Author Archives: Brian Easton

Richard Thaler’s Savings Principles

This entry was posted in History of Ideas, Methodology, Philosophy, Retirement & Savings on by .

From The Whimpering of the State: Policy after MMP p.75

Keywords History of Ideas, Methodology & Philosophy

People do not behave with the rationalism of the economic theory on which commercialisation was based, especially over their savings. The standard economic theory of individual behaviour is contradicted by the evidence of irrationality (or ‘quasi-rationality’).(1) In practice, as has been attested by numerous studies, the major predictions of economic rationalism fail.(2)

Economics for Children

This entry was posted in Listener, Literature and Culture on by .

C.S. Lewis’s The Voyage of the ‘Dawn Treader’ is a parable about the economy.
.Listener 2 January 1999.

Keywords: Literature and Culture;

A hundred years ago, scholar, critic, novelist, C.S. (Clive Stapleton) Lewis was born. Like his close Oxford friend, J.R.R. Tolkien (of The Hobbit and The Lord of the Rings), Lewis was an Oxford professor. He is best known for his religious writings (notably The Screwtape Letters and The Four Loves), a science-fiction trilogy, his autobiography A Grief Observed, which became a film Shadowlands, and his Chronicles of Narnia for children, especially The Lion, the Witch, and the Wardrobe, which was turned into a film. Lewis’s greatest work of scholarship was The Allegory of Love, about the courtly love tradition of medieval times.

The Casino Economy: Using Other People’s Money to Become a Millionaire

This entry was posted in Business & Finance, Listener on by .

Listener 5 December, 1998.

Keywords: Business & Finance

Use $20,000 to deposit on a $100,000 house, borrowing $80,000 from the bank. Get a friendly valuer to say the house is worth $200,000. Get the bank to lend you another $80,000 against the value of the house (so you have a mortgage of $160,000). With the $80,000 of cash the bank has just given you, buy another four $100,000 houses, borrowing another $80,000 on each house. Get your pet valuer to double the price of the four new houses, so your houses are now worth a $1,000,000. You can borrow an extra $320,000. Repeat.

Globalization and a Welfare State

This entry was posted in Globalisation & Trade, Social Policy on by .

In D. Lamberton (ed) Managing the Global: Globalization, Employment and the Quality of LifeI.B. Tauris. (2002) Proceedings of a conference sponsored by the Toda Institute and the Centre for Peace and Conflict Studies, at the University of Sydney, 28-30 November, 1998. P.163-168.

Keywords: Globalisation & Trade; Social Policy;

Globalization challenges us with the question ‘what choice (or what control), if any, does a society open to the globalized world have over its social and cultural policy?’ A common view is that it will that international competitive pressures are so strong that it will drive every country down to the lowest common denominate of a pure market economy, with a minimum of government intervention.

Some Macroeconomics Of the Employment Contracts Act

This entry was posted in Growth & Innovation, Labour Studies on by .

Paper to the Labour, Employment, and Work Conference 7, at Victoria University of Wellington, November 28-29 1996, published in Labour, Employment and Work in New Zealand 1996, pp.148-156.

Keywords: Growth & Innovation; Labour Studies;

Abstract

Earlier this year Wolfgang Kasper produced a book “Free to Work: The Liberalisation of New Zealand’s Labour Markets” (Centre for Independent Studies). By reviewing this book, this paper is able to shed some understanding of the effectiveness or otherwise of the Employment Contracts Act. On the basis of the emperical evidence it is very difficult to reach, in a systematic way, Kasper’s conclusions about the beneficial effects of the ECA. In particular, the poor productivity growth rules out the likelihood that the ECA was a major contributor to the macroeconomic expansion of the mid 1990s. The Act would, however, seem to have contributed to the poor real wage growth, and the failure of many workers to obrtain a share in the increase in propserity of the 1990s.

The Deindustrialization Of New Zealand

This entry was posted in Growth & Innovation, Labour Studies on by .

Labour Employment and Work in New Zealand: 1998 Proceedings of a conference, 26-27 November, 1998, pp.38-46.

Keywords: Growth & Innovation; Labour Studies;

Abstract

Deindustrialisation is the phenomenon of the secondary sector growing more slowly than the rest of the economy, whether measured by share of GDP or of employment. Almost all rich OECD countries have been expereincing it. However New Zealand has been deindustrialising faster than the OECD average (even if the energy based industrie developed in the 1980s are included). The paper describes rthe phenomenon and discusses why it happened.1

History Repeats: when Will Financial Markets Ever Learn?

This entry was posted in Business & Finance on by .

Listener 21 November 1998.

Keywords: Business & Finance

Desperately keen to go to a film in a fire-prone theatre, you choose a seat which gives you a good view, near an exit. A fire starts during the screening. You head for the door, and are crushed as everyone else does too. Your mistake is the “fallacy of composition”: that which applies for the individual, may not apply if every individual acts on it. One of my earliest lessons in economics seems forgotten today.

When Capital Flees: the Case for Exchange Controls Is Not out Of This World

This entry was posted in Globalisation & Trade, Listener, Macroeconomics & Money on by .

Listener 17 October, 1998.

Keywords: Globalisation & Trade; Macroeconomics & Money;

While I was recently analyzing a government report for a class, a student (who apparently worked on it) became increasingly agitated, asking what was my alternative proposal. Not worrying about analysis, but pursuing policy, is a characteristic Wellington foible. The same fallacy applied to the economists who criticized economist Paul Krugman when he was here. They did not suffer from the disadvantage of having read his analysis, which was considerably more subtle and sophisticated than the critics thought. You dont successfully spend time in top US university economics common rooms and the US economics circuit, without developing powerful defences to the elementary points the New Zealand critics made.

That ”D” Word: What Are We Voting for This Week?

This entry was posted in Governance, Listener on by .

Listener 10 October, 1998.

Keywords: Governance;

The new Minister of Local Government, Tony Ryall, began his first address with “Local Government is an important part of our economy. It’s 3.5 percent of our country’s GDP. Local government can either help the country or it can hinder. With the problems of Asia bearing down on us, every part of the economy has a role to paly in helping our nation weather the storm. Local Government must contribute to the international competitiveness of New Zealand exporters through good infrastructure, efficient regulation, and control over costs.”

Ashwin, Bernard Carl 1896 – 1975: Senior Public Servant, Economist

This entry was posted in Political Economy & History on by .

Dictionary of New Zealand Biography, Volume Four (1921-1940), 1998, p.21-22.

Keywords: Political Economy & History

Bernard Carl Ashwin played a key role in transforming the New Zealand government’s approach to economic management in the 1930s and 1940s. He was born in Paeroa on 22 September 1896, the second of eight children of Manley John Ashwin, a storekeeper, and his wife, Clara Elizabeth Foy. Ashwin left Cambridge District High School after two years, working initially for a local lawyer and a bank before becoming a cadet in the Department of Education in Wellington in 1912. By his own account his late adolescence was a time of sport rather than earnest endeavour. It was ended by the First World War, in which, as a sapper and driver in the New Zealand Divisional Signal Company, he was wounded shortly before the cessation of hostilities.

Remembering Peter Fraser (Review)

This entry was posted in Political Economy & History on by .

New Zealand Studies, 2, September 1998, p. 26-28. (First presented at New Zealand Book Council seminar on Peter Fraser: Master Politician, 29 July, 1998.)

Keywords: Political Economy & History;

There is an Easton family tradition that when Peter Fraser was a carpenter in Auckland, he stayed with my great-grandfather when he came to Wellington on Red Fed business. Perhaps it is an exaggeration: he might have stayed once, or called in on a visit. The connection seems to have continued, for the tradition claims says that as prime-minister Fraser attended my great-grandfather’s funeral. Fraser was a regular attender of funerals so that is possible too.

Intrigue and Deep Recession: Something Rotten in the State Of the Economy?

This entry was posted in Listener, Macroeconomics & Money on by .

Listener 26 September, 1998.

Keywords: Macroeconomics & Money;

Kenneth Branagh’s uncut version of Hamlet reminded us that while the depressed prince dithered and the court of Elisnore intrigued, Fortinbras of Norway invaded and conquered Denmark. Is there a parallel with the pettiness in our parliament, while the economy goes into what looks to be a deep recession? It had begun its downswing stage of the business cycle by the middle of last year, before the Asian crisis began. So the looming collapse of Asian export markets and commodity prices reinforced what was going to be a difficult time anyway.

Productivity Puzzles

This entry was posted in Growth & Innovation, Labour Studies on by .

Why is Output Per Worker Growing So Slowly?

Listener:12 September, 1998.

Keywords: Growth & Innovation; Labour Studies;

A scientist puzzles most when a prediction fails. The generally poor performance of the New Zealand economy since 1985 (inflation excepted), was expected given the overvalued exchange rate as a part of the disinflation strategy. However the poor productivity performance was a surprise. By a careful selection of period or industry, or relying on anecdotes, it is possible to claim the growth of output per worker has been high. But a comprehensive review shows that productivity growth appears to have slowed down since the reforms, despite the pro-reformers promises that it would accelerate. Even those who might have expected the reforms to fail must be perplexed.

Trying to Understand Dr Sutch

This entry was posted in History of Ideas, Methodology, Philosophy, Political Economy & History on by .

Revised Version of the paper in the Stout Research Centre Seminar Series, Wednesday 2 September 1998.

Keywords History of Ideas, Methodology & Philosophy; Political Economy & History

William Ball Sutch, publicly known as “Dr Sutch” and privately as “Bill”, could be remembered as one of a handful of public servants who shaped economic and social policy between the 1930s and the 1960s, to become the father of the export diversification of the 1970s; he should be remembered for his contribution to the early years of the United Nations, especially in the creation of an independent international public service, and the continuation of UNICEF; he will be remembered for being tried and acquitted under the Official Secrets Act; he must be remembered as an intellectual who set down a distinctive and influential vision of New Zealand’s economic and social development.

Heretic to High Priest: Krugman ‘sort of’ Predicted the Asian Crisis Three Years Earlier

This entry was posted in Business & Finance, Globalisation & Trade, History of Ideas, Methodology, Philosophy, Listener, Macroeconomics & Money on by .

Listener: 15 August, 1998

Keywords Business & Finance, Globalisation & Trade, History of Ideas, Methodology & Philosophy, Macroeconomics & Money

“A decade ago, he was the most celebrated heretic. Today, Paul Krugman is the high priest of economics, his career transformed by the unintended consequences of his own iconoclasm. Some of his radical instincts remain; but they now serve a different purpose. The vigour with which Krugman once probed the outer limits of economics is now used to protect its core values. Through his popular writings, he defends the dismal science by exposing fallacies in the public discussion of economics issues.” (Prospect, April 1998)

The Impact Cost Of Increasing Statutory Holiday Entitlements

This entry was posted in Labour Studies on by .

Report for the New Zealand Engineering Union, August 1998

Productivity and Employment contains an estimate of average annual hours worked by OECD economies.

Keywords:

There is a proposal to introduce four week’s statutory leave. The current situation is that the Holidays Act makes provision for an annual leave entitlement of three weeks (15 days) paid leave per annum. In addition there is also statutory provision for 11 days, although because Anzac and Waitangi days do not “mondayize” the number of such days are 10.4 in an average year. This paper estimates the impact cost of increasing the statutory minimum to four weeks a year.

Swing Low: a Short Economic History Of New Zealand

This entry was posted in Listener, Macroeconomics & Money, Political Economy & History on by .

Listener 1 August 1998.

Keywords: Macroeconomics & Money; Political Economy & History;

The Governor of the Reserve Bank finished a recent speech with “the sharp downturn in may of our export markets may well turn out to be the most serious shock to it the New Zealand economy since the oil shock of the seventies.” Here is a summary of the main shocks and recessions over our economic history.