Hartcher is intriguing. The guy strikes me as an economic and social liberal type, but smarter than average and a neat stylist. A Fairfax journo, he could easily fit into Murdoch’s editorial stable, and add a little class. He’s been a hard marker on Rudd, not that I mind that. I wonder if he is rethinking, at all? Anyway, I was browsing the current issue of The Diplomat, as you do, when I came across a Hartcher article that encapsulates my suspicions.
The Diplomat seems to be a mag for Lexus driving globalists, although Tim Blair might class it obscure Marxism, even without T S Eliot paraphrasing. You never know. Back on topic, the current issue is about globalisation, etc. Fred Benchley does the critique (“Strip out the resources boom, and Australia’s export performance is quite disappointing”). Hartcher does the boosterism (“a great transformation is underway”).
My quibble? The whole Hartcher piece is a hymn to competition. OK, if you like. The contradiction to my mind is when he says “Competitiveness is about strategy and execution, not about preordained national comparative advantage.” Huh? A competitive market, the subject of said whole hymn, is about a going price, take it or leave it, so stuff flows to highest use, etc. You can stand on your head and dream of John Howard and you still won’t change the price in a competitive market. Indeed, the textbook definition of a competitive market is one in which no single company has sufficient market power to alter the going price, regardless of its “strategy and execution.” In effect, Hartcher is exhorting firms to win temporary, the less temporary the better, degrees of monopoly market power.
The contradictions of Hartcher. A liberal in theory, a conservative at heart?
Chris
Competitiveness has deifferent meanings according to whether it applies to an industry or a market. An industry is competitive if it’s profitable and/or pays genrous wages, which ultimately means it enjoys higher productivity than the average for the country in question. In short, it refers to comparative advantage. Whether the comparative advantage is ‘preordained’ or due to some mysterious force called ‘strategy and execution’ is neither here nor there. Hartcher is confusing the phenomenon of comprative advantage with the long-abandoned ‘factor endowments’ explanation for it.
An industry is competitive if firms have lttle market power. This is just a technical term, and has nothing to do with how fierce the competition is between firms. Indeed the industrial organisations litereature of the last few decades tells us that, with the exception of pure monopoly, competition tends to be fiercer when market concentration is higher. In markets where ‘pure competition’ prevails (what you refer to as textbook competition), that’s not so surprising. In oligopolistic industries it’s obviously partly a consequence of competition law.
That last paragraph was meant to start ‘A market is competitive..’. But it’s confusing because in this context industry is sometimes used as a synonym for market.
It’s worth pointing out that competitive has several different meanings in ordinary language. In particular, we say that a job applicant is very competitive if they have exceptional qualifications and experience, but it doesn’t necessarily mean that the person has a competitive personality, strives to outshine her peers, hates to lose at sport and so on.
I can’t find anything in Hartcher’s articles that advocates or even hints at advocating monopoly as a business strategy. The sentence in which Chris somehow identifies covert monopolistic urgings follows a paragraph where Hartcher highlights the success of companies like NAB, QBE Insurance, Macquarie Bank and Babcock & Brown in carving out niches in the international financial services market. It seems highly unlikely that Harcher was suggesting that these or any other Australian companies either had or could somehow achieve quasi-monopoly positions in the global marketplace. Rather, at least on my reading, he is arguing that Australian companies can succeed on the world stage in industries where we don’t necessarily have any obvious initial comparative advantage that could even potentially permit the exercise of monopolistic or oligopolistic power (cf wool, wheat, uranium, coal). To achieve this, they will indeed need excellence in strategy and execution, as Hartcher suggests, not just a price advantage or dominance in control of world supplies of the commodity in question. I don’t read his argument as having anything whatever to do with advocating monopoly strategies.
in carving out niches
Is not this the aim of establishing a quasi monopoly – your very own niche?
I take James’ general point that competition has various meanings, yet it seems to me that Hartcher has leaned all over one meaning for the most part of his article, and glided into another meaning in this part, opening him up to the above complaint.
Who is Peter Hartcher? You could always ask him on his shiny new blog. But beware, he won’t do cute animal stories, he’s not one of those bloggers.
Yeah, most of the time Hartcher is quite readable, although sometimes you’re left wondering exactly where he stands on certain issues. Perhaps that is a worthwhile quality for thoughtful op/ed columnists to exhibit however.
I don’t think most people trend along the same predictable ideological line on all issues. Most of Hartcher’s columns give the impression that he is less ideologically driven than your usual.
I don’t think News Limited would have him (at least not writing the way he writes now), but if they would, it would obviously be a net gain for them.
Is it considered impolite to respond to this kind of question?
One of the things which sets Hartcher apart is what appears like inordinate effort to not be pigeon-holed.
Unlike other name commentators who appear through their work to be happy having a brand or style including a certain political tendency, Hartcher appears to take pains to be separate from that, or above it, or to shatter a few columns worth of such with a wild analogy or framing.
Contrast that with a writer like Carney who is happy to admit he doesn’t take himself too seriously, Hartcher definitely comes across as a bloke who rates himself. You could imagine him as a reporter of the old black and white television hat-wearing pre-movie newsreel fella doing just the same thing – not bad considering the influence on commentators of the ‘celebrity’ dynamnic.
Despite occasional attempts to appear otherwise, he’s definitely pro Howard and the conservatives; was introduced as political editor after the sweeping changes Fairfax went through for several years under influence of a pro Howard board, and has kept his spot for some while now. Preparing – positioning – for the new media laws these last years also played a role in choosing him, one imagines.
He’d fit in with News happy as a mudded pig except for the credence passed on to the Herald by poaching him.
Interesting also how Grattan is published under the Herald flag, is she on loan? Different demographic targeting or simply change to keep aflux?
Unlike Grattan, Hartcher appears to want to influence, and I reckon he’s good on outlaying upcoming strategy and play but a bit of a loose cannon.