The retailers should have gone partisan

That was quick. It only took a week for media consensus on the retail campaign by Gerry Harvey and others, in contrast to the consensus on the campaign by mining companies.

Both represent campaigns by established and vested interests to serve their own interests whilst claiming it is in their own interest. Yet whilst the first was either quoted uncritically or eagerly adopted by portions of the media (and then lauded as skillful), the latter is now ridiculed as PR failure. The consensus is on whether it was good PR or not, and only then, occasionally, on the merits of the policy. The horse race instinct is deep in these people, and the entire business model is built on the unverifiable assumption that marketing is worth what people spend on it.

This is interesting from a public policy perspective, particularly since of the mining rent receivers and the domestic retailers, I think it’s the retailers who have the better case. Yeah, it’s still disingenuous, ignores all sorts of other reasons for online shopping and is impractical to implement, but the principal of non-discrimination had some kernel of truth that the rent receivers never had.

It’s possible that they are just accurately channeling public opinion, but I find it hard to say this with a straight face. Even if there was a thing such as “public opinion”, in the absence of decent polling, they’d only have anecdotes, and anecdotes heard by people the most divorced from normal society (and who thinks latte sippers are a distinct demographic for instance). [fn1]

So were does this consensus come from.

1) Inertia. It’s so much easier to sell an interested sophistry, an argument for a policy in favour of vested interests, when it is the existing policy. For better and for worse, the present self vindicates, or at least has a huge benefit of the doubt. It’s hard to shift from this even when the case is strong (which the retailer’s wasn’t).

2) The implications aren’t as abstract. Paying GST is a straightforward story, and an inescapable one. Even the most credulous journalist won’t be convinced otherwise, since it’s so obvious. Stories about investment suspension and jobs and macroeconomics are easier to weave.

But I think by far the most important is 3).

The retailers didn’t go partisan. Had they be aligned with a political party, or even had merely attacked the government, the default reporting processes of the media would have been triggered. Partisan conflict. A story that was being reported as ” Retailer calls for tax on internet purchases” would become “Labor under pressure from retailers”. Subsequently, the doctrine of false balance established in contemporary journalism would have required uncritical quoting of media releases and interviews with PR spivs and Gerry Harvey. Beyond that, they’d likely be enthusiastically quoted by partisan parts of the media.

Then, in an attempt to gauge “public opinion” they’ll turn to social media and, more importantly, comments on their own websites (or letters pages). Unfortunately, these commenters, especially on the majors news sites, are a tiny sliver of the public. The news media have settled on an audience of political barrackers and partisan spectators. It’s a minority of the public that visits news websites, and a much smaller minority who post on comments threads or write letters. These are the most ferocious barrackers. Whilst the rent tax gave them partisan cues to support and oppose, the retailers’ campaign didn’t, so they focused on their own (and the public interest instead). But it is from this pool that the newsosphere gained it’s impression of public opinion.

So there’s a lesson here for interested sophists. If you launch a partisan campaign, the rituals of he-said, she-said will be enacted, enveloping you in an mist invulnerable to questioning. When the mist clears you will be praised for your PR cunning.

And the public interest becomes ever more detached from media debate.

[fn1] Here’s an article from the first edition of the Daily Telegraph after the election (i.e before results had rolled in).

ALP feels backlash over Neal scandals

VOTERS in the marginal Central Coast seat of Robertson lined up to punish the Labor Party because of “the Belinda Neal effect”.

The seat sat on a knife edge of 0.1 per cent coming into the election, and voters told The Sunday Telegraph yesterday Ms Neal’s controversial term as MP had prompted them to turn away from Labor.

I love that in the absence of results they published the one thing they thought they could be sure about  (and found a supporting anecdote or two), and were wrong as Robertson swung the other way to the rest of the state. It’s why I’m pessimistic about the ability of the media (or honestly anyone) to determine the unimaginably complex “public opinion”. When you focus all your effort on race calling, and who is winning, at least be capable.

About Richard Tsukamasa Green

Richard Tsukamasa Green is an economist. Public employment means he can't post on policy much anymore. Also found at @RHTGreen on twitter.
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10 Responses to The retailers should have gone partisan

  1. Pointybirds says:

    Couldn’t have put it better myself. Bravo.

  2. Simon says:

    Another theory: the key word is tax, and “the public” don’t like tax. They were against the mining tax (and therefore for the mining companies) and they are against the GST (and therefore against Gerry Harvey et. al.).

  3. Andrew Norton says:

    Richard – I’m not sure whether I don’t agree with your argument or I just don’t follow it. Are you saying the media would have ignored the obvious vox pop angle if the retailers had take a more partisan approach? (Try reading tabloid newspapers or watching commercial TV news if you think that.)

    Though the usual expert opinion seemed to be a bit light on with this story (perhaps because it came when they were all on holiday) the story was generally handled well, with the retailers being given a fair opportunity to present their case, at least the broadsheet newspapers I have been reading publishing articles explaining why it hasn’t been worth collecting GST on small international transactions and why it would not fix the retailers’ problems, and the predictable populist rejection of increased tax.

  4. Richard Tsukamasa Green says:

    Andrew – I’ll establish first that I’m a bit wary of talking about “populist” things. I’m running on the assumption that “public opinion” is an unknowable thing, and that the people that like to talk about it the most (people who hang around on blogs, PR types, think tankers and journalists) are probably even more ill placed than the majority of the population in identifying it. So we might restrict “populist sentiment” to “what these people think they think the majority is thinking”.

    And yeah, I do think that this kind of populist line would have been run regardless (it is easy and juicy), something I meant to capture more under 2) (but forgot to go back and fill it in), and they’d have found more quotes to go with it (as the Robertson example shows, you can always find quotes to support what you think you know).

    However, I also think that if it had been framed partisanly, the he said she said false balance would have led to more uncritical quoting, such as in Krugman’s shape of Earth analogy. It’s notable that whilst I think the retailer’s case is better than the mining rentiers (or most interested sophists), the analysis is far better than normal instance. Usually, if an interested sophist releases something it either has half a column and sinks out of sight, or if it gains traction through partisanness, the coverage includes more quoting and then a great deal of race calling.

    What I find unusual about this situation is that the campaign is both not disappearing, like all those half columns transcribed from press releases, but is being properly looked as (if not before) it is rejected. Maybe continuing coverage was guaranteed with those whole page advertisements, but not positive coverage. Or more likely, it’s just the only non cricket story they could write from their desks.

  5. Nicholas Gruen says:

    Thx for a great post Richard. I agree with your analysis but doesn’t it depend on whether the Opposition gives you an opportunity to make it partisan. They did on mining.

    Perhaps the retailers should have gone to see the Opposition and tried to work some partisan angle. Perhaps they did. But it’s not easy to see the Opposition putting its head in that noose to increase GST on some items – though I agree with you the case for it is probably better than the case against the mining tax.

    There’s another issue. A great deal of public persuasion – nearly all of it – does not involve special interests threatening and then proceeding to blow the government out of the water with a campaign. It’s much more usually influence than straight out power battles. That means that no-one wants to get anyone seriously off-side.

    Hawke was good at being ambitious and intimidating those who wanted to stop him – he used his political momentum to get them someway towards where he wanted to go and if they went far enough he’d cut a deal – in everyone’s interests (except purist reform). Today the default in government is ‘don’t upset any person or group who’s significant’. Unfortunately that’s been highlighted by the mining tax debacle, and I must say I feel a little for the government in that. They took a big risk that doing the right thing would work out politically.

    They didn’t manage the politics particularly well, it’s true, but it was remarkable to watch how hysterical everyone got, how gullible everyone was – including the press – once 0.01% (or should that be 0.001%) of the profits up for grabs were spent on a hastily cobbled together TV ad campaign.

  6. Patrick says:

    I agree with NG that this wasn’t about to be a partisan issue since the Opposition wasn’t about to start jumping up and down about more taxes. Maybe they should have gone to Barnaby and those independents.

    I also think Simon is right. Occam’s razor suggests that one go with the reflexively anti-tax angle too.

  7. Richard – Luckily with tax there is lots of polling, though perhaps taken together it does support your view that ‘public opinion’ can be hard to know. If asked about tax in isolation typicaly most people say it is too high (eg here). However if the connection with what tax is spent on is drawn recent trends have shown more people want extra government spending than lower taxes (eg here). Perhaps the retailers should have argued that the GST was necessary for social services.

    That aside, overall I don’t like this argument against ‘balance’, which seems to have proliferated in soft left circles (I think out of frustration that climate change sceptics were getting media coverage). It’s the same attitude I see in the political donations debate, where soft left academics want the rules of the game changed so that people they don’t like get less of a say.

    Yes, current practices do allow rent-seekers and cranks to have their say. But overall that is far preferable to a system of elite management of opinion.

  8. Nicholas Gruen says:

    Andrew, that’s a very crude dichotomy – I don’t think of myself as soft left and hope perhaps you don’t either.

    The point, is a simple one, which is the ‘balance’ we’re against is the kind of faux balance provided by the ‘he said-she said’ formula in which he and she can say anything they like. He said that McDonalds really serve up squirrels in their burgers but she, the spokesperson for McDonalds said they didn’t. And the caravan of news moves on.

    Is the alternative to this really the ‘elite management of opinion’?

  9. Nick – I didn’t say that all soft left people hold these views, just that most people who hold these views I would broadly categories as soft left (I expect people further left would take an even tougher line, but I don’t read them). Perhaps because they perceive themselves (mostly inaccurately in my view, but this is beside the point here) as the subject of biased media, people in the right have typically called for more balanced media reporting.

  10. Tel says:

    The basic argument of the retailers is that one tax system should consistently apply across the board to all business. The basic argument of the mining companies was that one tax system should consistently apply across the board to all business.

    However, there’s tricks at work. Firstly the perception angle — people see the mining companies as providers of jobs. No one cares if some profiteering goes on because the Chinese are paying for it. Now let’s consider the retailers. What’s the last thing you see at any retail outlet (and thus the thing that stays in mind)?

    . . . The cash register.

    Retailers are the ones asking you to open your wallet. If profiteering gets discovered in the retail sector then anger rises very fast. Suddenly, anyone and everyone can go check the prices of books and CDs over in the USA. We had a whole enquiry about it and got exactly the result we all expected — nothing happened. Retailers don’t even offer particularly good jobs, the average mildly skilled labourer in the mining industry get double what their mildly skilled counterpart gets in retail.

    Secondly, let’s get to the details of this GST claim. The difference between GST and no-GST should only be 10%, but I regularly talk to people saying that it is generally significantly cheaper to buy online direct from the USA, even after a substantial shipping charge is added and in many cases the range of products is larger, the service is better and sometimes you actually get the goods faster because local Australian retailers are cautious about keeping stocks of exotic items. As a price comparison, I recently bought a TV from Kogan (and I paid GST):

    http://www.harveynorman.com.au/product/1256972651582/panasonic–full-high-definition-lcd-tv

    http://www.kogan.com.au/shop/kogan-1080p-32-full-hd-led-tv-pvr-srs-hd-tuner/

    $1299 / $749 = 73% higher price at Harvey Norman… and if you happened to catch Gerry Harvey talking about Ruslan Kogan, you would want to cover the children’s ears.

    What the retailers are really asking for is some sort of regulatory obstruction to make life difficult for their competitors. Imagine the difference between buying something online and having it put into your hands, at your home or workplace, by a courier in a few days, as compared to needing to go to customs, fill in half a dozen forms, show three forms of ID, have your photo taken, then make a payment, then get your package.

    You also read a fair few comments along the lines of, “Where were the big retailers when my job got outsourced?” and to some extent, it’s a fair point. Gerry Harvey was perfectly happy to enjoy the benefits of global trade when it suited him.

    Finally, once more comparing the mining industry with the retailers; I think there was a very different situation in how each issue developed. The mining industry have demonstrated that they can make good profits under the current system and they are asking for no changes in that system. The Labor government found themselves with a big spending program and empty pockets so they scrabbled around to look for a way to take money from whoever happened to be successful at the time. That sort of thing attracts sympathy for the guy getting stabbed.

    In contrast, the big retailers are finding themselves under increasing pressure in a competitive market and are expecting the system to be changed to suit them. If they run into further trouble, presumably they will be asking for yet more changes. I think there’s a strong sense of entitlement in such a claim that makes it very difficult to be sympathetic.

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