Thursday, November 1, 2012

Why isn't doping allowed in sport?

This is actually a surprisingly difficult question to answer - why don't we allow doping in sport?

The immediately obvious answers like "it's cheating" or "it's unfair" are circular. That's just saying it's against the rules because it's against the rules. Yet at the same time, for most of us, that's enough. Of course taking drugs is cheating. Right?

In any sporting contest there are arbitrary rules about what can and cannot be done. Why can't they take a car in the marathon? Why can't they pick up the ball in soccer? Use twenty guys at once in a game of rugby league? Why? That's the rules. Sport is circular and self-justifying.

Simply put, a sport is a contest to see who can gain the most fair advantage at achieving a pointless goal within an arbitrary framework of restrictions.

There are rules against doping, but what about the massive amount of training and expensive equipment and sports science used by teams to gain an edge in the Olympics or professional sport? That's entirely allowed. Both are using money and science to get an edge, one is allowed, the other isn't.

However I don't think merely pointing out the existence of inconstencies is a terribly important point. You can't have a contest without rules and a framework within which to operate and since sport is a meaningless pursuit and we all die anyway, all the rules are silly and baseless. The question of why doping is banned is sort of the same as asking why we don't have multi-ball in the AFL. It basically boils down to "why does sport have rules?" or even "why is sport?" So it isn't the arbitrariness itself which is the issue

Nor is it that doping "destroys the fair contest" because in a fully doped-up world there'd still be a contest among people with arguably similar advantages. Doping wouldn't work if everyone did it.

So how do we justify having some things arbitrarily allowed and some things arbitrarily not allowed?

I'd argue two things. First, the very important issue of athlete safety. A world of legal doping is a world where being an athlete involves the compulsory imposition of a regime of potentially harmful drug use. That's kind of terrible, and while, yeah, they choose to become athletes I don't think that's a good enough reason to impose extra unnecessary risk.

Beyond that though (since I assume there's safe doping), I'd argue that if sport is competition within a made-up domain of "fair competition", you need pretty good reasons to expand or alter that competition space.

My possibly unsatisfactory answer is that doping is banned as unfair pretty much because most of us intuit that it's unfair. Why is that? Personally I think it's the ease of doping which creates a strong feeling that it's an unfair advantage as opposed to a fair one. Being an athlete is supposed to be hard... you've gotta earn your competitive advantages, and the idea that a simple chemical supplement can massively improve you without much effort just seems against the spirit of competition. At least with conventional sports science, it still takes time and effort.

Once upon a time, professionalism was considered a similar unfair advantage, with a split in the world of Rugby driven by it, and great athletes banned from early Olympics due to that same idea. Training regimens were considered suspect, as they got away from the idea of a pure body-to-body contest.

Clearly we don't think that any more.

I think the illustrative case about the flexibility of the rules of sport, and the resilience of sport, is to compare sports with salary caps, drafts and player recruitment restrictions to sports with no such rules. Both the Major LEague Baseball and the English Premier League and the AFL and NFL work and thrive despite diametrically opposed views about what is fair and legitimate grounds for competition. Some sports think money should be removed as an influence, others don't. Neither is right, both can work.

The only question of sport should be what is the best set of restrictions to create a good and enjoyable contest. What constitutes "a good contest" is inherently subjective.

Clearly the content of the restrictions that make a sport possible can vary as long as people accept the new playing field as legitimate. So basically until someone can mount an argument that performance enhancing drugs improve the sporting contest and defeat the existing general intuition that they're unfair, doping is banned because intuition.

Maybe at some point we'll end up with a world where people think doping to help do sport better is fine, and I'm sure sport will survive that just like it has survived professionalism, commercialisation and all the back and forth about contract freedom. But I don't think we're in a rush to get there - there's not much of a pro-doping lobby making that case.

The future of robotic body parts and chest-mounted basketball cannons, on the other hand, is quite bright.

Wednesday, October 31, 2012

On the limits of the power of refugee policy

What is to be done about refugee policy? I guess "do what a normal country does" would be my preference. We have to accept that despite our wealth and effective government, that we're not omipotent. As long as there's conflict and people fleeing persecution, they will attempt hazardous means of movement to obtain security when that seems the best option.

People walk across deserts, over mountain ranges, through jungles to escape war and persecution. They cram into the back of trucks, they sneak through border fences, they dodge corrupt and violent authorities in countries where they have no rights and often get beaten, extorted or deported. And yes, they attempt hazardous boat trips over open ocean. Australia is not a uniquely risky destination. I think we need to respect that one corollary of the right to asylum is the right to take risks to reach safety and that people have taken plenty of risks to even get near to Australia in order to attempt the final marine trip.

Furthermore I am fairly certain the attempts at "deterrence" push people to more dangerous and risky routes, in less seaworthy boats, and toward trying to avoid detection by Australian authorities (ie, the would-be-rescuers). I bet we could save lives by changing practise regarding those who facilitate the movement of people wishing to seek asylum. Excising the mainland pushed people towards Christmas Island, how many lives would reversing that decision have saved?

But at any rate, you never see people say America has Cuban people's "blood on their hands" for the way they give automatic residency to Cubans who reach Florida by boat. Does anybody say Spain or Italy have a responsibility to stop asylum seekers from Africa attempting the Mediterranean journey across the Straits of Gibraltar or to Lampedusa. Sure they have issues with racism, but does the "protect these people from drowning" narrative even make sense in Miami or Malaga?

Why do we have such a different discourse here? Why don't those countries attempt anything like what Australia does? Is it because they recognise that this is a thing which happens, and that no policy is maximalist enough to stop asylum seekers from deciding moving is more of a risk than not moving? Do such countries see their role as simply being a place where asylum can be sought?

By framing our entire policy around "stopping the boats", the main interest seems to be avoiding sad and politically charged images of shipwrecks on our doorstep, images which which impact elections and make people uncomfortable about the cruelty of the world and our own luck and privilege.

By making impossible the boat journey to Australia, we're eliminating both one risk and one opportunity, and closing off options for already desperate people. Unfortunately, with that focus, we're actually fairly literally just wishing refugees would just go somewhere else so we don't have to deal with them.

Wednesday, September 5, 2012

Privatisation of electricity does not mean loss of government control

I occasionally hear elements of the left getting very upset by the prospect of electricity privatisation. I understand the impulse. In most parts of the economy, selling off assets means you lose control of those assets (see also Qantas, Telstra). And electricity is an essential service for which universal access is a very big concern, which means it would surely make us feel safer and more secure for the government to have a tight grip on it.

However, I've come around to the view that the angst is actually misguided for two reasons.

The first is basically empirical. It turns out that if your goal is the cheapest and most reliable power for people within a given system, electricity markets actually do do roughly what boosters say they're supposed to. Generation markets do use the price mechanism to more efficiently generate and supply power. At the retail end, the experience in Victoria is that contestability (ie retail competition) does seem to bring retail margins down a bit compared to regulated tarrifs.

Private sector transmission and distribution grid operators, at least in Australia, actually do seem to result in cheaper grid costs in a natural monopoly environment. As an illustration, let's compare the revenue growth of the currently private and currently public grid operators in Australia. This comes from the Australian Energy Regulator with colouring added by me for emphasis.

As you can see, grid costs are going up everywhere (because we use shitloads more power than we used to). However, as a general rule the blue privately owned natural monopolies are clearly not going up in percentage terms more than the yellow public ones.

The actual reasons are a complex mess of issues and this isn't to say private good public bad (it might be possible to say certain state governments are shit, however...). I just wanted to demonstrate that existing private network operators clearly aren't price gouging relative to public ones. If anything it looks like the reverse, at least in Australia.


The second reason, though, is that the quibbles about who owns generation or does retail are actually really secondary to the question of how things are structured and how the rules work. You can dispute the details of a specific asset sell-off, whether there's fair value, whether it's being done alongside other shitty measures, and so forth.

However in a properly run system it should make basically no difference who owns electricity assets because regardless, the people making the rules and running things remain the same.

I think the biggest misconception in the minds of a lot of opponents to privatisation is that privatisation means the absence of control. However, the fact is that our whole electricity market system can only exist by the fiat of government and under its ongoing control.

Even in a fully contestable market with no price regulations on generation or retail, even if every single entity within an electricity system is privately owned, the government is still calling the shots and setting the rules. This must definitionally be the case, because physics.

Yep, physics. An electricity grid isn't like a road network or system of internet tubes. It is essentially a single giant alternating current circuit, meaning the electrons shoot back and forth 50 times a second (you can read more about this at Evan's excellent blog). Since there's no unidirectional flow of stuff, and a circuit must be complete to function, the physics of a grid dictates that it absolutely must be managed by a single entity with a clear set of rules and and the power to tell everyone what to do. Markets are a fiction created to enable the controlling entity to run the system better by ensuring everyone has a monetary interest in doing a thing, but the underlying physics dictate a monopoly of control must remain.

At the very least, the correct term of abuse over privatisation should be ordoliberalism rather than neoliberalism.


I don't think this is a trivial point. Because what it means is that in electricity production, a lot of ordinary market concepts become very utilitarian things. Having been conjured into being by government rules, features of the market are harnessed by the operator of the system as tools of coordination. That's why the idea was proposed in the first place.

The allocative efficiency of the price mechanism, for example, is here not just a principled argument for the superiority of free markets compared to command and control economies. Instead, the price mechanism is literally the principle which dictates what power generation occurs. Like, as in, a computer does all the allocation according to the price mechanism.

Price signals are obtained each day and sorted by the central operator (ie a government agency, in our case AEMO) and then as the day goes on, those prices are matched with the amount of  need at that moment. Then the operator tells all the power plants whether to generate or not (this is called "dispatch"). And they do what they're told. And then they get their money from the operator.

(The market operator's magical computers also factor in wind and solar movements in their telling everyone what to do, since the sun and atmosphere refuse to obey the orders of technocrats.)

The price mechanism is thus a tool for centrally coordinating and allocating power generation effectively. Ownership of the generators is actually irrelevant, as long as they're separate and blind and numerous enough to avoid market power. In such situations it's actually impossible for a generator to price gouge in this market. It's a market created and sustained by government which is pretty close to perfect competition.

This point becomes even clearer with the concepts of supply and demand. In the case of an electricity grid, they're not just abstractions. They're actually visible things, measured and tracked from moment to moment, because they need to match up. Not for economic reasons (though that's important for efficiency and thus keeping costs and emissions down), but literally so that the system doesn't blow up. In an electricity system, over-supply or over-demand trashes everything by throwing out the frequency from what it's built to carry (50 hz), causing damage and blackouts. So it's kind of important that physical supply moves to meet physical demand and the best way to match them up is to use a market.


I'm not talking much about electricity retail because basically it's not as interesting as the generation market, all they're doing is competing on the rights to bill you, trying to minimise their overhead and cut margins. The justifications or nonjustifications there are basically the same as having more than one telco retailer, so fill in your own blanks there. The biggest danger is either contracts becoming unfathomably complex a la mobile phones, and private companies having greater latitude to screw their workers.


So why are prices rising? Some of our problems in the electricity sector with price rises are to do with bad regulation (the so-called gold-plating problem with public network owners would be largely a product of dumb ministers and inexperienced regulators being bamboozled by natural monopoly grid operators).

Some problems are actually to do with incomplete market creation (for instance, we'd have less peak load and therefore cheaper networks if it were possible for customers to get a bill discount in exchange for someone having the power to remotely switch off air conditioning in 15 minute bursts during extreme demand days).

However, a lot of the price rise is just the inevitable consequence of our demand for air-conditioning.
But to blame privatisation of generation, networks or retail for power rises in Australia is pretty much wrong.

There's plenty more detail to go into, but this is basically why I think the fight over privatisation is misguided. The important issue is where control and coordination sits and how that control is used. In other words, the main game is the very unsexy work of making sure the rules work to do what they're supposed to - produce and deliver power reliably, as efficiently and therefore cheaply as possible.

Thursday, August 16, 2012

Could Australia settle all the local refugees?

My question is simple: could Australia feasibly settle all the current refugees in the UN's South East Asian area over a period of, say, the next five years?

(First up, I'm not an expert in the field, there's almost certainly things I'm missing, and my method for translating DIAC's current budget into a costing for an expanded intake is simplistic to put it mildly. This is an exercise in back of the napkin estimates, except the napkin is a Google spreadsheet.)

There's precedent for far greater generosity in times of refugee crisis. Australia's intake has been a lot bigger than it is now. In 1980 our population was 14.5 million, our refugee quota was 22,000. That's roughly the equivalent of 35000 per year today, compared with total population. If you chucked in an adjustment for the assumption that our higher real GDP (we're not far off twice as rich as in 1980) means we can afford to support more refugees compared to total population, the possible quota goes even higher.

So, what does a refugee cost to process and settle? Let's go straight to the Department of Immigration's own budget statement. The DIAC's budget is handily divided 6 outcomes which are the different functions of DIAC:

1. Managed migration
2. Reffos
3. Borders
4. Visa compliance, status resolution detention, etc
5. Settlement services
6. Multicultural feelgoodery. Also citizenship decisions.

In addition there's also the Migration and Refugee tribunal, part of DIAC's ambit but with a separate budget.

By my maths and assumptions about these items, it turns out the direct cost, per settled refugee is roughly $43000 a year. Here's a link to the spreadsheet with my figures.

Just an explanation on my assumptions:

In addition to the obvious entirity of Outcome 2, Outcome 5 is settlement services, so needed to be apportioned. Half the entire budget item is free English classes, so I took a a stab at splitting that between refugees and family visa recipients. I came up with 35% being refugees, assuming 80% of our 13750 refugee placements needed classes (found a reference which said 64% needed interpretors) and a complete guess at 50% of the 40000 or so on family visas from non-English speaking countries (DIAC figures, table 1-18) needing classes.

For other some big items around settlement grants and schemes, I assumed 100% refugees and then split the remaining budget 50:50 because why the fuck not. Details in the spreadsheet.

The biggest dilemma is how to account for current offshore detention and its replacement under the new policy. It was $700m in 2010-11, for about 5000 asylum seekers, which is firstly insane when you think about it, and secondly you could somewhat spuriously say cost $137,000 per detainee. But that wouldn't scale or translate to the situation of a radically expanded intake. The Red Cross estimates it costs them $11,000 for community based aslyum seekers. I bumped that up a bit and called it $15000, since government is inefficient or whatever.

However that fairly obviously skirts the question of how the fuck people are to get here. Are overseas processing and transport costs already included in Outcome 2? Quite possibly. But maybe not. Maybe the UN pays that stuff but would be unable to pay for the expanded intake places. That'd be the biggest caveat I put on this guess - it might not cover the costs to the Australian government at the point of origin.

SO! $43000 per refugee, apparently! Plus getting people to Australia. That obviously excludes a bunch of other stuff from the napkin. Within the departmental budgets, does each refugee make the per-refugee cost higher or lower? Are there economies of scale as refugee numbers expand or greater bureaucratic overhead? What the fuck does it cost ASIO to do security checks anyway?

What I DO know is that there's about yay many refugees locally:

To accept every one of these 478000 refugees would cost about $21 billion, with the earlier discussed assumptions. Do it over 5 years (so a bit under 100 000 a year) and we're looking at $4.2b a year in direct settlement expenses.

That's just the direct costs of course. What about the costs for building accommodation? (Could $40 000 shipping container houses be the new fibro shacks?) What is the cost of laying down infrastructure to basically build a new Hobart over a few years? What about the the flow on effects to welfare or education or health of bringing many refugees here? Would it be an idea to cut other areas of migration for a while to keep population growth down. Who knows! But here's a starting point!

On the other hand, this is an upper bound estimate of the direct costs if every single one of these refugees was to be settled in Australia. But an undertaking like this would almost certainly be intended to be regional, and surely by showing some leadership Australia could drag some other countries into taking some refugee settlers. Skive a quarter off on New Zealand for a start, and see if "we'll take 75% of your refugees if you settle the other 25%" works on the government of Thailand or Malaysia.

But the huge wildcard here is those massive numbers on the borders of Myanmar. The UN says there are 400 000 Myanmar refugees in other countries. If they're all in Southeast Asia that's 4 out of every 5 regional refugee being from Myanmar. Essentially all of the refugees in Bangladesh are Burmese, as are most in Thailand. As fucked as the place is, would they all qualify as fearing persecution? I don't really know. And of course there's no reason to assume Myanmar would stay fucked forever - many refugees ultimately return and if the situation changes in Myanmar we might see that in this case.

Furthermore, there's also the argument that Australia doesn't need to take all the refugees. I think I've satisfied myself that it's vaguely feasible (we're talking what, half an NBN here?), but the current obsession is with stopping the boats. And I don't think we'd need to take every refugee currently residing in Bangladesh to do that. We could and probably would focus just on the 240 000 in Malaysia, Indonesia and Thailand and that drops us to $10 billion. Over 5 years, starting with the longest-exiled refugees first, that 2 billion a year to save lives and stop locking children up indefinitely starts to look pretty reasonable. (Also that gets us down close to an intake proportionately comparable to the early 1980s.)

Could such a policy cause Australia to be "swamped" by the desperate hordes? I really actually don't think so. Remember that not everyone can be a refugee just because they live in a poor or unstable country. There's two key limitations - the first is the fear of persecution has to be proven. Right now, Burma's our biggest regional arsehole government, and surely just about everyone who's going to flee there has probably done so, especially with things maybe starting to open up slightly over there. And there's no wars of note elsewhere locally. Numbers coming from further afield to seek asylum directly are inherently limited by geographical distance.

Just about the only situation which would result in a literally overwhelming swamping by refugees is something seriously fucked happening in Indonesia. And if that happens all the mandatory detention and tough rhetoric in the world won't stop the human tide. There are a million Afghan refugees in Iran right now. Several hundred thousand Vietnamese and North Koreans in China. You think they're a soft touch and just let them in? Didn't have tough enough borders or strong enough deterrents? Yeah right.

So in summary, I think it would cost about $10bn in direct settlement costs to settle all the refugees currently in Indonesia, Thailand and Malaysia and $21bn to take every one from here to Bangladesh.

We no longer must brush our teeth

Top dental scientists said today that because of advances in Science it is no longer necessary to periodically brush one's teeth. Instead, in this bold new era, human teeth will maintain themselves in a state of toothy health and vitality without external intervention or application of tooth-cleaning substances.

At last we are free of the mundane ritual of brushing our teeth. The citizenry expressed surprise, shock and gratitude to the science-men and science-women and their mighty brains for achieving such a wondrous thing. More than one commentator suggested that finally, oranges will be safe to eat without fear of them tasting weird because of the lingering toothpaste.

Amidst the optimism, a note of sombre speculation: Ian Sonderton of Ryde asked “what will become of the minty fresh sensation one feels after brushing one's teeth? Is this a sensation our grandchildren will know only through history books and scholarly documentaries?”

Spokespeople for the toothbrush and toothpaste industries were also less than joyful at the news, saying that the science-people are liars and why do they lie so much. The toothbrush people suggested that perhaps caution is needed and you should keep brushing your teeth lest they rot and putrefy.

The people who put fluoride in the drinking water could not be reached for comment on these dental developments, but it is speculated that they will continue to undertake the adding of fluoride to our water for the good of us all. Perhaps they will branch out into adding other substances to the water but this remains unknown.