food is grown, whether it was grown to organic standards, or was manufactured gluten-free or nut-free. Advanced manufacturing firms want assurances that components — such as aircraft or wind turbine parts — are of high quality. And everyone wants assurances that their goods have been looked after while in transit.)

The result is piles of documentation shipped alongside internationally traded goods.

And the demand for documentation is growing. Supply chains are getting more complex. Regulatory requirements are increasing. End-users want more information about what they’re buying.

Introducing TradeTech

FinTech is the application of new technology — particularly developments in computer science — to the financial services industry. RegTech does the same for regulatory compliance.

Now we have TradeTech — the application of information technology to reduce the information costs of international trade.

TradeTech can reduce transaction costs, increase transparency for firms, regulators, and consumers, facilitate trade finance, and significantly lower regulatory and tariff compliance burdens.

Tackling border costs

One TradeTech application, blockchains used to manage supply chains, have the potential to provide a new digital services infrastructure for international trade in goods.

Blockchains use a combination of cryptography and economic incentives to allow people to come to a consensus on a shared digital ledger without the need for a trusted third party. Blockchains are a technology for secure non-hierarchical information governance.

Blockchains can store information about the provenance and distribution of tradable goods through the entire supply chain in circumstances where firms (and regulators) through the supply chain do not necessarily trust each other.

The invention of the shipping container in the 1950s radically transformed international trade by tackling the high cost — and unreliability — of getting goods on and off ships intact.

But in the 2010s, it isn’t the cost of transport that is the biggest burden on international trade. According to IBM and Maersk, the costs of bringing goods across borders are higher than the costs of transport costs.

In 2018 and 2019 we expect blockchains used in supply chains and to facilitate global trade will be one of the breakthrough blockchain use cases.

The impact of this sort of TradeTech will provide an enormous boost to the potential for global trade.

Facilitating trade flows

The information flows that facilitiate international trade are still to a remarkable degree governed and organised on a one-to-one basis and using paper. Each firm in a global supply chain passes off information relating to a tradeable good to each other one step at a time, vouchsafing that information until it can be passed to the next firm on the chain.

Furthermore, despite two decades of the digitisation of global commerce, it is still the case that international trade is a significantly paper-based process — which is slow, error-prone and raises fraud risks.

The growth of the regulatory state over the last thirty years has significantly increased the compliance costs of trade. While regulatory harmonisation and tariff reductions have encouraged larger volumes of trade, these have been matched by greater demands for information those goods travelling across borders.

New regulatory concerns about labour, environmental, chemical, and biosecurity standards are being reflected in international trade agreements and are translating into more regulatory requirements at the border.

Longer and more complex supply chains as a result of globalisation has multiplied these compliance burdens.

Blockchains can provide a ‘rail’ on which all this information travels.

Blockchains are uniquely suited for an era of advanced globalisation, the regulatory state, and demand for information about product origins and quality.

But TradeTech needs multilateral coordination

Private industry is developing the technology for blockchain-enhanced supply chains.

But there is the need for an international coordination to ensure that industry is able to exploit the opportunities this technology presents.

For example: information rmanaged on blockchains needs to be accepted as valid and compliant by domestic regulators.

One risk is that industry-developed blockchains might not be not treated as compliant with existing regulations. Goods could then remain subject to existing paper-based processes, necessitating double-handling of compliance and reducing the benefits of blockchain-enhanced trade.

Another risk is that individual trading countries adopt their own standards, which would also necessitate double-handling.

A further risk is that standards are developed by early market leaders in the blockchain-facilitated trade space, are adopted by regulators and trade authorities on an ad-hoc basis, and through regulatory lock-in limit the contestability of this trade infrastructure.

The benefits of TradeTech will be realised in a world of open-standards, rather than closed ones.

Multilateral bodies like APEC (Asia-Pacific Economic Cooperation) should be considering these questions now.

We don’t think governments should try to regulate the development of blockchain technology, or compel its introduction. The blockchain is an experimental technology that needs space to evolve. But there is a clear role for multilateral bodies to set standards for information managed through blockchains.

TradeTech doesn’t need government regulation or direction. But it does need government cooperation.

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Articles

The threat of identity politics

[This article originally appeared in the IPA Review]


At the core of our liberal democracy is the understanding that we are all equal. The spread of identity politics across Australia and the West, however, directly undermines this by seeking different rules for different groups of people. Rather than advocating classical liberal institutions and norms, identity politics seeks to divide us into our religious, ethnic, and gender group identities.

In practice, this is expressed in movements for differential racial recognition under the law, the suppression of supposedly oppressive speech, and the erasing of parts of our history.

While some examples of identity politics could be overlooked or ignored as isolated political discourse, the underlying philosophy must be forcefully rejected.

Once our lives are subsumed to our membership of different group identities, society and politics becomes a never-ending competition between privileged groups and oppressed groups. In this way, rather than expanding the institutions of liberalism, identity politics can only endlessly divide us, destabilising the footing on which our civilisation is built.

Through the lens of identity politics, the role of government becomes one of mediating the various power hierarchies in society. The end point can only ever be a more complex and powerful government, particularly because the movement is wrapped up in the idea that the oppressed can never be understood or represented by the privileged.

Rather than laying out the universal institutions that embrace our ability to be individuals, the rights of different groups are traded off against one another. The state is tasked with continuously meddling with our liberties—telling us which groups are granted special privileges while denying the rights of others.

The only way to establish a free, prosperous, and truly cohesive society comes from embracing our value as individuals and the institutions that empower us. This is what makes us equal.

One of those institutions that must be defended is formal equality before the law, which holds that we are all treated the same before the law regardless of our specific characteristics.

Equality before the law is a solution to the reality that we all have different identities, exist in different circumstances, and make different decisions—but that we all live within the same universal rules.

To be sure, formal equality is not a perfect solution, and some will point out situations where the law appears to fall unequally on some groups. But we do not live in a perfect world, and this is
no reason to abandon the goal of formal equality. Indeed, the antidote to historical oppression has been access to and expansion of our liberal democratic institutions. The alternative to formal equality is an arbitrary state pushing identity politics—a situation that can only ever walk away from liberty.

As Andrew Bushnell and Daniel Wild write in the cover story of this edition of the IPA Review, the solution to identity politics must include defending our institutions in popular culture and in our universities, and ultimately reducing the power of government.

The role of government in our interactions is to maintain a rule of law, enforcing our property rights and our contracts. Its role is to enable us to be individuals and to live our own lives.

Two other pieces in this edition touch on a similar theme of identity. A book review of the The Color of Law explores the claim that modern African Americans should receive public compensation for the wrongs perpetrated on past generations.

And don’t forget to read our new Ballarat statue walking tour in Strange Times—we’ve corrected the tour to make it politically correct, giving you a window into an identity politics future.

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Articles

Too much red tape could keep drones grounded

[This article originally appeared in The Weekly Times]


From spraying pastures to collecting crop data, drones are set to revolutionise Australian agriculture. However, despite this enormous potential, calls for more regulation threaten to keep drones firmly on the ground.

The application of drones in agriculture alone is estimated to be worth an enormous $32 billion globally. How can Australian regulators make sure we embrace this revolution?

No one knows the future of drones and how they will be used. That’s why entrepreneurs must be allowed to experiment and test. But this entrepreneurial process requires a flexible regulatory system. What’s more, business investors will only be attracted to a regulatory environment that is both certain and stable.

Nevertheless, it appears Australia is about to backflip on last year’s decision to relax drone regulations. For farmers this is a worrying sign because the changes had freed them to fly drones under 25kg for use on private land.

Since the announcement, however, there have been increasing calls to reverse the changes and impose more red tape. Indeed, we now have a senate inquiry and an upcoming safety review. This regulatory uncertainty threatens the early stage investments necessary for our domestic drone industry to flourish.

Australia must resist the temptation to stifle development based on fear.

There have been no incidents of collisions with manned aircraft in Australia. And we still have strict rules preventing drones flying over 120m or within 5km of airports.

It’s also unclear why privacy concerns cannot be solved using existing legal principles such as harassment and trespass.

Regulators should cut even more red tape on drones. They should consider reviewing rules restricting autonomous flight and flying drones beyond visual line of sight. The agricultural drones of tomorrow may be autonomous ones, flying over vast properties, monitoring crop yields and detecting early plant diseases.

Australia is in a prime position to embrace drone technology. But this will only happen if we encourage entrepreneurship and investment through flexible and certain drone regulations.

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Articles

Collared

[Together with Andrew Bushnell this article originally appeared in IPA Review]


‘White collar crime’ didn’t exist until 1940. That was the year American sociologist Edwin Sutherland dreamt up the idea that the ‘suave and deceptive’ upper reaches of society, insulated by their class privilege, were getting away with untold criminality, and so he set out to draw attention to their offending. The link between crime and white collars was expressly designed to stigmatise the wealthy and the professional classes and raise the class consciousness of workers, whose own criminality was relatively overstated and over-punished.

Since the global financial crisis, the left has shown renewed determination to upend the principle of equality before the law and single-out white collar professionals. In the past year we have seen the bosses of Australia’s major banks paraded before Parliament, while the Greens mounted an unlikely tough-on-crime campaign against the financial industry, and a Senate inquiry was launched into white collar crime penalties culminating in the ridiculously-titled report Lifting the Fear and Suppressing the Greed.

This trend is exacerbated by the growing fascination with identity politics, which expands the notion of class privilege into other social categories supposedly defined by power disparities, such as race and gender. White collar crime is part of a movement that sees the equal administration of justice as a cruel hoax perpetrated by the privileged to maintain their social advantages.

John S. Baker Jr of the Heritage Foundation has argued that the idea of white collar crime is an attempt to ‘remake the very definition of crime’ based on ‘who the perpetrator (is), rather than what that person (has) done’. But why should we care? White collar crime hysteria is a symbol of a dangerous shift in our society’s conception of justice. In the battle over white collar crime, the concept of equality before the law is at stake.

WHAT IS WHITE COLLAR CRIME?

There is nothing special about the crimes committed by those in white collars, nor the people themselves. This has made defining white collar crime difficult. It is a term of art, not science. Reflecting its political origins, the most common definitions are tendentious and vague.

White collar crime is typically defined as crime committed by executives and staff in the course of their work at businesses and corporations. Money is usually the subject of or the motive for the crime. Commonly-cited examples of white collar crime include fraud, misappropriation and insider trading. Which is to say, white collar crime is usually a kind of theft.

The justification for treating white collar crime as a special type of offending is that white collar criminals supposedly wield disproportionate and unfair power in society. Without this special attention, these people would simply not have to heed the law. Indeed, Sutherland, with Donald Cressy, even went as far as arguing that ‘the people of the business world are probably more criminalistic than the people of the slums’.

Moreover, the common references to ‘greed’ made by politicians when discussing white collar crime give an indication of the moral grandstanding and distrust of material prosperity inherent in the concept. Drawing special attention to the crimes of professionals is simply an outlet for anti-market sentiment.

PUNISHING WHITE COLLAR CRIME

None of the above should be taken as a denial that white collar professionals commit crime. Rather, white collar criminals should be treated the same way as other non-violent offenders, particularly property crimes such as theft. Increasingly this means finding punishments other than prison.

The unique function of prison is to isolate dangerous individuals from the community. For violent criminals, prison is the only punishment that will keep the community safe.

Many non-violent criminals, however, can be punished outside prison through a combination of community service, home detention, fines and restitution orders. For so-called white collar criminals, disgorgement of ill-gotten gains and professional disqualification should also be imposed. These punishments avoid the high cost of prison, which runs to $110,000 per prisoner per year, and the known negative correlation between imprisonment and reoffending. This would also put the victim back at the centre of proceedings by emphasising the need for the offender to restore the victim and give back to the community.

Sentencing is bound by the principle of proportionality: the punishment must fit the crime. For non-violent, non-recidivist offenders, prison is a disproportionate punishment, often far more severe than the harm caused by the offence. Applying this logic to white collar criminals is not letting them ‘buy their way out of prison’, or giving them special treatment. It is merely to reassert the basic principle that like crimes should be treated alike.

WHAT ABOUT DETERRENCE?

Many campaigners against white collar crime concede the above principle and yet still argue for special treatment for white collar criminals. They claim that because they are usually affluent, white collar criminals will not feel those alternative punishments as harshly as other criminals. With their luxurious lifestyles, white collar criminals see home detention and fines as joke punishments and only respond to the threat of prison.

But punishment attaches to the crime, not the criminal. It is a response to the harm caused, especially in cases like theft where that harm is readily quantifiable. It does not matter to a victim whether his television was stolen by a rich person or a poor person; the effect is the same either way. Similarly, it does not matter whether it was a television that was stolen or information about an upcoming trade. The principle is the same.

Sentencing either seeks to achieve ‘specific’ or ‘general’ deterrence. Specific deterrence deters the offender from committing another crime. For white collar criminals, this can best be achieved by stripping them of their professional qualifications and restricting their ability to work in certain fields.

General deterrence, on the other hand, means imposing a severe punishment to signal to others. This is a weak and illiberal justification for stronger sentencing because it punishes the offender for the potential crimes of others.

If we open the door to choosing punishments based on the supposed level of privilege of the convicted criminal, the potential for abuse is endless. When class is relevant to punishment, then so too are race, gender, age, intelligence and every other human characteristic correlated in some way with advantage or disadvantage.

We can deter white collar crime without sacrificing our traditional conception of justice. As was noted by the Senate Committee’s report on white collar penalties, restitution and disgorgement remove the financial incentive for white collar crime. Professional disqualification and disgrace are strong disincentives for offending.

Restitution also has the benefit of placing the victim’s interests at the centre of proceedings. Existing sentencing discounts for pleading guilty should be extended to take into consideration good faith efforts to make victims whole. And, conversely, efforts by criminals to hide the proceeds of their crimes—say, in overseas accounts—should be considered aggravating and lead to harsher punishment.

The positive effect that seeing justice done has on victims should not be underestimated. For many victims of white collar crime, a prison sentence for the offender provides a strong sense of closure and a sense that society cares about the wrongs that were done to them. For this reason, non-prison punishments must be designed to be felt by criminals as punishments, and not merely as a slap on the wrist. This is not special treatment for white collar criminals. It’s questioning how we treat non-violent offending in general. Society’s right to exact retribution on criminals is limited by the principle of proportionality, even where we might find them particularly odious.

A QUESTION OF FAIRNESS

Equality before the law is fundamental to justice. It is unacceptable to punish someone differently for his race, gender or any other personal characteristic, and this includes his profession or purported membership of a particular class of society. The same principles that apply to sentencing theft and property crime should apply to white collar criminals.

The idea that white collar crime should be carved out as a special category within the criminal law because those crimes are fundamentally different is illiberal.

‘Creating a climate of fear,’ as was noted in the Greens’ additional comments on the recent white collar crime Senate inquiry, goes no way to achieving the fundamental aim of our criminal justice system: ensuring community safety.

The demand for harsher penalties for white collar crime is rooted in leftist class warfare. The definition of white collar crime and its modern incarnation of anti-banker rhetoric is nothing less than contempt for the free market and a disregard for equality. It is part of a broader attempt to bolster the arbitrary power of the administrative state at the expense of individual rights, and ought to be forcefully rejected.

 

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Articles

Drone regulations stifle business and innovation with new technology

[This article was published in The Australian]


The Senate committee examining Australian drone regulations has had just one public hearing and is months away from its December reporting date.

Nevertheless, last week they wrote to the Minister for Infrastructure and Transport, Darren Chester, strongly encouraging immediate action and “strengthened regulation” for drone technology.

Calls for more red tape and restrictions on drones is not only premature, but represents a disturbing precautionary shift in Australia’s drone debate.

The $100 billion global drone market holds remarkable opportunity to boost productivity for our key primary industries. Farmers can better manage their land in difficult or cumbersome roles by collecting data to improve yields. Miners use drones for exploration and to assist with environmental management over long distances.

But Australia risks passing up these opportunities if we over-regulate today.

Regulatory tensions for drones have existed in Australia for more than a decade. But in September last year, the Civil Aviation Safety Authority updated the rules to reflect the growth of the industry.

The most contentious change was the scrapping of licences and expensive training for flying low-risk drones under 2kg. Farmers working on their own private land were also given more freedom to use drones under 25kg.

Despite the disastrous picture being painted, these new regulations won’t realise the dystopian images of blackened out skies.

Hobbyists and small commercial operations still face strict rules. There are prohibitions on flight within 5km of airports, higher than 120m in controlled airspace, and within 30m of people. Breaching these rules incurs fines of $9000.

CASA clearly recognises the trade-off between safety and flexibility. It also understands that regulation should be risk-based, and that it’s simply unviable to heavily regulate all uses.

Encouraging drone deregulation is particularly important because businesses looking to adopt drones are keenly observing the regulatory environment globally. For instance, when Domino’s chose to fly its first pizza last year in New Zealand, it said the country had “the most forward-thinking aviation regulations”.

Good drone regulations give freedom to entrepreneurs to experiment and test.

Poor policy, in contrast, emerges when safety is considered inherently more important than growth. This is known as the precautionary principle: where regulations underweigh the potential benefits to human lives that new technology brings.

The precautionary principle has existed for centuries. The 19th century “red flag laws” for cars in Britain are a prime example. The laws instituted a speed limit of 2mph in the city, and required a person to walk in front of all self-propelled vehicles waving flags. Of course this meant pedestrians were safe, but the enormous potential of cars was clearly delayed.

There’s a threat that Australia is heading down this same precautionary path for drones.

On Page 9 of the only public hearing in Brisbane, a temporary ban on the sale of drones is discussed. Such an extreme outcome is unlikely.

But we are seeing the precautionary principle in action: regulation based on potential harm, not demonstrated harm. It is telling that the committee has called for immediate action because of “mounting fears of the real prospect of a serious accident”.

According to the Australian Transport Safety Bureau there have been no collisions between drones and manned aircraft.

Drone incidents are inevitable, as is inherent in all transport options. But policymakers must weigh up trying to prevent these accidents with leaving room for entrepreneurs and hobbyists to realise opportunities.

Viewing the regulation debate from this optimistic perspective suggests regulators should consider further deregulation.

Maybe we should allow entrepreneurs to fly more than one drone at a time.

What about autonomous flight? Or even the prospect of enabling drones to be flown beyond visual line of sight. Companies such as Australia Post and Telstra have sought exclusions from regulations so they can test and trial new uses drones.

Regulatory challenges for drones will keep arising, but where possible the private sector should take a lead role.

The deregulation of the drone industry should not just be defended, but encouraged. Further, relaxed rules certainly shouldn’t be reversed based solely on hypothetical fears and prospects.

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Articles

Trumping architecture

A provocative speaker at the 2016 World Architecture Festival has thrown his politically correct industry into a tailspin with calls to scrap social housing, privatise public space and stop land zoning. In the speech, Patrik Schumacher, principal at world-renowned Zaha Hadid Architects, argued that housing crises would never end without a big dose of free-market libertarianism.

A free market perspective on architecture is rarely championed, so his hour-long keynote came as a big shock to the crowd. The architecture world quickly took to social media, with both critics and supporters dubbing Schumacher ‘the Trump of Architecture’.

While sweeping comparisons should be made with caution, there is no doubt that both Trump and Schumacher stir a groundswell of outrage precisely because they question the status quo. Unlike the US President, however, Schumacher’s claims are intellectually coherent within what can be broadly described as libertarianism or Austrian economics.

For Schumacher, deregulation is key. Deregulation frees up the creativity of architects to meet the diverse needs of individual clients, rather than bowing to boundless interference by regulators and planners. While these positions may be unfamiliar to the insular world of architecture, they are a microcosm of the broader views of a classically liberal political economy: planners are imperfect, never omniscient, and are prone to spectacular failure.

While poor planning causes obvious direct costs and delays there are also broader unintended consequences. Ineffective town planning hurts lower income earners and destroys any reliable market signals. At the same time, architects turn their attention away from their customers to navigate the maze of discretionary planning approvals.

Take the example of housing affordability. This is regularly misdiagnosed as a social problem, leading government into a cycle of interventionist remedies. According to the Reserve Bank of Australia, our capital city dwellings cost four times the average annual wage in the early 1980s but rose to almost eight times in 2010. More recently, calculations by credit rating company Moody’s suggest the percentage of household monthly income attributed to housing repayments, in the decade to March 2016, averaged an enormous 30 per cent.

As the story goes, escalating house prices are the result of too much demand. This demand, normally attributed to foreign investment, is supposedly remedied through government controls. But demand should not be feared. Demand is the only true signal of what people want. Indeed, economists have long known that without an efficient market mechanism there can be no entrepreneurship. The same is true for architecture. Standardised prescriptive rules stymy the ability of architects to respond to demand.

The language of architecture is riddled with phrases such as with the environment’. But such hand-waving is benign as long as our housing markets are shrouded in regulatory fog.

The main issue that needs to be tackled in the present housing crisis is to recognise governments created the problem in the first place. Attacking demand is a short-sighted policy response succumbing to fear or jealousy. The real question is why supply is unresponsive. And the answer to that is the increasing scope of planning.

We have grown accustomed to an infinite loop of government intervention on the issue of housing affordability. This led to higher prices, more distortions and bigger government. The only way to escape this cycle is to truly question the role of the government.

To some, urban planning requires a rationalised and standardised approach. That is, various levels of government imposing rules to coerce the public out of some form of market failure, all in the name of the ‘public good’.

The vision of Swiss-French architect Le Corbusier is a shining example of this rigid approach. He was the father of modernism in architecture and design, and sought a rationalist approach to city design, including the famous focus on the ‘golden number’ of planning based off the human scale.

Le Corbusier’s vision of a meticulously segregated city approaches totalitarian. While his ideas gained theoretical influence in the twentieth century—including a masterplan concept to demolish two square miles of downtown Paris— they thankfully proved too radical for the mainstream.

Le Corbusier failed to acknowledge the diversity of individuals and the places in which they wish to live. This failure is what Schumacher is seeking to remedy by taking power away from planners.

In stark contrast to Le Corbusier, urban scholar Jane Jacobs stresses the need to incorporate diversity within a city design. Her focus was on how an ordered city incorporates both individual and collective planning. For Jacobs, planning is about understanding neighbourhoods and their diversity. This decentralised and evolutionary approach to planning relies on individual choice.

In juxtaposing Jacobs and Le Corbusier we can discover the proper role and scope of government. Unfortunately, however, anyone who dares to question the authority of planners is howled down. Turning first to government for the solution—and only varying what coercive remedy is applied— prevents discussion and leads to more government intrusiveness. Government continues creating regulations without considering its own boundaries.

The planning of a city can be split into two often-conflated parts. The first is strategic or urban planning. This is the classic remit of town planning, ranging from setting out the broad scope of city design—from the roads to railways—all the way to zoning restrictions. The second type is statutory planning, focused on more individualised approval of individual plans.

The former idea, strategic planning, is justified on the basis that citizens will fail to coordinate long-term plans with others. But many areas of strategic planning are hampered by arbitrary and often rigid government decisions based on political motivations.

Zoning, for instance, evades logical reasoning. The idea that a government should restrict the use of a particular parcel of land—such as residential or commercial—is largely based on the fear of landowners that nearby individuals will make decisions to increase the value of their property while simultaneously decreasing the value of the properties around them. But on this criterion there are also substantial costs to enforcing government zoning.

The very idea of zoning places unrealistic epistemological faith in planners. For zoning to be effective, planners must understand every future alternative use of all land and the needs and desires of all potential landholders. If these variables shift, planners must quickly move the zoning boundaries. But the information necessary to do so is highly uncertain and impossible for anyone to fully understand. This is why, like any market, the use of land should be decided by individual landowners as they make decisions on where to co-locate with others.

Sitting on even shakier ideological ground than zoning is the growth of statutory planning. Now more than ever, centralised government bureaucrats and local councils create restrictions— colloquially termed ‘guidelines’—not for the good of society, but rather for your own good. These rules pervade much of our lives through endless application of red tape and cannot be justified in a liberal democratic society.

Melbourne’s most recent design guidelines are a perfect example. In December 2016, the Victorian Department of Environment, Land, Water and Planning released its ‘Better Apartments Design Standards’. Among other draconian restrictions, the planning provisions dictate minimum storage space for different sized dwellings, and the amount of private space necessary for ‘reasonable recreation’. The department also has a say on the visibility of entrances to ‘provide each dwelling and building with its own sense of identity’.

The Victorian Institute of Architects wants the rules to go even further. They want mandated architects within the design process for particular categories of buildings. Such blatant attempts to entrench your profession would be impressive in any industry.

To be sure, these Victorian restrictions don’t go as far some recent changes in Sydney, which included a minimum apartment size for new buildings. This is set to stifle the housing market and price out low-income earners even further.

These new rules deviate from any reasonable scope of planning. The technocratic and elitist attitudes found among the planners who create them are eating away at the organic changes in our city structures. What’s more, the role of government should never extend beyond where it can be demonstrated that harm is caused to others.

With the rare exception of statutory rules—such as those protecting the overlooking of private space— planners are eroding our property rights blatantly and unapologetically, enforcing their own social and environmental objectives onto landowners without compensation. What other reason can there be for ideas like ‘Water Sensitive Urban Design’ (that’s a real thing in Victoria) effectively requiring you to put a ‘raingarden’ in your own backyard? It is precisely this social engineering that Schumacher has called out as ‘intellectually bankrupt’, coercively changing the behaviour of individuals.

Architects are losing the opportunity for true creativity, shackled by the rules for which they regularly lobby. This relationship architects have built with planners will kill their industry.

Exacerbating this problem, local governments are handed too many discretionary powers. Regulators have the power to trade-off various design considerations at their whim, generating substantive uncertainty. The implication of this is to hurt those least connected to the relevant planning authorities.

The skill of a developer or architect increasingly lays in political manoeuvring around bureaucrats, rather than servicing their clients. This led Schumacher to call for regulation of the planners, curtailing and defining the powers of planners to erode development rights. Indeed, we should drain the planning swamp.

What is it that drives this intrusive erosion of property rights? It could be greed. Architects have an incentive to increase barriers to entry into the profession, such as tacit networking with the planners and the technical knowledge of the regulations. Local planners are also more than willing to supply those rules and grow their power.

But there is also a more optimistic perspective. Perhaps the ever-expanding remit of planning provisions is not only due to self-interest, but also ignorance. When so few individual architects question the expanding role of government— even when that expansion may be putting the profession itself at risk by suppressing creative endeavour— the idea that more rules are not the answer remains foreign and radical. This problem is exacerbated when debate is continually stymied.

This brings us back to Donald Trump. He is the President of the US precisely because of a culture where dissenting views were continually quashed by the political class. It had simply become unacceptable to question the role of government. For this same reason the architecture world now has an articulate freedom-loving intellectual who is not only well read in political philosophy and economics, but can engage in the long-term battle of ideas.


This article originally appeared in the IPA Review (Download the PDF).

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Why the proposed tree laws are the worst kind of red tape

 

The proposed vegetation clearing laws are red tape halting economic growth, suppressing entrepreneurship, and damaging our international competitiveness.

The Palaszczuk government wants to plug supposed loopholes in vegetation management law. Their plugs, however, focus solely on conserving the environment. What is completely ignored is a viable future for Queensland’s agricultural sector.

Chopping and changing laws in a jurisdiction with the largest agricultural lands in the country is a worrying trend, and brings great uncertainty to farmers.

This political power play—reversing changes made by the previous Newman Government—is the latest in a contentious history of agricultural regulation in Queensland.

Jointly understanding that clearing is necessary for growth, and that farmers have the incentive to protect and cultivate their own land, meant very few clearing controls prior to the 1990s.

However, as the 1990s came so too did the growth and spread of conservation campaigns. Legislation changes in 1999 and 2004 largely phased out broadscale land clearing by the end of 2006.

Of course the environment must be protected and conserved. But what happened to the importance of economic growth and development?

Effective agricultural regulation draws a reasonable line between environmental protection and agricultural production.

It is undeniable that efficient agricultural production requires the felling of trees. By entirely preventing such clearing—even for high value productivity land—policy makers have clearly lost sight of the real purpose of regulation.

The potential new laws, among other things, will remove land clearing purposes for high value agriculture and irrigation, reverse the onus of proof, and are retrospectively implemented.

Removing exceptions for high-value land specifically burdens the most productive farmers and removes the possibility that economic growth outweighs environmental conservation.

Not to mention all of this looks to happen with no compensation for the erosion of farmer’s rights.

While farmers will technically hold the deed to their land, these new regulations determine how and where they can alter that land, effectively removing their property rights.

From 2013, when the Newman government relaxed the laws, around 112,400 hectares high value agricultural or irrigated high value agriculture land has been cleared in Queensland.

How this is viewed demonstrates the ideological divide at the heart of the current debate.

One side sees this almost exclusively in terms of greenhouse gas emissions, or damage to wonderful resources such as the Great Barrier Reef. For instance, in the public hearing of the current Committee, this is viewed as the ‘release of around nine million tonnes of carbon emissions’.

Farmers and land owners, however, see this clearing as a necessity to continue productive agribusiness. The clearing, in their eyes, is the release of otherwise government-stymied land for the benefits of themselves and the nation.

In reality there must be a happy medium between these two opposing views. And it is clear that the latest laws are certainty not in the middle.

Only compounding these matters is the retrospective implementation of the bill in an effort to ‘reduce the risk of panic clearing’. The government is worried that farmers will go out and clear large tracts of their land under the current laws before the new ones come in. To farmers this means large tracts of private land will remain uncertain until at least the current Agriculture and Environment Committee reports in June this year.

If the bill is passed later this year, Queensland farming will become less viable, the entrepreneurial drive of the bush will wither, and our international competitiveness will be damaged.

Land owners and farmers are the most interested in protecting and conserving their farms. Bureaucrats in Brisbane—far from the reality of farm life—should not be in the business of classifying and determining the use of private land.

For the future of agribusiness in Queensland, the Palaszczuk government must realise the substantial and long-term consequences of these broad sweeps of environmental red tape, and shelve the current proposals.


This article originally appeared in Queensland Country Life. 

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