Listener 17 January, 1998.
Keywords: History of Ideas, Methodology & Philosophy;
The Anti Economist League (AEL) is an inevitable reaction to the state of New Zealand economics. Their objectives are (1) expose the invalidity of economists’ dogma, and (2) eliminate economists from public policy making. This columnist has no difficulty with the first aim but is understandably nervous about the second.
Listener 27 December, 1997.
Keywords: Governance; Health;
In a paper to the Association of Salaried Medical Staff, the chairman of the Transitional Health Authority (THA), Graham Scott, reported that the 1991 health reforms were predicated upon productivity gains in the public hospital sector, and that they not occurred. As a result the CHEs are in permanent financial deficit. In Scott’s convoluted presentation – after all he was a past Secretary of the Treasury where the English language is a challenge – “the current deficits in CHEs are not only about inefficiencies and variations in the quality of management but are also an outgrowth of the original efficient pricing policy [whatever that means]. In other words a share of these deficits was made in Wellington, because the policy did not work out as intended. They were in inherent in the policy framework that assumed efficiency gains would be allocated to the deficit.” More simply, the policy failed.
Listener 13 December, 1997.
Keywords: Political Economy & History;
Twenty years ago, in 1977, the main concerns in the newspapers included international terrorism, abortion and sex education, inflation, unemployment, and recession, and a mutiny in the National government. The pharmaceutical companies complained that the government was repressing drug prices, but otherwise there was almost silence on health policy and education. The Listener’s December editorials were on social ills, sport, Middle East peace, and social welfare at Christmas. The current account deficit of the balance of payments was a worry, while economists promised that next year the economy would be better. The papers I looked at made hardly any reference to the Maori (except in a context of crime) or the “Treedee”, as C.K. Stead calls it in a recent poem. Women were less evident too, except in women’s things. (There were but four in parliament – two in each party – 33 today.)
This might be thought of as the introductory part of a very early draft of a chapter for Globalisation and Welfare State. It was written (about the same time as the book) for another purpose, and repeats some of the material in earlier chapters.
Keywords: Labour Studies;
Unemployment as a Human Problem
It is very easy to focus on unemployment as a statistic, of say 6 percent of the labour force being unemployed, and ignore that for the unemployed the relevant statistic is that each is 100 percent unemployed. The statistics enables us to distance ourselves form the human condition. Saying that full employment is should be X percent, irrespective of what that rate is, ignores the human problem for those who are unemployed.
This is an appendix to a chapter of Globalisation and Welfare State The chapter is not written.
Keywords: Social Policy;
Since the 1970s there have been various proposals for state involvement in retirement provision. Each accepts there is a role for voluntary private provision (commonly called the third tier). The differences occur over the treatment of the first and second tiers.
A chapter of Globalisation and Welfare State
Keywords: Distributional Economics;
Note that this Chapter currently lacks the figures and tables which it discusses
In the 1980s, the objective of reducing inequality was given an increasingly low priority in policy implementation. Why this happened is in some ways a puzzle, because nominally the party in power was at first Labour who had once had a strong commitment to social justice and reducing inequality. Yet as we shall see, they steadily abandoned that commitment, although they did not go the distance of the succeeding National government.
A chapter of Globalisation and Welfare State
Keywords: Regulation & Taxation; Social Policy;
How should social security beneficiary who has some additional income be treated? There are numerous institutional arrangements but for economic purposes the crucial question is summarized in the `effective marginal tax rate’ (EMTR). Consider a beneficiary (or indeed any other person) who obtains an extra dollar of income, perhaps from working, perhaps a return from investments or a private pension. The additional dollar may be taxed, there may be a surcharge, the benefit may be abated or treated as taxable income, some other benefit may be reduced …. The possibilities are numerous. The economist focuses on how much additional income the beneficiary has in the hand (called `disposable’ income because that is what the individual has to spend), irrespective of the institutional arrangement to reduce it. Suppose the amount is X cents (say, 60 cents). Then the EMTR is 100-X percent (e.g. 40 percent). (1)
A chapter of Globalisation and Welfare State
Keywords:Globalisation & Trade;
The glacial shift to a fully market economy before 1984, was obscured by the draconian wage and price freeze form 1982 to 1984. It is important that it is noticed, for while the transformation after 1984 was faster, extremist, and ideologically driven, it was not a merely a political fashion. The external diversification of the 1970s was impacting back on the domestic economy. Before 1966 the economy had almost a dual structure in which the pastoral export sector and its suppliers were almost independent of the domestic sector. The connection was that the consumers dependent upon the incomes from exporting, were forced by imports, tariffs, and other interventions to give preference to domestically produced goods and services. (This enabled foreign exchange – in effect real incomes – to be transferred to the domestic sector and made average incomes of the two sectors more equal.) (1)
A chapter of Globalisation and Welfare State
Keywords: Labour Studies;
While it is easy to think of the workers in a labour market as largely homogeneous, in practice they are not. Rather than treat them as all totally different they can be usefully collected into common groups, in a theory of segmented labour markets.(1) Here we use the theory in its simplest form of segmentation – the dual labour market.
A chapter of Globalisation and Welfare State
Keywords: Distributional Economics; Social Policy;
As Chapter 3 reported, poverty has long been a phenomenon in New Zealand life. Yet in the 1970s poverty research expanded. A poverty income line was established, numbers of people below the line were calculated, some behavioral investigations were undertaken, ethnographic studies increased, and some policy measures were undertaken to reduce the incidence of poverty.
A chapter of Globalisation and Welfare State
Keywords: Distributional Economics; Labour Studies; Social Policy;
The issue of gender excites a passion which makes dispassionate observation and analysis nigh on impossible. We all have views about how gender relations should be organized, so that any changes are welcomed or a challenged according to those views. The debate is so dominated by judgements of proper relations, it has no understanding of what is happening.
A chapter of Globalisation and Welfare State
Keywords: Globalisation & Trade; Growth & Innovation;
With the collapse of the price of wool in 1966, came the end of the economic miracle. Although the price collapse was rapid, it took longer for its implications to work their way through, while the inevitable noise obscured the long term trend.
A chapter of Globalisation and Welfare State
Keywords: Labour Studies;
Dr Richard Smith, deputy editor of the British Medical Journal, described unemployment as a `medical problem’. (1) While unemployment has been treated as an economic problem with political overtones, Smith’s description reflects a growing recognition of unemployment’s impact on the health and welfare of individuals and their social groups.
A chapter of Globalisation and Welfare State
Keywords: Distributional Economics; Social Policy;
Bill Sutch characterized the progress of nineteenth and early twentieth century New Zealand in a book title of Poverty and Progress (and also The Quest for Security).(1) Certainly there was poverty in that period, which was a major driving force for social and institutional change. It would be foolish to compare the hardships of those times with those of today. As we shall see in Interregnum 1, a major development in the 1970s was recognition that poverty was simply an absolute notion of hardship but a relative one, so that rising affluence did not automatically eliminate it. Yet there is much to be learned from the earlier poverty and policy debates.
A chapter of Globalisation and Welfare State
Keywords: Social Policy;
Gosta Espinger-Anderson characterized the New Zealand welfare state as a `”liberal” welfare state, in which means-tested assistance, or modest universal transfers or modest social-insurance plans predominate.’ (1) He put New Zealand with Australia, the United States, Canada, Ireland and the United Kingdom, in the most primitive group of the 18 nations he looked at. However his classification procedure was based solely upon entitlements to old-age pensions, sickness benefits, and unemployment insurance, and evaluated under the assumption that contributory systems were superior. Frank Castles argued that this categorization is inappropriate because it does not distinguish between those welfare states which are minimalist (most typically the United States), commonly called `residual’ welfare states, and those like New Zealand and Australia where delivery is more through the labour market and other non-social security mechanisms. (2)
A chapter of Globalisation and Welfare State
Keywords: Growth & Innovation; Labour Studies;
For the first two decades after the Second World War the performance of the New Zealand economy seemed miraculous. Growth of real GDP exceeded 4 percent a year, consumer inflation was less that the average for other rich countries, there were strains in the balance of payments but no major crisis, (1) and unemployment was hardly reported at all (2)
A chapter of Globalisation and Welfare State
Keywords: Social Policy;
In a classic study of welfare states, Gosta Espinger-Anderson argued that all rich capitalist countries were welfare states, and that they could be classified into three groups. (1) He categorized New Zealand at that time (i.e. up to 1990), with Australia, in the same group as United States of America. Frank Castles argued vigorously that there are in fact four types of welfare states, because Australia and New Zealand are quite distinctive from the US and Switzerland. He called them `workers’ welfare states’. (2)
Keywords: Distributional Economics; Globalisation & Trade; Labour Studies; Regulation & Taxation; Social Policy;
In 1997 I commenced writing a book Globalization and a Welfare State. I finished about three fifths of the first draft and stopped. This was partly because other matters were using my energies, but also because I felt that the book was too technical and would not find a commercial market in New Zealand. I am putting the book on the website for those people who might be interested in some aspects of its contents.
Even If the Economy is Doing Well, the People May Not BeListener: 29 November, 1997.
Keywords: Regulation & Taxation; Social Policy;
The table below shows the government’s current spending on employees, goods and services. It does not include spending on transfers such as social security benefits or debt servicing. It includes spending by local government as well as central government. The most important items are health and education, but there is also spending on government administration and advice, on law and order, on the environment, on the arts and so on.
Listener 15 November 1997.
Keywords: Social Policy;
That 92 percent of voters rejected the proposed Retirement Superannuation Scheme tells us just how out of touch officials are with the public. Instructed to devise the best possible scheme, they chose a privatisation of New Zealand Superannuation akin to ACT’s 1996 election manifesto proposal. Despite a massive advertising campaign, support barely exceeded the ACT election share, indicating just how ill-advised the proposal was.