Author Archives: Brian Easton

All for One: Robert Reich’s Recipe Living in a Globalized World

This entry was posted in Globalisation & Trade, Listener on 18th July 1998 by Brian Easton.

Listener 18 July, 1998.

Keywords: Globalisation & Trade;

Robert Reich, Clinton’s previous Secretary of Labour, is a living embodiment of his own theories. His The Work of Nations argued that globalization has made it is increasingly hard to say where a particular product is produced, because the various components are made in many different countries. A Japanese marque car may have more American content than an American marque which uses Japanese components. (Either may have New Zealand made wheel hubs.) It is also true for Reich, for his artificial hips come from Germany, and were designed in France.

The Politics and Sociology Of Economic Forecasting

This entry was posted in Macroeconomics & Money on 7th July 1998 by Brian Easton.

This is an extended version of an article published in The New Zealand Herald July 7, 1998.

Keywords: Macroeconomics & Money;

Last week parliamentary leader of ACT, Richard Prebble, called for the resignation of the Secretary of the Treasury, Alan Bollard, because of inadequate Treasury economic forecasts. The call is so political that it may be dismissed as silly, but it also raises wider questions about economic forecasting in general.

In Stormy Seas: Can We Cope when a Wave Broadsides Our Economy?

This entry was posted in Growth & Innovation, Listener, Macroeconomics & Money on 4th July 1998 by Brian Easton.

Listener 4 July, 1998.

Keywords: Growth & Innovation; Macroeconomics & Money;

“Small open economies are like rowing boats on an open sea. One cannot predict when they might capsize; bad steering increases the chances of disaster and a leaky boat makes it inevitable. But their chances of being broadsided by a wave are significant, no matter how well they are steered and no matter how seaworthy they are.” Joe Stiglitz, World Bank chief economist.

The Ownership, Management, and Regulation Of Water (and Wastewater)

This entry was posted in Environment & Resources, Regulation & Taxation on 1st July 1998 by Brian Easton.

Presentation to the Annual Conference of the Rural Sector of Local Government New Zealand: July 1, 1998, Dunedin.

Keywords: Regulation & Taxation;

My conclusion is a simple one. There is no simple answer to the question of the ownership, management, and regulation of water and wastewater supply and services: there is no one answer which suits every locality, circumstance, and system. It is easy for extremists to claim everything should be privatised, while other extremists as equally shrilly argue they should be kept in local government control. It soon becomes evident that the practicalities of the general circumstances rule out any extremist argument, while the choice between the middle options depends on the local circumstances. This presentation details the argument that leads to the conclusion.

Law Of the Jungle: Is Ours a Market Raw in Tooth and Claw?

This entry was posted in Governance, Listener on 20th June 1998 by Brian Easton.

Listener 20 June 1998.

Keywords: Governance;

Given East Asian financial corruption, we may ponder on the probity of New Zealand. It is often argued that government interventions generate manipulation and corruption. Compared to other rich OECD nations, New Zealand’s market interventions before 1984 were high (although by Eastern European and developing world standards they were not). But even by OECD standards, New Zealand’s level of corruption seems to have been low. Of course there was some, not all of it was exposed. Even so a myriad of opportunities were not seized upon.

Notes for a Presentation on Maori Exporting

This entry was posted in Business & Finance, Globalisation & Trade, Growth & Innovation, Maori on 10th June 1998 by Brian Easton.

Presentation to a TPK seminar. June 1998.

Keywords: Business & Finance; Globalisation & Trade; Growth & Innovation; Maori;

The Maori economy has made exceptional progress in recent years. Preliminary figures from the 1996 Population Census show that the numbers of Maori employed have grown considerably faster than the Maori adult population, and that additional employment has tended to be in the better quality jobs: more at the managerial level, more involving greater skills. Job growth has also been strong in those industries to which the Maori has given priority: agriculture, forestry, fishing, and tourism. (See the attached table.) In summary the Maori Development Strategy of upgrading Maori skills, increasing Maori work experience, and emphasising Maori business in key growth industries has been extremely successful.

Is the Rma Sustainable?: the Politics Of the Coase Theorem.

This entry was posted in Environment & Resources, Listener on 1st June 1998 by Brian Easton.

Planning Quarterly June 1998, p.5-8, A revised version of a keynote address to the 1998 NZPI Annual Conference, Dunedin.

Keywords: Taxation & Regulation

The Resource Management Act (RMA) is based upon numerous, often conflicting, notions. Among them was an economic analysis which derives from a theorem first proposed by Ronald Coase who received an economics prize in honour of Alfred Nobel, for this and other key insights which are the foundation of the modern subject of law and economics. The Coase theorem was important in many of the reforms of the 1980s, including the RMA. I will explain why this powerful theorem is important, how it relates to resource management and the RMA, and then I will reverse its use to obtain insights on recent attempts to reform the RMA and draw some conclusions about the role of planning.

Pressure Point: When Accountants Reign Supreme

This entry was posted in Governance, Listener on 23rd May 1998 by Brian Easton.

Listener 23 May, 1988.

Keywords: Governance;

As Lady Bracknell could have said “to lose one could be regarded as a tragedy, to lose two looks like carelessness.” She may well have been speechless learning that Auckland has had three major outages this decade with perhaps two more to come. The recent loss of power to Auckland’s CBD follows a national power shortage of 1992, and a Auckland-wide water shortage. Experts tell me that the Auckland sewerage system is close to capacity, non-experts draw the same conclusion about the Auckland roading. Just how many cases of infrastructural overload does there have to be before a pattern is acknowledged?

That Sinking Feeling: on Track to Contraction?

This entry was posted in Listener, Macroeconomics & Money on 9th May 1998 by Brian Easton.

Listener 9 May, 1998.

Keywords: Macroeconomics & Money;

Readers of this column will be less surprised than most at the increasingly gloomy state of the New Zealand economy. In a September 1997 column I discussed the expected deterioration in the current of account of the balance of payments. Then the external deficit was running near 5 percent of GDP. The latest figure is 7.7 percent of GDP, which traditionally would be of crisis proportions. Rather than the usual rapid collapse of the exchange rate (or the government defending the existing level by selling foreign exchange), the rate is steadily sinking. Under our floating exchange rate regime, foreign exchange transactors can take forward cover (that is purchase contracts which guarantee they can withdraw New Zealand currency at a fixed rate in the future). This smooths any precipitate descent, so the rate sinks over a long period rather than plummets over a short period.

Open and Closed: Is the US Economy a Good Model for New Zealand?

This entry was posted in Globalisation & Trade, Growth & Innovation, History of Ideas, Methodology, Philosophy, Listener on 25th April 1998 by Brian Easton.

Listener 25 April, 1998.

Keywords: Globalisation & Trade; Growth & Innovation; History of Ideas, Methodology & Philosophy;

Numerous readers have asked me to reply to Debasis Bandyopadnyay’s review of my In Stormy Seas: the Post-War New Zealand Economy (7 March 1998). I do not think that quite appropriate, especially since dealing with the review’s errors and misunderstandings would be tedious to the reader. But he raised one issue so central to the economic debate, that it is useful to address it here. The review argued I was unaware of some of the current fashionable theories of the supply-side of economic growth. It did not say that I gave a quite different account of the growth process, based on the external demand side.

The Globalisation Of Rugby

This entry was posted in Globalisation & Trade, Listener on 11th April 1998 by Brian Easton.

Even the Most Sacred of Our Icons Cannot Avoid World Trends.
Listener 11 April, 1998.

Keywords Globalisation and International Trade

In an innovative and insightful article a couple of decades ago, sociologist Geoff Fougere pointed out that there was a sense in which non-Maori New Zealand was organized on a tribal basis, where the tribal areas was the rugby football provinces. A number of factors determined the regions: community of interest (parochialism?); geographic integration, for club teams would not want to travel too far; size to be financially viable, and to be able to compete effectively against the rest of the country. The regional structure of unions evolved. At late as 1985 North Shore split off from Auckland, while there was a continuing amalgamation among smaller unions no longer viable by themselves: Golden Bay and Nelson in 1969; Wairarapa and Bush in 1971.

Up in Smoke

This entry was posted in Health, Listener on 28th March 1998 by Brian Easton.

Cigarette Smoking has fallen to the level of the 1890s thanks to New Zealand’s rigourous anti-smoking policies.
Listener 28 March, 1998.

The greatest epidemic the world faces is not HIV-Aids, but diseases from tobacco smoking, which kill more than Aids, maternal and childhood conditions, and tuberculosis combined. A peculiarity of the smoking epidemic is it is driven by the commercial imperatives of tobacco growers, manufacturers, and distributors. Most diseases are not profit driven, but it is becoming increasingly clear from records released during American litigation that the tobacco companies knew tobacco consumption was addictive, and were aware that smoking caused early death, and poorer quality of life. Yet they encouraged the addiction and promoted tobacco sales.

Ins and Outs: Will There Be a Snap Election over Economic Policy?

This entry was posted in Listener, Macroeconomics & Money on 28th February 1998 by Brian Easton.

Listener 28 February, 1998.

Keywords: Macroeconomics & Money;

While there is a widespread expectation that there will be a snap election, the political arithmetic does not stack up. There is a solid majority of parliamentarians who would suffer personally from an early election, losing there seats, there perks and their power. Even so it is possible that the political scene could change to the point where a majority might think they had a chance if an election was called early.

Microeconomic Reform: the New Zealand Experience

This entry was posted in Growth & Innovation, Macroeconomics & Money, Political Economy & History on 26th February 1998 by Brian Easton.

Microeconomic Reform and Productivity Growth: Workshop Proceedings, proceedings of a conference “Microeconomic Reform and Productivity Growth”: 26-27 February 1998. (Productivity Commission and ANU, 1998) p.155-181.

Keywords: Growth & Innovation; Macroeconomics & Money; Political Economy & History;

Prologue

This being the first occasion which I have visited the Australian National University since the death of Professor Fred Gruen, may I briefly pay him a tribute. When we first met, Fred was suspicious of my approach, thinking I was anti-market. Over some long discussions he came to recognize I have a deep Marshallian respect for the market, even though we might not always agree on the details of policy. I would have appreciated a continuation of our intermittent dialogue with his response to this paper. It would have been thoughtful and shrewd. I would have responded in my revision, each of us shifting our position in the light of analysis and facts. I am sorry he is not here, except in spirit.

Introduction

Economic reform in New Zealand has been unusually comprehensive and thorough. For the scientist it provides a test of the theory which underpinned the reforms. The overt theory was essentially that which is known in Australia as “economic rationalism”, the consistent application of modern neo-classical market theory. At the practical microeconomic policy level this has been the withdrawal of government interventions which preferred one firm, industry, or sector (relative to others), in favour of market regulation of economic activity. Thus import licences have been abandoned, tariff levels steadily reduced, subsidies and tax incentives withdrawn, the tax regime made more uniform with exemptions barriers to entry eradicated, corporatization and privatisation of government trading activities, and greater reliance on competition law.¹ There remain some (now much lower) tariffs, a few special taxes, occasional interventions, and so on. Nevertheless the extent of the microeconomic reforms is such to that they become a test of the theory which underpins them.

The Economic Regulation Of Tobacco Consumption in New Zealand

This entry was posted in Health on 18th February 1998 by Brian Easton.

The Economics of Tobacco control: Towards an Optimal Mix edited by I. Abedian, R. van der Merwe, Nick Wilkins, P. Jha ( Applied Fiscal Research: University of Captetown, 1998), the proceedings of a conference of the Economics of Control Project, School of Economics, the University of Cape Town, 18-20 February 1998, Cape Town.

Keywords Health.

Introduction: A Brief History of Tobacco in New Zealand (1)

Tobacco was introduced in New Zealand by the Europeans about 200 years ago. Smoking became very popular with the Maori: surgeon Henry Weekes wrote in the early 1840s that it was “universal among New Zealanders [the Maori] of both sexes.” (Rutherford & Skinner 1940) It was also used as a currency and a commodity of exchange in the middle of the nineteenth century. By 1860 attempts were made to grow tobacco leaf, although this was not a successful industry until the 1930s. Cigars were being manufactured by 1884.

The Year Of the Paper Tiger: Asia Is in Economic As Well As Financial Crisis

This entry was posted in Growth & Innovation, Listener, Macroeconomics & Money on 14th February 1998 by Brian Easton.

Listener 14 February, 1998.

Keywords: Growth & Innovation; Macroeconomics & Money;

This column gets written about a month before it is first read. So there is a discipline to avoid instant comment which will prove facile a few weeks later. But the lead time also limits commenting on a rapidly unfolding scenario, as is occurring in East Asia. I have not been one to assume that the current bailout of this or that country by this or that institution will be the last, nor that the bailout will resolve quickly some underlying problem.

The Seven Percent Solution: a Background to the Proposed Health Referendum.

This entry was posted in Health, Listener on 31st January 1998 by Brian Easton.

Listener 31 January 1998.

Keywords Health

The health reforms debate enters a new stage in 1998 with the indicative referendum that Government should increase its spending on health services to at least 7 percent of GDP, if necessary by increasing personal income tax. Over the last six years the government has taken the initiative. The referendum presents the people seizing the initiative in 1998.

Money for Jams: the Government Response to Roading Reforms Is Commercialisation.

This entry was posted in Governance, Health, Listener on 31st January 1998 by Brian Easton.

Listener 31 January, 1998.

Keywords: Governance; Health;

The proposed roading reforms are a typical case of the identification of a problem – road congestion in Auckland and Wellington – and a policy solution which has nothing to do with the problem, but forces the sector to conform to “THE MODEL” of commercialising everything. Its report is obscured and confused: it even gives two different months for when it was published. We might predict the outcome if the policy goes ahead.