Mannkal Economic Education Foundation


Australia’s Entitlement Disease

Ron Manners, 31 August 2015
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Australia’s Entitlement Diseaseron-trophy

(Based on an address to the Young Liberal Movement of WA Policy Forum. Thursday, 13th August 2015)

By Ron Manners

I’m so excited that you are all here to talk about policy tonight.

Australia needs a policy rocket right up its backside.

Political parties, in Australia, talk about policies but inertia and the vested interests win out every time.

I want to talk about that and suggest a solution.

Did any of you learn about Public Choice Theory at university?

Does anyone want to describe it for me in two sentences?

Those of you who receive the concentrated benefits from any law or policy will work their guts out to protect their patch and they will distribute the costs widely, over as many people as possible, so that it is not life-threatening so the mob will not march in the streets.

That’s Public Choice Theory and it explains most of the bad policies that afflict Australia.  If you understand Public Choice Theory you will understand Australia’s entitlement disease and how it has lead to the mess we are in.

The entitlement disease is to be seen everywhere.

· In our schools.

· In politics.

· In business.

· In families.

Talking about families, one growth industry in Western Australia, is specialist companies set up to run family businesses because the next generation feel they are simply entitled to the proceeds, without having to work for it.

An international speaker is in Perth, next week, talking on how the next generation can graduate from being, as he puts it, “entitlement brats, to contributing leaders”.

However, the good news is - the game is up for this entitlement disease in politics and in business - thanks to your generation and to social media.

There can be no clearer example of concentrated benefits than those going to Bronwyn Bishop and the politicians of all parties.

The benefits are extremely concentrated but the costs have been carefully spread over some millions of victims, but the game is up now, thanks to the internet.

The unfortunate rub-off is that ‘respect’ has been completely lost for all politicians, which makes it doubly difficult and unfair for those exemplary few who have moderated their behaviour.

The same story applies for business.

Social media is now delving into matters of corporate looting which has been going on, on a grand scale.

Social media is identifying companies who have forgotten how to make a profit yet still fly their teams, via business class, around the world.

Shareholders are now revolting and are simply walking away from investing in such companies and, in fact, walking away from investing generally.

It is easy to see how so much abuse of the system has been regarded as ‘normal’ over all these years.  People say, ‘that’s politics’ or ‘that’s business’ but if respect is to be gained, over time, there is much hard work to be done.

For an explanation of how this has been going on for so long let’s again point to Public Choice Theory, which explains everything you need to know.

Why isn’t Public Choice Theory taught in the Australian universities anymore? (I do know that it is taught at ANU but I have yet to find examples of other universities teaching it).

Could it be that Public Choice Theory may indicate that universities themselves are an example in that they may be run with the concentrated benefits going to the administration and the academics and the diffused costs spread over many thousands of students and parents? I’m not sure but think about it.

Now let me give you a classic W.A. example of how Pubic Choice Theory permits bad policy to linger. An example could be our Potato Marketing Corporation of Western Australia.

I understand that we used to have Onion Boards, Egg Boards and all manner of Boards but they have been abolished and I think Potato Boards have been abolished in all other States.

Nearly all the experts agree that Potato Boards are a really bad idea and should be scrapped.

Here we have a policy which is very good for possibly 0.1% of our population. They, the potato growers, gain financial advantages through the existence of this policy.

What about the 99.9% not engaged in growing potatoes?

Most people, in this room, when they go to the supermarket pay more for their potatoes and, in addition, they pay higher taxes to pay for the Potato Board itself.

In other words the vast majority of us are getting screwed at both ends.

Now, we live in a democracy.  Here is the policy which is good for say 0.1% and bad for say, 99.9%.

Obviously in a democracy that policy would disappear.  It would be abolished.  Yet, every time there is an attempt to abolish the Potato Board it keeps coming back.  Now, how to explain this!

Public Choice Theory explains it as being the 0.1% who benefit from the policy, they really care about it because their income and wealth is tied up with the policy so they vote for and contribute to political candidates who support the policy.  They campaign for candidates who will continue with this and might even throw potato peel over candidates who don’t support such policies.

What about us 99.9%?  We don’t think about the policy much and even if we did we’d say, well it’s probably only costing us an extra $5 a week so we are certainly not going to march in the streets or hold placards up in front of TV cameras.

There are examples everywhere of the problems caused by concentrated benefits and dispersed costs with small groups holding the rest of us to ransom.

At least with the Potato Board there is an element of humour.  I understand that the Barnett Government has promised to get rid of the Potato Board, around next election time.  However, I noticed in last week’s Business News, that a new “leadership team has taken the helm at the Potato Marketing Corporation, as the industry moves towards deregulation.”

Deregulation doesn’t have to be managed.

You deregulate by simply abolishing the Potato Board.

(History is full of deregulation success stories; start with the West German Economic Miracle following WWII)

Meanwhile, W.A.’s potato statesman, Tony Galati, speaks for W.A.’s many consumers, who have been carrying these dispersed costs for many years, when he says, “The current stringent licensing system has pushed up prices for consumers for the benefit of a small number of farmers.”

You can see that we, the consumers, have been screwed again but the other interesting touch now is that those who have benefited, for so long, are now suggesting that the government should compensate them as their licences, issued by the Potato Board, are in danger of losing value.

Doesn’t all this sound a little like Uber and our over-protected taxi industry?


Digressing for a moment:

As an interested observer, and not a member of the Liberal Party, I’m amazed at how the State Liberal Government is acting as a government that desperately does not wish to win the next State election.

Look no further than the disgusting treatment of their own tenants at Elizabeth Quay.

Nobody treats their clients like that and remains in business.

Now, while we are searching for examples of bad policies that fit the Public Choice mould of concentrated benefits versus dispersed costs we can look at why residential building blocks in W.A. are three times the cost that they should be.

I personally have my own gripe with the State Government, which caused me to write a letter to the Premier (June 17, 2015), which I titled, “Barnett Government Trashes W.A. Property Rights.”

The letter and follow up responses have been copied to all State MPs and I’ve received an amazing amount of support from both Liberal and Labor MPs.

As a matter of fact one Labor MP actually rang and asked if they could steal my heading from the letter and use it as an election poster for the forthcoming State Election.  That heading of course was, “Barnett Government Trashes W.A. Property Rights”.

Governments could get away with this sort of thing before the internet and before we were empowered to communicate directly ourselves.  So, again, the game is up.

No need to go into the details of my complaint tonight but the correspondence is available on our website.

The basis of my complaint is simply that I’m not interested in what cosy deal may have been done between the Premier and Alcoa.

I’m just interested in the fact that, under our State Constitution, the Premier cannot destroy my Property Rights.  To reinforce my thinking let me quote the exact words of Judge Andrew Napolitano

“The greatest losses of our freedom have come not from someone attacking us, but from the government ignoring the Constitution and the majority letting them get away with it.”

Something the politicians have forgotten is that the two most portable things on earth are people and capital.  If either is not made to feel welcome, people can be on the next plane and capital can be transferred elsewhere at the click of a button.

Australia is not a welcoming business environment, as I described in Greece and Hungary recently.

They didn’t believe me when I explained that our State Governments fine employers for creating jobs and the more jobs you create the higher the fine - we call it Payroll Tax.

That, along with red tape, green tape and black tape, has driven 85% of Australia’s exploration dollars offshore, probably never to return again.

That’s why your deliberations on policy are important.

Enough complaining!

We live in a great State and there is work to be done particularly on policy.

Let’s finish on a high note and explain why you folk will win and why you must win, if you are to have an exciting future.

At Mannkal Foundation we develop curiosity in the minds of young people to go in search of good strategies and to explain the dire outcomes of bad policies (we collect examples of both).

If you see or hear a business leader or politician, who says something sensible, stand up and cheer them!  They are doers and achievers and should be recognized as such.

One example is Indian Prime Minister Modi, when he said recently

“The problems of public administration will end if politicians learn how to say ‘no’ and if bureaucrats know how to say ‘yes’.

Learn from leaders who have earned respect.  Another example, the former Czech Leader, Vaclav Havel, who was described with these words:

“When Vaclav Havel died in 2011, tens of thousands of Czech citizens paid their respects.  It is rare for a politician to be so loved.  Havel was a man of great integrity who spent his life ‘living the truth’ in a society that was ‘living a lie’.”

Mannkal Foundation focuses on youth and I saw similarities in Greece for this reason.

In Greece, as in Australia, change will not come from people over 40 years of age.

By then, they have usually found their way around the many rules and regulations (or transferred capital elsewhere).  However, our young people, like the young people in Greece, have more to lose.

They have been screwed and left with the debt.

So there are two reasons to succeed with reactivating policies.

1. You have the tools that previous generations didn’t have:-

v Project Western Australia.

v Books that clearly show which policies will work.

v The N.Z. example – where their recent successful reforms have been described as “Being designed by Hayekians, run by pragmatists and populated by socialists.”

and the second reason;

2. You will succeed because your own future depends on you, yourselves.

So, work on your policies and ensure that the concentrated benefits go directly to you and future generations, with the dispersed costs spread widely, but this time, over the many ‘enemies of industry’.

University “book burners” are busy again!

Ron Manners, 31 July 2015
Check out the author's latest book at

Ron Manners

Ron Manners

University ‘book burners’ are busy again!

We witnessed a remarkable situation in May, this year, when a local university returned a $4 million research fund to host noted Danish academic, Bjorn Lomborg, and his Consensus Centre.

The proposal was to research and debate matters of climate, malaria and safe drinking water for the world’s less developed nations, ranking the “return on investment” of hundreds of different policy choices.

A preliminary study, reviewed by a panel that included two Nobel Laureates, found that for each dollar spent on trade liberalisation over $4,000 of benefits were created, while investments in mosquito nets for rural Africans and immunisation also had high returns. 19 targets were identified that represent the best value-for-money in development over the period 2016 to 2030, each offering more than $15 back on every aid dollar invested.

I would encourage all readers of this column to look at Lomborg’s work and make up their own minds at

The thought of opening a ‘debate’ on some pet topics of a select few stirred a proverbial hornet’s nest and the funds were returned and the Consensus Centre was sent elsewhere.

Now, today, it’s interesting to see that the same situation is being repeated at South Australia’s Flinders University (The Australian - July 27th, ‘15 - article by Andrew Burrell).

“Education Minister, Christopher Pyne, has been searching for an institution to host the Centre, since the University of Western Australia pulled out in May, citing a backlash from academics unwilling to work with Dr. Lomborg’s Copenhagen Consensus Centre.


The revelation of the talks promoted an immediate backlash from Flinders’ staff and students who warned that they would protest against any move by the university to host the centre.”

All this was reminiscent of a similar event in Perth in 2010 when the ‘noisy few’ launched a protest at Christopher Monckton’s visit when he wished to open a debate, focused on ‘global warming - climate change’.

I don’t think anyone doubts that the climate changes, as it always has and always will, but there seems a great unwillingness to actually discuss the extent to which the causes may be apportioned to ‘mankind’ or nature and its accessory volcanoes - see

So, isn’t there something unhealthy about particular views being hysterically silenced in this way?

Rather than query the motives of the noisy objectors, could we spend a few moments reflecting on the words of British Philosopher, John Stuart Mill, who wrote in his book, On Liberty, in 1869, as follows:-

“If all mankind minus one, were of one opinion, and only one person were of the contrary opinion, mankind would be no more justified in silencing that one person, than he, if he had the power, would be justified in silencing mankind. ………….But the peculiar evil of silencing the expression of an opinion is, that it is robbing the human race; posterity as well as the existing generation.”

Ron Manners

Aug. 2015

Barnett Government Trashes W.A. ‘Property Rights.’

Ron Manners, 7 July 2015
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Mannerisms - July, 2015

Barnett Government Trashes W.A. ‘Property Rights’

17th June, 2015

Open letter to:

Dear Premier Barnett,

Travelling through Europe, particularly Greece, with a group of economists last month, I had a strange feeling. It came to me while we spoke on the importance of respecting ‘Property Rights’ as a key component in energizing any country’s economy.

Among the varying examples of Property Rights being trashed in those countries, none were worse examples than one in Western Australia that affects me as a small partner in a residential land development syndicate (Primewest Syndicate) at Wattleup Rd, just south of Perth.

We purchased the syndicate land, zoned Urban–deferred, in February 2006. Both at the time of purchase and rezoning to Urban in 2008, it was not affected in any way by any industrial buffer or the like.  Nothing complicated about that and easily understood.  In fact the WAPC had some five years before purchased an adjoining poultry operation, relocated it to a rural area and then proceeded to rezone the land for residential use.

Then, in 2009, a decision was made without reference to the Local Council or affected land owners.  It was a decision to extend the Alcoa exclusion zone by an additional 500m to include our land holding.  That decision overturned all strategic and statutory planning which had been undertaken over more than a decade to realise zonings under the Metropolitan Region Scheme and City of Cockburn Town Planning Scheme No.3 which allow for residential development.  Such extraordinary action undermines confidence in the planning system and increases the cost of bringing residential land to market, further fuelling Perth’s housing affordability predicament.

So, here we are, more than 9 years since our purchase and 7 years since the land was rezoned to Urban.  Despite our best efforts to subdivide this land and supply some residential blocks in this prime location, all we have to show for it is a mountain of paper and bureaucratic obfuscation that would provide a ready-made script for any Australian version of Yes Minister!

To continue on this lumbering process of applications into the distant future appears pointless, hence my direct approach to you as the matter rests in the Premier’s Department and not in the Western Australian Planning Commission where it probably should reside.

An economics student could write their thesis on why building blocks in Western Australia are three times the price they should be. To put this in perspective, the Perth median home price in 1985 was the equivalent of 3.16 times average annual earnings.  In 2014, Perth’s median home price represents 9.35 times average annual earnings - see att. spreadsheet (Ref. Institute of Public Affairs Research).

This is in a State where, through the efficiency of our home builders, the price of houses has been kept low.  Meanwhile, the price of housing lots has gone through the roof, one might say.

Yes, there was a request that we do further dust sample monitoring, over a 12 month period.

Yes, this was done by experts, based on a methodology approved by and in consultation with your Department of Health and Department of Environment and Conservation.  The monitoring was completed at great expense, and the results confirmed that no problems existed.

However, the State Administrative Tribunal claims the ‘Precautionary Principle’ should triumph over Property Rights.

I’ve studied the Precautionary Principle and understand clearly that on that basis no-one should ever get married because such marriage may end in divorce and that no-one should ever start a business because at sometime in the future it may fail.

Mr Premier, our great State was not built on the Precautionary Principle and we should be thankful for that.

Media Coverage

The ABC transcript of your own comments of October 15th 2014, state;

“If people have bought land in a buffer zone, which hasn’t been legislated previously but it’s been there and there’s been a lot of discussion about the buffer zone and how wide it should be, then those developers take on a risk,” Mr Barnett said.

Please let me, respectfully, correct this statement.

When our syndicate purchased this land in 2006 there was no buffer zone, nor talk of one on this syndicate land.

In respect to our land syndicate, your comments were incorrect (simply wrong) which leads me to suggest that either your advisors don’t understand Property Rights, or that they were misleading you in preparing that statement.

My question now is …..

Does your Government believe in Property Rights?

Do they agree that it is a key ingredient in what we call western civilization which has given us levels of prosperity in our State that is the envy of many parts of the world?

If you believe in Property Rights, then there can be no arbitrary ‘taking’ as is your current action of legislating a 1.5 km exclusion zone.

If your action is being taken to accommodate some form of “crony-capitalism” deal being done between the State Government and Alcoa (shades of WA Inc.) then this must be done by mutual negotiation, rather than by the stroke of a bureaucratic pen.

Mr Premier, it seems that I have only two alternatives:-

  1. Remain silent while my existing (at time of purchase) Property Rights are legislated away by your government (not a rational option).


  1. Protest vigorously about what I see as a clear breach of government trust that, if it remains unchallenged, will continue to create further uncertainty for all property owners in Western Australia.

I bring this matter to your attention in the hope that you might review the matter and I make myself available, at any time convenient to yourself, to discuss this matter with you further.

Yours respectfully,

Ron Manners,

Managing Director

Mannwest Group Pty Ltd



Governments spend your money unwisely, and then blame you for not paying enough tax!

Ron Manners, 3 June 2015
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Comments to the Free Market Road Show in Budapest, Hungary - May 27th, 2015

You might think that Australia is not relevant to this wonderful country of Hungary but let me assure you that we have exactly the same problems with government that you have and that Greece has…. In fact, it is a universal problem of governments spending your money unwisely, buying your votes for their next election, and then blaming you for not paying enough money in taxes.

They then think that by raising taxes, they will raise more revenue.

They are quite wrong you know because in reality it works the opposite way. Tax rates and tax revenue are quite different.


This graph illustrates that in Australia when taxes were reduced in the 1990s, the tax revenue actually went up, mainly because we were all encouraged to work harder.

Our politicians have forgotten this because many of them don’t understand economics.

Australia has a lot to learn from Hungary with your decision to introduce the simple flat rate tax, as this has given you an opportunity to start reducing your debt.

I’ve just spent an interesting week in Greece, the home of democracy where the original idea was to vote for people who have earned our trust and respect.

Well, all that has changed in most countries where, apart from a few exceptions, people vote for the politicians who promise to steal money from others so they can buy the votes of their own followers and so remain in power.

We are hearing today from various speakers whether this is the case in Hungary but in Australia it can be seen that welfare, unemployment and entitlements have become dynamic growth industries, whilst innovation and productivity are not enthusiastically encouraged.

This will all change in both our countries when the philosophy of liberty and free markets becomes the driving force and the national priority. I have been impressed at the way Barbara Kolm’s Free Market Road Show has taken this message to a combined audience of over 7,000 this year over the past 44 days, visiting 35 European cities.

Well, that’s the big vision and goal on a large scale which will bring us good government, small government, plus governments we can trust and respect.

However, my message for you today is, “what can each of us, as citizens, do to activate our economies right now while we are waiting for the big tide to change.”

There are many things that can be done to draw attention to the insanity of out-of-control government expenditure and I understand that Australia and Hungary are both facing the possibility of having more football stadiums than football teams.

Anything to get votes!

Now, let me quickly tell you the story of the surprise circumstance that gave Australia its best 15 years of remarkable growth.


A major event happened in 1983. A Labor politician who was a former union boss got elected as Prime Minister; he called his first Cabinet meeting and asked, “Have we got any policies?” Nobody knew what policies were and somebody said, “A small group of politicians known as ‘The Dries’ have been talking about policies for years.” However, their own Prime Minister (Fraser), refused to listen but Hawke, the newly elected Prime Minister, requested information on these deregulation policies (note this is a gross over-simplification of the events), he listened to every detail and then asked his own Party members if they had any better policies. When they advise no, he instructed his own Party to ‘do the lot’. As a result, Australia experienced 15 years of remarkable prosperity.

I benefited from this in several ways, including having one of the ‘Dries’, John Hyde, on our Mannkal Foundation’s Board. John and Mannkal’s Andrew Pickford have produced an instruction book - Project Western Australia - which outlines policies for new Governments to adopt which will get the economy moving. It’s available via a link on Mannkal’s website - This is a model of simplicity which reminds any new government why they have been elected. We sent a signed copy of this to every politician.

So the moral of my story is simply, ‘be prepared’.

Have your own ‘instruction book’ ready in case you can fire it off like an intellectual bullet every time you have the opportunity.  That way, and only that way, will we encourage growth and win the intellectual and economic battle of ideas that we must win, if our future generations are to have a future full of opportunity.

Wanted: An App to Replace Government (For Greece & Australia)

Ron Manners, 7 May 2015
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Just as the Uber App has expanded our choices of transport, so too, do we need apps to avoid  being locked into monopolies or government licensed services.

The recently announced $250M program announced by our government to provide ‘nanny services’ to Australia’s working families is the latest attempt to buy votes with borrowed money.

In other countries apps are available for ‘nanny services’ so you can make your own ‘nanny arrangements’, just as you can for fast food deliveries and other items to make your life easier.

If you are wondering why your government is spending hundreds of millions of dollars of your money, looking for someone else’s aircraft (MH370) in an area where there is no evidence of it having come down you might wonder what additional costs we will incur if we actually find the plane.

Will we offer to recover and rebuild that aircraft?

A risk-reward analysis of this expensive effort would look decidedly unimpressive.

Perhaps this would be avoided if there was a ‘missing aircraft app’?

Here in the West we see our State Government borrowing another $8 billion [i] so it can continue to pay itself.

A remarkable result from our ‘once in a lifetime minerals boom [ii]‘

I worry where all this mismanagement will end.

Perhaps I’ll find out at the Emergency Economic Summit for Greece [iii], to which I have been invited, followed by four Greek city visits.

Will I be having a glimpse into Australia’s possible future?

I promise to report-back on this experience (and I’ll watch out for a ‘better government app’).

How We Lost Our Comparative Advantage

Ron Manners, 7 April 2015
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(A question: Where were our leaders and philosophers, when we had a chance to set some sensible rules on how the game should be played?)

Nobel Laureate (1969) Paul Samuelson was once challenged by the mathematician Stanislaw Ulam to “name me one proposition in all of the social sciences which is both true and non-trivial.”

It was several years later that he thought of the correct response: comparative advantage. “That it is logically true need not be argued before a mathematician; that it is not trivial is attested by the thousands of important and intelligent men who have never been able to grasp the doctrine for themselves or to believe it after it was explained to them.”[i]

I humbly suspect that our mining industry’s ‘bright and intelligent’ people were among those who didn’t appreciate this concept of comparative advantage, otherwise they would have resisted repeated successful attempts by various enemies of our industry to de-knacker it.

This has led to a decline from hero status to ‘pathetic performance status’, where investment returns are such that no-one in their right mind would rely on dividend flow from our resource companies to finance their future.

If what I’m saying is true, then this reflects badly on our industry leadership.

Talking about the word ‘leadership’ our Mannkal Foundation ran an essay context last year at Curtin - W.A. School of Mines. The contest challenged students to ’search for leadership in our industry and report on any examples they could find.’

There were 35 finalists in the contest.

Overall it confirmed that, apart from the courageous few (three or four), there exists a leadership crisis in our industry …. generally populated by puppets and caretakers.

The over-use of the word ‘leadership’ could lead to it becoming yet another ‘weasel’ word’ where any real meaning is blurred.’

Here are some other words and descriptions that fall into the category of ‘weasel words’:-

  • Sustainability
  • Corporate Social Responsibility
  • Social Justice
  • Anthropogenic Global Warming
  • Political Correctness
  • Native title
  • Traditional Owners, or the current push to change Australia Day to Invasion Day.
  • & last, but not least, Stakeholders, (where companies are ranking stakeholder interests before shareholder interest …. it is no wonder that investors have gone elsewhere).

    All of these words or phrases have been used by various rent-seekers as weapons in their campaigns. As public choice theory economists have shown, there is a lot of money to be made by the few who benefit, while the costs are designed to be spread across such a wide number of ‘victims’ that, although debilitating, they are not ‘life threatening’.

    The result is that those who benefit greatly from these programs are incentivized to put in a huge effort to advance their interests, whereas the many who share the burden are not as well organized and continue to carry the financial burden.

    The usefulness of public choice theory in explaining bad government (or company) policies was explained to me by Prof. James Buchanan in Moscow, Sept., 1990 and Robert Nozick described resulting government policy….

    “The illegitimate use of a State, by economic interests, for their own ends, is based upon pre-existing power of the State to enrich some at the expense of others.”

    Governments and corporate executives are in fact giving away money that is simply not theirs to give.

    If they had any understanding of public choice theory they would realize that the moral thing to do is simply say no to all these competing demands for corporate support.

    Economists describe this as ‘Concentrated Benefits and Diffused Costs’.

    The costs are nevertheless substantial and have in many cases caused Australia to become uncompetitive.

    *An excerpt from a speech to the Yilgarn 50 Year Retrospective - - full notes on the speech will be available @

    [i] P.A. Samuelson, “The Way of an Economist.” In International Economic Relations: Proceedings of the Third Congress of the International Economic Association. (London: MacMillan, 1969), pp. 1-11.

    Memories of Moscow - The usefulness of Public Choice Theory

    Ron Manners, 11 March 2015
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    The brief mention of ‘Public Choice Theory’ in last month’s Mannerism - ‘Why have we built a million shrines to Islamic Terrorism?’ - link has created considerable interest with many people asking why Public Choice Theory appears not to be taught as a subject in Australian universities.

    The usefulness of Public Choice Theory, in explaining all manner of bad government policies, has been known for many years. So could I cynically ask if this may be why it is not being taught?

    One of the originators of this theory was James Buchanan (1986 Nobel Prize Winner) and I was fortunate enough to be with him on the 40 person, Cato Transition to Freedom, team sent to Moscow / St. Petersburg for several weeks in September, 1990. Our task was to “show the Russians how to handle free-enterprise because it was arriving the following month.”

    Our audience consisted of high ranking government officials / Communist Party operatives, intellectuals and sundry dissidents.

    Some of the audiences were over 1,000 in number, all leaning forward eagerly, with their translating devices to their ears.

    James Buchanan was telling any Russian who cared to listen that one of the greatest dangers they faced was to have their economy captured by ’special interest groups’.

    As a result, of this, they could end up with a catastrophe that would bear no resemblance to a free-market economy, one that would deliver them absolutely none of the anticipated benefits.

    He explained that a study of Public Choice Theory would explain how political decision-making quite often results in outcomes that conflict with the preferences of the general public. Advocacy groups, with their pork-barrel projects, could be the end result of the painful revolution they were currently experiencing.

    He painstakingly explained to them the extreme effort to which those receiving the ‘concentrated benefits’ would go to bring about their objectives at the expense of all those millions shouldering the costs. Those bystanders would not make any effort to resist strenuously and, in fact, be unaware of what was happening.

    Now, 25 years later, looking back, it is plain for all to see that this is exactly what transpired and why so many Russians ‘yearn for the return of Communism’.

    Unfortunately, our Australian experience is not much different (apart from the lack of physical violence) as we can see the detrimental effect, capably explained by Public Choice Theory, as we observe the constant stream of news reports drawing attention to bad government policy forever coming out of Canberra or Perth, delivered as from a conveyor belt with no ‘off button’.

    Here, in Perth, let me give you three examples ….

    1. The Potato Board survives (Western Australia has become an international joke because of this).

    Those benefiting from the existence of the Potato Marketing Corporation of Western Australia receive benefits, concentrated and focused on them and them alone. The rest of us share the burden of the cost of all this as well as reduced choice of potato varieties.

    2. Another example is the extortionate rate of Credit Card Interchange Fees applying in Australia, resulting in Travel Industry Downgrades to Australia: -

    YouTube link

    Click here for text of YouTube

    The attention to these issues by the travel industry should bring this taxi / airline game to an end shortly.

    Recently, our State Government announced that they have reduced the maximum Interchange Fee for taxis permitted, down from 10% (+ GST) to 5% (+ GST).

    However a reasonable rate should be ‘zero percent’, as is charged by the new competitor, Uber.

    The 10% or 5% does not go to the taxi drivers or to the credit card companies; it mainly goes to Cabcharge who pad their lobbying justification with all sorts of ‘administrative fees’.

    The minuscule credit card fee is normally absorbed by most businesses, simply as a ‘cost of doing business’.

    Meanwhile, it’s best to pay for taxi rides or air tickets with cash, as recommended by overseas travel agents.

    3. Another example of the Public Choice Theory explaining some government expenditure mysteries, could be the ‘forest’ of Solar Operated Speed Signs popping up all around Perth’s schools.

    This could be a ’solution’ in search of a ‘problem’ as it appears to solve a non-epidemic of student deaths near schools.

    The schools already have clearly visible speed signs, but the new solar contraptions are a tribute to supreme salesmanship.

    Yes, it will be us again picking up the invoice, $160,000 per school and W.A. has 1,113 schools, so that’s potentially between $36M and $178M neatly spread over all of us.

    All this at a time when the State’s finances are stretched and Perth is already known as the ‘Sign Capital of the World’ with signs everywhere proclaiming what we can and can’t do.

    I won’t even start on Federal affairs, but will leave it to you to apply this Public Choice Theory to our Foreign Affairs Department who are currently spending hundreds of millions of our dollars searching for someone else’s plane, in an area where there is absolutely no evidence of the plane disappearing.

    4. Shortly we will have another example put before us.

    This week’s announcement about major ‘reforms’ to your ‘Superannuation arrangements’, is alerting us to the fact that our Federal Government, in deep trouble financially, has noticed that prudent Australians share $2 trillion in their superannuation funds.

    That’s greater than the entire value of Australia’s Stock Exchange and 30% more than Australia’s entire GDP.

    If these private assets could be seized, or diverted to infrastructure, it is plain to see who will benefit.

    It has happened before, in Australia and elsewhere.

    Perhaps this is why some investment managers are suggesting that a portion of our superannuation funds should be allocated into more ’secure’ investments.

    Watch out whenever governments knock on your door (or your TV screen) with ‘offers to help’.

    It could be that we have learnt from history and know all this already.

    Is that why Australians usually vote against any amendments to the Australian Constitution?

    Those pushing hardest for those amendments will be those receiving the ‘concentrated benefits’.

    Please enjoy your search for ‘bad government policies’ and the driving forces behind them.

    Why have we built a million shrines to Islamic terrorism?

    Ron Manners, 5 February 2015
    Check out the author's latest book at

    Do you remember the old Chinese proverb?

    “Travelling ten thousand miles is better than staying home and reading ten thousand scrolls.”

    Well, after passing through seventeen airports in the last four weeks, I’m convinced that this proverb was written long before we transformed all our airport security facilities into ’shrines’ which demonstrate to the world that Islamic terrorism has decisively won the war against civil society.

    Will we continue to erect these barriers to free movement to the point where we will be forced to stay home and read those boring ten thousand scrolls?

    A good economist would analyse these ‘Airport Shrines’ of sophisticated screening equipment, all expensively staffed, as examples from Public Choice Theory that studies ‘concentrated benefits and dispersed costs’. Those benefiting from the provision of such equipment and services – such as those selling body-scanners or working as intrusive security officers – profit very handsomely from being a part of this nefarious charade. Conversely us many millions of travelling public patiently endure this disruptive probing, poking and inconvenience, feeling powerless to do anything about it.

    Well, next time you travel and have to take out your laptop, empty your pockets, remove your belt and shoes and spread your personal items before the gloating eyes of a bureaucrat, simply think of this as the outcome of your non-action.

    Edmund Burke put it well when he said, “All that is necessary for the triumph of evil is that good men do nothing.”


    Ron Manners, 23 January 2015
    Check out the author's latest book at


    Ron’s comments for Saturday 29th Nov. 2014

    Mannkal’s Outgoing Student Briefing

    I have 3 minutes….

    1. Someone sent me a LinkedIn message earlier this year saying ………, “I’d like you to tell me exactly what you had in mind when you set up Mannkal Foundation.  Was it to get people interested in politics?”

    My reply was, “It was exactly the opposite.  It was to get people more interested in themselves and their own ability to solve problems without getting the government involved (which usually brings on more problems than solutions).”

    So, I’m interested in CHANGE and we want you to be facilitators for change.

    We don’t just mean cosmetic change, like changing one set of politicians for another bunch.

    This is not change as the same political and bureaucratic apparatus remains in place.

    That sort of change reminds me of the Admiral of a ship some years ago who had just inspected the living quarters on one of the ships and he said to the Captain, “This is no good, it stinks below deck and I think it is time for your crew to do something about it.  For instance they could start by changing their underwear.”

    So the Captain immediately went below, called the crew together and issued specific instructions to remedy this problem.  He commanded that Jones change underpants with Simpson and Brown change underpants with Ledger and so on.

    So that is simply change for change sake, but it’s not what I’m talking about today.  I’m talking about fundamental change.  What sort of fundamental change?

    a) Speak up when you see governments spending your own hard earned money on dubious populist causes.

    For instance Perth currently is at risk of ending up with more football ovals than we have football teams.

    b) The problem is not just political either it has infected the business community around the world too.  For instance, every day we see executives of public companies giving away their shareholders’ money on various benevolent causes and then those executives go out and pose as ‘philanthropists’ themselves.  It’s not even their money to give.

    This is replicated in a larger sense by the investment banks where you saw them bringing in the financial crisis by creating those defective derivatives and selling them off all around the world.  Their actions were criminal and those investment banks were subsequently fined billions of dollars.

    But, who paid the fines?

    The shareholders.  The executives didn’t pay the fines it was the shareholders!  The executives kept their jobs and their bonuses.

    Why no outcry?

    Simple, because very few understood the scale of manipulation that was going on at the time.

    2. What got me interested in the power of these short term internship opportunities that you’re embarking on?

    Well, I was lucky enough to be selected when I was about your age, back in 1968, to attend a Duke of Edinburgh Commonwealth Study Conference.

    Prince Philip, himself, trained us on how to get inside the minds of community leaders and people at all levels, simply by asking the right questions.  The first question is never the one that gives you the real answer.

    That experience, combined with an understanding of the free-market’s ability to solve complex problems, has made all the difference in my own personal life and business life over those subsequent decades and I hope that your own experiences, as you go out into your various locations, will give you the same lasting benefits for the rest of your own lives.

    It’s as simple as that.





    A Big Fat Fail for ANU!

    Ron Manners, 9 December 2014
    Check out the author's latest book at

    The appalling behaviour of Canberra’s Australian National University calls into question their understanding of the word ‘research’.

    Proudly, with his biases on full display, ANU’s Vice Chancellor, Prof. Ian Young, announced that the university’s $1 Billion investment fund would no longer hold shares in seven resource companies:

     Iluka Resources Ltd
     Sandfire Resources NL
     Independence Group Ltd
     Santos Ltd
     Oil Search Ltd
     Newcrest Mining Ltd
     Sirius Resources NL

    He said that these companies had failed their socially responsible screening process and the university did not want to invest in companies that cause ’social harm’.

    ‘Social harm’ now joins Australia’s collection of weasel words that can mean anything to anyone, depending on how they were programmed for that day.

    After publicly damaging the hard-earned reputations of these seven fine Australian companies, it was disclosed that ANU’s ‘research’ was limited to what was disclosed on those company websites and not concerned in any way with what the companies actually were doing in the ‘real world’.

    Having made fools of themselves in this way, ANU should not be surprised at any resulting withdrawal of research funding (on the assumption that all their research may be similarly flawed) or if parents and students take steps to investigate the ANU’s research credentials and compare them with other competing educational institutions.