$7 billion of neoliberalism

The Stationers' Company mark

The Stationers’ Company: an early example of government cultural policy. Image: Wikipedia.

Australian economist Jason Potts has restarted an important debate about cultural policy in this country with an article entitled “You’ve got $7 billion – so how will you fund the arts?“. I just wish he hadn’t analysed Australian cultural policy from the sort of instrumentalist, neoliberal position we find so familiar in many other spheres of policy debate.

I’ll say right up the top that I’m a fan of Potts’ work, and think him a pretty clever fellow. His work on evolutionary economics is in its own way quite heterodox, and a far cry from the sort of automatic and reflexive market worship we often associate with both the RMIT Economics school, and the Institute for Public Affairs, which he is apparently doing some work with.

On the other hand, his op-ed in The Conversation on cultural policy  is not one of his more perspicacious efforts. Justin O’Connor has already written a useful response, but I thought I’d add a few points of my own, set forth below.

Let’s start by setting forward Potts’ argument. Then we’ll move on to a critique.

Last year the Australian Bureau of Statistics did the maths – government spends about A$7 billion annually in Australia on arts and culture. The exact dollar figure varies depending on what we count, but it includes heritage, broadcasting and botanical gardens, along with all the usual suspects: performing arts, literature, film, visual arts, and so on.

This is apples, oranges and all sorts of random fruit.  “Heritage” funding, for instance, includes such things as war memorials, botanical gardens, zoos and some national parks expenditure. That’s a pretty different sort of thing to grants to game design companies or tax incentives to Hollywood movie studios. Does it actually make sense to treat all of these things as the same sort of expenditure?

Anyway, moving on:

To make this exercise fun, let’s suppose that no political horse-trading was involved in reaching this figure. Let’s assume this figure is the result of disinterested economic calculation of the size of the positive externality in the production of a public good, all wrapped in willingness-to-pay studies, and tied with a big bright cost-benefit ribbon.

So what’s next?

Do we put away our box of shiny economic tools and turn to grubby political compromise to allocate the exact market-failure correcting amount of public funding?

In Australia, as in Europe, this is more or less what we do. Economics to justify an economically efficient level of spending – and politics to implement it.

Really? Last time I looked, in most nation-states, including most democracies, politics is almost always the over-riding factor in the way  budget priorities are set. Sure, politicians and lobbyists and ordinary citizens use economic arguments to make the case for this spending increase or that tax cut. But the process is always and by definition political. On the really big picture stuff, economics arguably can’t really help us. For instance, how much should Australia invest in national defence, or climate change mitigation? The answer depends on inherently political judgments, such as whether you think global warming is real, or the likelihood of a major war.

Indeed, ‘economic efficiency’ is itself an inherently political argument, because it applies a very particular set of assumptions to public policy — namely that Pareto efficiency can actually hold in the first place. In markets in which there is imperfect information — and cultural markets are amongst the most opaque of all — Pareto efficiency may well be impossible. Potts knows this, which is why his quip about the “exact market-failure correcting amount of public funding” strikes me as disingenuous.

So let’s get to the guts of Potts’ argument:

… modern economics suggests that it would be better if we turned the process upside down. Let politicians determine the level of funding in a given area – and let economists determine the allocation.

Why? The political model of funding allocation is very bad at creating – or even recognising – new knowledge. In fact, political allocation mechanisms cause incentives that reward lobbying and punish experimental or innovative thinking.

Only by weakening those incentives can arts and cultural funding seek to be more than a rearguard preservation exercise or sinecure for vested interests.

I suppose it’s something of ad hominem attack to point this out, but it’s just a tad ironic that the person making this argument is a Federation Fellow of a publicly funded Australian university. A person writing for a website, by the way, also funded by universities and the government, using a medium — the internet — that was created almost exclusively by public investment in research.

“Political allocation mechanisms”, by which I think Potts means governments making budget decisions, certainly create incentives that reward lobbying. Then again, so do market mechanisms. Markets require the state to provide a level playing field via such basic institutions as property rights, police forces and courts of law. All of these create incentives for vested interests to plead their cause.

This is no trivial point, by the way: the cultural industries are completely dependent on intellectual property rights such as copyright and patents. The very fact that many cultural goods are non-rivalrous and non-excludable creates huge incentives for content industries to lobby governments to create and strengthen IP regulations — as has been well documented by researchers such as Lessig. When property rights become unenforceable, digital goods become a whole lot less valuable. Anyway, Potts’ claim was that public spending creates lobbying, which is bad. On this analysis, many of the cherished market mechanisms of the cultural industries must also be bad, because they were created via lobbying.

This points to a further naievete: the implicit belief that cultural goods and services are just like any other industrial product.

Even a moment’s reflection shows us this isn’t true. The products of cultural industries are not like any old widget or commodity: they are not even really the same thing as an iPhone or an operating system. Cultural industries produce symbols, and symbols are powerful (or at least highly influential). An aluminium ingot or a wind turbine cannot affect the democratic judgment or voting intentions of millions of citizens. A newspaper empire or television network can.

It doesn’t really matter whether you think that the power of media companies to swing elections is illusory. The history of modern media policy tells us that governments certainly do think symbols are powerful. Media has generally often been heavily regulated, sometimes on the grounds of public interest, but more commonly for naked reasons of political expediency. Even in the US, with its famous First Amendment, successive Washington administrations have had no qualms about controlling spectrum, imposing stringent copyright regulations, and spying extensively on their citizens’ communications. Hosni Mubarak turned off the internet in Egypt for a reason. Whether it’s internet filters or the Stationers Company, the political nature of cultural industries means they can’t be divorced from questions of power.

This curious ignorance of the symbolic reality of culture is often found amongst unsophisticated approaches to cultural economics — much as economics as taught in the modern university tends to ignore key aspects of sociology. As a result, when economists issue prescriptions for cultural policy, they tend to propose cures that are far worse than the supposed disease.

Perhaps this is why Potts misconstrues key facts about real-life cultural policy. For instance, he seems to think arts funding is about “inputs, not outputs”, when in fact nearly all Australian government arts grants are legal contracts specifying outcomes, allowing the government to recoup the funding if not properly acquitted. He also equates prizes as some sort of gold standard of outcome, which is strange because prize committees show exactly the sort of “bullshit” he decries in grant panels.

Similarly, when he argues for “tax credits to anyone – private citizen, corporation, foundation or NGO alike – for spending on arts and culture”, he seems to imply these don’t currently exist. In fact, they do. An individual donating to a DGR-status cultural organisation already receives a tax credit, while a non-profit NGO or foundation already pays no tax beyond the GST.

Australian federal budget 2011: wrap-up of arts and cultural funding

The following article appeared in Crikey on Friday May 13th 2011. 

The 2011 federal budget contained some modest announcements for the arts and culture.

In the Arts portfolio, the government delivered on its 2010 election promise for $10 million over five years in new grants for artists to create work. The funding will support “up to 150 additional artistic works, presentations and fellowships over the next five years through the New Support for the Arts program.”

As well, $400,000 has been found for the federal government’s Contemporary Music Touring Program, a successful program which supports popular mid-level contemporary music acts to tour regional areas.

In broadcasting, $12.5 million has been provided for the proverbially penurious community radio sector, an increase of 25% for a critical area of broadcasting that generally receives very little government support

There was also a package for the screen industry, with a headline figure of $66 million (as we will see, it is actually less than this). Much of the extra money goes to production subsidies through the tax system in the form of lower qualifying thresholds for the Screen Production Incentive. According to Screen Australia, the changes include:

  • Lowering the threshold for Producer Offset eligibility from $1 million to $500,000, for features, TV and online programs

  • Replacing the Producer Offset for low-budget docos with a Producer Equity payment

  • Converting the 65 episode cap to 65 commercial hours for TV

  • Exempting documentaries from the 20% above-the-line cap

  • A reduction in qualifying Australian production expenditure thresholds, and allowances for a broader range of expenses to be eligible for QAPE.

Some really good news is the restoration of the Australian Bureau of Statistics’ screen industry survey, which provided gold-standard data on the state of the industry and which hasn’t been performed since 2007-08 (shortly before the Rudd government slashed funding to the ABS in its first budget).

But how much new money for screen is really here? Go to Budget Paper 2 and you will find that the total extra funding is only $8 million. This is because, quoting from the budget papers, “these changes will be partly offset by $48 million in savings over four years from 2011-12 by removing the Goods and Services Tax (GST) amounts from [qualifying production expenditure] for the film tax offsets and increasing the minimum expenditure thresholds for documentaries to $500,000 in production (from the current threshold of $250,000).”

Money is also being clawed back from cultural agencies through the increased efficiency dividend. Rising to 1.5% in future years, the efficiency dividend hits smaller agencies much harder than big ones. And everything in the arts is small.

The efficiency dividend measures mean the Australia Council is being asked to save $3.3 million over the forward estimates, the Australian Film Television and Radio School will have to find $1 million, the National Film and Sound Archive $1.1 million, the National Gallery $1.4 million, the National Library $2.1 million, the National Museum $1.7, and Screen Australia $759,000. That’s more than $12 million in funding cuts for cultural agencies over the forward estimates.

If we look a little closer at the portfolio budget statements, for instance from the Australia Council, we can see the effects of the efficiency dividend in falling support for artists and cultural organisations. This year there will be “a decrease of approximately $2.5 million in forecast grants expenses compared with 2010-11.” Australia Council grants funding will be only 2% above 2010 levels in 2014-15. But CPI is forecast to run at 3% annually, meaning Australia Council support for artists and organisations will fall in real terms — by perhaps as much as 10%.

In other words, the “New Funding for the Arts” money announced in this budget will be almost completely clawed back by the effects of static funding and the increased efficiency dividend on the Australia Council.

The one really big-ticket spending item in culture was of dubious policy value: the $376 million spend on helping pensioners and senior Australians to make the switch to digital TV. Opposition leader Tony Abbott has already pilloried the program as “Building the Entertainment Revolution”, while our own Bernard Keane and Glenn Dyer have pointed out “the political imperative of ensuring pensioners aren’t left without television as analog signals switch off”.

Personally, I’m sympathetic to the argument that television represents an important human service that allows older Australians to stay connected with the broader community. But the spending program should also be seen in the context of the broader budget, in which $211 million in spending is being “saved” from aged care itself. The government appears to be prioritising access to daytime television over places in aged-care facilities.

Money for art and culture is often spuriously disparaged by critics as diverting resources away from the critical services that governments provide. In reality, of course, the numbers are tiny compared to the investments annually in roads, schools and hospitals. But in this case it really does seem as though the owners of television networks are getting a subsidy at the expense of much-needed investment in aged care infrastructure.


Where to next for the Google Book Settlement?

This week a US judge ruled against the Google Book Settlement, the latets in a seven year legal saga that I’ve covered in some depth here.

Jerry Brito has a good explainer of the background of the case:

In mid-2005, the Author’s Guild and the American Association of Publishers filed suit to stop Google from scanning any more books. Soon the Author’s Guild’s case was certified as a class-action lawsuit, meaning that anyone who had ever published a book—millions of authors—would be part of the class represented and would be bound by the result of the case.

An Unsettling Settlement

Three years later, after extensive negotiations, the parties announced they had reached a settlement. Google would pay $125 million up front and would then be allowed to continue scanning books and making them available online. More importantly, Google would be allowed to offer not just snippets, but it would be allowed to sell entire text of books as well. The copyright holder would get about 2/3 of the revenues and Google would keep 1/3.

On its surface, the proposed settlement was a boon for all involved. Google would get to continue digitizing books, authors and publishers would get a cut of the profits, and consumers would get universal access to almost all of the world’s books. But reading between the lines, the settlement proved to be problematic.

Because it was a settlement to a class-action lawsuit, it meant that all authors who had ever published a book were bound. Google could scan any book without first asking for permission. If an author didn’t want his book to be scanned or included in Google’s database, he had to contact Google and opt-out. This would have turned copyright on its head.

As a result, many authors protested. The Author’s Guild and the publisher’s association had negotiated on behalf of millions of authors, and many felt the deal didn’t represent their wishes. Almost 7,000 authors wrote to the court asking to be removed from the lawsuit’s plaintiff class.

Saving the Orphans

Another contentious aspect of the settlement was how it treated “orphan works,” books the authors of which are unknown or can’t be found. It’s a well-known problem in copyright that members of Congress have tried to fix several times.

The problem is that if a company like Google wants to digitize a copyrighted book, and it can’t find its author to ask for permission, then its choices are 1) scan the book anyway and face heavy penalties if the author surfaces later and sues, or 2) leave the book undigitized and out of a universal library. As a result, hundreds of thousands of books are in a kind of limbo, not accessible to readers even if the author may well have been fine with digitization.

The Google Books settlement presented a solution to the problem. Because it bound all authors—-known and unknown—-Google could proceed to scan orphan works without having to worry. If an author later surfaced who didn’t want his book used, he could no longer sue Google. He could opt-out of the program and claim a check for the revenues associated with his book, but no more.

Some welcomed this solution to the problem, but others, including the Department of Justice, pointed out to the court that it would give Google a monopoly over orphan works. Because the settlement would only apply to Google, if another party like Amazon or the Internet Archive wanted to create its own digital library that included orphan works, it would not get the same protection.

And it wouldn’t be easy for other to get the same deal. Short of Congressional action, the only way a company like Amazon could get similar treatment would be to settle a class action suit of their own—a very difficult and time-consuming set of events to replicate. Additionally, because the authors and publishers who negotiated the Google deal are getting a cut of revenue, some have suggested that it would be in their interest to make sure Google remained a monopoly and would therefore not settle as easily with other parties.

What’s Next

Because class-action lawsuits can be as controversial as this one, the law requires that a court approve a settlement before it becomes binding. The court accepted over 500 briefs from various parties supporting or opposing the settlement and early last year held a hearing on the fairness of the settlement. It rejected the case yesterday.

The options available now to Google and the authors and publishers are:

  1. Continue litigating the original lawsuit, which is an unlikely scenario.
  2. Amend the settlement to make it opt-in, meaning that authors would have to give permission before their books are scanned.
  3. Appeal the judge’s decision to a higher court.

Judge Chin seemed to invite a new settlement, saying in his opinion that “Many of the concerns raised in the objections would be ameliorated if the [settlement] were converted from an ‘opt-out’ settlement to an ‘opt-in’ settlement.”

In the New York Times, Robert Darnton, himself a librarian and a strident if highly-0informed critic of the deal, weighed in with this opinion piece:

This decision is a victory for the public good, preventing one company from monopolizing access to our common cultural heritage.

Nonetheless, we should not abandon Google’s dream of making all the books in the world available to everyone. Instead, we should build a digital public library, which would provide these digital copies free of charge to readers. Yes, many problems — legal, financial, technological, political — stand in the way. All can be solved.

The Chronicle of Higher Education carries a good interview with Pamela Samuelson:

It’s the only ruling really that the judge, I think, could have made. The settlement was so complex, and it was so far-reaching. With the Department of Justice and the governments of France and Germany stridently opposed to the settlement, it seems to me that the judge really didn’t have all that much choice. So the ultimate ruling, that the settlement is not fair, reasonable, and adequate to the class, is one that I think was inevitable.

The thing that surprised me about the opinion was that he took seriously the issues about whether the Authors Guild and some of its members had adequately represented the interests of all authors, including academic authors and foreign authors. That was very gratifying because I spent a lot of time crafting letters to the judge saying that academic authors did have different interests. Academic authors, on average, would prefer open access. Whereas the guild and its members, understandably, want to do profit maximization.

The EFF’s Corynne McSherry has this analysis:

On the policy front, the court recognized – as do we – the extraordinary potential benefits of the settlement for readers, authors and publishers. We firmly believe that the world’s books should be digitized so that the knowledge held within them can made available to people around the world. But the court also recognized that the settlement could come at the price of undermining competition in the marketplace for digital books, giving Google a de facto monopoly over orphan books (meaning, works whose owner cannot be located). The court concluded that solving the orphan works problem is properly a matter for Congress, not private commercial parties. Sadly, Congress has thus far lacked the will to do so. Perhaps yesterday’s decision will finally spur Congress to revisit this important issue and pass comprehensive orphan works legislation, that allows for mass book digitization.

That said, the court also got some things fundamentally wrong in its copyright analysis. For example, it states that “a copyright owner’s right to exclude others from using his property is fundamental and beyond dispute” and then proceeds to quote at length from the letters of numerous authors (and their descendants) who share the misguided notion that a copyright is, by definition, an exclusive right to determine how a work can be used. We respectfully disagree. Copyright law grants to authors significant powers to manage exploitation of creative works as a function of spurring the creation of more works, not as a natural or moral right. And those powers are subject to numerous important exceptions and limitations, such as the first sale and fair use doctrines. Those limits are an essential part of the copyright bargain, which seeks to encourage the growth and endurance of a vibrant culture by both rewarding authors for their creative investments and ensuring that others will have the opportunity to build on those creative achievements. Thus, as the Supreme Court has explained, such limits are “neither unfair nor unfortunate” but rather “the means by which copyright advances the progress of science and art.” If the legal issues raised in the underlying lawsuit are ever litigated on the merits, let’s hope this or any future judge keeps the traditional American copyright bargain firmly in mind.

Michael Liedtke of the Associated Press thinks this is a micvrocosm of the larger anti-turst and monopoly challenges facing Google:

This week’s ruling from U.S. Circuit Judge Denny Chin did more than complicate Google’s efforts to make digital copies of the world’s 130 million books and possibly sell them through an online book store that it opened last year. It also touched upon antitrust, copyright and privacy issues that are threatening to handcuff Google as it tries to build upon its dominance in Internet search to muscle into new markets.

“This opinion reads like a microcosm of all the big problems facing Google,” said Gary Reback, a Silicon Valley lawyer who represented a group led by Google rivals Microsoft Corp. andAmazon.com Inc. to oppose the digital book settlement.

Google can only hope that some of the points that Chin raised don’t become recurring themes as the company navigates legal hurdles in the months ahead.

The company is still trying to persuade the U.S. Justice Department to approve a $700 million purchase of airline fare tracker ITA Software nearly nine months after it was announced. Regulators are focusing its inquiry into whether ITA would give Google the technological leverage to create an unfair advantage over other online travel services. Google argues it will be able to provide more bargains and convenience for travellers if it’s cleared to own ITA’s technology.

In Europe and the state of Texas, antitrust regulators are looking into complaints about Google abusing its dominance of Internet search to unfairly promote its own services and drive up its advertising prices.

And Google is still trying fend off an appeal in another high-profile copyright case, one stemming from its 2006 acquisition of YouTube, the Internet’s leading video site. Viacom Inc. is seeking more than $1 billion in damages after charging YouTube with misusing clips from Comedy Central, MTV and other Viacom channels. A federal judge sided with Google, saying YouTube had done enough to comply with digital copyright laws in its early days.

One of my favourite comentators on Google is of course the one-and-only Siva Vaidhyanathan, who is quoted in this excellent Inside Higher Ed piece:

Siva Vaidhyanathan, a media studies professor at the University of Virginia and a notable Google gadfly, said the company overplayed its hand by essentially trying to rewrite the rules governing the copying and distribution of book content through a class-action settlement. “Google clearly flew too close to the sun on this one,” he wrote in an e-mail. “…This is not what class-action suits and settlements are supposed to do.”

Vaidhyanathan said that Google now faces the choice of either continuing to fight for its interpretation of copyright law in the courts or scaling back its plans for a digital bookstore. “If Google decides to take the modest way out, it can still ask Congress to make the needed changes to copyright law that would let Google and other companies and libraries compete to provide the best information to the most people,” the media scholar says. “Congress should have been the place to start this in the first place.”

 

 

 

 

The Australia Council’s recent Arts and Creative Industries report

The following article appeared in Crikey on February 4th. There’s been quite a bit of debate over at Crikey in the comments pages of this article, so head on over to see the discussion.

The plan to provoke a profound shake-up to the arts

In a week where so much has happened in the world, it’s not surprising a report from the Australia Council has not made the news. But in the rarefied atmosphere of arts policy, the release of a report entitled Arts and creative industries will make waves — the document, if followed to its logical conclusions, implies a profound shake-up to the current status quo. 

Authored by a team of QUT academics led by Professor Justin O’Connor, Arts and creative industries is a long, detailed and rigorous examination of the context, shape and setting of arts and cultural policy in Australia. It’s not quite the Henry Tax Review, but it’s certainly the most academically informed piece of research to be released by the Australia Council in a long time.

Beginning with a historical overview of 19th century culture and the genesis of “cultural policy” in postwar Britain, the report then examines each of the issues that has bedeviled the arts debate: the role of public subsidy, the growth of the industries that produce popular culture, the divide between high art and low art, and the emergence of the so-called “creative industries” in the 1990s. It’s as good a summary of the current state of play as you’re likely to find anywhere, including in the international academic literature.

O’Connor and his co-writers conclude that “the creative industries need not be —  indeed should not be — counter posed to cultural policy; they are a development of it” and that economic objectives (in other words, industry policy) should be a legitimate aim of cultural policy.

Taken as a whole, the argument has big implications for the way Australia currently pursues the regulation and funding of culture. For instance, it argues that “the ‘free market’ simply does not describe the tendencies of monopoly, agglomeration, cartels, restrictive practices, exploitation and unfair competition which mark the cultural industries” and that this in turn justifies greater regulation of cultural industries like the media. That’s a conclusion that few in the Productivity Commission or Treasury — let alone Kerry Stokes or James Packer — are likely to agree with.

The report also argues the divide between the high arts and popular culture has now largely disappeared, and that therefore “it is increasingly difficult for arts agencies to concern themselves only with direct subsidy and only with the non-commercial”. This is an argument which directly challenges the entire basis of the Australia Council’s funding model, in which opera and orchestral music receives 98% of the council’s music funding pie. No wonder the Australia Council’s CEO, Kathy Keele, writes in the foreword: “This study proposes to challenge many of our current conceptions, definitions, and even policies.”

Intriguingly, the report stops short of any concrete policy recommendations. Perhaps this is because some existed, but were excised from the report. Or perhaps it’s because any recommendations that genuinely flowed from this report would imply the break-up or radical overhaul of the Australia Council itself.

As Marcus Westbury this week observed in The Age: ”While the Australia Council isn’t backward in promoting research, reports and good news stories that validate the status quo, there is not much precedent for it challenging it.”

That’s because the real guardian of the current funding model is not the Australia Council, but the small coterie of large performing arts companies and high-status impresarios that are its greatest beneficiaries. It won’t be long before a coalition of high arts types, from Richard Tognetti to Richard Mills, start clamouring to defend their privilege.

Wikileaks, information and democracy

The scene outside Julian Assange's extradition hearing at Westminster Magistrates Court, London, December 7th 2010. Image: AP Photo/Kirsty Wigglesworth

Like most of the rest of the world, I’ve been fascinated by the recent developments in the world of new media.

“New media” is a much-abused phrase, but in the case of Wikileaks and Twitter, the phrase is literally accurate. Wikileaks and Twitter really are new mediums: they are less than five years old.

A wiki and a social network like Twitter are both ultimately also platforms that rely on older and more established media and communications infrastructure: the internet itself, including the servers, routers and undersea data cables that criss-cross the world. And because of that, they can take advantage of the unique benefits bestowed by the distributed architecture created by Leonard Kleinrock, Vint Cerf and the other architects of the ARPANET – ironically, a defence project created to ensure researchers had access to significant national computing resources (and not to create redundancy in the event of a Soviet nuclear attack). The internet, in other words, began life as a communications and data-sharing technology, and the open network architecture of that initial design philosophy continues to affect the way the internet works today.

This week, courtesy of Wikileaks, we learnt a lot more about the sinews of political and financial power that link the modern internet to the security and executive agencies of the contemporary nation-state. The content of these lessons has much to teach us about the state of our democratic societies.

Under sustained pressure from US politicians, several important aspects of Wikileaks’ infrastructure were shut down by the corporations that manage them. First, Amazon shut down Wikileaks’ servers. Then PayPal stopped processing online donations to Wikileaks from supporters.

Interestingly, Wikileaks is not really a “wiki”, in the sense that Wikipedia is: it can’t be collaboratively edited and it is very far from open access.

Nor are its philosophies necessarily original: they are in fact an amalgam of the Enlightenment ideas of Locke, Mill and Paine, and the 1980s and 90s techno-millenarianism of writers such as John Perry Barlow. But in its technological sophistication, its intent and most importantly its impact, Wikileaks is a recognisably new phenomenon. There have been many attempts by internet companies and media organisations to encourage whistleblowers and apply the ideas of scrutiny to monitor governments. But none have had the political impact that Wikileaks has achieved in just a few short years. Wikileaks is new — not because it is on the internet, but because it is making powerful elites in the government and media genuinely uneasy.

Wikileaks is web publisher that relies on clever encryption and distributed servers and publishing platforms. In doing so, it necessarily relies on older and more established media and communications infrastructure: the internet itself, including the servers, routers and undersea data cables that crisscross the world. And because of that, Wikileaks can take advantage of the unique benefits bestowed by the distributed architecture created by Leonard Kleinrock, Vint Cerf and the other architects of the ARPANET — a defence project created to ensure researchers had access to significant national computing resources (and not to create redundancy in the event of a Soviet nuclear attack). The internet, in other words, began life as a communications and data-sharing technology, and the open network architecture of that initial design philosophy continues to affect the way the internet works today.

Wikileaks is certainly more than merely a very clever whistle-blower protection and publication system. While the encryption and other information security aspects of the site are impressive, perhaps more important is that Wikileaks allows disgruntled would-be leakers to turn the power of modern information technology against the nation-states and large corporations that now rely on it.

In an ironic turn that Michel Foucault would surely have applauded, the sheer amount of information now hiding behind government and corporate firewalls makes that information increasingly vulnerable to disclosure. The current cache of Wikileaks cables being released, for instance, have all been distributed on the US government’s SIPRNET, which stands for Secret Internet Router Protocol Network. However, in this context, “secret” is something of a euphemism. As Kevin Rudd himself has pointed out, more than two million US officials have access to SIPRNET. More than 180 US agencies were signed up to SIRPNET by 2005. No wonder much of this content eventually made its way into the public domain. The wonder is that it hasn’t been leaked sooner.

Some of the sharpest thinking about what Wikileaks means has come from the intelligence community itself. US security think-tank Stratfor, for instance, points out that there is a “culture of classfication” rampant inside the US government, in which even relatively mundane documents are classified under Executive Order 13526 as “confidential” or “secret”. Consequently, according to Stratfor’s Scott Sewart, “this culture tends to create so much classified material that stays classified for so long that it becomes very difficult for government employees and security managers to determine what is really sensitive and what truly needs to be protected.”

Information probably doesn’t “want to be free”, as the activist and technologist Stewart Brand famously announced but there are plenty of people who would like it to be. Some of them work in the US military, including Private First Class Bradley Manning.

The content of the Wikileaks releases so far has been devastating, not for what it says, but because it has cut through the lies, disinformation and media spin on which modern democracies increasingly depend. Many citizens will not be surprised by the dark truths that Wikileaks reveals, but they will scarcely be energised to a new optimism about their governments. That US forces violate rules of engagement to gun down innocent civilians, or that the war in Afghanistan is going badly, or that the US State Department actively spies on the UN, or that the Saudis want Iran’s nuclear facilities destroyed: none of these revelations are particularly surprising. But they tear away the veil of deceit behind which politicians and other democratic officials routinely operate in the course of their daily affairs. In the face of truth, deniability is implausible.

Much of what has been written about Wikileaks has missed this fundamental point. It is interesting that Assange himself justifies the cable releases by pointing to the lies of governments to their own people in justifying wars, writing, “there is nothing more wrong than a government lying to its people about [just] wars, then asking these same citizens to put their lives and their taxes on the line for those lies.”

As The Guardian’s John Naughton has pointed out,  there is a delicious irony to the relatively indiscriminate way in which Wikileaks has attacked the sacred cows of the left and the right. It was Wikileaks, remember, that published the hacked emails of UK climate researchers — leaks which commentators and politicians on the right were happy to seize upon as incontrovertible evidence of a giant cover-up in climate science.

Now that Wikileaks has turned the blowtorch on the cherished organs of US national security, those same right wing commentators are calling for punitive action to shut down the organisation.

Many on the left have been equally discomforted, as the confused and savage reaction of many in the Australian Labor Party demonstrates. As Simon Longstaff argued yesterday on The Drum, “it would seem incumbent on those who criticise Wikileaks to renounce the use of leaks in general”.

As with every revolution, Wikileaks has also forced politicians, corporations and officials to make snap decisions about where they stand — and with whom they stand. In the case of USinternet firms like Amazon and PayPal, that decision was to side quickly and decisively with theUS government. Further down in his article, Naughton makes the point that:

the attack of WikiLeaks also ought to be a wake-up call for anyone who has rosy fantasies about whose side cloud computing providers are on … you should not put your faith in cloud computing – one day it will rain on your parade.

 

The other really penetrating account of Wikileaks comes from European media theorists Geert Lovink and Patrice Riemens. In “Twelve Theses on Wikileaks”, they make a number of telling observations — including that some of the most uncomfortable Wikileaks revelations involve the rapidly declining potency of the media itself. They write:

The steady decline of investigative journalism caused by diminishing funding is an undeniable fact. Journalism these days amounts to little more than outsourced PR remixing. The continuous acceleration and over-crowding of the so-called attention economy ensures there is no longer enough room for complicated stories. The corporate owners of mass circulation media are increasingly disinclined to see the workings and the politics of the global neoliberal economy discussed at length. The shift from information to infotainment has been embraced by journalists themselves, making it difficult to publish complex stories. WikiLeaks enters this state of affairs as an outsider, enveloped by the steamy ambiance of “citizen journalism”, DIY news reporting in the blogosphere and even faster social media like Twitter.

 

Or, as Assange told the Sydney Morning Herald back in June, “how is it that a team of five people has managed to release to the public more suppressed information, at that level, than the rest of the world press combined? It’s disgraceful.”

Instead, of course, much of the media coverage has concentrated on Julian Assange’s sensational personal conduct, and the sexual assault allegations levelled against him by two Swedish women.

This is a different — although obviously connected — issue. It should be possible to distinguish the Wikileaks website and organisation from the personal conduct of Julian Assange. If allegations presented to the British court by Swedish authorities are true — allegations which have yet to be tested — Assange has committed a crime.

It is frankly disturbing to see many on the left who one would expect to see defending the rights of women, like Naomi Wolf (Naomi Wolf!) make disparaging remarks about the seriousness of these allegation. One of the allegations is for a rape under Swedish law: a non-consensual sex act in which Assange allegedly forced the claimant’s legs open and of ‘”[used] his body weight to hold [her] down in a sexual manner.” The facts of this matter can and should be established in a free and fair judicial process. But as a matter of principle, no should still mean no.

Ultimately, the importance of Wikileaks may be that it is beginning to reveal the contours of a new sort of social contract between citizens and their rulers: a type of relationship that historian and academic John Keane has called “monitory democracy.” For Keane, “monitory democracy is a new historical type of democracy, a variety of‘ ‘post-Westminster’ politics defined by the rapid growth of many different kinds of extra-parliamentary, power-scrutinising mechanisms.”

Monitory democracy, in which non-government and non-media organisations start to exert meaningful and impactful scrutiny of the state and the corporation, holds the promise for a more balanced informational relationship between ordinary citizens and the power elites. But it also implies some disturbing corollaries.

There is a reason conservative commentators are likening Wikileaks to a kind of informational terrorist group: it uses its military-grade encryption tools for the political goal of destabilising governments and states. In this sense, Wikileaks and especially Anonymous, the hacking group suspected of attacking Amazon, Visa and other sites in retaliation for the Wikileaks crackdown, are “non-state actors” — the term given by security and international relations analysts to terrorist groups like Al Qaeda.

We aren’t really at the beginning of the first global “information war”, but there is a grain of truth to the claims that the willingness of hackers and cyber-activists to attack web infrastructure represents something new and important. And in this analysis, the flip-side of monitory democracy is informational insurrection.

 

Some thoughts on cultural innovation and cultural policy, via the Victorian election

I’ve been away from the blog for the last little bit, but the break has given me the opportunity to do some sustained reading and thinking about some of the bigger philosophical issues that revolve around the ideas of “new work”, originality and innovation, and what these might tell us about cultural policy and the everyday experience of creating and experiencing art.

Rather than mount an entire academic paper’s worth of argument here, I’m going to take things from the particular and work my way back to the general … which might well be putting the cart before the horse, but should chart a course for you (and me).

Let’ s tart off with a bit of real-world cultural policy: today’s announcement by the Victorian Labor Party that it plans to amalgamate all of Victoria’s “cultural” agencies into a new mega-department called “Creative Victoria”:

“Under Creative Victoria, cultural organisations and industries currently overseen by Arts Victoria and those relating to screen, digital games and design that reside with the Department of Innovation, Industry and Regional Development will be brought under the one banner.”

Those who’ve studied a bit of the recent history of cultural policy will know this is thoroughly reminiscent of the formation of the Department of Culture, Media and Sport by Tony Blair’s government in 1997 – the administrative move which is generally considered to have started the whole “creative industries” ball rolling.  There is now a pretty deep literature about the DCMS, it’s lofty intentions, actual actions and the sociological and theoretical underpinnings of the move. A few of the best papers have even been covered here in this blog – Phillip Schleshinger’s paper on think-tanks, Justin O’Connor’s literature review, Toby Miller’s anti-creative industries critique, and Nicholas Garnham’s “From Cultural to Creative Industries” paper of 2005.

As Garnham observes in his paper,

… the use of the term “creative industries” … draws its political and ideological power from the prestige and economic importance attached to concepts of innovation, information, information workers and the impact of information and communication technologies drawn from information society theory.

Garnham puts his finger on the critical point: that creative industries policy is a political idea that can be traced to ideas championing the economic value of creative innovation. Richard Florida and Australia’s CCI centre, while they would not see themselves as fellow-travellers, are indeed partly responsible for promoting to policy-makers these ideas.

Innovation is one of the key terms here, because it the mechanism through which this school of thought connects creativity to economic growth. A case in point is Paul Stoneman’s recent book Soft Innovation. A ‘soft innovation’ is roughly an aesthetic innovation that can be fitted into existing neoclassical concepts of ecocnomic innovation, such as the so-called “technological, process and product” (or “TPP”) innovation defined and insitutionalised by bodies such as the OECD. Stoneman is an economist, and his project aims to carve out a meaningful space for aesthetic innovations in the cultural industries (like books, films and games) in the existing economic theory of innovation. (This poses a few problems, because his models are neoclassical ones which assume things like perfect comeptition, rational consumers and markets that always clear … that doesn’t sound much like the music industry in the era of The Pirate Bay to me.)

Another line of research comes from the CCI’s Jason Potts, who sees the creative industries from an evolutionary economic perspective in which the act as a kind of meta-industrial economic cluster that provide transformative innovations to the broader economy … a sort of storm-cell generating constant gales of Schumperterian creative destruction, if you will.

Both Potts and Stoneman are interested in innovation in a specifically economic sense, which is interesting in itself. They are not overtly interested in, for example, the social consequences or preconditions of cultural innovation, and you would be hard-pressed to fit them into any kind of sociological understanding of innovation such as the social production of art or the social reception and consumption of art.

This matters, because by the time these ideas get bowdlerised and compressed into an election promise, cultural policy begins to force ideas of art and culture into a highly reductionist framework. As they are understood by governments, the value of the creative industries then begins to look like large matrices of employment and income data, and probably of a less-nuanced nature than the gold-standard data like that collated by Peter Higgs.

What we could expect in Victoria under this policy, then, is some sort of gradual skew of cultural policy away from ideas of participation and access, and towards economically-validated special pleading for various well-connected organisations and firms within the creative sector, much as Garnham described happened in Britain. Festivals and “flagship” performing arts organisations are probably best-placed to benefit from this skew, because of their media profile and the social capital they enjoy amongst well-connected board members. Paradoxically, independent artists and small collectives might also benefit, perhaps, out of a general realisation that they provide essential seed-beds of start-ups necessary for the generation of “innovation” – understood as bringing a cultural product to market, of course. Community arts organisations and service agencies may not find the new paradigm as easy to manage.

I’m going to sketch out some more ideas about what I think are some of the problems of innovation theory as it is being applied to cultural policy in a future post.

Foremost among them will be the contention that we need to rescue the idea of innovation from the economists, because the creation of new ideas and artworks often occurs outside markets, for anti-rational reasons, and produces harms as well as benefits. Indeed, there is a strong case that can argued in analogy from theories  in science and technology studies that ideas like “innovation” and “new work” are themselves socially constructed and open to contestation, resistance and subversion – one reason perhaps that Rosalind Krauss famously described “the originality of the avant-garde” as a “modernist myth“.

Cultural policy in Victoria

Earlier this year, I was asked by the Arts Industry Council of Victoria to present an overview of the current state of cultural policy in Victoria, in the lead up to the state election. I’ve just tracked down the video of that speech, and here it is below. If you want to see the slideshow, you can link to it here [Victorian cultural policy presentation3].

Why culture is bigger than the arts: Rebutting Christopher Madden part 2

The main thrust of Christopher Madden’s recent article in response to my criticism of the Australia Council can be summarised by his title, “An arts council by any other name.”

To quote Madden:

Eltham calls for the Australia Council to be ‘abolished’. Yet the agency described in his ‘new model’ – what I will refer to as a ‘culture council’ – looks suspiciously like the Australia Council with a new name and a different focus. The new agency is not described in detail. Is it at arm’s length like the Australia Council? Would it support all of culture, from Facebook to historic places? What powers would it have? How would its ‘radically strengthened and diversified’ peer review processes work? Whatever the details, I would caution that an arts council by any other name would smell as sweet.

Today, an online survey popped into the inbox of my partner Sarah-Jane which, I think, proves exactly why what I’m calling for is not “an arts council by any other name”. It’s a survey of emerging artists who have applied for or been funded by the Australia Council in the past twelve months. Sarah-Jane is a film-maker: a director and producer who has received funding through OzCo’s Story of the Future initiative (an initiative which has since been discontinued). And yet, what are the types of artforms that the survey asks about? Here they are:

A7i. Which types of artistic work have you been practising in over the last 12 months?
If you don’t think these options describe your work, please select the best options and add a comment in the box below.
Please click all that apply
Music
Theatre
Dance
Writing
Visual Arts
Crafts
Hybrid Arts
Community Arts
Other

Notice how there are no film related categories here? That’s because the Australia Council doesn’t fund film-makers – Screen Australia does. Nothing wrong with that.

But what is an issue is the result of that distinction: the fact that OzCo only collects statistics about the things it already funds. We saw exactly the same issue in the Australia Council’s recent research about artists occupations.

You can see the problem here. If OzCo doesn’t fund it, the Australia Council does not consider it an “artform”. The reason for this is not any coherent theory of cultural practice – which is probably just as well, because just exactly what makes jewellery more artistic than cinematography anyway? No, the distinction is all about bureaucratic demarcation.

The result is that things that OzCo doesn’t fund, like game design or film-making, are not part of the Australia Council’s statistics, its evidence base, or its policy advocacy. This alone demonstrates why Madden is wrong: a different council, by another name and with a different ambit of cultural practice, would be a very different organisation, with very different policy imperatives.

In response to Kathy Keele

Australia Council CEO Kathy Keele has formally responded to my article in Overland about the future of Australia’s art funding body. In this post, I continue the dialogue.

Firstly, I should acknowledge Keele’s engagement in the debate, and I welcome the fact she has taken the opportunity to respond.

Secondly, there are some specific points Keele raises which I should address. These relate to my imprecise phrasing in certain sections of the Overland article. Basically, where I’ve said the Australia Council “doesn’t fund” certain artforms, I should have written “the Australia Council contributes tiny or negligible funding”. You can see what I mean below. Keele’s points first, then my response:

  • [Eltham] states that the council ‘funds opera but not musicals (except when opera companies mount musicals)’. This is incorrect. The music and theatre boards have an initiative called Music Theatre which supports the development of musicals.

This is true in the narrow sense, but in the broader sense my point holds. The Australia Council does fund a Music Theatre Initiative, but at a risible level. The Initiative distributes a tiny proportion of funding compared to that devoted to opera. In 2009, the Music Theatre Initiative gave out $288,000 to 9 projects. Opera Australia received $17.9 million and Opera Queensland received another $318,000. Hence, music theatre totalled less than 1.6% of opera funding. In fact, the extra money Opera Australia received to produce Bliss nearly totalled what the Music Theatre Initiative distributed!

  • He argues for the artistic importance of gaming, and asks ‘why doesn’t the Australia Council support gaming?’ It does. The council has over many years funded artists who create game art works and explore game culture as an artistic practice.

The Australia Council’s support for game art and game culture is tiny. There is no game art board, in the way there are Theatre, Music, Dance or Major Performing Arts Boards. The Council has over many years funded all sorts of things with very small amounts, but that doesn’t change the big picture, which is that the Australia Council overwhelmingly funds a very narrow palette of artforms and practices – gaming is not one of them.

  • He states that the council supports ‘serious novels, generally, but not genre fiction or online writing’. Not true. The Literature Board has funded genre novels, interactive media writing, websites, iPhone apps and graphic novels through our New Work and Write in Your Face grants programs. The board recently completed a three-year initiative called the Story of the Future and published the Writer’s Guide to Making a Digital Living.

Again, this is true in the narrow sense, and these intiatives are important. Unfortunately, they are also comparatively minor. Indeed, Keele’s response only reinforces my point – Story of the Future, for instance, the Literature Board’s most substantive effort to support these practices, has finished and has not been renewed. The Write In Your Face initiative, while worthy, distributes tiny grants of only $5000 to a lucky few applicants. Go through the New Work Assessment Meeting Reports and you will see mainly literary writers working in traditional forms sch as novels or literary non-fiction.

In fact, the Literature Board itself recognises that it is not really addressing digital literacy and writing in its Sector Plan. One of the goals of the Sector Plan is “Targeted support for multimedia writers by the end of 2011” –  suggesting that not only is there a need for such support, but that the Literature Board does not currently meet that need.

  • Eltham states that the council ‘funds companies that only produce a few works a year but not festivals that produce hundreds’. In fact, each year the council funds dozens of works that are presented at festivals all over the country. We also fund the Major Festivals Initiative which commissions new Australian work for presentation at the seven capital city festivals.

Again, while it is true that Australia Council funds works that appear at festivals, it is stretching the truth to argue that the Australia Council provides much meaningful funding to the festival sector. Key festivals like the Melbourne Fringe and Adelaide Fringe receive nothing from the Australia Council, despite their key role in presenting small-to-medium work. The Major Festivals Initiative, at $3 million over four years, is a tiny fraction of the funding given to Opera Australia or the orchestras, and largely funds major performing arts board organisations anyway.

Where does the money go? We know where the majority goes: to the big companies in the Major Performing Arts Board.

Strong Aussie dollar hammers Australian screen production

Pop star Rihanna in uniform on the shoot of Peter Berg's Battleship. The big-budget movie was scheduled for production in Australia but was moved to Louisiana owing to the strong Australilan dollar and attractive production subsidies from the US state.

When Alex Burns and I set out to examine the past two decades of Australian screen policy, we concluded that the biggest influence on the success or failure of the Australian film industry was macro-economic factors like currency fluctuations – and not the perceived quality of Australian writers or directors.

You can read that paper – “Boom and Bust in Australian Screen Policy: 10BA, the Film Finance Corporation and Hollywood’s ‘Race to the Bottom‘” in the August issue of Media International Australia, reposted by Alex in proof version here.

Recent developments have only reinforced our findings. Yesterday, for instance, the Australian Financial Review published a feature-length article about the serious trouble posed for that the export-intensive parts of Australian screen industry by the strong Australian dollar, which briefly reached parity with the US dollar last week.

You can’t read the AFR article (by Brook Turner, entitled ‘Dollar dampens local film production’) online, so I’ve transcribed important sections below:

 

 

 

For the first  time in decades there are no major American films being made in Australia, and none in the pipeline, a clear sign of the devastation the dollar has wrought on a $2.3 billion business.

NSW hasn’t had had a major US  film since Wolverine wrapped at Fox Studios in mid-2008, Victoria since Don’t Be Afraid of the Dark in September last year, Queensland since Narnia last November. The Sunshine State is hanging in thanks to local production and Steven Spielberg’s 13-part, $150-million TV dinosaur epic Terra Nova. But there are fears that may go the way of films such as Green Lantern and Battleship, which migrated back to the US with their $US150 million budgets ass the dollar rose, as estimated $200 million loss to the Australian industry.

“This is unprecedented”, Ausfilm’s chief operating officer Tracey Vieira, said this week from Los Angeles, where she has the job of enticing US production to Australia. “We have always had a good momentum of production inquiry about filming in Australia; I’ve never been in a position where we haven’t had a US production that is seriously considering Australia. And there’s nothing in sight.”

Ausfilm hass asked the federal government to at least double Australia’s production offset – a 15% tax rebate on local expenditure on foreign films – to bring it into line with North American, UK and European competitors as part of the government’s independent film sector review, due later this year.

The article reinforces the problems faced by Australia’s screen industry, which features anaemic levels of locally-financed production and is heavily reliant on “runaway production” from Hollywood studios. As we pointed out in the paper, Australia’s foreign-financed production is highly vulnerable to currency fluctuations and “race to the bottom” competition from other jurisdictions offering their own generous production subsidies.