Tuesday, December 29

The philosophy of money

Australian Aboriginals lacked an independent currency, but like other indigenous groups traded ceremonial artifacts, grinding stones, sea shells, ochre’s, shields, axe heads, spears and even ‘water rights’ along their trade routes marked by permanent waterways. Trade was a ‘United Nations’ of affinity to the land where scarce resources in one region were exchanged for another’s as one Australian nation shared nature’s bounty. The tribes all spoke different dialects and relied on carved symbolic message on a message stick accompanied by translators to negotiate trade agreements. Their existence as the longest uninterrupted culture for 60,000 years or more bears testament to their idea that the land owns us rather than we own the land-the only real wealth upon which we all depend.

Elsewhere in the globe as an independent currency money was created philosophers debated its merits and use. The philosopher Aristotle (340 BC) asserted money was best understood as a duality; to procure necessary goods or services of which he approved and as an accumulated corruptible means to obtain one’s fortune. His extreme view proved a reliable sage as money has bedevilled humanity in whatever form was adopted be it capitalism, socialism, communism or a mixture as is evident in modern day China.

It was the era of modernism around 1500 that heralded inventive trade to follow the advancements in science. The puritan work ethic from the Reformation cast money in a more favorable light to coincide with the idea hard work was virtuous. Oliver Cromwell subsequently enacted laws to bolster the 'mercantilist' system to give preference to the British enterprise and shipping companies. Although historically we have many monetary empires dating back to the fall of the Roman Empire none rivaled the Industrial Revolution in England from 1740- 1780, - a logical melting pot given the recently discovered Newtonian mechanistic world - as suggested by John Gribbin in ‘Science a History 1543- 2001’

The industrial revolution became the catalyst for western world industrialization, but was a two edged sword in terms of benefits. Whilst inventiveness, division of labor and productivity supported vastly improved living standards capable of supporting a much bigger population it was at the expense of massive exploitation of people and land- to become the genesis of our current ecological disaster.
During the Victorian era philosopher and moral ethicist Adam Smith published in 1776 his influential classical economic work entitled ‘Wealth of Nations’ to criticize the 'mercantilist' system. Smith articulated the view that money as the invisible hand of free markets will produce a satisfactory price return for land, labor and capital because the self interest in any free market benefits the whole of society as competition keeps prices low. Smith was aware any concentration in power would distort a free market and pointed out Merchants wielded monopolistic power afforded them as a consequence of bans on foreign competition. Mercantilism was also associated with a monetary system which used exported bullion to pay for imports- mainly from Asia- which reduced money supply to exert downward pressure on prices and economic activity at the expense of impoverished workers.

Mercantilism also adversely affected the colonies which were forced to use English ships, pay duties and only trade in commodities whose prices were set by the British Empire to effectively create an underclass of colonial citizens - a significant factor that led to world war and eventual American independence. The classical economics of Smith overturned the mercantilist system and his free market ideas remained popular up until the great depression of the 1930’s.

But the period afterwards saw the inevitable boom and bust cycles continue in tandem with the growth of the larger financial institutions such as banks whose occasional lending sprees exceeded loanable funds beyond the level of maintainable voluntary savings to cause social dislocations.

During the depression years in the 1930’s, John Maynard Keynes was to present a new radically different system to offer hope we could avoid recurrences of the painful boom bust trade cycles that had come to haunt modern day societies and brought upon an unsuspecting pre boom population the horror of the great depression. His theory was we cannot rely on markets to automatically adjust to ensure full employment so long as workers remained flexible in their demands. Rather his theory saw an active role for government intervention with both fiscal (taxation and spending measures) and monetary policy (control over the level of interest rates) to ensure economic growth and stability. Banks were to be regulated but enjoy ‘Lender of last resort’ from a reserve to ensure confidence was maintained in the system.

Keynesians thought it was imperative for government action during severe economic cycles to introduce government spending, tax breaks and reductions in interest rates during recessions but to reverse the situation during highly expansionary times. In other words to increase those same levers during inflationary times.
Following the outbreak of World War II Keynes's ideas were universally adopted throughout the western world with commensurate success so that by the time we reached the mid fifties all western capitalist nations mirrored his views to share in the relatively strong, stable economic fortunes of the immediate post war era.

Keynes's influence however began to wane from the 1970s, with the emergence of renowned economist Milton Friedman who was skeptical over the ability of governments to effectively regulate the economy with fiscal policy as suggested by Keynes, explaining that such measures were prone to be both costly and ineffective. Freidman relied on tight control of money to maintain price stability. His elegant theory was easily understood and very appealing at a time of high inflation but selectively seized upon by vested interests promoting a free market economy. Concurrent to that change in economic focus was a type of philosophical materialism which had taken firmer root to assert our wellbeing or happiness is only measurable in terms of money. This became linked to fundamentalist type religions who promised future wealth as if synonymous with salvation. Simply put -‘if it doesn’t make money it doesn’t matter’! A type of economic fundamentalism persuasively joined forces with branded religion to present a rather potent cocktail of political inspiration based upon a minimalist role for regulation, suggesting markets are sufficient as the sole arbitrator except for control over the money supply.

Economic fundamentalism gained traction from the power of entrenched interests under either party to be incorporated into decades of government policy reaching its zenith in more recent times. However the recent stimulatory moves made by Obama, Gordon Brown in England and Kevin Rudd in Australia may well have been taken directly from a Keynesian handbook which is likely to rekindle resurgence in renewed interest in his economics.


Any measures that might help avoid the sizeable crashes of 1987, 1997 and 2007- the latter coming perilously close to emulating a great depression, will, as would be anticipated represent the best of the old and new way of thinking. But ultimately you cannot legislate effectively morality but rather I think one can ensure a system is both transparent and fair. I think it would be fair to say the free market envisaged long before by Adam Smith bears little resemblance to the one now championed as free. The championed free market today in reality is so encumbered with a concentration in monetary power and sufficiently lacking in transparency to necessarily distort the beneficial outcomes envisaged by Smith.

Freidman’s ideas about the advantages of smaller government and reliance on monetary controls have been selectively seized upon to give credence to an economic fundamentalism. What we have witnessed has been a very loose monetary policy which made the cost of money (money being currency and easily liquefied bank deposits) very cheap and acted as a catalyst for the excessive leveraging of corporations whose failure precipitated a financial collapse of grand proportions. I agree with Economist Paul Krugman who suggests we will, going forward, increasingly revert to a Keynesian style of economics in preference to one grounded purely on monetarism.

That is not to say a need arises for a larger government sector or even for more legislation. In fact I think we are in danger of over-acting and imposing such increased regulatory controls with proposed increases in new capital ratios and stricter lending requirements as to risk curtailment of any recovery by inducing a reduction in liquidity just as stimulatory measures globally must be wound back.

What are needed in my view are more descriptive type provisions in tandem with improved regulation, coupled with transparency. Large financial institutions need to have their mainstay commercial business and consumer lending areas separated
into different entities to those involved in derivatives and any proprietary trading.

Additionally markets all need to be afforded transparency so that any derivative trading – particularly in relation to Hedge Funds – can be determined for markets to be informed and not left in the dark as was past practice.

The type of philosophical materialism which led to the idea that the stock exchange represents preferred repositories of money making entities which require freedom from regulation in order for those entities to create the wealth necessary to sustain our economies was always a discredited theory. However to the extent those stocks do represent a sustainable linkage of goods or services that may indeed be true. But because of the remoteness and lack of transparency to many of the corporate inputs the actual outcomes are oft far removed from such a reality. Sucked into a vortex of a money making machine where investors in AAA rated securities (and those securities derivations )were so far removed from those who actually owned the properties,it was hard to grasp initially how such schemes were concocted in the first place. Any renegotiation after default was thwarted by intermediaries who had no interest in any renegotiation or were restrained through legalities. The lack of regulatory oversight and need for improved transparency needs no further elaboration on my part. Any system which trades purely on the expectation of another’s failure is doomed to eventual failure, since integrity never envisaged insurance was to benefit from another’s failure or that one could make a profit from insurance.

However on a more positive note all of the major companies I have studied here in Australia – and from what I understand applies globally – are making strenuous efforts to ensure their business is sustainable and reflects the latest in good governance. Most refer to the savings in carbon reductions per employee and even in relation to their stakeholders. There is realization the old ways are not appropriate and regardless of any inaction by the government, a global transformation is already in full swing. It is also refreshing to read that many of the big banks were dismissive of the overtures of their overseas counterparts when offered trade in collaterised debt securities. That rejection was based upon the unnatural dichotomy between the security holder and the layers of wrapping that preceded the security in the form of the property. Some Banks still like to know who their customers are and to personally evaluate the risk- if you’re unable to do that alarm bells need to go off.

I will close with a link to where I began with the Australian Aboriginals. Money really is only a means of exchange so that we- ideally like our indigenous peoples- share to the extent as is necessary and sustainable.

Similarly our evolution was more dependent upon survival through cooperation - not on survival of the fittest as evolution’s most misquoted quotes suggest- since the way forward so far as our evolution is concerned has always depended upon cooperative efforts.

Best wishes for 2010 – may it offer more hope than the previous decade!

Friday, December 25

Christ “Hidden Beneath the Whitewash”

There is a story told in Holland, perhaps more mythical than true. It runs this way:
There was an old church. For many years, upon entering it, every-one would stop and bow in the direction of a whitewashed wall. No-body knew exactly why anybody did that, but everyone had been doing it for such a long time that nobody questioned it. It was tradition. Besides, there was something fitting about doing it. It felt right.

One day, the parish decided to renovate the church. Among other things, they began to strip the paint and whitewash off the old walls. While doing this, they discovered traces of a painting on the wall that everyone bowed to. They became very careful and peeled off the paint gently so as not to damage what was beneath it. Slowly, a very beautiful centuries-old painting of Christ emerged. Nobody alive was old enough to have actually seen it before. It had been white-washed over for at least a century. Yet everyone had been bowing to it, not knowing why, but sensing that there was good reason for the reverence.

There is a Christmas lesson in that. Western culture still bows towards the crib of Bethlehem. We may be post-Christian in our beliefs, our attitudes, our ethics, and our policies, but we still celebrate Christmas. Like the people in that church in Holland, we are not really clear any more as to why we are doing what we are doing. There is not much conscious faith left in our Christmas celebrations, just a habitual response to a tradition.

But - as the story of the painting recovered in a church in Holland can teach us - that’s not all bad. It’s better than not bowing to the wall at all. At least we still have the sense that there is something special beneath the whitewash.

If we are among the ones who still know that there is a painting of Christ behind the whitewash, our response should not be one of cynicism. The Christian choice at Christmas is not: do we celebrate or not? Of course we celebrate and we should be happy that the world is still making a big deal out of Christ’s birth, even if it isn’t so clear any more as to why.

Our task is not to stop the bowing or the celebration. Our task is to help peel off the whitewash, to help restore the painting beneath it, and to tell the story of who did the painting and why.

You criticize the bad by the practice of the better. The best way to help our culture to celebrate Christmas properly is not by criticizing how it celebrates, nor by ourselves ceasing to celebrate, but by celebrating in a better way.

Let our joy exceed that of the commercial world! Let our bow be deeper and more aware of the marvellous gift that’s behind the whitewash: the gift of the Incarnation of our God!

Reflection on the Epiphany by the Canadian Oblate priest Ron Rolheiser
Click here for his website

Sunday, December 13

Christian parallels with Buddhism

Both Buddha and Christ preached peaceful co–existence ; the amelioration of suffering by application of an expanded world view for compassion- to present similarities from markedly different cultures. Christ’s Jewish heritage was rooted in the Messianic expectation for the end of the world which leads to his eschatological message whilst Buddha’s concern was over indifference to suffering within a caste based societal system. There remain fundamental differences of substance between the two but personally, on a purely subjective note, I would proffer the view Christ’s sayings also have a distinctive Buddhist flavor to them. Certainly there has been a long history in contemplative Catholicism towards similarity in meditative practices, but I also think there is a tentative link to the way both respond to suffering.

The tenuous parallel link is evident in the expanded compassionate response to suffering. Christ’s ‘sermon on the mount’ was to establish a pacifist society, to end the eye for eye justification and to strive for a universal forgiveness by an active expanded role for compassion. In the Buddhist tradition the release from suffering through Nirvana – by ceasing to will, is the recognizable path to enlightenment. Christ’s account can best be understood by way of eschatology- to establish the spiritual kingdom for righteousness and expanded compassion. That love preached by Jesus was to be universal and to include all people, sufferers, oppressed, those sick, murderers, those found guilty or even your worst enemy. Buddha brought to all sentient creatures that same kindness, friendliness and sympathy but without a personal involvement of heart binded to earthly things.

However, just as the “historical Jesus ‘scarcely exists outside of the Biblical references – except for a fleeting historical reference - so the Buddha also is historically obscure or at least what is attributed to him remains a topic for debate by scholars. Both spent years of monastic contemplation- (Christ may have been a member of the Essenes) prior to a public ministry which attracted disciples and has subsequently spread throughout the world. Their first records and accounts were eventually written down by the disciples and followers. Many Buddhist traditions were orally maintained for over 400 years before any formalization took place. Buddhism may be considered a philosophy or a religion, but more so a religion in my view with Buddhist sacred scriptures and doctrines.

In China philosophical Taoism has influenced Buddhism, but religious Taoism has also been transformed by Buddhism; to include rebirth/ with systems of heavens and hells. (Ching Julia – from Kung Hans and Ching Julia. Christianity and Chinese religions. SCM Press, London 1989) Hans Kung also talks about a kind of Taoist church with priests, monks, cults, feasts, holy water, confession, penance, fasting, legends of saints and even a Taoist Pope. Importantly for both Taoist and Christian thought the innermost essence of Tao and God remains hidden from human beings. (Kung Hans and Ching Julia. Christianity and Chinese religions. SCM Press, London 1989)

Buddhism has been rediscovered in the west and gained popularity as an alternative to secular materialism in philosophy or fundamentalism in religion or for those whose spirituality sits uncomfortably with the various strands of Christianity. Such an interest might seem surprising given for the most part western rationalism which is unaccustomed to discussing such subjects as emptiness, karma, release from suffering through Nirvana – by ceasing to will, illusions of the mind and the idea of death simply taking on a different form of rebirth. But I think the reason Buddhism has gained popularity is it seems less authoritarian and, while its rationality may be debated it does suggest a rational pathway. However, when one examines the mystical bent of all religions and traditional ritual, richness in religious art and the vast body of canonized scripture held by both wisdom streams, I think we all read from the same hymn sheet; to listen to tunes set from fundamentally different cultures but who aspire to the same more positive outcomes.

Wednesday, December 2

Economic update

Introduction and risk assessment

As economic trends signal an end to the steep cyclical downturn, future sustained recovery remains problematical amidst conflicting signs. The US economy continues to digest a never ending cocktail of mixed signals to post meager gains which suggest sustainable economic growth is still probably a year or more away.

Globally tentative improvements remain buffeted by stiff headwinds; more conservative capital consuming banks,vulnerability in asset prices,the circumspect consumer and the unwinding of unprecedented monetary and fiscal stimulus packages which increased government indebtedness by 50%. The continued nuclear ambitions for Iran & North Korea also cast a shadow over global outlooks.

The consensus outlook by the Board of the Reserve Bank of Australia is slightly more upbeat for Australia, aided by the resilient economies of China and Asia recovering faster than expected. Australia benefits from these faster growing regional ties and a very modest level of government debt combined with a well regulated banking system. Our risks lie in the relatively high level of household debt secured on residential property; any pronounced weakness in housing prices exerts pressure on a banking system captive to overseas funding. Rising house prices have reduced home ownership affordability by 24% since April this year. Any risk of a pronounced housing price fall is low since housing stock is under supplied and demands continue to flow on from record levels of immigration. Banks reliance on overseas funding leaves the economy vulnerable to any credit squeeze imposed by overseas lenders, because,apart from forced superannuation saving and government surpluses, we remain a nation of spenders not savers. Increased saving remains a key initiative for the country to be more sustainable in the future.

Interest rates

The Reserve Bank of Australia today raised the cash interest rate 25 basis points to 3.75% to record a unprecedented 3rd straight monthly rate increase; expect another rate increase in February 2010 and a cash rates of 5% by 2010. Such increases represent an unwinding of a previous accommodating monetary policy stance in response to the GFC to one that returns to a position of neutrality. The rise in interest rates and in our exchange rate will contain the prices for traded goods and services but dampen growth in the trade-exposed sector of our economy. The Reserve Bank has also expressed some concern over rising house prices and hopes the interest rate increase will dampen consumer sentiment and propensity to continue to pay inflated prices for housing.

The current yield on the Commonwealth Government March 2019 bond is at 5.267 per cent while the yield on the April 2012 bond was at 4.430%.


Because of the continued weakness of the US dollar speculation is rife the US dollar may lose the world’s currency reserve status. Throughout the 18th and 19th century the English pound enjoyed reserve status before an elected dollar came to power, many years after the US had become the world’s largest economy.

Bearing in mind the reluctance for sudden changes, the requirement for deep markets and the need for ease of convertibility you can reliably conclude it will take several decades before any change become feasible.

In the meantime ongoing US Dollar weakness could be a catalyst for continued political and economic tension, particularly if China continues to avoid a Yuan appreciation, although I think fears here are overblown.

Lessons from the great depression and recent GFC after shocks

As the past tumultuous events of the global financial crisis continue to hover in our collective consciousness, inevitable comparisons continue amongst economic commentators and share chartists with the great depression. The great depression was preceded by the roaring twenties which tended to add a flavour of assumed speculation and bubble bursting scenarios to most of the economic commentary at the time and subsequently.

However an analysis of stock indices (earnings to stock price ratios) just prior to the massive falls of the thirties reveals stock price was not excessive except for one industry sector. That sector was the popular leveraged Investment companies whose specialty was utility stocks. As inevitably more realistic profit reports undermined inflated values of utility stocks the leveraged investments companies were forced to sell their entire share holdings to satisfy liabilities to margin lenders. That event triggered a train reaction as investors in their now defunct management investment companies were forced to sell their entire shareholdings to satisfy their margin lenders.

The operative lesson is the extreme danger of gearing. The final straw during the depression that led to the now famous double dip in stock prices was governments action taken to stem perceived greedy speculators initiated by tightening credit which caused widespread panic selling and subsequent larger scale insolvencies due to lack of liquidity.

I don’t think we are in danger of following that same fearful path today but the risk nevertheless remains, particularly whilst the US banking system (unlike Australian) is not adequately regulated and could still inflate a bubble from excess liquidity and leverage.

However Banks in Europe are 25% and in the US 20% bigger now than pre 2007 crash levels -when the cry was heard too big to fail ! This scenario provides is an ongoing challenge to regulators in relation to capital adequacey and to internal risk managers who need to be given authority to influence bank practices and policies.

Another lesson learnt in recent times was it only took the huge indebtedness of one tiny nation - Iceland to undermine the house of cards that had enveloped the globe. Investors are now more recently worried about Dubai; since it has borrowings of $US80billion to finance a 4 -year construction boom now subject to a pronounced property slump. Dubai world surprised markets when it called for a halt on paying back $US60 billion debt until next year. Dubai's debt problems will be well contained, but expect a few more surprises like this over the next year or so until we reach a point of renewed confidence.

US Banking system still inadequate in regulation.

Federal lawmakers and regulatory officials continue to grapple with what new regulations are needed to be introduced to avoid a repetition of the conditions that led to the Global Financial Crisis. Policies and proposed recommendations remain bogged down within the political process with the administration unable to obtain a bipartisan approach. The current US policy settings which ensure the benchmark interest rate remain near zero, carries the risk such an accommodating monetary policy setting, will fuel a surge in assets and the so called “carry trade” risks another bubble occurring. The unwinding of this “carry trade” would not be pretty. The Fed itself is aiming to better identify risks, drawing on its 220 PHD qualified economists to be more effective in identifying potential bubbles and improve regulatory oversight according to a recent article appearing on Bloomberg.

Federal Reserve Chairman Ben S. Bernanke said he doesn’t rule out using monetary policy to pop asset-price bubbles, while stressing that financial regulation is his preferred approach.

Corporate Profits

Disregarding the US fragile banking system the one bright feature is the recovery in corporate profits largely driven by cost cutting and stabilization in inventory levels previously slashed in response to faltering weak demand. However the cost has been high in widespread human misery and unemployment to leaves a continued deep scar well into the future. Given this caveat and apart from the banking sector, most of the corporate sector (with a few notable exceptions) are in relatively good shape and should continue to improve. Historically current stock price earnings ratios are only slightly in excess of long term historical averages to assume an inbuilt profit improvement inherent in 2010, which is also true for Australia and most of the western world.


You cannot legislate morality or a perfect a set of banking indices which alienate risk. Rather, what is needed is for regulators to be prepared through improved training - to get their hands dirty and carry out periodic due diligence's and exercise a common sense regulatory service which demands transparency.
If you can’t understand what is going on that is usually a clear signal that something is fundamentally wrong. If you’re subject to a financial services or banking license it is preposterous to think a company’s operations can rely on a complex computer generated model which generates huge profits and counterparty risk but whose risk profile remains unintelligible or a mystery to inexperienced regulators.

“Banking should be boring – it is boring. When banking becomes exciting, then it becomes very dangerous “

Quote from Mike Smith - ANZ's chief executive who operates one the largest and most profitable successful banks in the world today-'In the black' -December 2009

Gearing ratios vary according to the quality of the risk – if you’re gearing to invest in government bonds ratios of 20 or 30 to 1 won’t matter – if your investments are risky 4 to 1 may be far too much leverage. I am afraid there is no easy answer but a return to integrity and the constant need to evaluate different scenarios with industry experience.

Financial services as an industry also needs to ensure fees and charges are transparent and easy to undestand, just as regulators can incorporate such requirements into sensible regulatory oversight.

Insofar as transparency for operations are concerned free enterprise markets always needed to be transparent to be effective and equitable and nowhere is this more apparent than in the derivatives market. Since the crash we have merely increased market liquidity sufficiently by massive injections of funds to substitute existing counterparty risk with increased liquidity.

There also needs to be more regulatory measures for boards of directors of public entities to set sensible remuneration limits – particularly in relation to draw backs on share options arising in the event of subsequent failed results.

Classic Bank Run

President Barack Obama has blamed compensation tied to excessive risk-taking for fueling the deepest financial crisis since the Great Depression. The administration has named a special master to approve compensation packages at firms that have received the biggest government bailouts.

Friday, November 27



On Thursday with Gary & Anna we visited Monsalvat, located close to where I live in Eltham. Monsalvat is a sprawling mixture of buildings set on 12 acres in an idyllic setting. Artist and architect Justin Jorgensen together with a dedicated group of volunteers purchased the land in 1934 with a view to establishing an artist’s colony of painters, sculptors, poets and musicians. Building materials used were rescued from old beautiful buildings being demolished in Melbourne to make way for modernization, locally produced mud bricks, rammed earth, mud stone, bush timbers and slate flooring combined with beautifully crafted stained glass windows. The artists operated a dairy and a small farm so that the community was largely self sufficient.
Many of the descendants of the original community today inhabit the adjoining cottages as sculptor’s painters and musicians. The appearance resemembles a European Castle with its adjoining chapel and surrounded by artist’s residences; once stables and storehouses.
The picture is of Gary and myself outside the castle and below are other pictures of adjoining buildings.
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Saturday, November 21

Island in the sun under pressure


Oh Island in the Sun -click on picture to enlarge.

The deep blue sea was tranquil and shimmered like a precious stone sparkling under the noonday sun as our small boat headed for a deserted island not far from Abyiang in the republic of Kiribiti. The oceans in that region can be treacherous; a sudden squall or storm turns the ocean into a cauldron of white tips and high waves like our journey so far; a mixture of excitement and relief. We had left the most populated island of Tarawa to visit Abyiang; to be guests of volunteer Australia and Canadian teachers who worked for the local Catholic mission school. Previously we planned to fly to Abyiang but the plane service was cancelled due to a breakdown. We had negotiated the trip with local boatmen but it soon became apparent they were not sure of the way. Finally, after spotting a landmark, we all trekked across the coral reef, knee deep in water with our boatman carrying our provisions to finally arrive both hot and exhausted.

I remembered my wife sitting quietly in the bow; fully recovered from an earlier ordeal when she awoke as if from a sudden nightmare to a raging shivering fever in an unfamiliar thatched hut on Abyiang. The schoolchildren brought us coconuts, confident the juice from the green adolescent coconuts would immediately restore her to good health. True to their word my wife was soon up and about as if the fever was no more than a bad dream, to our mutual relief. During the course of the week we joined in with school activities, then were told of a trip organized for us to visit a nearby deserted Island.

The first glimpse of the island from our boat was one of undisturbed pristine white sand and crystal clear water with almost jungle like thick foliage intruding in a wide arc onto the foreshore.

After landing we cleared an open space within the thick foliage to make up a rough camp but were soon interrupted by the arrival of a local family. Oh dear! We soon leant the island was not only inhabited but the islanders were concerned over our lack of protocol; strangers were expected to introduce themselves to the spirit of the Island by traversing it from one end to another.

The family finally departed amicably and we were left to explore the coral reef and its wondrous underwater sites. To our surprise the family returned again but this time with a number of large brightly coloured crayfish, caught specially to be consumed for our lunch. Furthermore after learning some of us were to soon return to Australia, they performed a special ceremonial dance of farewell on the sand. A most elaborate and complicated long dance ritual; in the spirit of friendship- extended generously to strangers, to whom they were unable to converse or ever likely to see again.

The dance reminded me of the ceremonies that must have been performed to farewell canoes long ago from Polynesia and Melanesia as they set out to populate the many Islands that now make up what was once known as the Kingdom but now a Republic ( since 1979) of Kiribiti.

Their history is recorded in the many dances and songs, words to exquisite harmonies lasting for several hours, never written down but handed down orally from the one generation to another. But that rich history takes on a much more sober note as Abyiang and the other islands that make up Kiribiti are gradually sinking into the ocean to the tune of global warming and erosion.
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Wednesday, November 11

Truth and Fiction in the Bible

Robin Lane Fox - The Unauthorized Version: Truth and Fiction in the Bible


The book is an interesting historical exposé about the Bible by a scholar whose approach to this biblical analysis is purely historical although he does value highly prior contributions from many of the leading theologians. In his introduction he shares his passion for history whilst acknowledging a non belief in GOD, to introduce to us his stated aim to critically review the veracity or otherwise of historical evidence within the bible where the bible makes reference to events taking place - to ask the question ‘is the text historically true or credible’?


Biblical text represents a literary history of humanity; rich in inspired testimony, prophesy, story, parable, metaphor, analogy, allegory and poetic verse. Fox, as a historian contends the bible does represent a fallen history of humanity but whose truthfulness is limited to the extent the texts remain faithful within that narrow context.

The question arises as to primacy of purpose and of expectations given the texts accumulation over 700 years.

What is evident is the continual gravitation towards ‘modernity’ - that is what was modern then – to became a primacy of purpose to flow through from the nadir of the old testament to the parables of Jesus whose mystery was to the disciples as it remains today - discerned by reference to allegory. The quest for the sacred and for life meaning was what held together tentatively those unwieldy papyrus manuscripts to emerge finally into book format a thousand years later. Along the long and arduous journeys which bears witness to the richly endowed stories biblical authors borrowed from the mythical, pagan or recalibrated prior events or texts to give reasons and substance to their existence as new needs arose.

Indeed in the very first book of Genesis spanning 2 centuries from the time of King David, scholars have identified at least 4 different authors collaboratively presenting different moral, repetitive and mythical interpretative views of creation edited by the one exhibiting a priestly style. - The Liturgical Press – Collegeville Minnesota – GENISIS – Pauline A, Vivano.

Fox asserts there are the 2 conflicting contradictory creation stories – the unblemished story of creation and the other in which Adam and Eve fall from grace.

The question arises, can different interpretations and issues of style be creditable and, are contradictions no more than a matter of acceptably different views taken from a different perspective, so that both different views might reasonably be argued as capable of being right rather than to assert such differences must logically denote a falsehood.

Repetition of style

An important aspect to a scholar’s work is to painstakingly analyze different writing styles and grammatical expression to reliably link a consistent style to identify each writer, but even so the results can be problematical and changes oft remain the secrets of antiquity.

The Bible represents a kaleidoscope of genres written in the style of priestly, poetic, historic, and philosophical traditions. Hence determining the cultural context together with both genre and style is a prerequisite to unlocking the door to understanding. What is revealed is purpose, as is the case of the creation text where the 4 authors offer different perspectives of the creation stories. At first sight these different perspectives may give the appearance of contradiction as the writers attempt to introduce new themes – many of which would already be very familiar to their intended audience.

Many of the earlier books of the Old Testament depict the tribal patriarchal evolution which invokes the ideas of their transcendent GOD or GODS tied to the preceding recorded events of triumph or tragedy – slavery to freedom, or the stained blood and redemptive events that shaped nationhood in keeping with a coherent purpose. The coherency of this purpose is evident in the patriarchal tribal stories of Abraham commencing when he believed in many GODS before his conversion in belief of the one GOD- Yahweh – or at least to assert Yahweh has primacy. Solomon in his youthful wisdom presiding over a period of immense prosperity that opened up trade with the Phoenicians and brought untold wealth and prosperity to his reign- attributable to his wisdom. But in the latter chronicles of the book of KINGS he succumbs to materialism and the worship of many different GODS towards the end of his extraordinary reign. Hence the writers adapt but do not distort events that shaped them – not necessarily confined to an era or historical context, but much more to do with what actions they perceived to be faithful or unfaithful to their GOD – to breathe new life and perspective into the living texts to impart perceived wisdom for each new generation.

Walking the Bible

A remarkable measure of that ancient past journey can be gauged by reading “Walking the Bible” by Bruce Feiler.
Feiler takes you on a 10, 000 mile journey to retrace the 5 books of Moses; through the desert, 3 continents, 5 countries and 4 war zones. He crosses the Red Sea and tests the slopes of Mt Sinai, to interview Bedouin tribes people and pilgrims – to touch and feel the ancient lands and in the process spiritually experienced that same sense of awe of what must have been felt so long ago from what is the cradle for many of the world’s great religions. A measure of the faithfulness of the ancient texts is the degree to which biblical stories still define existing terrain and foliage of a living landscape whist remaining faithful to a consistent coherent purpose.


Given the extraordinary long time periods that ensued over which the texts were compiled, matters of authorship and authenticity are legitimately challenged by Fox. He poses questions over what systems guarded against the alteration or amendments to books or material regarded as sacred. Later, in relation to the gospel writers he asserts irregularities in the narrative and falsehoods in relation to the nativity scenes. These are questions that go to the root of any historical quest for Jesus and assume greater importance when we consider maters of the heart or faith as interpreted within the gospels.

The historical Jesus

Here I believe it helpful to include a reference to the rather long somber conclusion presented by Albert Schweitzer in his ‘Quest for the Historical Jesus’ -
The mistake was to suppose that Jesus could come to mean more to our time by entering into it as a man like ourselves. That is not possible. First because such a Jesus never existed. Secondly because, although historical knowledge can no doubt introduce a greater clearness into an existing spiritual life, it cannot call spiritual life into existence.

History can destroy the present; it can reconcile the present with the past; to a certain extent there was a danger that we should offer them a Jesus who was too small, because we had forced Him into conformity with our human standards and human psychology. To see that, one need only read the Lives of Jesus written since the 'sixties, and notice what they have made of the great imperious sayings of the Lord, how they have weakened down His imperative world-contemning demands upon individuals, that He might not come into conflict with our ethical ideals, and might tune His denial of the world to our acceptance of it.

Many of the greatest sayings are found lying in a corner like explosive shells from which the charges have been removed. No small portion of elemental religious power needed to be drawn off from His sayings to prevent them from conflicting with our system of religious world-acceptance. We have made Jesus hold another language with our time from that which He really held.

Jesus as a concrete historical personality remains a stranger to our time, but His spirit, which lies hidden in His words, is known in simplicity, and its influence is direct. Every saying contains in its own way the whole Jesus. The very strangeness and unconditionedness in which He stands before us makes it easier for individuals to find their own personal standpoint in regard to Him.

Modern Lives of Jesus are too general in their scope. They aim at influencing, by giving a complete impression of the life of Jesus, a whole community. But the historical Jesus, as He is depicted in the Gospels, influenced individuals by the individual word. They understood Him so far as it was necessary for them to understand, without forming any conception of His life as a whole, since this in its ultimate aims remained a mystery even for the disciples.”


The question of concern over Fox’s irregularities and biblical factual errors proffered will only be of concern to those who believe all of the Bible is inspired truth- for those of less emphatic views but needless to say acknowledge their belief in the sacred, such revelations will not be of concern- perhaps one can be fortified by the view that what was to be analyzed in the flesh so to speak would reveal its ongoing fragility.

Fox in his conclusion draws a parallel in his acknowledgment in the humanity of the Bible to become empathetic with the idea of the revelation of human truth in the frank admissions and misunderstandings of the disciples, the betrayal, in their disloyalty and in the admissions of wickedness which stains the pages of much of the earlier ancient texts.

Robin Lane Fox’s book is a thoughtful and insightful treatise into the history of religion and of belief, but his findings will be met with immediate hostility to anyone of a fundamentalist persuasion. For others his courteous disciplined scholarly approach will be welcomed but for me the continuing theme became a tad too long and highly predictable.

Tuesday, November 3

The Biology of belief


Looking backwards in time my mind struggles to imagine how those first awakenings of self consciousness were played out in humanity’s journey of discovery. I rather think those first early insights will remain hidden forever in our oral history, in the evolving stories of dance, in the lyrical chants of the ancients or in the wondrous dreamland scenes carved on rock walls up to 60,000 years ago. Elkhonon Goldberg in ‘The Executive Brain’ suggests religious ideas about this time may have first emerged as we struggled to separate the thoughts we have about others are separate to those we think about. He suggests such self memories about a deceased person may have been attributed to the current spirit of that deceased person as it became a taboo custom to speak of the dead.

Before that momentous crossover into self consciousness much earlier a series of seismic events transformed our living planet to create nature’s vision splendor. The timing of those massive upheavals was necessarily precise to change our planetary environment to enable life’s previous abundant first single cell life to evolve into the multi celled life complexity we see today; as our planet temporarily appearing like Jupiter – totally wrapped in thick ice –then thawed to cause water to carve out the new landscape warmed by immense erupting volcanoes. Miraculously the planetary environment reached a state of equilibrium to give birth to the first evolved multi cell creatures some 650,000 years ago which are evident today in the fossilized imprints- as if just recently left in dried mud- in the thin layers of ancient rocks in the remote areas of what is known as the Flinders Ranges in South Australia.

These insights into our past are only made possible by the evolution of our self consciousness which enables us to makes sense of such things; to ponder the sequential events needed for one single cell to become the trillions estimated to make up the human body. The mechanism to enable enjoyment of our enhanced understanding is in the architecture of our frontal lobes which allow us to retrieve information stored in the older ‘limbic’ areas of the brain for dynamic processing in the frontal lobes area coupled with repositories of self awareness. Elkhonon Goldberg in ‘The Executive Brain’

Interestingly just as these frontal lobes are our most recently evolved brain area they remain by far the most vulnerable or fragile to trauma and the onslaught of dementia which exhibits those frightening losses of cognitive memory ability. It is not that memory is lost in dementia patients but rather the circuitry connections to memory are either damaged or severed, - Eklhonon Goldberg ‘The Executive Brain’.
Self consciousness is thought to be only evident in humans and maybe in other highly developed life forms albeit such views continue to be debated and constrained by a lack of any known developed animal language.

Given our newly acquired self consciousness- an insatiable curiosity combined with unquenchable thirst for knowledge it is hardly surprising we have complex ever changing belief systems.

But with the onset of a scientific age of new discoveries to contradict many of the rigidly held religious ‘beliefs’ scientists became very wary of making any references to ‘beliefs’ in scientific discourses preferring to talk about concepts which were to be only to be accepted as science after stringent evidentiary validation.

Book Review- The Biology of Belief

The title of Bruce H Lipton’s (Ph.D.) book ‘The Biology of Belief’ aroused my interest- no doubt as was the author’s intention to engender for him a wider reader’s audience.
The author’s first watershed moment is vividly described in the Prologue when he was lecturing medical students in the Caribbean

I had resigned my tenured position at the University of Wisconsin’s School of medicine and was teaching at an offshore medical school in the Caribbean. Because the school was so far out of the academic mainstream, I started thinking outside the rigid parameters of belief that prevail in conventional academia. Far from ivory towers, isolated on an emerald island in the deep azure Caribbean Sea, I experienced a scientific epiphany that shattered my beliefs about the nature of life.
My Life changing moment occurred while I was reviewing research on the mechanisms by which cells control their physiology and behavior. Suddenly I realized that a cell’s lifer is controlled by the physical and energetic environment and not by its genes. Genes are simply molecular blueprints used in the construction of cells, tissues, and organs. The environment serves as a ‘contractor’ who reads and engages those genetic blueprints and is ultimately responsible for the character of a single cells ‘awareness‘of the environment, not its genes that sets into motion the mechanisms of life.

His book is an amalgam of the next 20 years of research and experience which I will attempt to engage sufficient portions so that you have some understanding of the nature of his findings.

Cells as Miniature Humans

He introduces to us to the idea that every cell in our body – and there are roughly 60 trillion of them – is a smart cell capable of fulfilling all of the known bodily functions we attribute to our mind and body as a whole. This intelligence is resident in the cell membrane and reacts to its physiology through controlling proteins able to override the genetically encoded DNA resident in the cell nucleus. That is to say that although the DNA which is resident in the cell nuclei does determine our pre programmed genetic characteristics their operation can be turned off and on by the controlling proteins within the cells membrane environment. Hence the author contends our ‘belief systems’ are instrumental in the control of our biological functioning rather than by genetic determinants. Lipton explains the trend scientifically towards genetic determinism was adopted since the discovery of genes provided the final missing link to show how Darwin’s species adaption’s or changes were all transferred genetically into each new evolved generation.

An analogy to help explain the Magical Cell membrane

Lipton uses the analogy of the test pattern appearing on old TV sets. Those of us old enough to remember will recall how a test pattern appeared on our TV sets once the day’s program’s came to closures traditionally after midnight.

Think of the pattern of the test screen as the pattern encoded by a given gene, say the one for brown eyes. The dials and switches, TV fine –tune the test screen by allowing you to turn it on or off and modulate a number of characteristics , including colour, hue, contrast, brightness, vertical and horizontal holds .By adjusting the dials, you can alter the appearance of the test pattern on the screen, while not actually changing the original broadcast pattern. This is the role of the regulatory proteins.

Waltzed through the ‘Magical Membrane’ and on to ‘The New physics; Planting both feet on thin Air”

Lipton waltzes his readers through chapters entitled ‘Magical Membrane’, and on to ‘The New physics: Planting both feet firmly on thin Air’; to introduce the dual wave -particle physics theory to understand how energy underpins his biological beliefs and to persuade us more research is needed into the fields of energy waves rather than what is currently disproportionately devoted to genes. The question one skeptic might immediately ask is would this approach risk ‘throwing the baby out with the bathwater’ since it would signal a retreat away from genealogy which forms the mainstay applications of westernized based prescriptions. On a more general note however I think few would argue, not least of which, the inhabitants of developing nations, to say modern medical advances have ensured improved longevity and help enormously to maintain improved healthy sustainable lives. A visit to any impoverished nation reveals the extent to which provision of improved medical and mental health facilities with an array of prescriptive drugs has a beneficial improvement in the overall wellbeing of the population.

However I do not think the author risks ‘throwing out the baby out with the bathwater’ but I rather think the question might well be asked in reverse ‘has the westernized approach become guilty of putting too much faith in the genealogy? , or put another way ‘putting too many of its research dollars into one basket? As Lipton reminds us ever since Darwin’s species adaption’s or changes were thought to be conveniently verified via the modus operandam of genetically transferred information within the DNA of the cell nucleus into each new evolved generation, scientists have assumed this must represents the crucial frontier area to find future cures for such things as cancers and incurable disorders. Whilst it is true to say the environmental was accepted as playing a pivotal role in outcomes this was more generally attributed to the overall attitude of the mind and reactions to external stimuli rather than thought be equally present in the individual cell intelligence as suggested by Lipton.
The manufacturers and distributors of drugs found a powerful advocate in money motivation to direct disproportionate research efforts into the genealogy pool and away from other forms of research which may be far less drug dependant and be more successful without the dreaded side effects of prescription medicine.

Maybe we are at the crossroads where a more multi disciplinary approach offers the best future opportunities.
We can be optimistic that so called reliance in genetic determinism is almost dead in the water.

Positive thoughts and a conclusion

I think I am a positivist by nature but as the book moves into the realm of a personal empowerment treatise for living and loving, for me, I think his views are more intuitively driven than as a logical progression from earlier chapters. My point is a personal one and does not detract from the thrust of his inspirational message of self empowerment which will be met joyously by many less skeptical readers than me - particularly as he shares his own personal journey in tandem with his fascinating scientific treatise.
I should hasten to add I think intuition can play a pivotal role in many deliberations and does not diminish the validity of our outcomes but rather ads important new dimension to our everyday life. But what is intuitively true for some will not be so for others and for the teams that work together particularly in dynamic highly charged atmospheres, where intuition is no substitute for prior training and consultation. I was reminded of this factor when reading about the shortcomings of an ambulance emergency centre which relied too much on the intuition of its operators to determine the seriousness or otherwise of callers to allocate emergency status or otherwise to distressed cases with catastrophic results.

The author’s message is of hope and joy with an emphasis that nurturing of children is more important than their genealogy, that we can influence our outcomes by positive thoughts and what are fears already etched in sub conscious memory might be unlocked in conscious thought. They are aspects that many of us have long held to be true, but Lipton takes on an evangelical emphasis to encourage believers to no longer feel they are trapped in the rut imposed by the false belief we are constrained by a pre programmed genetic disposition.

But equally we know that the outcome does not always turn out as a positive as we might have hoped as we are confronted by children born or contacting an incurable chronic disorder who dies prematurely notwithstanding the loads of love nourished upon them so that it remains an enduring life mystery. The author does not broach such issues excepting to say that he thinks his biological way of thinking stands a better chance of finding a cure, by forging new frontiers into science.

The author’s admission that he has become a Spiritual scientist is oddly enough tucked away as an epilogue, was to me disappointing as I think he would be more effective is added to earlier discussions. His spiritual visions are lucid, concise and exciting as he asserts our life in not arbitrary as may have been inferred from Darwin and his successors but is rooted in a series of endless repeating patterns which depend upon co operation for survival. Those few cancerous cells lack housing and make up a minority who one day may no longer cause havoc as our cells membranes intelligence expands in conscious awareness sufficiently to ensure no damage can be done.

I would recommend this excellent book as fascinating reading for anyone with any interest in the cutting edge of biology – and wants to know why a spiritual scientist asserts our caring loving nature or otherwise is the spiritual energy source to have more of a profound influence on ourselves and others than we think – from the point of view of all of the combined energy evident in every cell in our body and the aggregate I am happy to call me.

Sunday, October 18

Post Card to the future

The thirsty camel

Most of us love water which is possibly the most valuable of all resources – to enjoy the refreshing sea, river, stream or lake. But the bulk of our fresh water resides in the polar icecaps which are now threatened by global warming. Water occupies about 70% of the earth’s surface and is 75% of our human body mass.

Australia to me is like a giant camel whose safely stored water is to be used sparingly between infrequent stops at waterholes fed by uncertain rain.

The Australian land mass was once part of a larger mass which remained submerged for nearly 4 billion years beneath the sea (click here to read more) to accccumulate vast salt deposits below the water table. Our soils are generally poor since the sea washed out most of the soils nutrients except for a thin rich top soil.

Our industrious pioneers were blissfully unaware their extensive tree felling and irrigation would raise the water table sufficiently to cause salt deposits; miles and miles of desolate, salt filled land with pools of salt water to render the once arable land unusable. It is an eerie and disconcerting feeling to gaze out the window when travelling to view this blight visited upon the landscape. Similar outcomes are prevalent in parts of the USA, Egypt, Iraq and Pakistan, all effected in the same way by salination. Over grazing and tree clearing also exposed the precious top soil to more frequent dust storms and erosion.

Our economy today is less dependent on agricultural exports and more resilient to withstand the effects of drought since forging stronger economic ties to the Asia region. The strong bond to Mother England reduced about the time of the discovery of minerals and energy when England was to also join the common market and reduce trade with Australia.

Immigration has remained a stalwart for post war economic growth but many may be surprised to learn Australia is currently growing at its fastest pace ever; faster than any other country in the world. This combination of population growth, a robust financial regulatory regime combined with improved corporate social responsibility and rising exports to Asia has allowed us to avoid a recession.

Given existing growth ratios our population is forecast to double within the next 40 years in the Asian region which is expected to contain 60% of the world’s population. While the economic benefits are both apparent and challenging the more fundamental question arises over whether our finite water, land and infrastructure systems can sustain such a projected level of population.

Nobody has the definitive answers but there any number of futurists willing to stake a claim both for and against Australia being able to support such an increased population scenario. In the end their educated guesses are no better than yours or mine – but with the amount of information doubling every 18 months no one is short of information but as always there seems to be a shortage of wisdom. This post does not pretend to be wise or better informed, rather, within my limited sphere of knowledge and research I will attempt to examine the challenges as I see it to argue what might be sensibly suggested to achieve a more sustainable future.

Pre colonization

Living on a large Island which had become separated from the mainland Australian Aboriginals are thought to have enjoyed a period of 60,000 years of isolation prior to colonization,(click here to read more) to represent the oldest known period for any culture. Like many indigenous societies its oral and visual history does not reveal definitive records of changing climatic and land mass conditions although it has bben gauged they were involved in extensive burning of bush land to seek out game which permanently changed the landscape. Aborigines also engaged in some agriculture using water channels (click here to read more) for irrigation planting of a variety of wild grains which were cultivated into regular crops. They also engaged in seasonal eel framing. They erected stone cottages where they lived during the time of harvest. It is difficult to ascertain population levels at the time of colonization due to their rapid decimation from the newly contacted diseases and ensuing wars but estimates vary from a million to a low of three hundred thousand.

A feature of the Australian bush is many of the species require the intense heat from a bush fire for the seeds to burst from their pods to later germinate. Evidence points towards Bushfires being an integral part of our landscape for a very long period of time- possibly caused by periodic man made burning and lightning strikes. Many have argued the tragic bush fires in February of this year would have not been as ferocious had periodic large-scale burning off of the tinder dry forest areas been more widespread.

What we can learn from the aboriginals is the land owns us, not the other way around. It is only in partnership with nature that modern methods can be effective. It seems to me unhelpful extremism exists on both sides of the bush fence so to speak; unbridled development versus maintenance of a wilderness. I don’t think there are any definitive answers other than to aim to work in partnership with nature by setting aside connecting corridors of land to maintain bio diversity which have been demonstrated will enhance yields of existing land use.

Genetically modified agriculture is yet another subject and suffices to say science can be the friend of agriculture. But GMO based agriculture tested in the laboratory may not behave in the same manner in the environment and requires vigilance to be carefully tested in the field for a very long time to avoid unforeseen consequences.

A Farmers lament -Rain no longer follows the plough!

The early settlers reshaped the landscape with extensive tree felling and overgrazing by sheep and cattle unaware of the consequences of their actions as if Australia was to expressed as an extension of an English county. During the early periods buoyed on by a repeat of unseasonally good rainy seasons a philosophy took root from successive good harvests – the rain always follows the plough.

The repeated cycle to clear the land gained momentum to the extent more and more marginal areas were opened up for farming with disastrous results. Soon landowner’s optimism gave way to despair as they were forced to walk off the land destitute as a consequence of the inevitable drought cycle which took them by surprise.

In the more immediate post war period the same pattern was to occur. The then liberal government created solder settlements; small farming land parcels ganted to returning servicemen. Although many of these holdings through amalgamations and capital improvements continue, many were forced to walk off the land broken heartbroken. I remember vividly, the anger and frustration in my Uncles voice, as a youngster staying on his farm ,to hear him berate the government for their foolishness. He knew full well there was never a hope in hell they could become sustainable farmers from such small uneconomic land holdings.

Fortunately today these lessons have been learnt and larger scale amalgamations have occurred in most agricultural sectors to ensure farms collectively have become world’s most efficient. However, encouragement to use irrigation for water dependant crops such as rice and cotton were examples of ccontinued bad policies.

Kidman’s bid to drought proof his properties

Cattle king Sir Sidney Kidman set up a vast pastoral empire dating from the late 19th century where he sought to drought-proof his landholdings by buying up strings of interconnected properties across the continent so that stock could be moved from one area to another as the need arose.

Today only 15 of the properties remain including Anna creek, (click here for ther website), which is the largest cattle station in the world covering 3 million acres – larger than Belgium. You can read the history of Anna Creek and the present carrying capacity by clicking here . At one stage during the drought in 2008 they decided to shut down and wait for rain.

A perspective on modern day agriculture and farming in Australia

When Jarred Diamond visited Australia a few years ago he talked about what had changed from 40 years ago when he was last here. It was all about the land, he said, the new spirit within the country that acknowledges it is not here for us to do with it whatever we please. In Australia away from our dense populations on the eastern seaboard, in our dry fragile country our unsubsidized farmers- unlike our European and American counterparts- have had to adopt innovative farming techniques combined with excellent infrastructures to compete and remain at the top of the table as the world’s most efficient. This has meant Australia is currently in the enviable position of having food security and being one of the largest net food exporters. Naturally enough there will not always be general agreement between farmers as to the best way to farm alongside nature and there are both positive and negative aspects but overall there are many reasons to remain positive.

There currently exists a mixture of the large scale technologically based farming more reliant on chemicals versus those in favor of a more bio diversified approach that relies more on nature for its sustainability. But overall, despite our poor beginning most farmers today are staunch conservationists, intent on preserving the land in perpetuity for future generations. One aspect I think that has tremendous potential to continue to yield outstanding results is Land Care.

Local Land Care groups ensure farms are not only sustainable, but set aside corridors of up to 12% of the land as sanctuaries for nature. Land Care, introduced in 1989, is an exciting government funded initiative which enables groups to receive grants and technical advice to help better maintain the native landscape and set up the vital corridor sanctuaries which interlink the properties within each respective land care group. There are 4,000 community Land Care Groups currently engaged at many different levels.

I like the conclusion in Dr Chris William’s book entitled Old Land, New Landscapes “The foreground of Australia’s old frontiers reveals that people’s circumstances, personal histories and memories are diverse, mutable and dynamic, like the physical landscape itself. The future of the bush in the sheep and wheat belt, as an ecological opportunity, remains dependant therefore on embracing diversity in both the landscape and its people. Landscape foreground is complex, even chaotic, but it is human. It is, therefore, the source of the relationship with nature that we now attain, or for which we might one day strive.

Click here for Chris Williams book.

Water shortages

Since Australia is the driest continent on planet earth it is not surprising water shortages should remain the most crucial of issues to support a burgeoning population.

One of the worst areas affected is our largest river the Murray which is in desperate needs of an increase in its water flow, depleted by inappropriate irrigation. The Murray flows along the eastern side of South Australia, and part of the New South Wales and Victoria borders. Irrigation from the Murray sustains this region which produces 50% of Australia’s fresh fruit and vegetables, but at a terrible cost to the river and its eco system. Irrigation water drawn from the Murray has resulted in so little water remaining in the once mighty river its flow was insufficient to carry any fresh water into the ocean.

This environmental position for the river, if allowed to continue, would have a devastating effect on its biology, eliminating many species dependent upon brackish waters.

Fortunately there is a ground for cautious optimism today as both our Commonwealth and State Governments have put aside substantial funds directed to restoring an environmental flow of water to the Murray River, but at the time of writing programs has been slow with 40% of the projects yet to start. One solution is to buy the water rights from farmers who will either disengage or revert to less water intensive activities. So far about $3 billion has allocated for this purpose. The aim is to return 120 billion liters of water to the Murray River from farmers in exchange for funds for them to upgrades irrigation and other farming infrastructure. Some irrigation systems lose up to 40% of water to evaporation.

Today there is also an industry being built up around water and water rights which are actively traded, like other commodities; ensuring users pay a market price for those facilities to be made available. The rights are aggregated in total to the level calculated as sustainable by respective country authorities.

Although progress has been frustratingly slow the idea Rivers will be legally entitled to a certain amount of water known as an Environmental Water Reserves is a meritorious idea but as yet is not implement.

It is as vitally important for Australia as it is for the developing world which uses around 70% of all available water for irrigation

Overall we are learning from past mistakes and per capita use of water in Australia has reduced by 20% per year for the past few years.

I think farming and looking after the environment go hand in hand. Both can co-exist as an expression of long term sustainability. It's often Farmers who are the ones most interested in preserving their environment to farm in a sustainable way.

Notwithstanding some of these positive aspects of reduced agricultural water usage, the provision of fresh drinking water remains one of the largest challenges for the world today.

Rural land is overvalued

The value of rural land in Australia and indeed in many parts of the western world is vastly overpriced. This is a consequence of continued income support to farmers over successive frequent droughts that ensure the price of land remains unrealistically high, whilst overseas huge subsidies paid to farmers inflate the value of the land.

Rural land in Australia has appreciated in real terms around 5-6%, that’s 5-6 % above the rate of inflation over the past 20 years, putting undue pressure to obtain a commensurate improved return.

But I also think Australian farmers are the most efficient in the world and most are responsible environmentalists who do a magnificent job looking after the land for future generations. During dire times of drought they immediately begin de stocking to mitigate the effects and lessen stress on the land. Many are debt free 3rd generation farmers whose reserves and or alternative incomes tide then through these most difficult of times.

What I favour as an alternative to income support is government assistance in the form of interest free loans, made during such times but to be repaid during good seasons. I think most farmers would prefer a loan to income support schemes, which is nothing more than a handout.

I also think additionally it’s worth considering a substantial heritage type annual payment, in recognition of the Farmers custodian role of looking after the land and preserving the land for future generations subject to meeting certain conditions.


In the long term exceptional dry circumstances will not be so exceptional in years to come, but I also believe the Australians farmers will adapt and preserve the land for future generations in a sustainable way. That means much more diversity for farms, a sole farming income may need additional sources as we experience drier conditions. The dichotomy or tension between country and city, farming and non framing and or industry need not exist at all as we are all co dependent upon one to another, particularly to sustain a substantial increase in population.

In fact I think it will be true for most countries the world over. The pooling of skills and sharing between communities both country and city allows us to learn together as to how to be sustainable, in partnership with nature and to grow more in a sustainable manner. It's how we evolved and it’s how we will survive the future and even accommodate a much bigger population in Australia.

Tuesday, September 29

Economics in Australia compared to the US

Economists invariably cop the tag of belonging to the pessimistic science since jokingly it is oft said by way of an introductory welcome to the podium …….Please welcome .......... who has successfully predicted 14 of the last two recessions.

Economic reputations suffered a further blow since most failed to predict the global financial crisis or identify sufficiently the consequences of the prior rising bubble.

There are notable exceptions but invariably their prior records are patchy enough to reasonably conclude this was the one prediction they just happened to get right at the right time. This patchiness is not surprising since bubbles don’t figure in economic or monetary theory nor are they included in the sophisticated economic models. Economics was never a science but is the art in dealing with the erratic human behaviors which can routinely make miserable fools of economic forecasters based upon rational outcomes. You spend most of your time looking in the rear vision mirror for any reflections indicative of the way forward.

I remember early student days full of debate on contemporary issues such as tariffs, subsidies, basic wage increases, international trade and regulatory issues for a banking system and so on. Today there is far more complexity and global interaction to consider, but I remember then many appalling decisions made in Australasia when life was simpler. Neverthless there are always lessons you can learn from studying past trade cycles, even to go far back to the great depression.

One aspect worth noting about the great depression is the assumed degree of speculation attributed by governments of the day and subsequent commentators. But if you undergo a thorough analysis of the prior trading conditions you find speculation was not nearly as rife as is commonly assumed. By way of example if you take the various PE ratios ( earnings to stock price ratios) for companies in the various industry sectors just before the massive fall in stock values you find a degree of normality that today would not cause undue concern. Lurking behind the bland facade however was the leveraged investment companies with their investments in overly valued utility companies which caused all of the havoc. Once values and profits fell in that one industry sector alone highly leveraged investments companies had to sell their shares to pay the margin lender. The same pattern happened with the individual investors in the Management Investments whose worthless investments meant they had to sell their remaining stock holdings in other sectors to cover their margin lending. Then the government talked simplistically about all of the greedy speculators as the only cause for an overvalued market which helped perpetuate the next downward spiral famously known (and still fearded )double dip. Most of the self perpetuating downward spirals were driven by leverage and subsequant sentiment but not substance that culminated in a collective fall of 89% with all of its accompanying misery.

After my studies and during my subsequent career I have almost always been responsible for forecasting economic indices and have endeavored as far as possible to follow economics which I have found both to be very interesting but equally frustrating.

When I first studied Keynes and Samuelson dominated our textbooks.
Keynes was one of the first philosophical economists who insisted economic theories must lead to fairer more ethical outcome for everyone. Keynes’ views were no doubt forged from his desire to avoid a repeat of the great depression where he held onto his shares and subsequently lost his fortune along with many others. Throughout his life he remained a colourful witty character devoted to the arts, nature and conservation to the extent he was miles ahead of his time. His highly developed mathematics gave way to theories suggesting the need for the creation of a strong regulatory regime to prudently effectively use both monetary (supply of money and interest rates) and fiscal policy (government spending and taxation) to help iron out inevitable economic imbalances were adopted in Australia.

In the USA Economics was to eventually turn away from Keynes to a different route with the rise in power of the economic monetarists who suggested you only need to vary the volume of money in circulation (money, bank deposits in demand and related interbank deposits with overnight liquidity)and interest rates to effectively control imbalances between supply and demand.This suited successive governments and business since it involved less regulatory resources and ensuing compliance as was proposed by Keynes and others. These ideas inevitably filtered through to Australia as the economy in the USA seemed to be traveling well.Subsequently the USA rode out the Savings and Loan fiasco and the Dotcom bubble but only at the expense of a burgeoning debt burden.

However fortuitously our economy in Austrtalia was to benefit enormously from increased taxation revenue derived from a mining boom wisely squirreled away in reserves for a rainy day,( some since released for a number of stimulatory measures) our close ties to the expanding Asian region and because we invested in a more effective regulatory regime following our largest corporate collapse in Australia - the demise of HIH.

At that time officials at APRA – The Australian Prudential Regulatory Authority correctly concluded that any large bank, financial, insurance or related entity could fail and with sufficient negative sentiment bring down the entire economy with them. They set about regularity changes to improve and more closely monitor solvency ratios and risk management practices with quarterly reporting requirements for all of our major institutions which caused a considerable amount of angst within the business community. These factors, inclusive of the tyranny of distance aspect which separated us from the sharper end of the pencil where all of the sub prime action was taking place ensured our lucky escape so far to date.

Recently in the US I was disappointed to see mooted bank regulatory changes are to be confined to increasinging capital requirements rather than ensuring unregulated derivatives are separated out and excluded from cover under their banking licenses.
Even Hedge fund billionaire George Soros and Berkshire Hathaway’s Charlie Manager are calling for urgent limits on credit-default swaps- one of the prior subprime culprits. These instruments are unnecessary since there already exists regulated conventional insurance products able to cover risk. The current banking structure leaves those large institutions in the same vunerable position as existed prior to the crisis. I hope there is change in heart.

Longer term my prediction is for continued weakness in the USA dollar to ultimately lead to higher inflation and inevitably higher interest rates. But in the medium term as Fed Chairman Ben Bernanke (who co incidebtally did his PHD on the trade cycle which involved studying Keynes and the great depresion effects )correctly points out U.S. interest rates will be kept low for quite some time, because of prolonged weakness.

Meanwhile if the American economy does stabilize and begin to give grounds for some genuine hope of a rebound, which I earnestly hope it will, then I also predict there will be an abundance of born-again Keynesians to poke up their heads from under a winters burrow.

Saturday, September 26

Information overload

We live in an information age where knowledge grows exponentially. The effect is for an increasingly reliance and trust on a dwindling number of specialized individuals -particularly in science and technology. The potential for large scale crashes and unmitigated disaster is apparent everywhere - just as we saw in what many would regard as feeble regulatory efforts due in part to the inability to understand what was going on and the potential for disaster by a few overwhelmed investigators. The explosion of available and mandated information is reaching plague proportions as we become inundated with larger and larger data bases.In the area of business to day I have seen this explosion and specialization subdivide subjects I once studied with authoritarian texts that might have run to a few hundred pages expanded to dozens of volumes. In our everyday lives we are attempting to avoid the responsibility to trust in the integrity of one another by lengthy product disclosure statements, huge information gathering exercises for prospectuses and in the increased regulatory complexity that impose burdensome reporting on to specialists.In spite of this additional information the same glaring inequalities and injustices continue to exist. We are in danger of thinking the provision of additional information can supplant the central importance of human integrity.

What appears to be enigma in our western culture is we no longer take information from divergent disciplines to inform philosophical debate.The reasons relates to our specialized knowledge based society with its’ esoteric information for each disciplinary area which is not easily applied elsewhere. The growth of knowledge in every discipline means we will soon reach the stages where increased volume will ensure any research effort will involve an extraordinary amount of weeding to finally smell the flowers you are searching for.My conclusion is ironically we are at risk of almost returning to the pre printing press days when few people could read or write – but now because of information overload few know enough to know what to accept about different topics presented by varying experts in that field.
The contextual nature of information to a particular discipline is necessary for its integrity but nevertheless I see a danger in continued specialization to create the potential for a cultural desert within the self perpetuating isolationism of the various schisms’ within such a structured society. Indeed the search for the “facts” and total reliance on independent experts to support government decisions is increasingly becoming popular and neatly sidesteps any obligation to simplify and clarify the benefits to a country and its electorate of any intended changes. It is almost impossible not to make a reference to fairness, value and purpose when debating change if you want to argue philosophically why those changes are needed. Nevertheless such basic aspects are often lost or glossed over in a debate consumed by the veracity or otherwise of information.

In other words who has the correct facts or who is right and who is wrong. Ultimatedly voters like to be able read and understand enough to decide who they trust to make the best and fairest use of our scare resources and information and who they don’t for the reasons of ……….. . As we find leaders who can be trusted than we make real progress just as those leaders find experts who can be trusted and so on. It was always a matter of who could be trusted – or not!

There is a need for those in power to reduce the information overload so that what it made available is in a easily digestible format to support a particular policy, its value and overall purpose. If it’s too complex or difficult to be understood than its back to the drawing board until such time as it’s easily understandable.

Understandably I think whilst Science is fascinating, enhanced by books which lead the bestseller lists, there is equally the danger of a community backlash to derail its advances to a retreat into fundamentalism - unless information is presented in an easily understandable way - to include how it is to be used to enhance fairness value and purpose.

Monday, September 14

"The God Delusion “by Richard Dawkins

Review of the book “The God Delusion “by Richard Dawkins

In his book “The God Delusion” Dawkins distances himself from pantheism (the idea God is in everything) and Buddhism but singles out for criticism the traditional fundamentalist interpretation of a theistic GOD representative of the Abrahamic based faiths of Judaism, Christianity and Islam. His approach is to first define the GOD hypothesis from which to argue against GOD’s existence, the religious philosophy of omnipotence outlined by Aquinas, the non relevance for a vengeful God and how morality is unconnected with religion.

I found his book lacking in philosophical challenge.

Here is my review:

The problem for me with Dawkin’s reasoning is that many of his concerns about fundamentalism in religion are equally shared by non fundamentalists who have no problem in retaining a belief in GOD. All of his philosophical rebuttals are also reliant on the philosophical materialism that undewrites all of modern science. Aquinas put the idea of God succinctly as “BEING” – unrelated to any form of materialism.

Dawkins takes issue with Aquinas on the omnipotence of GOD, but Astrophysicist Jesuit George Coyne explores the ideas of continued creation in a different way - “A theologian already poses the concept of God’s continuous creation with which to explore the implications of modern science for religious belief. GOD is working with the universe, the universe has a certain vitality of its own like a child does, and it has the ability to respond to words of endearment and encouragement. Coyne rejects the idea of the omnipotent and omniscient GOD of old – “The universe is not GOD and it cannot exist independently of GOD. Neither pantheism nor naturalism is true. But, if we confront what we know of our origins scientifically with religious faith in GOD the Creator –if, that is , we take the results of modern science seriously –it is difficult to believe that GOD is omnipotent and omniscient in the sense of many of the scholastic philosophers. For the believer, science tells us of a GOD who must be very much different from a GOD as seen by them.”

Dawkin’s has no doubt forgotten more of evolutionary biology than I can remember-what one would expect from the culmination of a life’s study and efforts in one’s chosen endeavors. It is not this scholastic record that I question since I accept and trust what he has to say about biology is true. He is also at odds with dozens of eminent evolutionary biologists that do believe in GOD- but that is not my point, rather my issue is his emphatic assertion any debate in relation to the existence of GOD must remain within the province of science and evidentiary material proof.

The problem with this assertion is apparent as modern science refuses to talk about value, purpose or consciousness- under which such a belief would be debated. Dawkins does make some references but never really strays too far from his original premise to demand scientific evidence to argue against his atheistic views.

Science only talks about the theories in relation to physical objects supported by observation and mathematics. It cannot purport to understand ultimate reality since there is no evidence to support or calculate its definitive nature or existence. Likwise we cannot say what it is any more than we say what it is not - but Dawkins insists we can say what it is not- it cannot be spiritual - it can only be physical, since it is only the physical things that we can study.

Dawkins refuses to step outside his narrow reference, yet warns sternly against ’absolutism’ which I endorse – but it seems to me his ideas that nothing is possible outside sciences’ materialistic philosophy is an absolute statement. – A denial of the possibility of anything spiritual. Dawkins insists science comes up trumps – the best fitted shoe for any philosophical logical argument despite the fact the vast majority of scientific studies and discoveries have all been counter intuitive. Even possibly the greatest - Einstein’s theory of general relativity may yet need to be modified should we ever develop a coherent theory for quantum gravity.

Even so, on many occasions, we rightly put our faith in science- until another theory can be proven. However, within Dawkin’s own field of expertise – biology - the Holy Grail of Darwinian evolution which underpinned scientific belief is under challenge. It is acknowledged our early earth temperatures, following the “big bang” at 300 degrees Celsius were a very hostile environment for any primitive life but we have now discovered bacteria ( bacteria has DNA ) continuing to exist in the heart of volcanoes, where conditions replicate those first earliest conditions. It seems plausible many uncoded molelcular forms with the potential to self replicate binded together and under natural selection evolved into the coded RNA and DNA molecules that drive the functioning and reproduction of all living cells.

I think you could liken it to a form of evolved intelligent design or creation or biological evolution- ( call it whatever you wish) arising effortlessly over many billions of years. The remarkable sequential life giving events give rise to a possibility of another form of intelligence, which is outside of material matter and energy to created it (nothingness or GOD) or that which was necessarily and preceded its existence.(nothingness or GOD)

For acclaimed physicist and mathematician Stephen Wolfram, life complexity, intrinsic to physics is not only driven by natural selection but more from the ability of non complex life forms to quickly become complex. Wolfram contends wherever one sees complexity-say in the shape of a leaf –its form is not just generated because of some particular purpose by some sophisticated process. He has indicated in his experiments biology expands into complexity from even very simple rules of growth- even in complex species evident in the fluidity of parallel cell development.

I think the creative element exists within evolution which nevertheless remains an important milestone in helping us better understand how we came to be whom we are. We have only recently evolved our “consciousness” allowing us to ask the big metaphysical questions. Modern science is not philosophy- since it remains a helpful tool to relay layers of light to guide our path, just as religiosity with metaphors, analogies and old stories from differing cultural backgrounds illuminate ones beliefs.

All of the arguments against a belief in GOD presented by Dawkins with much aplomb are self refuting. You can argue until you are black in the face and it won’t make an a iota of difference - our existence gives rise to a much stronger philosophical arguments that appeals to another’s existence and so on back to the original singularity which transcends our understanding. In every day of our adult life we make an estimated 2 billion judgments with only the very tiniest slither ever entering our consciousness. To assume such a tiny slither makes our scientific undertanding the irrefutable be all of everything seems to me to be in the exact same vein as Dawkins assertions against the fundamentalist GOD delusion. All of his assertions, once debated philosophically, expose the weak ineffectual nature of such non existential arguments.

Dawkins also makes a point of the possibility of linking violence to religion. I don’t wish to defend the indefensible – past atrocities committed in the name of religion remain atrocities, but I think religion is often the lever which would be easily substituted for another secular one to suit the purpose of its murderous perpetrators should it be convenient within a particular country or region. In other words I think the desire and will to power which consumes some in an “ecstasy of violence” does not need religion to power its explosive fuel. There have been any number of commensurate psychopaths in many countries in which religion was not a good lever but whose rule precipitated untold death and misery – some of the worst in modern history had no need for religion to underpin such pathways.

The idea of a reconciliation, and for justice to finally prevail are not pie in the sky romantic notions of a flowery religion, but viable alternatives for hope that transcends a miserable materialistic philosopy of science. That hope in goodness in turn depends upon the actions and the philosophy we adopt in this world today. Atheists, humanists, agnostics and believers equally can all do very good work, since good is not dependent upon belief although it may influence what you do and why we do it.

As Dawkins attempts to tear down the old theistic idols he reveals his passion for science and for science’s ability to make sense of much of the material world for us – one that I share with him – but I also think his atheistic passion borders on the equivalent of the religious zealot so consumed by his belief that one is unable to ascertain his own life philosopy - except for the one lonely point – He does not believe in GOD.