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Category: Market Failure

19/11/2022

The Myth of Liberal Competence-1

19 November 2022

One of the enduring myths of politics is that conservatives are better money managers. This is the case in the US, where the Republicans, who enthusiastically dismantle government programs that help poor people and the UK Conservatries who do the same. And it is the case here with the Liberals.

Perhaps the logic is that since they are rich, they must be better with money. But I wonder at the influence of Christianity. The key message is that you must suffer to be redeemed. Suffering is worthy and will later be rewarded. This seems to play into notions that the country will benefit if we all suffer now, ‘we’ in this case being those more dependent on welfare, or those at the bottom of the heap.

The other overarching fact in a market economy the more wealthy people can set the prices, which effectively means they set their incomes. At the bottom of the social pyramid, those at the bottom compete for the jobs and wages set by others. In short, the rich get richer and the poor get poorer. The game ‘Monopoly’ was designed to illustrate this. People play Monopoly, and when they win or lose, they stop the game and go on with life. But what is the game were real and never ended? The losers would get poorer and poorer until they had nothing else to give. That arguably is what a market economy will do without some intervention from an outside force, like a government, to intervene in the cause of those going backward.

Arguably the world’s leading economist is Thomas Piketty. He is a Frenchman who, as he rose, was offered a post in Harvard. He did not take it, opining that economics in the US was theoretical and not based on hard data, as a science should be. Records of national income and death duties going back for 400 years in 4 countries had been put together and he analysed it. His book, ‘Capitalism in the 21^st Century’ is a towering work. It is long, but it is very well-structured with concise conclusions at the beginning and the proof in the later chapters for those who want to read more. He observed that the wages of the population go up at the inflation rate, and the income of the rich who loaned money go up at the interest rate, but the interest rate was always higher than the inflation rate, otherwise there would be no profit in lending. So the income of the rich would always go up faster than the rest of the population, so social inequality would increase in the absence of other interference.

It has always been known that money goes round, and to stimulate the economy people have to spend more. But Piketty points out that poor people spend a greater percentage of their money than rich people. Very poor people spend all the money they have, rich people save about a third. So if you want to stimulate an economy, you should give money to poor people. This is of course not what conservative governments do. They give money to infrastructure, which these days means big private contractors or have industry assistance packages. But these initiatives are giving money to the rich, on the assumption that it will generate more jobs in the long term than the extra consumption would have generated.

(You might ask why Piketty has not got a Nobel Prize for being the first economist to use real data over centuries and come to such a profound conclusion. If you did ask that you might wonder if the Nobel prize economics committee are all neo-liberal economists and you might be right).

The point is without government intervention, the rich will get richer and the poor will get poorer. The best way to minimise this is to have as much shared wealth as possible in the form of park and public facilities, such as transport, health, education and essential services that blunt the significance of income disparities, as a base-line is set without it having the stigma of charity.

But conservative governments, like the Nobel committee want to ignore Piketty and the obvious facts as they do not suit their ideological agenda. A cynic would say that the ideological agenda from right wing ‘think tanks is merely an endless list of convenient reasons to keep the money flowing to the top end of town, to lessen government ‘interference’ which might act for fairness, and to commodify everything such as housing, transport and education so they can become profitable, increase inequality and profit those at the top. How can this agenda ever be considered the foundation of good financial management?

But as Treasurer, Morrison was not even clever in his management of his own revenue. Here is a tale of how his GST deal with Western Australia was out by a factor of almost 10 times over 3 years. Yet the legacy of this shambles is contracts and deal that other have to grapple with.

One of the modest contributions that I am seeking to make to political discourse is to sheet home the blame for failures to the people responsible for them. Here is a start, from the SMH:

Cost of Morrison’s WA GST deal blows out by $20 billion as debt hits record high

By Shane Wright SMH November 14, 2022 — 5.00am

A deal put in place to placate Western Australia when its share of GST revenue was tumbling is on track to cost the nation’s taxpayers 10 times more than originally forecast, helping drive up federal government debt and interest payments to record levels.

Pulled together by then-treasurer Scott Morrison in 2018 before being put through parliament by his successor, Josh Frydenberg, the deal that was originally expected to cost $2.3 billion is now on track to cost more than $24 billion.

WA, which delivered four seats to Labor at the May election on the back of a 10.6 per cent swing, is vowing to fight to keep the arrangement, due to expire in 2026-27.

Morrison struck the deal at a time WA’s share of the tax pool had fallen to an all-time low of 30 cents for every dollar of GST raised within the state. Its iron ore royalties were effectively being redistributed among the other states and territories based on a Commonwealth Grants Commission formula that takes into account each state’s revenue sources and expenses.

Under Morrison’s deal, from 2022-23 WA must receive a minimum of 70 cents in the dollar before increasing to 75 cents in 2024-25. When the policy was put in place, it was expected iron ore prices would fall and WA’s share of the GST pool would therefore rise. Instead, prices have soared.

The Morrison government ensured other states and territories wouldn’t be worse off, which requires the top-up funding for the deal to come from outside the $82.5 billion GST pool.

It was originally forecast to cost federal taxpayers $2.3 billion over three years, including just $293 million in 2021-22, but the surge in iron ore prices has meant more top-ups and for longer.

The October budget revealed that last year, the deal cost $2.1 billion and is forecast to jump to $4.2 billion this financial year. By 2025-26, the cost of the entire deal is on track to reach $22.5 billion, with another $2-3 billion likely the year after that.

Throughout the entire period, the budget is expected to be in deficit, forcing the extra cash to be borrowed. In percentage terms, the blowout in cost is larger than the NDIS, aged care, health or defence.

Independent economist Chris Richardson said the deal had been ill-conceived from the beginning with the cost to be borne by future taxpayers.

He said all significant spending programs needed to be properly assessed, including the GST deal.

“Yes, the politics of it are difficult. But we have a whole host of other issues, like the NDIS, and the economics of them have to be dealt with,” he said.

Any change to the GST deal would create enormous political problems in WA which is likely to gain more political power with an additional seat in a looming federal electorate redistribution.

WA Premier and Treasurer Mark McGowan, who reported a $5.6 billion budget surplus for the 2021-22 financial year, told this masthead he expected the GST deal to remain.

“I have made it very clear that West Australians will not accept any changes to the GST distribution,” he said.

“Those on the east coast who are demanding WA lose out still do not realise that under the reforms, WA will receive 70 per cent of its population share of the GST next financial year. In complete contrast, no other state has ever received a share of the GST lower than 83 per cent.

“WA will continue to subsidise all the other states into the future under this arrangement. No state has lost a dollar under these reforms.”

The extra borrowing for the GST deal has contributed to the lift in gross debt, which on Friday reached a record $909.4 billion.

Ahead of the COVID-pandemic, gross debt was expected to reach $576 billion this financial year. Instead, it is now forecast to reach $927 billion before reaching $1 trillion in 2023-24.

Treasurer Jim Chalmers said the cost of servicing the debt was getting more expensive and was now the budget’s fastest-growing expense.

“We’ve made good progress in a very short space of time. We’ve found $22 billion in savings and kept real spending growth flat across the forward estimates,” he said.

“[But] it will take more than one budget and more than one term of government to make up for a decade of missed opportunities and messed-up priorities.”

05/11/2022

The Twitter Story- and the bigger subtext

5 November 2022
Elon Musk likes to play in every game. His car company existed on hope for many years, but has at last ramped up production. He is in software, AI, batteries, cars infrastructure with tunnelling and trains, space rockets, investments, and now politics.

Twitter has established itself as the world’s political events exchange platform. A new concept like Twitter, which allows direct person to person contact was a good idea. Naturally if there is to be a conversation, everyone has to be in it, so a monopoly system is favoured if the system is new and is seen to work. So Twitter has become unique and immensely powerful. But the technologies that have everyone able to have an equal voice enable radical and socially damaging perspectives to be aired and publicised, legitimised by their ubiquity. Radical groups can link up with others anywhere, adding strength to isolated opinions and tending to lead to discussions that become even more radical and may lead to action.

So the social effects of the new technologies have created new and effectively unaccountable power structures. The regulation of these can be by government edict, as in China, or left to the corporate owners as in the West. Both these regulatory actions and the lack of them are controversial and many have long term political and social effects.

Now Elon Musk seems to have offered to pay too much for Twitter. He tried to withdraw his offer, but was forced to honour it. Having paid too much, he now wants to cut staff numbers radically. I was under the impression that social and political pressure was making Twitter more responsive to concerns about its social and political effect and its staff were part of an effort to minimise any harm it might do. If this is so, it is likely to be, no staff = no action.

So looking at Twitter as purely a financial entity verges on the absurd, but that is what is happening. And a financial mistake by Musk, and his corrective action in sacking people may have considerable effects. Commentators are already talking about the polarisation of US politics and the rise of violence with the storming of the US Capitol and the easy and unsophisticated attack on Paul Pelosi.

So the subtext of the situation is that an unregulated world market allows the immense concentration of power such that when the world’s richest man corrects what is for him a relatively minor financial error a major world information system is significantly disrupted and may become dysfunctional. (Whether it was considered dysfunctional before is a matter of opinion- it is hard to get an exact understanding of how much power the Twitter information model has).

One of the more ridiculous features of our society is that those with money, or who know about it are assumed to know about everything. They know about money, and have usually specialised in making it to the exclusion of other concerns. Often, it is dubious that they have the faintest idea about the implications of their actions.

Because the world’s economy advisers have allowed the world to become just a market we have the equivalent of elephants in China shops and we wait and wonder which way they will turn. A more cynical view would be that we have a situation where the playthings of the rich can have massive uncontrolled consequences and there are no regulatory mechanisms that have either the will or the power to influence the situation in the public interest.

The jobs of the Twitter employees are the tip of a very large iceberg, and the stories of Twitter’s share price have a much larger subtext. Here is an article from today’s SMH:

Twitter staff shut out as global purge starts
Zoe Samios, Nick Bonyhady

Twitter Australia staff were being locked out of their company accounts yesterday as billionaire Elon Musk’s job cuts hit the local office in Sydney, which employs about 40 people.
Musk told confidants he planned to eliminate half of Twitter’s workforce to slash costs at the social media platform he acquired for $US44 billion ($70 billion) last month.
Local staff in marketing and news curation were shut out of Twitter’s systems after receiving an email signalling layoffs but without any official confirmation that their jobs were being axed. Others were waiting to see if they would still have a job come Monday.
One employee said there was a sense of relief. ‘‘It’s not the company that we joined, and it’s not the app that we all love any more,’’ they said.
Others familiar with the company said the news team, which selects articles on topical moments in the national discourse, is among the largest local units and had about 10 staff. Some communications staff for the Asia-Pacific region have also been locked out.
Twitter’s local public relations representative declined to comment.
Australian staff received an email yesterday morning saying Twitter would ‘‘go through the difficult process of reducing our global workforce’’. Staff were to be told whether they still had a job via email by 9am Pacific Standard Time, or 3am AEDT yesterday, but the lockouts started early.
‘‘We recognise that this will impact a number of individuals who have made valuable contributions to Twitter, but this action is unfortunately necessary to ensure the company’s success moving forward,’’ the email, which was obtained by the Herald, said.
The Herald revealed in July that Twitter was closing its Australian office in Sydney, with staff to work from home.
All told, Musk wants to cut about 3700 jobs at San Francisco-based Twitter, people with knowledge of the matter said this week. The entrepreneur had begun dropping hints about his staffing priorities before the deal closed, saying he wants to focus on the core product.
‘‘Software engineering, server operations & design will rule the roost,’’ he tweeted in early October.
Twitter was sued over Musk’s plan to eliminate the jobs, with workers saying the company is doing without enough notice in violation of federal and California law. A class-action lawsuit was filed on Thursday in San Francisco federal court. The federal Worker Adjustment and Retraining Notification Act restricts large companies from mounting mass layoffs without at least 60 days’ notice.
Security staff at Twitter’s San Francisco headquarters carried out preparations for layoffs, while an internal directory used to look up colleagues was taken offline on Thursday afternoon, people with knowledge of the matter said.
Employees have been girding for firings for weeks. In recent days, they raced to connect via LinkedIn and other non-Twitter avenues, offering each other advice on how to weather losing one’s job, the people said. with Bloomberg

01/11/2022

Want to know about high energy prices?

4 September 2022

It is about market failure. When public power utilities were privatised a market was set up and power producers could bid into a market to supply at a certain price for each period of time. But obviously if someone bid in at a low price for part of the market, they would then watch as others bid in higher and made more money. So the price to all producers was set at the last bid, so the cheap producers made a lot of money.

There were a few problems. The amount of electricity needed varies widely. Coal fired power is not very flexible-it needs a constant load, cannot be stopped and can vary its output only slowly and within a limited range. When renewables came, solar is only in the daytime, and wind varies, so the system had a problem with ‘stability’- the ability to dispatch power when it was needed.

Another problem was rorting, though no one wanted to talk about this. There were big players who could withhold power so that there was a shortage; the price went up, and then they all cashed in. ‘Imperfect competition’ as economists would call it. No one wanted to build coal plants and there was not enough storage to let renewable energy last overnight or for dull or windless days. So the Morrison government said that gas was a ‘transition fuel’ and more gas plants would be built.

Meanwhile the Australian gas industry agreed to massive export contracts on the assumption that they could frack Australia as the US had been fracked. But the environmentalists realised the harm this did and resisted. So our price of gas went up. So the companies pressured the Albanese government, which is now breaking its election promises and approving fracking. Sorry environment- what is a bit of permanently polluted groundwater and desertification between friends?

Of course years ago, publicly owned utilities run by professional engineers were charged with providing electricity and gas to the public on a non-profit basis. They charged enough to cover their costs with some money for maintenance and future planning. The price was the average price of generation, not the most expensive component. The model worked quite well and could again. The change to a ‘market’ was ideological.

At an international level, the problem is similar, but it all being blamed on Russia, which is only partly true. Naturally in a globalised world, we are also affected by the European gas market, but less directly, especially if we frack to get out of it; which is a very bad solution, substituting a long-term problem for a short-term one.

Here is an international article:

https://eand.co/this-is-why-your-energy-bills-are-going-through-the-roof-cc99e2a59d12

08/04/2022

Bullshit Jobs

8 April 2022

The idea of bullshit jobs is not new. It comes from a book in 2018.

However, with employment supposedly doing well, largely because we have excluded guest workers due to Covid, it is worth looking at how many jobs are actually needed.

Everyone needs something to do and a reasonable income to live on. The status of having a job relates generally to its perceived income, though there is some ‘doing good’ status associated with jobs like nursing despite their being chronically underpaid.

But technology replacing people has not brought the expected benefits because there seems no plan to spread the benefits evenly, or look at whether what is being done has any social utility. Many jobs that need doing are not done. Many people who want to work cannot, yet much energy and money is spent doing useless things.

I waste about 80% of my time as I treat Workers Comp and CTP injuries. About 20% of my time is deciding what treatment is needed, and about 80% filling in paperwork or writing reports to try to get the treatments paid for. On the other side there are a phalanx of clerks trying not to pay and to transfer the costs elsewhere. (i.e. to Private Health Insurance, Medicare or the patient themselves). Many doctors and lawyers also strive mightily in this unproductive area. The bottom line is that while the overheads of Medicare are about 4.5%, the overheads of CTP are close to 50%,; i.e half the money goes in processing or disputing claims or in profits for the companies indulging in this nonsense. And since many patients often cannot get the treatment or suffer long delays because of their efforts, it is a really bad use of human energy.

Someone needs to look hard at what we do and where the benefits go. Assuming that ‘the market’ will fix it is about as sensible as saying that ‘God’ will fix it, and is usually espoused with the same uncritical zeal.

Here is Wikipedia summary of the book:

In Bullshit Jobs, American anthropologist David Graeber posits that the productivity benefits of automation have not led to a 15-hour workweek, as predicted by economist John Maynard Keynes in 1930, but instead to “bullshit jobs”: “a form of paid employment that is so completely pointless, unnecessary, or pernicious that even the employee cannot justify its existence even though, as part of the conditions of employment, the employee feels obliged to pretend that this is not the case.”[1] While these jobs can offer good compensation and ample free time, Graeber holds that the pointlessness of the work grates at their humanity and creates a “profound psychological violence”.[1]

The author contends that more than half of societal work is pointless, both large parts of some jobs and, as he describes, five types of entirely pointless jobs:

flunkies, who serve to make their superiors feel important, e.g., receptionists, administrative assistants, door attendants, store greeters, makers of websites whose sites neglect ease of use and speed for looks;
goons, who act to harm or deceive others on behalf of their employer, e.g., lobbyists, corporate lawyers, telemarketers, public relations specialists, community managers;
duct tapers, who temporarily fix problems that could be fixed permanently, e.g., programmers repairing bloated code, airline desk staff who calm passengers whose bags do not arrive;
box tickers, who create the appearance that something useful is being done when it is not, e.g., survey administrators, in-house magazine journalists, corporate compliance officers, quality service managers;
taskmasters, who create extra work for those who do not need it, e.g., middle management, leadership professionals.[2][1]

Graeber argues that these jobs are largely in the private sector despite the idea that market competition would root out such inefficiencies. In companies, he concludes that the rise of service sector jobs owes less to economic need than to “managerial feudalism”, in which employers need underlings in order to feel important and maintain competitive status and power.[1][2] In society, he credits the Puritan-capitalist work ethic for making the labor of capitalism into religious duty: that workers did not reap advances in productivity as a reduced workday because, as a societal norm, they believe that work determines their self-worth, even as they find that work pointless. Graeber describes this cycle as “profound psychological violence”[2] and “a scar across our collective soul”.[3] Graeber suggests that one of the challenges to confronting our feelings about bullshit jobs is a lack of a behavioral script in much the same way that people are unsure of how to feel if they are the object of unrequited love. In turn, rather than correcting this system, Graeber writes, individuals attack those whose jobs are innately fulfilling.[3]

Graeber holds that work as a source of virtue is a recent idea, that work was disdained by the aristocracy in classical times, but inverted as virtuous through then-radical philosophers like John Locke. The Puritan idea of virtue through suffering justified the toil of the working classes as noble.[2] And so, Graeber continues, bullshit jobs justify contemporary patterns of living: that the pains of dull work are suitable justification for the ability to fulfill consumer desires, and that fulfilling those desires is indeed the reward for suffering through pointless work. Accordingly, over time, the prosperity extracted from technological advances has been reinvested into industry and consumer growth for its own sake rather than the purchase of additional leisure time from work.[1] Bullshit jobs also serve political ends, in which political parties are more concerned about having jobs than whether the jobs are fulfilling. In addition, he contends, populations occupied with busy work have less time to revolt.[3]

As a potential solution, Graeber suggests universal basic income, a livable benefit paid to all, without qualification, which would let people work at their leisure.[2] The author credits a natural human work cycle of cramming and slacking as the most productive way to work, as farmers, fishers, warriors, and novelists vary in the rigor of work based on the need for productivity, not the standard working hours, which can appear arbitrary when compared to cycles of productivity. Graeber contends that time not spent pursuing pointless work could instead be spent pursuing creative activities.[1]

24/03/2022

Planning Minister Anthony Roberts scraps flood and fire checks in Planning Laws

March 24 2022

Almost unbelievably, NSW Planning Minister Andrew Roberts has scrapped requirement of his predecessor Rob Stokes that fire and flood risks be considered in planning approvals. This is only a week after the worst floods in history, and a few months after the worst bushfires.

His excuse was that he had a priority to act on affordable housing. No doubt flood-prone land is cheaper.

One might think that It is almost impossible to explain such stupidity, but we might note that the Property Council and the Urban Taskforce supported the decision, with the usual disparagement of ‘red tape.’

We might also note that Minister Roberts started working in Parliamentary offices at the age of 22, worked for Flagship Communications as a PR person and was cited by journalist Chris Masters as the liaison person between Alan Jones and John Howard’s offices. Flagship Communications was the PR company for the Orange Grove development, which set up a ‘factory outlet’ and turned it into a full blown shopping complex (until it was shut down by then-Premier Bob Carr after lobbying from Westfield). He became an MP at the age of 33 as member for Lane Cove.

There has been quite a lot of negative reaction to his planning decision in the letters columns.

Here is the SMH story:

NSW Planning Minister scraps order to consider flood, fire risks before building

By Julie Power March 22, 2022

NSW Planning Minister Anthony Roberts scrapped a requirement to consider the risks of floods and fires before building new homes only two weeks after it came into effect and while the state was reeling from a deadly environmental disaster.

Mr Roberts last week revoked a ministerial directive by his predecessor Robert Stokes outlining nine principles for sustainable development, including managing the risks of climate change, a decision top architects have branded “short-sighted” and hard to understand.

But a spokesperson for Mr Roberts said the minister had been “given a clear set of priorities to deliver a pipeline of new housing supply and act on housing affordability” by Premier Dominic Perrottet.

The president of the NSW chapter of the Australian Institute of Architects, Laura Cockburn, said the decision was difficult to understand “after the recent devastating floods and with bushfires still scorched in our memory”.

The revoked directives had sought to address “risk-management and resilience-building in the face of such disasters”, Ms Cockburn said.

“In the midst of our current flood and housing crises, why would a government choose to remove planning principles aimed at disaster resilience, and delivering affordable housing?” she said. “This is a short-sighted decision that could have enduring negative impacts.”

Mr Roberts’ spokesperson said: “The minister did not consider that the planning principles due to take effect on March 1 would assist in delivering his priorities so discontinued the principles and issued a new ministerial direction to that effect.”

Mr Roberts’ move coincides with expectations the government will also scrap or substantially change the new Design and Place State Environmental Planning Policy (SEPP) under consideration for apartments and homes. The policy stresses sustainability, quality and liveability by requiring, for example, better ventilation.

Mr Stokes’ directive on sustainable development, issued on December 2 but in effect from March 1, was designed to simplify the planning system, cut red tape and put people first. It said housing should meet the needs of the present “without compromising those of the future”. It was scrapped on March 14.

These principles are also reflected in the new design policy developed by the office of the State Architect. It is being reviewed.

Mr Stokes directed the planning department, developers and councils to also consult Indigenous landowners, consider the risk of climate change, and provide the public with information about the risks of natural disasters where they developed, lived or worked.

“Land use should be compatible with the level of risk of an area, such as open space or playing fields in flood-prone locations,” Mr Stokes’ statement of principles said.

Many in the property industry expect Mr Roberts will abandon plans for the new Design and Place SEPP.

Luke Achterstraat, NSW executive director of the Property Council of Australia, supported Mr Roberts’ move. With NSW facing a shortage of about 100,000 dwellings, the council backed any measure that sought to reduce red tape and activity that would “unblock” the planning system.

“The added significance of why we support the Minister’s announcement is that he has doubled down on housing supply and affordability, and has recognised the industry has been in an elongated process of policy reform.”

He said the Property Council expected the new Design and Place SEPP would either be set aside or substantially changed. Mr Achterstraat said the government’s own modelling found they would cost an additional $2.3 billion.

The chief executive of Urban Taskforce Australia Tom Forrest also applauded Mr Roberts’ decision.

“Planners were confused. Lawyers were aghast. Developers were exasperated. It is great to see this unwelcome initiative abandoned,” Mr Forrest told The Urban Developer, which first reported Mr Roberts’ policy change.

Stephen Albin, an analyst and principal of consultants Urbanised, advised Mr Stokes on the scotched principles.

He was disappointed to see Mr Stokes’ principles abandoned when NSW’s planning system needed reform. “The definition of stupidity is doing something again and again, and expecting another result,” he said. “We wanted a modern planning system that was inclusive.”

Ms Cockburn said she hoped the latest change by Mr Roberts would not impede the significant efforts to design places to meet the needs of their communities in the Design and Place SEPP.

Architects across Australia are also campaigning for new planning policies that ensure clearer standards and codes to protect consumers from worsening impacts of climate change, including new controls for building in floodplains.

A recently released research report by Climate Valuation found a million homes nationwide will be “at high risk of devastating riverine flooding by 2030 without investment in adaptation and mitigation”.

The future of building on floodplains will also form part of the inquiry into the NSW disaster that has left nine people dead and thousands with damaged homes.

24/02/2022

Loneliness and its solutions

25 February 2022

I sometimes watch Foreign Correspondent on ABC TV and by chance on 15/2/21 I came across this excellent programme on loneliness in Japan.

The ABC correspondent there looks at loneliness in the Japanese population from older folk dying alone, to younger people simply withdrawing from society.

Some of the older ones had no family or jobs. Some of the younger ones were so pressured to succeed and felt that they had failed, so simply withdrew from society. It seems that the pressure on kids all to be CEOs is an absurd and unachievable objective.

I am not sure that the situation in Australia is as bad, but I thought about some of my patients and could think of half a dozen immediately. With some of them , I am one of the only two or three people in the world they have any contact with, their relationships are tenuous.

None of them started with mental health problems. Here are some examples:

A 60 year old man worked for a security company looking after an insurance company. He was doing surveillance for them, but it took over his life as he was contacted 24 hours a day for various crises. Case management employees having conscience over what they were doing had to be rescued from self-harm in the toilets. Enraged claimants with refused claims threatened to blow up the company offices with cans of petrol. He saw staff high-fiveing as some claimant got a derisory settlement when they deserved and needed a lot more. It went on like this for years. When he said that he could not do this anymore he was treated as badly as any of the people he had dealt with. He told me this story, and I had hoped that with his considerable management skills and experience, he could be put into a less stressful position. But he deteriorated. Everything reminds him of the corruption of the world. He is estranged from his wife and they communicate with post-it notes on the frig. He goes for a walk at 11 at night so he will not have to speak to people in the street. One son has stuck by him and visits daily, and will build him a self-contained unit in his new home.

Another patient is a 62 year old ethnic taxi driver who was so badly bashed 11 years ago by a gang stealing his takings that he lost an eye, has never worked again and never recovered mentally or physically. He was divorced; lives alone and sometimes will not even answer the phone.

One is a 42 year old foreign student who came to study theology, wanting to become a pastor. Her English is not great. She is a trifle unworldly, and thought that the world is basically kind and people look after each other. She had a casual job in a motel and her boss asked her to move a bed down the stairs between floors. She said it was too heavy and she could not, but he threatened to sack her. She did it and got an injury to two discs in her back. She was frightened to have surgery, so was in agony for a couple of years and eventually agreed. She had minimal surgery, which was not successful. The insurer decided that she was not complying with what they wanted so refused to pay her. She was effectively broke and homeless, so an old lady from her church offered her a bed and food. But she lives a long way away and up a drive that is hard for my patient to walk up. She was effectively trapped. As a foreign person she did not even have Medicare for the minimal psychological help it offers (6 visits a year). Her mental health deteriorated and she shunned all outside contact, and would not even answer the phone. She has gone home to her family- I can only hope she improves there.

One is a 39 year old from a religious and teetotal family with a high sense of ethics. He was a top salesman of a computer company and became aware that they were ripping off some customers. He drew this to management’s attention, but they declined to do anything and he was labelled a whistleblower. Management supported him by putting out an email asking that he be supported for his mental health issues. He felt that this ostracisation was the end of his career, because he had asked them to behave ethically. He was certain that no one in his tight top group will now employ him, so he withdrew and started to drink to lessen the pain. His family then rejected him because of the drinking and his sales friends are estranged also. The psychologist gives him Cognitive Behavioural Therapy exercises and I try to get him to drink less and somewhat ironically counsel him that you cannot withdraw from the world merely because the baddies generally win. He lives alone, answers the phone and is just able to do his own shopping, but is not improving much.

These are just some examples that I know. Coasting home as GP at least keeps you in contact with life. The point is that many people have broken lives, but just keep living. None of these examples have done anything wrong themselves. Is a sense of ethics a mental illness?

As everyone has to ‘look after themselves’ in a consumer-oriented society, more people will fall through the cracks, especially as the gap between rich and poor is enlarged by pork barrelling which puts resources into areas that need them less, tax breaks for the rich, subsidies for private schools and private health insurance, derisory welfare payments, and insurers allowed simply to refuse to pay without penalty.

People need basic support with universal housing and universal health case. They need jobs or at least occupations and an adequate income to survive. And we need outreach and support services that can be called upon.
When people say, ‘There are not enough jobs’, they are taking nonsense. Anyone can think of many worthwhile things that need doing. And there are plenty of people who would be happy to do them. The problem is that in a world where nothing can be done that does not make a profit, a lot of things that need doing are not done. That is where the policy change are needed. We cannot simply look at the money and see to what level existing activities can be maintained. We need to look at what needs to be done, and then work out how to achieve it. We need to decide that everyone has a right to live and those who have a good life will live in a better society if everyone can share at least a basic quality of life. There has to be recognition that the ability to be profitable need not be the overwhelming criterion for what is done. Tax may go up, but if there is real re-think of priorities, it is not likely to be all that much.

The link to the ABC program that initiated this tirade is below.
https://iview.abc.net.au/show/foreign-correspondent/series/2022/video/NC2210H002S00

20/02/2022

Gun Manufacturer Remington Found Responsible for Sandy Hooks School Massacre

20 February 2022

For the first time ever, a gun manufacturer was found to be responsible for a massacre.

As everyone who is aware of US news knows, massacres are commonplace in the US, all carried out by guns being used exactly as they were designed to be used. Oh yeah, but not used on those people…

Somehow the US gun manufacturers have had immunity from prosecution and the Sandy Hook legal team had to say that it was the irresponsible (and highly successful ) marketing that had caused the assault rifle to be used in the shooting. So they got them for the marketing, not the product.

Given the political difficulties of doing anything about guns in the US political system, it is natural that people might turn to the legal system for some hope. It is difficult, but not as hard to change as the political system.

I am reminded of the same debate in the tobacco war. For years the tobacco industry gave money to the major parties in big amounts and the deal was something like, ‘Say what you like, but no restrictive legislation till after the next election, then the next, then the next etc’. They denied knowing the health facts, but said that it was common knowledge that smoking was harmful. They had to not know so that they would not be liable, but everyone had to know because then the smokers were responsible for their own illnesses. This was known as the ‘Tightrope policy’. Of course they had done the research and knew very well, but hey, lies are common and part of many business models.

In 1983 a group in Northwest University in the US was trying to get enough money to run cases, because tobacco used exactly as intended was causing thousands of deaths every day. The industry had been very keen to be forced to put ‘Smoking is a health hazard’ on the packs. This was because they could the say that the people who smoked had been warned and they were not responsible for the consequences of using their product. They also wanted the government to tell them to put it there, so they could say that they did not know if tobacco caused cancer, but the government and health people thought so. They fought every case, generally drawing it out so that the plaintiff either died or ran out of money or both. When they were about to lose a lung cancer case in a librarian in Australia, they found out that she had had a child out of wedlock 40 years before, and said that this would be released if she did not stop the case. Such was the shame of that fact that his person, weakened by cancer, withdrew her case and died. Ruthless.

The US believed tobacco campaigners believed that their victory would come in the courts, not the parliaments, and this was true. In Australia it was a bit different as BUGA UP targeted the tobacco industry and made them such pariahs that they were politically weakened enough for advertising and sponsorship bans, plain paper packaging, rotating health warnings and eventually some-free indoor air. The tobacco industry in Australia was relatively weaker than in the US, and the gun lobby is also, but it is very unwise to be complacent.

We in Australia need to be very vigilant to keep our gun laws strong, as the Shooters have expanded their base to become the Shooters, Fishers and Farmers and have capitalised on the weakness of the Nationals to get lower house seats. They have used balance of power situation in NSW quite astutely under Bob Carr and continuing. John Tingle, The Shooters MP in NSW got Carr to enact that to have a shooters licence in NSW, one had to belong to a shooting club and shoot at least once a year. The shooting Club could then keep an eye out for crazies. But of course the shooting clubs got a subsidy to maintain their records and database, and this is ideal for organising fundraising and troops on election day. Running a political party is a significant expense- only one group is subsidised, though it must be conceded that the shooting clubs and the Sporting Shooters Association (the lobby group) are not the same entity as the Shooter, Fishers and Farmers party.

We need to watch the US legal efforts, and be vigilant. And of course lessening social inequality and having a place in society for everyone with jobs, income and housing helps lessen the probability of alienation, anger and despair.

www.abc.net.au/news/2022-02-16/sandy-hook-families-settle-with-gun-maker/100833782

03/02/2022

Scam Crime and the Response

3 February 2022

It is no secret that computer and phone scamming are now hugely common crimes. A couple of years ago, I got new landline as it was only a few extra dollars on my data plan. The number was not known to my friends and there are no phone books these days, so the only calls I got were surveys or scams or both. I was nearly conned, but when ‘Telstra’ asked for my credit card to fix my line I woke up just in time. Others in the house were scammed. The government has a Scamwatch, but it is only interested if you actually lose money and it seems very desultory about taking action.

The Police are not interested. As criminals go from mugging and burglaries to scamming there is less violent crime, but prison numbers continue to rise at vast cost to the taxpayer and with minimal rehabilitation- the recidivism rate remains high, which is unsurprising in that there are few jobs, little housing and a stint in gaol getting different friends and new skills makes reoffending more likely. Telling the Police or the government about scams seems to have no effect.

Some years ago as I collected more and more credit and loyalty cards they filled my wallet to bursting. As I paid for a restaurant lunch in a small cafe I dropped quite a lot of the cards and picked them, apparently bar one. I went back to work and a few hours later was called by the bank that asked if I had made a couple of big purchases in Sydney without signing and then flown to Melbourne, as someone had done this using my credit card. I had not, and the bank did not charge me for whoever had. That seemed good, but it is also an explanation for why credit card interest rates are so high. Presumably the person who got the card also got away scot-free; an unreported crime.

Recently a friend asked me to befriend a Nigerian medical student who is apparently honest and does not scam, but has a lot of trouble to advance in his profession as influence-buying and connections are necessary and he does not have these. I was informed that in Nigeria there are few jobs, the money goes overseas and scamming is the major source of income for a whole class of young people, particularly men. Now as one gets a few scam calls each day and sometimes the phone even warns about this the whole situation is becoming ‘normalised’. Some of us might hope that the government that is so ‘tough on crime’ that it locks so many people up, might actually recognise that the type of crime is changing and go after scammers and cyber criminals or even take some measures to prevent this. Surely taking advice in real time- calling the number, blocking them or listening to them to gain evidence for prosecution are all easily accessible remedies that could happen in a very short time-frame.

As the governments do very little, it seems that they want to push it to the banks, who, true to their form do not want to help. A buck-passing exercise, in short. Naturally the Australian Banking Association (ABA) said that Australia is ‘world-leading’ in all this. Perhaps they learned this unconvincing line from the politicians. The fact that normal transactions might be slowed by checks is one thing, but if we look at the amount of extra time it takes to board an aeroplane due to fear of crime, we might see this in perspective.

Once again Consumers will have a make a large fuss to that our ‘leaders’ will eventually follow us.

Here is an article from the SMH on the subject:

Banks battle to dodge refunds

Charlotte Grieve 3 February 2022

Australia’s major banks are fighting a push from regulators to force them to refund billions of dollars lost in online scams, arguing requirements to bear the costs of internet fraud could create complacency among consumers and lead to more losses.

In a tranche of internal documents obtained by The Sydney Morning Herald under freedom of information laws, the Australian Securities and Investments Commission (ASIC) detailed ‘‘strong opposition’’ from the banks to proposals for new obligations ‘‘to prevent scams or reimburse customers for losses’’.

Financial scams have increased around the world during COVID-19, with consumers spending more money online during lockdowns and criminals exploiting security vulnerabilities. Australians lose about $2 billion annually to scams, according to estimates from the competition regulator, most of which go unreported.

ASIC is reviewing the ePayments code, a voluntary code of practice that contains consumer protections for electronic payments, in a process that has been plagued by delays.

Australian Competition and Consumer Commission (ACCC) deputy chair Delia Rickard wrote to ASIC in early 2020 calling for scams to be included in its review, but ASIC decided against this after fierce pushback from major banks.

In one document, ASIC noted banks claimed accepting liability for ‘‘preventing customers from falling victim to scams is problematic, as it raises moral hazard issues (there is a risk that customers take less care if they know they will always be backed by their ADI).’’

The UK regulator recently introduced a raft of new protections for consumers affected by scams, including increased liability on banks to reimburse customers who lose money and a ‘‘confirma‘‘confirmation of payee’’ (CoP) mechanism that forces banks to flag payments where the account name does not match BSB and account number.

Both the ACCC and the Consumers’ Federation of Australia (CFA) supported introduction of a name-checking tool in Australia, claiming it would address an increasingly prevalent style of scam known as business email compromise, in which hackers falsify invoices and request payment to fraudulent accounts using genuine business names.

In another document, in comments later deleted by ASIC, the banks claimed to ‘‘already help customers in various ways’’ and said blocking genuine transactions ‘‘is a highly sensitive issue that can lead to challenging interactions for frontline staff’’.

The Australian Banking Association (ABA) has consistently stressed the need for greater personal responsibility in preventing scam losses, which has led some groups to accuse it of ‘‘victim blaming’’.

In one email to ASIC from September last year, the cited ‘‘timing and cost’’ as the main reason for opposing the CoP mechanism while promoting greater consumer education.

An ABA spokesman said Australia was “world leading” in online payments security and pointed to existing initiatives including PayID.

The industry also argued namechecking would increase ‘‘friction’’ and ‘‘substantially delay’’ payments processing and warned of rising customer complaints if new regulations saw banks blocking payments because of minor typographical errors, according to the documents.

The CFA told ASIC that there had been ‘‘blame shifting’’ between banks ‘‘to reduce liability for scam losses’’ and criticised the ‘‘little or no recourse’’ for victims.

It added it would be increasingly ‘‘important to minimise mistaken payments through good system design, rather than relying on moves to get the money back afterwards’’.

Britain’s new regulations force banks to reimburse customers for scam losses if certain criteria are met, using a pool of funds contributed by the banking sector.

An early draft of ASIC’s review showed support for this approach.

However, ASIC became increasingly concerned members of the voluntary code would withdraw participation if new obligations to prevent scams required ‘‘significant investment’’ in new systems.

Rather than introducing regulations similar to the UK, ASIC sought to enhance existing onscreen warnings that inform customers about risks of entering incorrect details.

However, the documents show there was also ‘‘resistance to this suggestion from banks’’ because it would probably ‘‘be expensive and resource intensive’’.

13/01/2022

NDIS- An Unsuccessful Privatisation of the Welfare System

13 January 2022

I was never in favour of the National Disability Insurance System as I saw it as a defacto privatisation and reliance on a ‘market’ which would have another layer of assessors, who may or may not get it right in a single interview, the award of ‘packages’ of money which may or may not be enough and/or may or may not be wisely spend. The greatest problem was that as a ’market’ it would be always liable to have glossy marketing to vulnerable families, with services delivered as cheaply as possible, by unqualified people and profits skimmed off. The government coffers were topped up by increasing the Medicare levy, which just ensured that the private sector was given huge amounts of public money.

When I was in the NSW Parliament’s Social Issues Committee which looked at the issue, a key problem was that there was no actual numbers of what the needs were for disability services. There were two ways of calculating it. The first was to add up all the people on benefits on the assumption that everyone who needed benefits was getting them. The other way was to ask the Australian Institute of Health and Welfare (AIHW), the government-funded research body what percentage of the population had a disability and multiply that percentage by the population. Their answer was many multiples of those on welfare, presumably either because their relatives or support networks were looking after their problems, or there was unmet need.

It seemed obvious that:

There would be a huge increase in demand when more resources were (at least in theory) available
There would be a lot of bureaucracy that would waste a lot of money
Those actually doing the job and who knew the needs at a practical level would have less control so the decision making would worsen
There would be a lot of profiteering
Disability workers would face a race to the bottom in pay and conditions.

It might be noted that NDIS cuts out when you are 65, so the whole process restarts with recipients having to apply for a Disability Support Pension (DSP). The current government has boasted that it is putting only a third as many people on the DSP as formerly. My experience was that when the NSW government stopped all Workers Comp payments after 5 years, many people who had been on this support for 5 year at least had to apply for the DSP. Figures were rubbery as the NSW government did not want to know how many people were simply tipped off income support, but the best estimate was that about 20% got the DSP and the rest had to go on Jobseeker. I wrote a lot of detailed medical reports for people who were still unable to get the DSP, and then the government wrote to me and said that I could only charge a very modest Medicare amount to write such reports, so presumably doctors will not be able to take much time on them. I cannot write them in the time that the allowance pays. I had one patient who was 61, ethnic, unskilled and illiterate in English who had been on compensation for a back injury 13 years and was carer for an invalid wife and was refused the DSP despite my best efforts and put into the ‘mutual obligation’ multiple job application system.

But to get back to the NDIS itself, I recently chanced across this article recently from an old issue of Green Left Weekly- a personal story. It seems very credible.

My view is the NDIS needs to be abolished, but it will be very hard to rebuild a public welfare support system against a well-funded and established private lobby that is making a fortune and has at least one major party ready to undo any efforts in this direction.

NDIS is also making life harder for disability workers

Janine Brown, Melbourne, February 8, 2019, Green Left Weekly Issue 1208

I am employed as a disability support worker by a council and, since the introduction of the National Disability Insurance Scheme (NDIS), I will soon lose my job. This is my story.

I am in transition to becoming “self-employed” with an ABN (Australian Business Number), which makes me a small business, and enables me to sign individual contracts with each client.

The other alternative was to become an employee of a private company that has contracts with NDIS clients.

From these two bad choices, I decided to go with the former.

We have been told that NDIS will be much better for hundreds of thousands of Australians. But is it?

Once families receive NDIS funding, it is their responsibility to make the choices for their child or adult family member and manage their finances over a 12-month period.

The idea that they are in control of the life choices of their family member may sound appealing. But the stress levels rise with the amount of bookkeeping required and when it is difficult to clearly define their needs.

Parents are encouraged to employ an advisor, but that person is paid for by the funding for their family member. That NDIS planner will recommend “one of theirs”, someone who will ask many questions and tick many boxes but who doesn’t really know the needs and interests of the person concerned.

I was once supporting a child at home when the NDIS planner was interviewing his parents. One of the questions was “Do you own your home?” I invited the planner to meet the child but she declined, saying it wasn’t necessary.

As much as I agree with giving parents options in choosing a carer for their child, the options being presented are often inadequate to the task at hand.

By privatising the disability sector, many people are obtaining an ABN (which is easy to do online) and presenting themselves as a qualified support worker. They do not need background checks and parents who search online for support workers only see promotional material.

I am qualified and have many years of experience, but l am now in competition with an untrained person who is willing to provide “services” at a cheaper rate. They call it business. I call it a dangerous rort.

NDIS has also meant that our work is now casual: we no longer have permanent employment with leave benefits, superannuation and union support.

A few weeks ago a parent asked me to do a buddy shift with a potential new carer as she lives near the client. Having a carer nearby is appealing for parents who may need to call on you at the last minute.

l agreed to do the shadow shift. I found that the inexperienced carer had no idea about the work responsibilities or the safety measures. She had no knowledge about supporting someone who is non-verbal with behavioural difficulties, who needs support in all aspects of daily life. She appeared to be more interested in the times of shifts, rather than the child’s needs.

It is easy to be blinded by the NDIS marketing, but just as the privatisation of the aged care sector has led to cuts in staff, quality meals and wound management, the same is true for the disAbility sector.

There are also many grey areas concerning the care of people with a disability.

Statistics show that as the number of people being diagnosed with autism (done by general practioners) has increased in the past few years. This adds to the NDIS budget.

As a result, NDIS bureaucrats are thinking of using “their people” to make the diagnosis. If this happens, we can expect a decline in the numbers of people being diagnosed with autism and many who need support will not be eligible for funding for appropriate services.

Another grey area concerns supporting people transitioning from childhood to adulthood, and teaching them to become more independent.

It is sometimes possible to teach a person to take public transport to an activity. However, it becomes a crisis situation when the bus/tram/train is late or cancelled and the person has lost all points of reference and they have to navigate replacement measures.

The NDIS planner may have ticked a box for someone to take public transport to an activity when things are going well, but an unexpected or crisis situation which causes the person anxiety is not factored into the plan.

It is imperative that we continue to support vulnerable people in our community. We must not be blinded by the NDIS hype when the reality is vastly different.

www.greenleft.org.au/content/ndis-also-making-life-harder-disability-workers

06/01/2022

Fake Science now an Industry

6 January 2022

Many years ago (?1977), I applied for the job as editor of the Medical Journal of Australia. I had done two years as a surgical trainee and took a year off from the somewhat disillusioning hierarchical system. I had done 3 and a half years of university English, but in terms of my experience editing, it was perhaps a long shot.

The salary was roughly the same as a second year resident, though more than half that salary had been overtime. The job seemed a bit of dangerous niche, but it was worth thinking about. I didn’t get the job (Dr Alan Blum from the US did), but was invited to apply for Deputy Editor. The salary here was $20,000 less, which was more than a third. But the key reason I declined is that I hate having someone else waste my time.

There is such an incentive to publish in order to climb academic ladders that most writing is done for the writer, not the reader. As many papers are written as possible, so the idea of spending a lifetime sorting through thousands of papers to find ones of merit seemed a hazardous occupation with a great danger of drudgery.

When I thought about the issue I devised the Chesterfield-Evans theory of knowledge acquisition. It is an exponential graph with time on the horizontal axis and knowledge in the vertical. With a little time you can get quite a lot of knowledge, but to get a little more or to get the forefront takes an immense amount of time, for the last bit of knowledge. This extra bit of knowledge may be well rewarded financially in medicine if you get it ‘approved’ as a specialty, but in many scientific endeavours there is no reward at all. Getting to the forefront is made harder by the lack of incentive to write concise papers for the benefit of the reader.

In practices as a medical professional the explosion of information of indifferent quality has made reliance on key journals the easiest way to go, but even here the increased specialisation makes even being a reasonable generalist more difficult. The monetisation of knowledge makes the specialties not want to share all their information, the college and universities act like businesses and the drug companies want to sponsor a certain view.

When I wrote both my Masters theses, getting a good supervisor was a problem. No one really wanted to go through the writings of yet another postgrad. My supervisor, Dr Chris Winder said that he would simply prefer students write concise papers and send the lot to a publisher, giving degrees to the ones considered worthy of publishing.

But there has been a profusion of journals, initially driven by the profitability of these. Now the pressure from students has been joined by a rogue element, the dodgy rip-off factories. Plagiarism and now straight out fraud are now industries.

Those who seek knowledge now have to be more discerning. There is delight amongst the non-scientific who can, like Pontius Pilate ask, ‘What is truth’ and then also like Pilate not want to know the answer.

Sadly, politicians and managers who have agenda other than optimal knowledge are flourishing in this environment.

I am glad that I did not become a medical editor; it is hard enough getting a broad-based knowledge of reasonably indisputable facts.

I am quite unsure how the confluence of factors favouring ignorance can be countered. Making everyone learn some science and maths at school might be a start.

How fake science is infiltrating scientific journals

Harriet Alexander

January 5, 2022

In 2015, molecular oncologist Jennifer Byrne was surprised to discover during a scan of the academic literature that five papers had been written about a gene she had originally identified, but did not find particularly interesting.

“Looking at these papers, I thought they were really similar, they had some mistakes in them and they had some stuff that didn’t make sense at all,” she said. As she dug deeper, it dawned on her that the papers might have been produced by a third-party working for profit.

“Part of me still feels awful thinking about it because it’s such an unpleasant thing when you’ve spent years in a laboratory and taking two to 10 years to publish stuff, and making stuff up is so easy,” Professor Byrne said. “That’s what scares the life out of me.”

The more she investigated, the more clear it became that a cottage industry in academic fraud was infecting the literature. In 2017, she uncovered 48 similarly suspicious papers and brought them to the attention of the journals, resulting in several retractions, but the response from the publishing industry was varied, she said.

“A lot of journals don’t really want to know,” she said. “They don’t really want to go and rifle through hundreds of papers in their archives that are generated by paper mills.”

More recently, she and a French collaborator developed a software tool that identified 712 papers from a total of more than 11,700 which contain wrongly identified sequences that suggest they were produced in a paper mill. Her research is due to be published in Life Science Alliance.

Even if the research was published in low-impact journals, it still had the potential to derail legitimate cancer research, and anybody who tried to build on it would be wasting time and grant money, she said. She has also suggested that journals could flag errors while articles were under investigation, so people did not continue to rely on their findings during that time.

Publishers and researchers have reported an extraordinary proliferation in junk science over the last decade, which has infiltrated even the most esteemed journals. Many bear the hallmarks of having been produced in a paper mill: submitted by authors at Chinese hospitals with similar templates or structures. Paper mills operate several models, including selling data (which may be fake), supplying entire manuscripts or selling authorship slots on manuscripts that have been accepted for publication.

The Sydney Morning Herald has learned of suicides among graduate students in China when they heard that their research might be questioned by authorities. Many universities have made publication a condition of students earning their masters or doctorates, and it is an open secret that the students fudge the data. The universities reap money from the research grants they earn. The teachers get their names on the papers as contributing authors, which helps them to seek promotions.

International biotechnology consultant Glenn Begley, who has been campaigning for more meaningful links between academia and industry, said research fraud was a story of perverse incentives. He wants researchers to be banned from producing more than two or three papers per year, to ensure the focus remained on quality rather than quantity.

“The real incentive is for researchers to get their papers published and it doesn’t have to be right so long as it’s published,” Dr Begley said. He recently told the vice-chancellor of a leading Australian university of his frustration with the narrative that Australia was “punching above its weight” in terms of research outcomes. “It’s outrageous,” Mr Begley told the vice-chancellor. “It’s not true.”

“Yes,” the vice-chancellor replied. “I use that phrase with politicians all the time. They love it.”

According to one publishing industry insider, editors are operating with an element of wishful thinking. This major publishing house employee, whose contract prevented him from speaking publicly, said when his journal started receiving a torrent of applications from Chinese researchers around 2014, the staff assumed that their efforts to tap into the Chinese market had borne fruit. They later realised that many of the papers were fraudulent and acted, but he was aware of other editors who turned a blind eye.

“Obviously there’s so much money in China and the journals have their shareholders to answer to, and they are very careful not to tread on Chinese toes because of the political sensitivity,” he said. “There’s a lot more they could do to sort the good from the bad because there is good science going on in China, but it’s all getting a bad name because of what some Chinese people have worked out — that there’s a market here for a business.”

Last month, SAGE journals retracted 212 articles that had clear evidence of peer review or submission manipulation, and subjected a further 318 papers to expressions of concern notices. The Royal Society of Chemistry announced last year that 68 papers had been retracted from its journal RSC Advances because of “systematic production of falsified research”.

To indicate the upswing in cases, German clinical researchers reported last week that in their analysis of osteosarcoma papers, just five were retracted before the millennium and 95 thereafter, with 83 of them from a single, unnamed country in Asia. University of Munster Professor Stefan Bielack, who published the study in Cancer Horizons, said some open access journals charged academics US$1500 to $2000 to publish their work, so they were more interested in publishing lots of papers than their scientific validity.

“There is a systematic problem and in some countries people might have the wrong incentives,” Professor Bielack said. “I think the journals have a major role. They all need to be more rigorous.”

The problem is not confined to China, but it has accompanied a dramatic growth in research output from that country, with the number of papers more than tripling over the last decade.

In 2017, responding to a fake peer review scandal that resulted in the retraction of 107 papers from a Springer Nature journal, the Chinese government cracked down and created penalties for research fraud. Universities stopped making research output a condition of graduation or the number of articles a condition of promotion.

But those familiar with the industry say the publication culture has prevailed because universities still compete for research funding and rankings. The number of research papers produced in China has more than tripled over the last decade, with dramatic growth over the past two years. The Chinese government’s investigation of the 107 papers found only 11 per cent were produced by paper mills, with the remainder produced in universities.

Until last year, University of NSW offered its academics a $500 bonus if they were the lead author in a prestige publication and $10,000 if they were the corresponding author of a paper published in Nature or Science. The system, which was designed to reward quality over quantity, was discontinued due to financial constraints.

But others have questioned whether the quality of a paper can be measured by the journal in which it is published, and an open access movement has sprung up in opposition to the scientific publishing industry, arguing that research paid for by taxpayers should be freely available to all.

Alecia Carter, an Australian biological anthropologist at University College London, said the emphasis on getting published in a high-impact journal rewarded sensational results over integrity, positive results over negative results and novel findings over building the evidence base. Researchers might inflate effect sizes or omit conflicting evidence because it muddied the overall story they were trying to tell.

“We as scientists know all these things that are wrong with the way the system is set up, but we still play the game,” Dr Carter said. “We’re all chasing the same thing.”

Dr Carter boycotts luxury journals, publishes as much as possible in open access journals and reports negative results, though this has come at a cost to her career. She was once asked at a job interview why she would bother reporting results that were not interesting.

“I said, ‘If it’s interesting enough to do the research then we should publish the results’.”

She did not get the job.

Here is an SMH article which stimulated my post: