Monthly Archives: March 2011

Language is a virus

Language is a virus and we are its host. Some strains of language are virulent and spread rapidly. Others are weaker, struggling to infect their hosts and easily supplanted by stronger challengers.

The natural habitat of the language virus is the social group. Some of the more obvious forms are schoolyard slang (what was unreal in my day was sick in later years, but could now be random) or the jargon of specialists. Sometimes the ponds the virus infects can be large ones. By 2008, everyone in Australia knew that “GFC” stood for “Global Financial Crisis”, but I repeatedly saw visitors from the US or UK mystified by this initialisation.

The corporate world is a rich source of (often meaningless) jargon, as decried by Paul Keating’s speech writer Don Watson in Death Sentence: The Decay of Public Language. But what has fascinated me of late in the corporate world is not the language of mission statements, paradigms, closure or value-add, but simpler more innocuous words or phrases that flourish within organisations. After a number of years away, I have been back less than two months at a firm I worked for before and I was immediately struck by the near universal use of a few expressions that I am sure were not being used there four years earlier, and were certainly not used at the company where I worked during the intervening years.

I have now realised that it is impossible to attend an internal meeting without someone suggesting an alternative lens with which to view a problem rather than, say, an alternative perspective. Even more prevalent is “calling out”, as in “I’ll just call out one or two points on this slide” or “Last time we met I called that out as the primary challenge”.

The point is not to criticise these terms themselves, which are quite reasonable means of expression, unlike so much of the corporate-speak that Don Watson ridicules. You could even make the case that “lens” is a better term as it suggests a point of view which can be quickly and simply changed, whereas “perspective” often has connotations of being more permanent. What fascinates me is the way these words have established such a firm hold on the organisation. It makes the social dimension of shared language very clear: if I start using the same terms as you, it makes me seem more a part of the group, which in turn reinforces your use of the terms. All of this can happen subconsciously, so that the hosts can be quite unaware of the infection. Some may notice, but to a newcomer like myself, the infestation is startlingly clear.

It probably will not be long until I find myself calling out the merits of putting on a different lens, but for now I am trying to be strong.

Irony

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Last year I wrote about one of the more amusingly ridiculous attempted spam comments intercepted by my blog’s spam filter. It may be genius, stupidity or just an excellent coincidence, but a comment spammer has now attempted to add the following comment to that post:

There are actually loads of details like that to take into consideration. That may be a nice level to deliver up. I provide the ideas above as normal inspiration however clearly there are questions like the one you carry up where a very powerful factor can be working in trustworthy good faith. I don?t know if greatest practices have emerged around things like that, however I’m positive that your job is clearly identified as a good game. Each boys and girls feel the affect of just a moment’s pleasure, for the rest of their lives.

The internet is a funny place.

Carbon tax

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Our regular guest writer James Glover (@zebra) returns to the Stubborn Mule today to look at the real cost of carbon tax…and who pays the cost.

It is no surprise that the latest Newspoll shows the Labor Government sinking under a concerted attack by the Opposition, and its supporters in the media, over the Carbon Tax. The incessant cry of “a great big new tax” was bound to have an effect on the marginal voters who derive their political views in atavistic ways. In fact most of the political arguments lately recently seem to revolve around the distinction between levies and taxes. The trick seems to be if your opponents propose it then it is a tax and if you propose it is a levy—the latter being used by both sides to describe variously the flood levy (Labor) and the parental leave levy (Coalition). Taxes, as opposed to levies, apparently lead to profligate spending and are downright un-Australian. It makes you wonder what they use to fund hospitals, schools and roads.

So how does the Carbon Tax work? And what does it mean to say it is “revenue neutral”? Is it really a tax or “not really a tax” as the Treasurer, Wayne Swan, claims? Suppose the government wants to set up a Carbon Tax for the purposes of reducing carbon emmissions. It does this by imposing a tax (or levy or fee) on the price of goods and services that are deemed to ultimately cause high but avoidable (hence no agriculture) emissions of carbon. This of course raises the price of these goods e.g. electricity. If we impose a Carbon Tax on coal-generated electricity (the sine qua non of carbon emitters) then expect the power companies to pass on all or most of the increase to consumers. Now here’s the thing, the money the tax raises will have gone to subsidise the increased power bills of these very same power consumers. By exactly the same amount as the price should rise. So in effect nothing happens. In other words, at a base level the Carbon Tax does nothing. It has no benefits and no costs. Isn’t it really “a great big snooze tax” and not “a great big new tax”?

The Carbon Tax has one (fully intended) important consequence. If power emitters want to increase their profits they can do so by switching to lower carbon emitting alternatives. These might already be available or they can pay to research and develop them. And because of the tax what was previously uneconomic will now be made viable. Since these alternatives are really more expensive than coal-based power, without the tax, you might ask what is really happening at the cost end. It seems like a tax which costs nobody nothing, magically makes alternatives to carbon emitting industries economic. Voila!

Well that’s what the government would have you believe. On closer examination though it is precisely when the Carbon Tax has its intended effect that the cost gets passed onto consumers. But not when the Carbon tax is first introduced. To see why let’s have a look at an example.

Suppose the cost per unit of producing electricity from coal is $100. The power company charges $110 to consumers and so makes a $10 profit. The Govt introduces a 20% Carbon Tax on the cost of producing electricity using coal. This raises the price to $130 in order for the company to maintain its $10 profit margin. That’s $100 for the coal, $20 for the tax and a profit of $10. The extra $20 gets passed onto the consumer whose bill is now $130 per unit. However after the $20 subsidy (paid for by the $20 proceeds of the tax) they still only pay $110.

In other words: the producers, the consumers, and the government are no better or worse off immediately after a Carbon Tax is introduced. But what happens if the Carbon Tax is successful in reducing emissions? That is when consumers end up paying more. The cost to the company, including the tax, of producing one unit of electricity is $120. Suppose an alternative non carbon-emitting energy source is found which costs $115 per unit. This is more than the coal-based cost before the tax, but less than the cost with the Carbon Tax as this carbon-free energy source, let’s call it “sunshine”, attracts no Carbon Tax. So the company, in order to maintain their profit of $10, charges $125 per unit, less than coal based power with a Carbon Tax. But now the consumer receives no subsidy either so even though their total bill has dropped from $130 (with carbon tax and a subsidy) to $125 without a subsidy. It now actually costs them $125, an increase of $15 over the cost before the carbon tax was introduced and even immediately afterwards. This of course is the extra $15 per unit that it costs to produced electricity from sunshine rather than coal.

That is how the Carbon Tax really works and ends up costing the consumer. You start out with a Carbon Tax which costs nobody anything and end up without a Carbon Tax that everybody ends up paying more for. When it has its intended effect, and there is no coal based power, but also no more money for subsidies. And, in principle, no more carbon pollution.That of course though is really the point. There is a (currently) hidden cost of producing carbon as carbon dioxide and methane in global warming and that is, if the system works, the $15 extra you pay to solve the problem by removing carbon from the economy.