New Zealand is a small, isolated nation and needs to design itself accordingly. We should avoid uncritically imitating larger nations. Among the news websites I read is a British daily which once a week interviews a local writer on the books they grew up reading and which influenced them. That’s fifty-odd a year; most interviews…
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Pragmatic analysis says maybe we should, but we should also consider nationalisation. We should certainly consider better regulation. An earlier column argued that we should make the government’s net worth – the value of its assets less its liabilities – more prominent in fiscal policy. Net worth is also fundamental when we are discussing whether…
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Big Corporations Are Not What We Think They Are John Kay has been widely described as ‘one of the greatest economists of our time’. He is well grounded in economic theory and has taught it. He is rich with practical experience, both as a consultant and a corporate director, which he melds shrewdly with the…
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It is said that economists know the price of everything and the value of nothing. That may be an exaggeration, but an even better response is to point out economists do know the difference. They did not at first. Classical economics thought that the price of something reflected the objective cost of producing it –…
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Can we trust the Trump cabinet to act in the public interest? Nine of Trump’s closest advisers are billionaires. Their total net worth is in excess of $US375b (providing there is not a share-market crash). In contrast, the total net worth of Trump’s first Cabinet was about $6b. (Joe Biden’s Cabinet total was about $118…
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What seemed a booming success a couple of years ago has collapsed into fraud convictions. I looked at the crash of FTX (short for ‘Futures Exchange’) in November 2022 to see whether it would impact on the financial system as a whole. Fortunately there was barely a ripple, probably because it was too small and…
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Evergrande and Country Garden – two giant Chinese property development companies – are a portent of the turbulence before us. The recent financial failures of two ginormous Chinese property companies, Evergrande and Country Garden, at various times ranked the second largest and sixth largest in China have implications for the New Zealand economy. The Evergrande…
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I was asked by a Spanish journalist the following two questions (particular with attention to a historical perspective): How likely do you see (if at all) a transition from an economy based on primary products towards an economy where digital services exports might play an important part? I would also like to ask about the…
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New Zealand’s most distinguished economist reviews New Zealand’s premier financial agony aunt Newsroom 29 April, 2021 Because economists are believed to know the mysteries of finance, I am often asked to give financial advice. I advise that I would never take the advice of an economist without paying for it; that it is never worth…
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I have been dipping into Brett Christophers’ Rentier Capitalism: Who Owns the Economy and Who Pays for It? Economists should be warned that his use of the term ‘rentier’ is ‘heterodox’ (his term). I have no difficulty with Humpty-Dumpty’s ‘When I use a word, it means just what I choose it to mean – neither…
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Building more houses is not going to reduce house prices much (although it will help more people to be decently housed). The inflation driver is financial speculation based on leveraged borrowing. Until that is addressed, house prices will continue to boom. Policies based on theories which do not fit the facts are not going to…
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If the Commercial Miracle of Newspapers is Over, What will Replace It? Newspapers have been a commercial miracle. For a very small outlay one got access to a surprisingly wide range of news, opinion and information. Part of the explanation was economies of scale, but the trick was that much of the industry’s revenue came…
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A recent decision by New Zealand on Air in response to the changing media technologies raises a range of issues about how the platforms are used. The announcement by New Zealand on Air that it was changing its mode of funding is a reminder of the current turmoil in the media from the convergence of…
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The economics of information shows that whatever happens, the solution our ailing newspapers to the digital revolution will not be a perfect one. An important notion in economic analysis is of a ‘public good’ (which may be a service). Not THE public good (a.k.a. the ‘common good’), which is shared and beneficial for all or…
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The government has let the housing market deteriorate with measures which are insufficient, late and ineffective. As a first step we need to identify the underlying problems. The Prime Minister’s announcement that there is nothing new about homelessness is both an example of his strengths in reassuring the public that there is never really a…
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The history of New Zealand is speculation on farm land which stokes up debt, with disastrous consequences when the bubble bursts. The New Zealand industry is going through another one. During the Great War, farm land prices boomed. When farm product prices collapsed in 1920, farmers walked off their land. It was not that the…
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The short answer is all trade reduces sovereignty to some extent. The TPPA is no exception, but its effect is probably small. Allow that we had to give away something, such as increased copyright extensions, for better access for our exports; the real issue for us in the TPPA is that it reduces ‘sovereignty’. To…
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World Sharemarkets Are Sneezing. What Does That Tell Us About the World Economy? Before discussing the state of the world economy – especially what is going on in China – it is useful to say something about the importance of the sharemarket (Americans call it ‘stock market’). It is far more important in pop-economics than…
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The strange economic assessment of the proposed extension to Wellington Airport’s runway reduces to a plea for subsidies from tax and ratepayers. I am sometimes asked to assist voluntary groups with a critique of a commissioned economic assessment of a development project. I decline because of the high standard required from me – one which…
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While TPP – any trade deal – compromises sovereignty it does not mean we cannot respond constructively to unsatisfactory aspects such as those involving intellectual property. The stupidest thing said about the TPP deal – thus far – is the claim that it does not reduce New Zealand’s sovereignty. Of course it does. Agreeing to…
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