The deed is done, the doers undone Had I been a Brit, I would have voted ‘Remain’ rather than Brexit (or ‘Leave’). Instead, I have been bemused by the comic theatre of British politics, fascinated by what the Brits actual think and professionally interested by the revelations of the complexity of the interactions between Britain…
Continue reading this entry »
What follows is a series of quantitative thoughts on the election outcome. It is based on the 2017 election night vote. Specials are likely to change precise voting shares and even seats. However potential changes do invalidate the column’s overall conclusions. Summary (which is less numerically challenging) – The share of the left has returned…
Continue reading this entry »
Is public spending stuck in the vicelike grip of the austerity of our quasi-Austerian economic policy? Are we at a turning point in our politics? I don’t mean whether we have a new government. That is a matter for the voters; the polls say that either they are very volatile or that the polls are…
Continue reading this entry »
The last column described the philosophy of economist James Buchanan as it applied to the United States. What is its relevance to New Zealand? When I looked at James Buchanan’s theory of public choice, I was struck by how it reflected an American institutional setting; Our political system is different. Even so, our colonial mentality…
Continue reading this entry »
A new biography of James Buchanan, a founder of economist’s public choice theory, suggests he was not only anti-democratic but was working with others to revoke democracy in America. The work of economist and social philosopher James Buchanan (1919-2013) came to prominence in the mid-1980s when he was awarded the Economics Prize in honour of…
Continue reading this entry »
The just published PREFU, Treasury’s assessment of the economy, raises more important questions about our fiscal stance than what the election is talking about. Have we the right borrowing strategy? It was amusing how the Minister of Finance, Stephen Joyce, had to present the PREFU (Pre-election Economic and Fiscal Update) as both an optimistic account…
Continue reading this entry »
The policy dimension of the election appears to be about the concerns with past restraints on government spending and the consequential social failures. But whatever the rhetoric, implementation of campaign promises is going to be much harder. Last Saturday, the Minister for Social Housing, Amy Adams, admitted her government had a poor record on social…
Continue reading this entry »
Equivocation and dissembling have been integral parts of political life. How should we judge them? Among the sinners the drunk porter in Macbeth welcomes into hell is the ‘equivocator, that could swear in both the scales against either scale’. Equivocation is a theme of the play; Shakespeare is thought to have been influenced by the…
Continue reading this entry »
With most parties having announced their lists for the next election, we need to think about how the system works. As some day it may happen that an MP must be found They’re put upon the list – I’ve got a little list Of political offenders who are always safe and sound And who never…
Continue reading this entry »
The lives of two outstanding economists who died recently illustrate just how diverse the profession is. I first came across William Baumol when, as a student, I valued greatly his two textbooks: Economic Dynamics and Economic Theory and Operations Analysis, both lucid, intellectually challenging and with a gentle humour. (Rather than the conventional tradeoff of…
Continue reading this entry »
Effective markets are underpinned by the government. The interventions may be sophisticated and well-thought through or they may be clumsy and ineffective. The neoliberal rhetoric of ‘free markets’ leads to the latter. In a recent Metro article, Matthew Hooten wrote ‘globalisation combined with free markets has been the most successful economic and social system of…
Continue reading this entry »
The growth of farm output may be slowing. Specialty cheeses show an alternative strategy of further post-farmgate processing. Land for farming ran out in the 1950s. Farm production intensified. We shifted from more dollars of farm output by using more land to getting more dollars per unit of land. Among the challenges we had was…
Continue reading this entry »
By exploring the multiple worlds she grew up in in New Zealand, Helene Wong’s memoir ‘Being Chinese: A New Zealander’s Story’ tells us much about our worlds too. Economists have a predilection for the open economy because, I think, openness to trade tends to be associated with openness to ideas, to technologies, to people, to…
Continue reading this entry »
Jenny Shipley says the middle class has captured the welfare state. But did she understand what the welfare state actually meant before she began attacking it? In her interview with Guy Espiner, Jenny Shipley regretted that the ‘middle class’ were still beneficiaries of the welfare state. Now the term ‘class’ is a summary of a…
Continue reading this entry »
Answering that question proves to be challenging. This preliminary assessment suggests the economic benefits to incumbent New Zealanders may not be great. During the Vogel boom, say between 1871 and 1881, the population of New Zealand doubled, as did real GDP (as best as we can measure). That means per capita GDP was much the…
Continue reading this entry »
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…
Continue reading this entry »
Much of the commentary on the budget was shallow. What is really going on is that the changes are small but they reflect a particular political perspective. The financial threat was hardly discussed Allow me to be irritated by the trivial discussion which surrounds the government’s annual budget. The budget is simply the government setting out…
Continue reading this entry »
Following up my ‘AUT Policy Observatory’ report on ‘Housing Prices Relative to Consumer Prices: An Analysis’. Last week the Reserve Bank reported stress tests to assess the ability of borrowers to cope with higher mortgage interest rates. Assuming 7 percent p.a. – close to the average two-year mortgage rate over past decades – the RBNZ…
Continue reading this entry »
Or has Labour lost its clothes or forgotten how to put them on. Some Labour supporters are disturbed that the government seems to be stealing their policies. Probably National is shifting a bit to the centre, perhaps for electoral reasons (although the party is almost certainly more concerned with New Zealand First than Labour) and…
Continue reading this entry »
Managing the government’s fiscal deficit need not mean cutting social expenditure. An economic Austerian is someone who advocates cutting government spending, particularly social expenditures, in order to eliminate a government’s fiscal deficits. (The name is a portmanteau of ‘austerity’ and ‘Austrian’ from the neoliberal ‘Austrian School of Economics’.) While Austerian policies are currently most evidently…
Continue reading this entry »