Should we be more concerned about the policies being followed by the European Central Bank?

Jim was obviously agitated by my response to his question. He had just asked me whether I thought that the latest political deal in Europe would resolve the European financial crisis. Instead of saying I didn’t know I had tried to list some relevant factors, none of which I knew much about. I ended my list by mentioning that the policies being followed by the European Central Bank (ECB) were preventing the governments of southern Europe from following their pre-euro strategy of using high inflation to fund their profligacy.

‘I suppose that means you would be a strong supporter of the ECB’s anti-inflation policies’, Jim said. ‘You were an inflation hawk back in the 1980s. And I can remember a discussion in 2006 when you told me you were worried about expectations of higher inflation in America and the possibility of a re-run of the stagflation of the 1970s and 1980s. A year or so later inflation expectations started to fall. Then in 2008 we had the global financial crisis and it became obvious to everyone that there was actually more reason to be concerned about deflation than inflation’.

Jim was right about the 1980s, but I couldn’t recall our conversation in 2006. I pointed out that it wasn’t necessarily inconsistent to be concerned about rising inflation expectations in 2006 and to be concerned about the emergence of deflation a couple of years later. I suggested that central banks should be aiming to keep inflation expectations low and stable.

Jim said: ‘The fact that you keep talking about inflation expectations suggests you must have read some of the material on Scott Sumner’s ‘Money Illusion’ blog.  I started to try to explain that Scott actually recommends that central banks should target NGDP (nominal GDP i.e. aggregate demand) rather than inflation expectations, but Jim cut me off. He said: ‘I followed the link on your blog to Sumner’s blog to try to understand the European financial crisis. You obviously haven’t read whatSumner wrote a couple of weeks ago about the ECB’.

I had to admit that I haven’t been reading Scott’s blog regularly over the last couple of months. Jim said that in the post about the ECB Scott had a chart about inflation expectations in Europe that had been sent to him by Lars Christensen. At that point Jim got slightly distracted. He told me that I should read a post that Christensen had written recently on his blog, ‘The Market Monetarist’, about Calvinist economics and the gold standard mentality. ‘Christensen must have written that post with people like you in mind’, Jim said.

Jim eventually came back to the chart showing inflation expectations in Europe. He explained that the chart implies that the ECB has been driving inflation expectations sharply lower during August and September despite its mandate to produce stable inflation.

Jim ended by saying: ‘Look, why don’t you write something on your blog telling people to read Scott Sumner’s post about the ECB. And don’t forget to quote the passage where he points out how why it is so important for inflation expectations to be kept stable in Europe at present’.

I’m not sure which passage Jim wants me to quote, but this one seems to capture the main point:

‘I’m not saying a policy of steady eurozone inflation would solve the debt crisis, obviously it wouldn’t.  But the current policy is making it far worse than it needs to be.  The US made the same mistake in mid-2008.  Even at that time the subprime crisis was well understood, and estimated losses to the US banking system were quite high.  But when the Fed drove NGDP expectations much lower in late 2008 … the debt situation got far worse, and spread far outside the original subprime sector.  Now we are seeing the euro sovereign debt crisis spread to more and more countries.’

Perhaps we should be more concerned about the potential effects of the aggressive anti-inflation policies being followed by the ECB. 

Will Bhutan succeed?

Some readers will know exactly what I mean by this question. Others may be wondering: Where is Bhutan? What does he mean by success? And why should we care?

Bhutan is a small country which has not had much exposure to the modern world. The first roads were built in the 1960s and TV was only introduced in 1999. It is located at the eastern end of the Himalayas, sandwiched between India and China. It covers about the same area as Switzerland and has a population of about 700, 000 people. About 75% of the population are Buddhists and most of the remainder are Hindus of Nepali descent.

The 'Tiger's Nest' monastery, near Paro

What do I mean by success? About 40 years ago the former king of Bhutan famously declared that ‘gross national happiness is more important than gross national product’. This play on words led eventually to gross national happiness becoming a national objective of Bhutan. In terms of this objective, Bhutan will succeed if it can modernize so that the people can enjoy the benefits of the modern world, without major social problems, loss of culture or environmental damage.

Why should we care? Bhutan’s approach to pursuit of happiness is a social experiment that is attracting a lot of attention around the world. A few months ago the United Nations General Assembly accepted unanimously a resolution sponsored by Bhutan which recognizes the pursuit of happiness as a universal goal. In the years to come we can expect to hear a lot about the success or otherwise of Bhutan’s approach to pursuit of happiness.

So, will Bhutan succeed? If we look at the matter from a management perspective, some of the necessary conditions for successful pursuit of goals have been established: 

• The government has a fairly clear view of what pursuit of gross national happiness means. It involves promoting socio-economic development and good government (including a vibrant democracy), while preserving cultural heritage and protecting the environment.
• Surveys are being conducted to monitor progress. The surveys monitor the views of the people about the performance of government as well as resilience of cultural traditions, ecological knowledge, living standards and psychological well-being. 
•  Survey results are used in de veloping policy e.g. a finding that meditation was not being practiced as often as expected led to meditation classes being offered in schools.

   

Archery: the national sport and an important cultural activity 

The chances of success might look good from a management perspective, but will the people of Bhutan actually be any more successful in coping with the modern world than the people in other countries have been?

The first point, which seems obvious to me from my short visit, is that most of the people of Bhutan, like most people elsewhere, want the amenities of modern life. The more they know about how people live in wealthy countries, the more they are likely to aspire to have the stuff that people in wealthy countries take for granted – the household items that take the drudgery out of life, the phones and internet access that enable us to stay in touch with each other, motor vehicles – all that and more. It will become obvious to an increasing proportion of Bhutanese that a lot of this stuff can be useful - even though they may be happy with what they have at the moment.

My second point is that Bhutan’s government is not likely to come under much, if any, pressure from the public to sacrifice environmental or cultural objectives to achieve a higher economic growth rate. There is considerable potential for economic development that does not involve major conflict with environmental or cultural objectives. For example, there is potential to sell more hydro power to India and to expand tourism based on cultural and environmental resources.

The big question, in my view, is the extent to which Bhutan will be able to obtain the benefits of modernity without ending up with the social problems of modern societies? How will they cope with the potential for weakening of traditional values and support systems as larger numbers migrate from rural areas in search of a better life in the cities? How can they ensure that young people continue to acquire social values and avoid the weakening of the social fabric (which seemed evident, for example, in the orgy of rioting and looting in London a couple of months ago)? How can they provide a social welfare safety net without ending up with large numbers dependent on welfare benefits? How can they avoid the excesses of a consumer society, with substantial numbers of people incurring excessive debts to live unaffordable lifestyles? How can they avoid having large numbers of people living unhealthy lifestyles, addicted to TV or the internet and vulnerable to inducements of advertisers?

I think there are grounds for hope that the government of Bhutan will learn from the mistakes of other countries and come up with sensible answers to such questions. It is obvious from the international conferences it has been holding that the government is actively seeking to learn from experiences of other countries. The way survey results are being used also provides grounds for hope that Bhutan will succeed. For example, the emphasis that the government is placing on providing opportunities for children to learn skills in mindfulness makes me hopeful that young people in Bhutan are more likely to learn as they grow up that it is their individual responsibility to make best use of the opportunities available to live a meaningful life. What that means at a practical level is learning to accept responsibility for the important choices in their lives, including choices about such mundane matters as what to eat and when to switch off the TV.

On balance, I think there is a better than even chance that Bhutan will succeed in modernization with fewer social problems than have been experienced elsewhere in the world.

Thimphu: the capital city of Bhutan

What is the price of civilization?

According to Jeffrey Sachs, in his new book ‘The Price of Civilization’, the United States needs an increase in tax revenue equal to about 6 percent of GDP in order to balance the budget and ‘pay for civilization’. He arrives at this figure after making allowance for some cuts in government spending and increases in spending of about the same magnitude in areas such as education, training, childcare, infrastructure modernization and foreign aid.

Jeff Sachs asks himself a ‘crucial question’: ‘how do Canada, Denmark, Norway, Sweden, and other countries manage to educate their young, fight poverty, modernize their infrastructure, enjoy life expectancy well above America’s, and still maintain a budget that is more in balance than America’s?’ He concludes: ‘The answer, of course, is that the other countries tax their citizens more heavily in order to supply more public goods, including in the case of the Scandinavia, universal access to health care, higher education, and child care and support for families with young children’.

Jeff’s revenue-raising proposals would increase America’s tax revenue as a share of GDP to a magnitude similar to that of Canada, New Zealand and Britain. He points out that America’s tax revenue as a share of GDP is currently current second-lowest among the high-income jurisdictions considered, ‘just slightly larger than Australia’. (The comparison doesn’t include Singapore or Hong Kong.)

I was surprised to see that America now has a bigger government than Australia. This must have something to do with the relatively poor economic performance of the US over the last couple of years. It certainly can’t be attributed to any recent cuts in government spending in Australia.

But let us not get side-tracked by the trivia of short-term movements in GDP. There is a fairly clear implication in what Jeff has written that he thinks Australia must be uncivilized because tax revenues as a share of GDP are relatively low in this country.

Australians are so used to being told that they are uncivilized that they rarely take offence. But it is surprising to see this implied in the writings of an American. We tend to associate the view that Australians are uncivilized with chinless members of the English aristocracy, rather than people who espouse democratic principles.

Nevertheless, I think Jeff may have a point. I don’t want to undermine the efforts of Australia’s foreign minister to portray us as civilized people, but it is a difficult case to make. Australians generally make little effort to even appear to be civilized. Most of us require very little lubrication before singing our national song, which is a eulogy to a hobo who steals sheep. With very little more lubrication many of us can be encouraged to sing an advertising jingle we learnt as children, that identifies us ‘as happy little Vegemites, as bright as bright can be’. In this instance it may be equally true that ‘what we identify with establishes our identity’ and that ‘we are what we eat’!

More seriously, perhaps, it is difficult to argue that social outcomes in Australia are up to the standards that might be expected of a civilized country. Australia’s rating according the UN’s human development index (HDI) is only 0.937, just 6 percent higher than that for Sweden. When inequality is taken into account, our performance is even worse – a rating of 0.864, just 5 percent ahead of that for Sweden. Average life expectancy at birth in Australia is only 81.9 years, just a few months ahead of Sweden. Australians only spend about 12 years at school on average, again only a few months more than Swedes. In the few years Australians do spend at school, they don’t actually learn much. Not only are our PISA scores well below those in Shanghai and Korea, they are only slightly higher than those for Sweden.

I hope that anyone from Sweden reading this has a sense of humour. My real point is not that Sweden is uncivilized – just that it is not high levels of taxation that make Sweden a civilized country. Those who argue that Sweden is civilized because it has a big government should consider how they would respond to the view that Sweden is civilized country because it generally adopts market-friendly policies. According to the Heritage Foundation’s measures of economic freedom, Sweden’s policies are more market-friendly than those in the United States in relation to business, trade, investment, finance, monetary policy and corruption - just about all aspects of policy other than size of government and the labour market.

The general point I have been trying to make (in case anyone has missed it) is that it doesn’t make much sense to equate civilization with the size of government. Social outcomes in high-income countries with big governments tend to be fairly similar to those of high-income countries with smaller governments. It is possible to provide a decent social safety net, without huge levels of taxation if benefits are means tested. I have provided some references to research on this topic in a paper I wrote last year for New Zealand’s 2025 taskforce (‘How much does size of government matter for economic growth?’, 2010, p11).

I started off to review ‘The Price of Civilization’, but I haven’t progressed very far. The recommendation for higher taxes is probably the most important recommendation in the book – and it is the issue raised in the title – but that is only part of what the book is about. In particular, the book contains an interesting discussion about what is wrong with American politics, which I will consider in a later post.

Are freedom and trust linked to social values and support for free markets?

In my last post I presented a table showing that countries in which people have strong social values tend also to have high proportions of the population supporting free markets. Unfortunately, that table is difficult to read because of the amount of information it contains, so I am presenting a ‘pruned’ version below.


Apart from presenting fewer indicators, the main difference has to do with the ranking of countries. In my last post, the countries are ranked according to levels of interpersonal trust. In the table below, the countries are ranked by an index (not shown) that gives equal weight to interpersonal trust and feelings of individual agency. As before, each entry in the table is presented against a green, yellow, orange or red background depending on how favourable it is to either the market economy or community values.

The table suggests that values supporting both community and free markets tend to be stronger in countries in which there are relatively high levels of trust (or absence of distrust) and relatively strong feelings of individual agency (a high proportion of individuals who feel that they have some freedom of choice and control of their lives). It seems reasonable to expect that societies that encourage tolerance and respect for others, as well as confidence in the justice system, would tend to foster both trust and the feelings of agency that are necessary for entrepreneurial innovation. Paul Zak and Stephen Knack noted that high levels of trust are favourable to economic activity because they reduce transactions costs (‘Trust and Growth’, The Economic Journal, 2001). Zak has argued subsequently that moral behaviour - i.e. trustworthy behaviour - is necessary to reduce cheating without exorbitant transactions costs. It also enables employees, for example, to be given greater opportunities for self-direction (Zak, ‘Moral Markets’, 2008, xvii and 273).

Favourable economic outcomes generated by relatively high levels of trust and strong feelings of individual agency could be expected to generate attitudes more favourable to the functioning of a market economy. As noted in a recent post, individuals with relatively strong feelings of agency tend to have favourable attitudes towards markets.

The next step in the analysis is to consider the available evidence on changes over time. What changes have occurred in community values in market economies over the last couple of decades?

Why do people in countries with strong social values tend to support free markets?

This question presupposes that people in countries with strong social values do actually tend to support free markets. Some evidence in support of this is provided in the table below.


The table has been constructed from information in the World Values Surveys conducted in 2005 to 2008. Countries are ranked by levels of inter-personal trust i.e. the percentage of people who are more inclined to agree with the proposition that ‘most people can be trusted, rather than that ‘you can’t be too careful’. Each entry in the table is presented against a green, yellow, orange or red background depending on how favourable it is to either the market economy or community values. Further information about the definition of the variables in the tables may be obtained from the last couple of posts (here and here).

Hint: If you click on the table you might still need a magnifying glass to read it!

The fact that there is more green and yellow at the top of the table and more red and orange at the bottom reflects a positive relationship between values supporting the market economy and community values. Why is this so? I suspect the answer has to do with the development of institutions that support both inter-personal trust and strong feelings of individual agency.

I will write more about this later (and possibly present some information from the table in a more readable form).

Do people who have negative attitudes toward wealth accumulation have greater concern for community?

If people are cynical about the potential for everyone to share in the benefits of wealth creation it might seem reasonable to expect they would tend to have relatively more concern for community. If they think it is only possible for individuals to get rich at the expense of others, it might be reasonable to expect them to have a particular concern for helping other people and/or protecting the environment. On the other hand, as noted at the end of my last post, people who have strong feelings of individual agency - who tend to have positive attitudes toward wealth accumulation – do not tend, as a group, to be particularly selfish in their attitudes.


The simple analysis I have used to test these conjectures has involved comparing responses in the World Values Survey (WVS) to a range of questions relating to attitudes toward community of people with relatively negative and relatively positive views about capital accumulation. In asking about attitudes toward wealth accumulation, the WVS specifies a rating of 1for agreement that ‘people can only get rich at the expense of others’ and of 10 for agreement that ‘wealth can grow so there’s enough for everyone’. Data used in this exercise are from the 2005-2008 survey covering about 75,000 people in 57 countries.

The results of the exercise are reported in the following chart. For the purpose of constructing the chart, responses to the capital accumulation question of 1 to 3 have been labelled ‘negative’ and responses of 8 to 10 have been labelled ‘positive’.

The chart suggests that there isn’t much difference, on average, between the social values of people with positive and negative attitudes towards capital accumulation. People with positive attitudes seem to somewhat less selfish than those with negative attitudes on all the items considered.

Some readers might be wondering whether this finding reflects a greater concentration of people with negative attitudes toward capital accumulation in countries in which the social fabric tends to be weaker. If that is so, it is not likely to be entirely coincidental. The question deserves further research.

Are attitudes towards success, wealth accumulation and competition linked to feelings of individual agency?

People with strong feelings of agency feel that they have a great deal of choice and control over the way their lives turn out. As shown in the charts below, such people tend to have more positive attitudes toward hard work and success, wealth accumulation and competition. However, people who do not feel that they have a great deal of choice and control do not, in general, seem to be particularly cynical; they are just tend to be less positive than those with strong feelings of agency.


Readers who would like to know why I am considering questions such as this might find an answer in an earlier post.

The data used in this exercise are from the World Values Survey 2005-2008 which surveyed about 75, 000 people in 57 countries. The question concerning feelings of agency asks respondents how much freedom of choice and control they feel over the way their lives turn out. A rating of 1 means none at all and a rating of 10 means a great deal. The average rating is 7. Ratings of 1 to 4 are relatively uncommon and responses with those ratings have been aggregated in the charts shown below.

The first chart shows how responses relating to attitudes towards the relationship between hard work and success vary among people with stronger and weaker feelings of personal agency. The survey asks whether respondents agree with the statement ‘hard work brings success’. A rating of 1 means that ‘in the long run hard work usually brings a better life’, whereas a rating of 10 means that ‘hard work doesn’t bring success – it is more a matter of luck and connections’. Ratings have been aggregated in the chart to show the differences more clearly; ratings 1to3 have been labelled ‘positive’, ratings 4 to 7 have been labelled ‘mixed’ and ratings 8 to 10 have been labelled ‘negative’. The data in each of the charts add to 100% on the depth access (i.e. for each level of agency, the red, blue and green columns added together equal 100%) .

The second chart shows how responses related to attitudes toward wealth accumulation vary among people with different feelings of agency. The survey question asking about attitudes toward wealth accumulation specifies a rating of 1for agreement that ‘people can only get rich at the expense of others’ and 10 for agreement that ‘wealth can grow so there’s enough for everyone’. Ratings 1-3 have been labelled ‘negative’, ratings 4-7 have been labelled ‘mixed’ and ratings 8-10 have been labelled positive.

The third chart shows how responses related to attitudes toward competition vary with agency. The survey question specifies a rating of 1 for agreement that ‘competition is good; it stimulates people to work hard and develop new ideas’ and of 10 for agreement that ‘competition is harmful; it brings the worst in people’. Ratings have been aggregated and labelled as for the first chart.

The pattern shown in all three charts is fairly similar with people who have strong feelings of agency tending to have more positive attitude toward success from hard work, wealth accumulation and competition. This result was much as I had expected but I had thought the attitudes shown by people with relatively low agency might be somewhat more negative than they appear to be.

What do the results mean? Previous research has suggested that feelings of agency are related to the amount of freedom that people actually experience in their lives. The results suggest that people who feel a lot of freedom tend to have more positive attitudes toward success from hard work, wealth accumulation and competition.

Previous research suggests that people who have strong feelings of agency are not particularly selfish in their attitudes. I wonder whether that is also true of people who have positive attitudes toward wealth accumulation.

Postscript:
That question is followed up here and here.

Is Maslow's hierarchy of needs a pernicious doctrine?

I recently heard a distinguished economist claim that Abraham Maslow’s hierarchy of needs is a ‘totally pernicious doctrine’. He expressed a strong objection to the idea that ‘first you have to satisfy the body and, only when you have done this can you satisfy the spirit’. I will refrain from naming the individual and providing a link to his remarks because I am not sure that the comment represents his considered view. He might have just been intending to provoke further thought about Maslow’s theory.


Maslow presented his hierarchy of needs as a theory of motivation in a paper written in 1943. He suggested that a person who is lacking in food, safety, love and esteem would probably hunger for food more strongly than anything else. He hypothesized that humans are motivated by a hierarchy of needs, which they seek to satisfy in the following order: physiological, safety, love, esteem and self-realization. He acknowledged that the order of need gratification might not be as rigid as this ranking implies and that it was not necessary for a particular need to be entirely satisfied before a higher need emerged.

It seems to me that the idea at the core of Maslow’s theory is that gratification of the most basic needs releases a person to focus on higher needs. This idea of natural progression to satisfaction of higher needs is the opposite of extreme asceticism which implies that higher needs can only be met through denial of desire. There may also be some tension between Maslow’s view and the Buddhist view that gratification of desires can be addictive, as explained by Lam Goembo Dorji in a recent paper.

In testing Maslow’s theory it seems to me that the central issue is the extent to which people actually move on to satisfy higher needs as their incomes rise. Maslow’s theory should be rejected if most people do not respond to rising incomes by moving on to satisfy higher needs. It ought not to be rejected just because a few relatively enlightened people are able to flourish even though they have relatively low incomes.

A recent study by Louis Tay and Ed Diener tests Maslow’s theory using data from the Gallup World Poll as indicators of the needs identified by Maslow. The authors found some support for Maslow’s theory in that people tend to achieve basic and safety needs before other needs. They also found that fulfilling the various needs has relatively independent effects on subjective well-being, so humans can derive happiness by simultaneously working on a number of needs regardless of the fulfillment of other needs. (The paper, entitled ‘Needs and Subjective Well-Being Around the World’, JPSP (2011) can be obtained here, and Bridget Grenvill-Cleave has written a good summary here.)

There are some other posts on this blog that are relevant to the priority that people give to various needs. In a recent post I discussed evidence presented by Christian Welzel and Ronald Inglehart that as the contribution of greater financial satisfaction to overall life satisfaction has become ‘saturated’ to a greater extent with higher levels of economic development, people tend to achieve higher life satisfaction to a greater extent through activities that enhance feelings of agency.

In the post entitled ‘Does the law of diminishing returns apply to a level of achievement?’ I used Australian survey data to explain life satisfaction in terms of levels of satisfaction with seven domains: standard of living, health, safety, relationships, community connectedness, future security and achievement. Best fit was obtained from a linear function, suggesting that the various domains have independent effects on life satisfaction. However, satisfaction ratings in the various domains are correlated - for example, there is a relatively high correlation between satisfaction ratings for relationships and achieving.

In a related study (reported here) I attempted to identify whether high satisfaction in any particular domains of life are more necessary than others to high satisfaction with life as a whole. The criterion used was the percentage of respondents with high satisfaction with life as a whole among those with low ratings on particular domains of quality of life. The relevant percentages were follows (ranked in order of importance of each domain): personal relationships 10.8%, achieving in life 11.8%, standard of living 12.8%, future security 15.6%, health 15.9%, community connectedness 19.0% and safety 20.3%. The results suggest that satisfaction with personal relationships and achieving are more necessary to high life satisfaction of Australians than is satisfaction with standard of living and future security.

A post entitled ‘Are the world’s poor motivated solely by survival needs?’ discusses survey evidence about the ways very poor people spend their incomes. Surprisingly, they tend to spend a substantial proportion of their income on entertainment, suggesting that they are not motivated entirely by survival needs. The post discusses why this might be so and also why some wealthy people stay fixated at a materialistic level. The way people respond to experiences depends importantly on what those experiences mean to them. It is possible for wealthy people to feel deprivation and for poor people to feel that living means a lot more than meeting physiological needs.

So, where do I end up? I like the idea that self-realization is a fundamental human need that people seek to satisfy if they are able, but I don’t think gratification of desires is a particularly helpful frame of mind - individuals are more likely to realize their potential if they seek equanimity rather than pleasure. Yet, it seems obvious that human flourishing is not possible unless basic physiological needs to be met. I am impressed by the evidence that there is a general tendency for people to move on to satisfy other needs as their basic physiological needs are met. At the same time, there is plenty of evidence that some people achieve high levels of satisfaction with life at relatively low incomes and that some wealthy people are not satisfied with their high income levels. The extent to which people perceive increased economic opportunity as an opportunity to satisfy higher needs may be strongly influenced by culture, values, frames and beliefs.

Maslow may have been too simplistic in suggesting that gratification of the most basic needs releases a person to focus on higher needs, but that doesn’t mean his theory is a pernicious doctrine.

Should advertising be allowed in schools?

Nicola has sent me a message presenting the following views and providing links to a range of different web sites discussing the issues involved:

‘A school should be a simulating learning environment for our children. We trust our schools with our children to provide them with an opportunity to learn and grow. The school breaks this trust by allowing corporations to influence and manipulate their minds. As adults we have the ability to be critical of advertising, however, a school environment is one of trust, therefore, children are more likely to take the advertising at face value. Furthermore, the advertising appears to be endorsed by the school that heightens its power when compared to other contexts.

America has led the way on this form of advertising in schools. The present push by the major supermarkets to put advertising billboards on our school gates and in our schools in the form of voucher collectors is the first step. The use of TV screens with commercials and product placement in our classrooms is not far behind this. Is this the direction we want to take our education system and the welfare of our children?

There should be a blanket ban on advertising in schools as it exploits our children. In the interest of your children, please speak to your children's school management and lobby for the removal of banners and voucher collection.’

It seems to me that this is a matter that should be decided by parents’ organisations in individual schools. If parents think that some form of commercial sponsorship is an appropriate method of fund raising, why should I object?

However, there is probably no harm in expressing a personal view. In my view schools must be really desperate for ways to raise money to allow commercial organizations into schools to give prizes to kids for singing advertising jingles. What is the world coming to?

For further explanation of what Nicola is writing about, see this story in ‘The Australian’. There is a paper here discussing the methods of modern marketing being applied in schools.

Postsript:
I neglected to say that Nicola Moir is a Sydney artist.  The emphasis of her work is on what she describes as 'the forgotton spaces we inhabit between work, home and leisure' - 'the spaces where we come together as a community'. Her web site is well worth visiting. Among other things it might prompt you to consider whether you really are 'a happy little vegemite'. (For the benefit of non-Australians, the vegemite song is probably the most successful advertising jingle ever aimed at children in Australia.)