Why restrict students to government funded university places? Let them pay if they want.
Year 12s have already lodged their university preferences with VTAC. Some may have opted for full-fee courses as a back-up plan if they don’t get into a government supported place.
But these fee-places are criticised by the Australian Labor Party. Indeed, the ALP has promised to abolish fee-places should they be elected to government.
Yet is such an action warranted? And would it improve access to university education?
To find the answer we need to understand how the current system works. The most important feature of the present system is that there are a limited number of government supported places, and universities can only accept the amount of students negotiated with the government. Also, governments—both ALP and Coalition—are unwilling and unable to increase the amount of students that universities can take on board because of financial constraints.
As Andrew Norton, a former advisor to retired federal higher education minister David Kemp, notes:
“You do not need... an ENTER 99, or anything like it, to be able to complete an arts/law degree at Monash University. But you do need an ENTER of 99 to have been ‘clearly in’ for a HECS place in 2005. The reason for this is simple. The number of HECS places in this course, and every other course, is limited. There are various ways we could ration HECS places, but Monash uses what is, in effect, an academic auction in which, instead of bidding with money, you bid with marks. People who did very well in year 12 win in this process.”
Even if governments were to drastically increase expenditure on higher education at the expense of all else, student demand is difficult to predict and having a centralised government doling out money cannot ensure everyone who is competent enough to complete a university course will get past the quota system.
So the high Commonwealth Supported Place entry scores you see are the result of a poorly designed system unable to cope with student demand.
This is where fee-places come in. What fee-places do is alleviate this problem by allowing universities to take in more students who, although intelligent, may have missed out by a few points. If we only had Commonwealth Supported Places to get into university with, there would in all likelihood be far fewer people going to university.
However, having a limited amount of full-fee places is not, in itself, a solution. What if we changed the rules of the game entirely? What if, instead of governments dictating financial arrangements to universities, universities were privatised and allowed to run like businesses—competing for fee-paying students? Experience with competition in other industries suggests fees would lower and quality would improve. With greater university autonomy and a complete removal of ‘red-tape’ in higher education, Australian universities will hone their education product in response to student demand.
We must allow universities to expand supply in response to demand. Students should be able to pay for undertaking a degree -- perhaps through a bank loan -- rather than being dependent on a limited number of government funded places.
Originally published in the 2005 edition of 'The Witherbarian'.
Historically, politics and lies have mixed so frequently that both sides of politics in Western democracies now find it fairly easy to ignore fresh allegations, especially if they can depict the allegations as unlikely or remote. Nevertheless, the whistleblower as a figure holds immense public interest.
Although it’s worth remaining sceptical of those who shed doubt upon the official story, acknowledging their possible accuracy (especially if they’re an insider) is worthwhile too.
Since February 2002, Tony Kevin — a former diplomat who served in the Department of Foreign Affairs and Trade — has focused on investigating the circumstances surrounding the sinking of an asylum seeker boat named SIEV X. Despite what has been written and said, Kevin is not throwing accusations in his book, A Certain Maritime Incident. In fact, he is asking questions, the sorts of questions some would say needed an airing anyway.
His book explores in detail the boarding of SIEV X, its sinking and the subsequent investigation. By writing this book, it was Kevin’s intention to keep the issue of SIEV X alive. Save for Sydney Morning Herald journalist Margo Kingston, Marg Hutton and a handful of others, Kevin is all but alone in his campaign for a comprehensive judicial inquiry to clear what he believes are murky waters surrounding SIEV X, the Government’s disruption programmes and the intelligence failures that may have led to the deaths of 353 men, women and children.
But his questions have left him “effectively marginalised from the governance-centred society in Canberra” to which he “once comfortably belonged”.
Because all the intelligence agencies (which manufacture false flags for war) are against him, as Tho Bishop of the Mises Institute writes:
Libertarians shouldn't overlook the biggest benefit of the whole debate over Russia hacking, which is that Donald Trump has now become the greatest threat to the "Intelligence" community in recent history. Obviously this is not due to Trump being a secret libertarian, or his business background making him results-oriented, it's precisely because he can be a vindictive asshole.
Plus he favours auditing the Federal Reserve system!
In 1933, a referendum was held in Western Australia. By 21st century standards, the question put to voters was well outside the confines of socially acceptable discourse. Voters were asked whether WA should secede from the Commonwealth and become an independent nation. Amazingly, a sizable majority — 68 per cent — decided in favour of breaking away from the federal government.
There are few better examples of the distinctively rugged spirit of the West. Yet despite the sentiment in favour of seceding, WA’s plea was denied by the Australian government and the British Parliament in no uncertain terms. The powers that be were not about to stand for such intransigence.
For the most part, Western Australians appear to have resigned themselves to their fate. But worsening economic conditions have in recent years re-ignited the debate over secession.
Reasons to Secede
WA’s Mines Minister Norman Moore has openly advocated that the state secede and rely on alliances with China and the US for its defence needs. The Labor Opposition has ridiculed such talk, labelling it the work of a “lunatic, right-wing fringe in the Liberal Party.”
Such hyperbole is hardly justified given that WA has legitimate grievances. Take for instance, the carbon tax introduced in July 2012, or Julia Gillard’s mineral resource rent tax, both of which will create uncertainty among the Western Australian business community. Moreover, as Moore points out, other states in the federation parasitically live off the revenue generated by WA’s booming economy. How is this fair?
In general, secession can be expected to result in less internal conflict within the state that has seceded. This makes sense because communities that come together to secede are usually homogenous in important respects (such as ethnicity). Also, another political benefit of secession lies in the emergence of governments that are closer to the people they represent and are consequently more accountable.
The Legality of Secession
Already we can see that there are several reasons why WA would be better off as an independent country. An important question arises, however. Does Australia’s Constitution permit secession in the first place? Professor George Williams of the University of New South Wales does not think so. “The constitution simply does not contemplate any part of the nation breaking away,” he writes, “with no state having the right to unilaterally leave the federation.” Williams suggests that “the only viable legal path to secession is by way of a national referendum. This could change the constitution to permit Western Australia to leave.” In his book Secession: The Ultimate States’ Right, Greg Craven — one of Australia’s leading constitutional experts — reaches a similar conclusion.
The legality or otherwise of secession is a moot point. If secession is to occur, it will never happen with the High Court’s approval, simply because the court is appointed and funded by the federal government and will therefore tend to rule in favour of Canberra. Hence, in an important sense the legal arguments of Williams and Craven are irrelevant to the issue at hand. The debate over secession must occur primarily in the political rather than the legal arena.
That said, is the legal case against secession really as strong as Williams and Craven say it is? The answer is no. When Australia’s colonies agreed to come together as a federation under the Constitution, they did so on the assumption that the federal government would be limited to the powers enumerated in section 51, and that the states would retain their reserved powers. Common-sense, not to mention elementary contractual principles, dictates that if the federal government oversteps its bounds and encroaches into areas of state responsibility then a state is justified in exiting the constitutional compact.
The compact theory of the Constitution derives from American statesman Thomas Jefferson. Jefferson argued, essentially, that for federalism to mean anything in practice, the states must have the ability to hold the central government to account. Or as Clyde Wilson puts it, “Federalism implies states’ rights, and states’ rights imply a right of secession.”
Craven considers Jefferson’s theory and dismisses it on the grounds that the circumstances of Australia’s legal framework differ substantively from the US because, unlike the Americans, Australians were a part of the British Empire at the time of federation. If readers are interested however, an excellent collection promoted by the Mises Institute entitled Secession, State and Liberty more than adequately defends the theory.
We may sum up by emphasising that secession is not a radical idea. In fact, many Western nations were borne out of secession. Consider, for instance, the fact that the American revolutionaries fought to secede from the British Empire. And Australia has over the past 100 years effected a peaceful secession from Britain as it has gradually become more independent and republican sentiment has grown.
As more people become aware of the positive effects of secession, let it not be said that it is an idea only supported by the “loony right”. Secession is an idea whose time has come.
Joe Hoft writes:
Based on current delegate counts and poll numbers Ted Cruz will be mathematically unable to reach the delegate count required for him to win the Republican Presidential nomination.
A study by Martin Gilens of Princeton University and Benjamin Page of Northwestern University finds on the basis of multivariate analysis that the United States resembles an oligarchy because "economic elites and organized groups representing business interests have substantial independent impacts on US government policy, while average citizens and mass-based interest groups have little or no independent influence". Gilens and Page confirm the notion that factions have allowed politicians to act independently of their electorate:
Each of four theoretical traditions in the study of American politics--which can be characterized as theories of Majoritarian Electoral Democracy, Economic-Elite Domination, and two types of interest-group pluralism, Majoritarian Pluralism and Biased Pluralism--offers different predictions about which sets of actors have how much influence over public policy: average citizens; economic elites; and organized interest groups, mass-based or business-oriented.
Martin Gilens and Benjamin Page, ‘Testing Theories of American Politics: Elites, Interest Groups and Average Citizens’ (Sep 2014) Perspectives on Politics, Vol. 12, No. 3.
Don’t raise salaries to eliminate corruption, just cut the size of government instead.
The political class in India is largely populated by criminals. If the reader doubts me, they need only look at Transparency International’s rating of India, which ranks the country as even more corrupt than China.
Elections, they come and go. But corruption – that is a constant: it never seems to go anywhere. Some have suggested, however, that the way to eliminate corruption is to boost public sector salaries. Supposedly, making government officials richer will make them less tempted to take bribes. But there really is no logical limit as to how far we could push this argument. At what point do we draw the line? $100,000? $500,000?
In Singapore, for instance, ministers receive about $1 million a year. Sure, Singapore is a low-corruption society, but wealthy politicians are not the reason why.
There is really nothing stopping government employees from taking money regardless of how wealthy they are. The one thing we can be confident of is that individuals will pursue their self-interest as they perceive it, and if the probability of detection is low, political corruption will continue.
Consider what happened in Indonesia when judicial salaries were raised. Although the Supreme Court’s budget went from 79.5 billion rupiah in 2002 to 153 billion in 2004, 1.2 trillion in 2005, 2.2 trillion in 2006 and finally 3 trillion in 2007, academics Simon Butt and Tim Lindsey observe that “increased salaries, even combined with strong new corruption laws, have apparently failed to reduce corruption”. The judiciary remains the most corrupt institution in Indonesia.
Increasing salaries just ends up rewarding bad behaviour. Even if some take bribes because their low salaries ‘force’ them to do so, relying on them to stop taking bribes because their salaries have been increased is hardly a foolproof policy. Rather than looting taxpayers to arbitrarily enrich government agents in the mere hope of reducing corruption, what we need is a policy that is guaranteed to get the job done.
And that policy can be summed up in one word: freedom. This means moving towards the free-market, rather than socialism and corporatism. It means eliminating reams of paperwork and unnecessary complexity in the legal system. The ultimate aim is to do away with the need for citizens to supplicate in front of government agents just to set up a business or perform other routine day-to-day tasks.
An example will help illustrate the point. Suppose you wanted to start a business, but came up against a babu who demanded 1000 extra rupees as the price for granting you a license. “Alright”, you think, “I’ll pay him because I really need the income from my business”.
The problem here wasn’t the bribe per se, it was the onerous licensing system that allowed the bureaucrat to exercise power over the small businessman. As David Henderson explains, “A necessary condition for corruption is that someone has power to make decisions for others, decisions that those others can’t perfectly monitor. The reason so much corruption occurs in government is that government officials hand out so much in the form of subsidies, tax breaks, permits and regulatory exceptions”. Therefore, the way to reduce corruption is to start removing discretionary powers that facilitate extraction of bribes.
Now we are in a position to understand why countries such as Hong Kong, Singapore and Australia have achieved such success in stamping out corruption: they invariably tend to prioritize the market economy, at least in comparison to India.
The other argument often used in favour of raising salaries goes as follows: we should pay public sector employees more, because this will attract the best and brightest into politics. This is an equally nonsensical argument. Why would we want to encourage India’s smartest men and women to enter politics? Far better to have them go into private sector jobs where they actually create something of value. Bill Gates has done more to improve the standard of living for the common man through his work in Microsoft than all the prime ministers of India combined.
It should be remembered that politicians in a democracy are inevitably thinking about their short-term careers, rather than what is best for the country in the long-term. As Hans-Hermann Hoppe argues in his book Democracy: The God that Failed, politicians are essentially caretakers who think from one electoral cycle to the next. Thus, it is in their interests to extract the maximum benefits they can from taxpayers before they are voted out at the next election. It is emphatically not in their interests to put in place long-term reforms that will improve the overall health of the nation.
Cicero reminds us that “The more laws, the less justice”. We should heed his words.
Beyond Democracy: Why Democracy does not lead to Solidarity, Prosperity and Liberty but to Social Conflict, Runaway Spending and a Tyrannical Government
By Frank Karsten and Karol Beckman
CreateSpace Publishing, 2012, 102 pages.
Each year, the United States government releases a Human Rights Report on China. In this report it waxes eloquent about the lack of democracy in the Communist Party controlled state, as if it were beyond question that democracy is an unambiguously good thing. So confident is the US government about the moral infallibility of democracy that in the president’s National Security Strategy document, promoting democracy abroad is stated as an explicit goal.
In Beyond Democracy, the authors dissent from the mainstream perspective on democracy and focus on its negatives. After reading this book it would be difficult to ever again view democracy in a positive light. Instead of promoting freedom, democracy takes it away. It is an inherently collectivist system that can be likened to totalitarian ideologies such as Nazism, fascism and communism: “[i]n principle, no freedom is sacred in a democracy, every aspect of the individual’s life is potentially subject to government control… At the end of the day, the minority is completely at the mercy of the whims of the majority (p. 27)”.
Frank Karsten and Karel Beckman point out that while democracy may work well when implemented in a small city-state, there is much less accountability when applied to large countries with millions of people of varying cultural and ethnic backgrounds. In smaller jurisdictions, politicians can be expected to be closer to the people and to be hesitant to depart from what a majority wants due to the personal nature of their electorate (everyone knows everyone else). In larger jurisdictions, however, political parties frequently do things that a majority of people do not want.
Accountability is also diminished by the indirect nature of democracy which relies on the election of representatives. Citizens have less say than in a direct system where they are allowed to vote on every legislative proposal: “Everyone knows that governments regularly take decisions that most people oppose. It is not ‘the will of the people’, but the will of politicians – prompted by groups of professional lobbyists, interest groups and activists…they all know how to work the system to their advantage. (p. 18)”.
Votes that are cast in large countries are vague preferences that politicians are only loosely bound by, since there are no legal consequences for breaking an election promise. For this reason, the authors suggest that “[v]oting is the illusion of influence in exchange for the loss of freedom”, arguing that the probability of one vote making a difference is so small that it would undoubtedly be better to remove many decisions – over healthcare, education and so on – from the democratic arena and instead have them made by individual citizens through the private sector.
Moving away from voting, Karsten and Beckman also argue that democracy has broader effects on society, including on crime (“The democratic welfare state encourages irresponsibility and antisocial behavior”), educational and cultural standards (“[D]emocracy may be expected to lead to a dumbing down of the population and a lowering of general cultural standards”) and poverty (“Democracy doesn’t lead to prosperity, it destroys wealth”).
My only concern is that an undecided reader would find the book’s arguments lacking in detail and sophistication. A closer inspection of contemporary democracies would have illustrated their points more convincingly. For example, with respect to democracy and crime a comparison of cases such as Australia – where crime is comparatively lower than in other democracies such as South Africa and America – would have made the arguments stronger.
Karsten and Beckman do a superb job, however, when discussing alternatives to democracy. In response to the question of ‘what would we replace democracy with?’, Beyond Democracy provides a nice answer: secession should be allowed, and a contractual society should be encouraged. “Diversity in governance implies that people can decide more easily under what system they wish to live”, the authors write. “They can go to another municipality or county if they desire different governance. Such competition ensures that rulers are held accountable, which is hardly the case when a citizen’s influence is restricted to elections once every four years”.
They see a positive future for realizing freedom. Human beings are not opposed to decentralization per se – it is just that they demand a high threshold before seeking to break away. Unless there is some urgent pressing reason, people prefer to tolerate their differences. Thus when Pakistan seceded from India in 1947 and the Indian government decided to accept Pakistan’s departure, it was probably due to an acknowledgement of irreconcilable cultural differences (in this case the clear division between Hindu Indians and Muslim Pakistanis).
All in all, Beyond Democracy is a refreshing breath of fresh air. The authors have done a great service in compiling the main arguments against democracy in an accessible manner.
Here I am speaking at last year's Mises Seminar held in Sydney:
David Leyonhjelm, from New South Wales, has won the fifth Senate seat in the recent Australian federal election.
Congratulations to David and the Liberal Democrats!
I have also noticed that the Australian government has ranked Libertarian Papers an 'A' for quality, putting in the same league as better known journals from Harvard. There's something about Australian pragmatism that keeps them open-minded to good ideas, including free-market ones.