07/07/2011 - 00:00

Stifling debate no way to find solutions

07/07/2011 - 00:00

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What is it with academics and their desire to sign proclamations about what is right or wrong?

THE latest effort by some members of the academic community to try to stop Christopher Monckton, the British eccentric who represents one of the extreme ends of the climate change debate, from speaking at Notre Dame University in Fremantle follows a historical pattern of behaviour.

Apparently 50 or so academics, a loosely used phrase which, in this instance, encompassed mainly people working at a university or engaged in higher studies, were opposed to a tertiary institution giving Lord Monckton a platform to air his views.

This is an appalling attitude from academics who themselves have historically valued freedom of speech and the independence from control that universities have typically provided those who work and study.

I have no great desire to defend Lord Monckton or the way he expresses his views – my mind is not nearly as made up as his. In any case he seems quite capable of being heard without me. Nevertheless, a lot of people object to barriers to freedom of speech.

Then again, this ‘safety-in-numbers’ approach by academia isn’t new.

Dare I raise the subject of Albert Einstein, whose theory of relativity a century ago so infuriated members of the academic community of the time that some of them actually published a book called 100 Scientists Against Einstein.

Einstein’s response is famous: “If I were wrong, it would only have taken one”.

It is disappointing that, during the past century, academics haven’t learned from the deep sarcasm of the genius who stands out as, arguably, the leading scientist of the modern era.

Global warming, which is now referred to more broadly as climate change, has attracted a big amount of this petition-like nonsense, with claims about consensus and lists of ‘scientists’ who are agreed on the theory being countered by declarations disputing consensus (along with lists of opposing ‘scientists’ who don’t agree).

It is as if scientific knowledge can be decided by weight of numbers. The public is not that stupid, so it’s surprising that academics engage in this silliness as if settling the science is a game of poker – ‘I’ll see your 500 PhDs and raise you a Nobel Prize winner’.

If the AFL adopted this system, Collingwood would win every year because it has a membership that is not only the biggest but arguably the most committed. That doesn’t make them right, although recent evidence is strongly supporting their cause (cue to graph showing upward trend in the past decade).

This ridiculous notion of arguments won by sheer weight of numbers is not limited to climate change, it can be found anywhere ideological debate engages science in one form or another.

Take last year, when nearly 70 people calling themselves economists signed an open letter saying they were “convinced that the coordinated policies of the Australian Labor government have prevented the Australian economy from a deep recession and prevented a massive increase in unemployment”.

They – almost all university academics, joined by two union advisers and a retired consultant – congratulated the federal government on giving $900 to most households, followed by the massive boost to education building and first home owners. There was no mention of pink batts.

Clearly they wanted to shut down debate by stating the subject was settled, in their learned opinion.

The debate, of course, wasn’t as simple as that. There were question marks over the size of the stimulus package, the wastefulness of significant elements of it and the role of the resources industry supplying China as a form of insulation. None of those factors was addressed in recognising the “outstanding performance” of the Australian economy and “economic achievements” of the federal government.

Another omission was the fact that other countries that used similar types of stimulus at even greater levels in proportion to GDP still slumped into recession.

I find it disturbing, given the complex nature of economics, that a group of academics could be so sure of something, which, to many other relatively smart people was a subject of conjecture.

I admire much about academia and the passion, in many instances, of those who devote themselves to both the formal study of theory and the research required to test that.

But the hallowed halls of academia are not the only places where people learn or the only receptacles of truth.

Occasionally, people in industry or even the oddly obsessed hobbyist, attain expertise that rivals or excels those who have made study their profession. Amazing breakthroughs are not the sole preserve of those who read peer-reviewed journals. Of course, these people are not always right, but those in academia ought to be listening to them and constantly testing their arguments, not drowning them with their signatory ink.

It’s what you know

THERE has been much discussion about the Australian Securities and Investment Commission win in the case it brought against former directors and executives of the Centro Properties Group regarding the way the company’s annual accounts were handled.

Making a statement about the win, ASIC said: ‘the central question in the case was whether the directors were required to apply their own minds to, and carry out a careful review of, the proposed financial statements and the proposed directors report, to determine that the information they contained was consistent with the directors’ knowledge of the company’s affairs, and that they did not omit material matters known to them or material matters that should have been known to them’.

Having spoken to a few leading directors in the Perth community I have to say the reaction appears muted.

To some, the decision by the court is validation of the increasingly onerous view of responsibilities that contemporary directors have anyway.

The big question is how this decision – in which the penalties have not yet been stated and thus, the full case may not yet have played out in terms of appeals – affects directors’ ability to do what they currently do.

Many directors in Western Australia sit on multiple boards, so will the need to better understand each company’s reports make them too thinly spread? Will those considering a director’s position for the first time shy away from that?

It is hard to imagine it. Centro’s situation is not unique but the lessons are easily learned. A robust understanding of items that are fundamental and significant to the business – both financial and strategic – seems fairly sensible.

Centro’s difficulties in an era of financial engineering will be seen again in some other form in the future. Maybe, simply plucking a relevant example out of thin air, some directors of booming resources companies ought to better understand what their company really means when it comes to their individual understanding of what reserves are in the ground.

I would presume such skill is common on junior explorers’ boards, which are often populated by geologists, but it strikes me as an example of how the Centro decision – borne from decisions made in a profligate era and reviewed at a time of austerity – may apply specifically in WA.

More importantly, the Centro decision is simply another reason for directors of public companies to err on the side of caution. Listed shares are a great way to spread risk, but that benefit is defeated if public companies stop taking risks.

• mark.pownall@wabn.com.au

 

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