The abrupt shutdown of much of the incessant, mindless busyness of modern life imposed by the COVID-19 pandemic is forcing a fundamental rethink about many things and the consequences that are likely to be with us long after the virus itself is history. In particular, the economic sequelae are almost certain to demand tough decisions about what we can afford, what we can’t and what are the luxuries we don’t really need.
Some things we could put aside without any real loss or even do differently with significant benefit might include the suggestions below.
Defence: Billions of dollars are being wasted on technologically obsolete military hardware such as frigates and diesel-electric submarines, which will never serve any useful purpose. The advent of long-range hypersonic missiles and advances in satellite tracking capabilities are set to render all surface vessels into sitting ducks before the new frigates can even be launched.
As for taking a proven nuclear sub design and retrofitting it with diesel-electric engines to achieve half the performance at twice the price, one might just as well go all out on non-nuclear virtue signalling, do away with the submergence capability altogether and equip it with a white flag as well.
On the other hand, if a submarine capability is really needed, there are already in prototype-development stage drone subs (pictured above) which will afford vastly greater speed, depth, range and duration for real deterrent capability at a fraction of the price of manned submersibles. Better still — and call me an incurable optimist if you will — with the entire world facing serious economic difficulties, the time has never been more opportune to seek a global agreement to cut back on the insane waste of resources that goes into the ever more extravagant cost of armaments.
Taxation: Another increasingly costly expense we could do without at little loss and much gain would be in the area of government itself. There are numerous areas of government over-reach and inefficiency where any reasonable assessment of costs and benefits would clearly indicate substantial cuts could be made with minimal or no detriment.
In particular, there is one area of government that is central to a seemingly intractable growth of government along with chronic and increasing deficits, strangulation of productive activity by regulatory excess and growing impairment of the capacity of free markets to efficiently allocate resources. Behind all of this is an insanely complex system of taxation operating with little understanding or evaluation and only poor ability to administer effectively.
An all-digital payment system with an end of cash is fast approaching and will afford the opportunity for a vastly simpler taxation system employing a single modest service charge imposed automatically at the account keeping institution on every debit. There would be no need for elaborate tax returns, little opportunity for avoidance or evasion, no distortion of markets by tax-liability considerations, no attraction to nestle wealth in offshore tax havens, plus greater predictability and less variability for government revenue flow and a more equitable distribution of the tax burden across different levels of income.
Although any suggestion of this type always seems to provoke a knee-jerk rejection from many people, the objections raised are invariably either non-existent (e.g. privacy concerns, which would actually be far less than the existing approach) or capable of being addressed without great difficulty if one is seeking a solution rather than an excuse to continue down the same increasingly dysfunctional path.
Most importantly, such a system could change the fundamental dynamics of government from the current blank-cheque approach, with no limits and little control over government spending, to a conscious deliberate determination of the portion of GDP that will be allocated for governance, the rate for a transaction tax to be set accordingly. If all government revenue were clearly determined in such a manner and with a requirement to operate within this limit, all new initiatives would need to be evaluated by considerations of need, priority and cost/benefit examination.
An end to the blank-cheque approach with concomitant bureaucratic bloat and every productive activity struggling under an ever-increasing burden of regulations, fees, taxes and red tape, would provide a massive economic stimulus. It would also illuminate a path out of the tunnel of debt now enveloping the entire economy at all levels, personal, business and government, both state and federal.
As for considerations of fairness, by simply eliminating all of the loopholes, dodges and deductions now existing, a transaction tax would collect as much or more from big business and high income levels than it does now. In addition, it would rake in a huge range of activity now outside the tax net.
Education: The growing role of government in subsidising higher education has seen the development of a grotesquely swollen administrative structure accompanied by exorbitant tuition charges enabled by student loans, but with little or no increase in educational quality or improved employment prospects for freshly minted holders of many degrees. Worse yet, most of those who do find employment will be beginning their careers under a burden of student debt that will impose a long delay in buying a home or starting a family. For increasing numbers, such a delay will extend to simply never doing so.
The reality is that tertiary education has become grossly overpriced, often of dubious value, misaligned with market demands and not accessible enough to meet the social, technological and economic needs arising from the accelerating rate of change in modern society. The current centuries-old approach of a professor giving a live lecture to a handful of students in a classroom for a few hours a week is hopelessly inefficient.
A well-produced video recording by an inspiring lecturer can offer far better instruction quality to thousands of students at their own time and place, plus the ability to pause, repeat, take notes or access additional information as desired. This can also be easily be supplemented by live online discussions with other students and assistance from tutors. A large selection of such courses from leading universities are now available online at no cost, or modest cost if formal accreditation is desired.
A further advantage of online courses is that a curriculum does not have to be limited to one institution. It can readily be assembled from the best or most relevant courses from various providers. This could easily include sources of valuable expertise, with the additional benefit of addressing the now entrenched problem of an overwhelmingly liberal-left political bias in academia. The result has seen tertiary education become more of an indoctrination than an exercise in logic, critical thinking and unfettered debate. What we have now is a system where well founded understandings of proven value have been banished or deconstructed into newly fabricated meanings designed to support a preferred postmodern ideology.
However, like the traditional media companies, the universities are now finding themselves hopelessly trying to accommodate the rising digital tsunami without having it disturb their established market. This is currently evident in the attempt of universities to quickly throw together amateur-quality live video instruction to keep classes going at full regular tuition prices while meeting virus quarantine restrictions. The probability of this succeeding would appear to be about the same as those of newspapers which have discovered that charging the same price for a digital subscription as for a print one is a forlorn hope. For universities, as with magazines and newspapers, the writing is on the wall. It is going to be a simple choice: letting go of the old approach or trying to hang on while it sinks.
Although the advantages of cost, quality and accessibility made possible by online instruction do offer potential for a quantum jump in education, effective uptake also requires a different mindset from students. This entails awareness of the necessity for a greater degree of self-discipline as well as some basic knowledge and experience of self-directed accessing and evaluation of information. These things are eminently teachable, valuable in themselves, and should be a required subject of its own in every high school education.
Energy: The ability to generate, control and employ energy is fundamental to modern civilization. Within a few days without it, cities would become unliveable and society would collapse. Net Zero by 2050, the warmists’ rallying cry, is an oxymoron. Wind and solar power technology cost more per unit of generating capacity than fossil fuel or nuclear power and, on average, generate only one-quarter to one-third of their rated capacity. Their service life is only a fraction of that of fossil-fuel generation and nuclear plants. They also demand large areas for energy farms, have significant environmental impacts of their own, and require significant increases in grid infrastructure and burden the grid with complexity of operation. In addition, full backup generating capacity running inefficiently in standby mode is still needed to quickly pick up the load when the wind dies or becomes too strong. Need I mention the effect nightfall and clouds have on solar generation? In addition, all of this results in CO2 emissions to manufacture, install, and maintain. The actual net outcome likely to be achieved by all this is not to be seen in any current or future emission reductions, but only in the certainty of multifold increases in the cost of power and frequency of blackouts.
The only long-term option for power which is technologically and economically viable is nuclear. Small modular reactors showing excellent promise for safety, reliability and economic good sense exist in prototype form, with commercial trial installations approved and beginning development. Continuing to pursue a crash program trying to power a modern society with sunbeams and summer breezes is a simple-minded a fantasy of the technological ignorati far more determined to signal their virtue than power homes, factories and cities.
On the other hand, should governments continue to endorse and underwrite the green dreams of the wilfully ignorant, the consequences, already dire, will be ruinous in a post-COVID economy struggling to regain its feet.
The other very real danger to Australia in regard to energy involves the supply of diesel and petrol which now depends virtually entirely on a continuous flow on imports, with never more than a couple of weeks’ supply in hand. Being at the end of a supply line stretching from the Middle East through SE Asia and the South China Sea leaves Australia highly vulnerable to any disruption. Havoc would erupt in short order as food supplies fail to reach supermarket shelves while commerce more generally came to a sudden halt.
Not having a secure capacity to supply fuel for essential services is inexcusable, especially when it is both readily possible and economically profitable. Addressing this should be a winning plank in the political platform of any political party with enough foresight to detail the peril and effectively present a solution.
And that solution is both eminently feasible and entirely doable. The South African company, Sasol, has developed a well proven technology to produce diesel and petrol from coal or natural gas at prices competitive with petroleum, about $40 per barrel. They have developed successful plants in South Africa, Nigeria, Qatar, Uzbekistan and the US. Australia’s fuel imports now cost about $40 billion annually. Any portion of that which could remain in the country and go back into the economy would be of double value. For both security and economic reasons, having a domestic fuel production capability is — or should be — a no-brainer.
Environment: The hypothetical possibility of catastrophic climate change has become the mother of all purported environmental threats. Fortunately, the actual effect has been of far less magnitude than the predictions and, in reality, it has been more of a net benefit than a detriment. Over the past several decades the frequency and severity of extreme weather and the rate of sea level rise have been well within historical variability, while total mortality from such events has been greatly reduced despite a much larger population. Air and water are also much cleaner in all developed nations. Food production is increasing but using less land, and forested areas are also increasing. The only things becoming more extreme are the hype, distortions, and outright falsehoods about the “climate crisis”.
The alleged “record temperatures” so frequently headlined are typically only a few hundredths of a degree higher than the past record, and in so many cases that earlier figure has also been “adjusted” down without any clear disclosure or explanation. For the past three decades there has been no statistically significant warming trend in the global surface record. As for the satellite record for the lower troposphere, that indicates only a mild warming at about half that of the highly touted predictions from the models used by the IPCC. Satellite monitoring also shows a marked greening of arid regions.
The relevant reasons and evidence to verify all of this are readily available. However, it does require going deeper than the popularity-weighted links which produce search engine results. In addition, some non-trivial effort is necessary to acquire sufficient basic knowledge of the relevant science to understand the concepts and terminology involved. It is also important to learn how to discriminate between genuine expertise in advanced fields of research and the media bestowed “experts” — a motley crew of self-proclaimed “climatologists” of no academic distinction outside of alarmist claims and with a consistent track record of failed predictions.
Trying to force a mass adoption of wind and solar power in the face of a serious global recession would almost certainly turn it into a full-blown and long-lasting depression. There is no climate crisis, the cries of doom from rent-seekers demanding governments grant them unlimited access to other people’s money notwithstanding. As detailed above, for safe, clean and affordable power, embrace a nuclear future.
Employment: With increasing numbers of business failures and staff reductions resulting from the economic impact of the pandemic, coming on top of an ongoing longer term trend arising from robotics, artificial intelligence, globalisation and other accelerating rates of societal change, unemployment appears set to become a critical issue in the near future. Governments are going to find it impossible to continue to meet increasing demands for economic assistance, unable as they will be to significantly increase tax revenues without tripping up any small steps towards recovery.
The problem is not that there is nothing useful for people to do. Rather, it is that the things which need doing either require skills the workforce largely lacks (see ‘education’ above), or that the cost and obligations of taking on workers are greater than the benefits to be had. More affordable and accessible training and education must become a priority. However, that is inherently a longer-term proposition; in the meantime, a national job corps, where the unemployed can be hired for a modest, but tax-exempt wage. Such work would depend on skills and abilities and could be for either government or the private sector. In the case of government this might include age and childcare assistance, infrastructure development and maintenance, environmental and urban renewal or enrollment in training and education in under-served skills.
For the private sector, the employer might pay most or all of the wage but without all of the additional cost and obligations of normal employment. This could be a real benefit where part-time and casual employment is needed, especially for businesses struggling to recover.
Priority: Although changes in defence, education, energy and environment will require a longer time to implement and then to see their useful effects, a single tax and a job corps could be implemented much more quickly and would begin to bestow immediate gains. They would also address what are likely to be the most urgent problems emerging from the pandemic.
Despite repeated efforts at reform, the trend in all of these areas is toward increasing dysfunction, not improvement. The fundamental assumptions of our present approach are either incorrect, deficient, or no longer applicable. It is time to start thinking outside the box of our established ideas and ways of doing things and begin to explore some fundamentally different approaches.
If we cannot find the will to do this, the only other obvious path ahead is a well-trodden one. It has been taken by every other once-successful society before us. It leads to the dustbin of history.
A marine biologist, Walter Starck is a frequent contributor