The Dim-Post

January 30, 2011

Quote of the day

Filed under: Politics — danylmc @ 2:15 pm

The true test of an economy is not the rise or fall of GDP. The true test of our economy is the wellbeing of our land, our water and our people. – Russel Norman, State of the Planet 2011.

I’m dubious about the intellectual rigour of green economics’, but the balance of the speech is very strong. There is no new policy but no one really pays attention to the Green Party’s policies anyway, so sticking to values and attacking the government is the smart approach. It’s easily the best of the three pre-election speeches this week.

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31 Comments »

  1. This is bad for Phil Goff.

    Comment by George D — January 30, 2011 @ 5:30 pm

  2. “I’m dubious about the intellectual rigour of ‘green economics’”

    Politics is not about rigour, it’s about ‘common sense’ and that speech seems, to me, to contain a great deal of it…

    But even so, it seems more intellectually rigorous than either of the big fishes’ economic ‘ideas’…

    Comment by nommopilot — January 30, 2011 @ 5:33 pm

  3. What’s he saying?
    1. Markets need regulation.
    2.’Think Big’ didn’t really work.
    3. We should live within our means.
    4. Social capital and environmental capital should be considered as well as financial capital.
    I’m struggling to find the holes in his case.

    Comment by Neil — January 30, 2011 @ 6:00 pm

  4. I’m struggling to see him say what he will actually do. Oh hang one, broad generalisations and sweeping statements are the preserve of third parties who never have to deliver.

    Comment by leon — January 30, 2011 @ 6:06 pm

  5. Oh hang one, broad generalisations and sweeping statements are the preserve of third parties who never have to deliver.

    I’d have thought just the opposite. Clear policies are what third parties do best – because they know they can never deliver, and have an excuse when they don’t.

    Consider ACT’s 20-point plan. Or the Maori Party’s $5b of tax cuts.

    Comment by Graeme Edgeler — January 30, 2011 @ 6:49 pm

  6. It’d be better if they didn’t assume a Capital Gains Tax moves capital away from property speculation and that it makes housing affordability a reality. If you want to raise government income then sure a Capital Gains Tax is a smart idea and a CGT will in some way move certain people away from property.

    Those being the people already struggling right now with debts on secondary property. They’ll be the ones you hurt and you’ll hurt people who were relying on secondary housing for their retirement income.

    But a CGT actually doesn’t stop speculation and nor does it make housing anymore affordable. Housing affordability depends on supply and incomes and the availability of loans. The next 10 years is likely to see far more tightening of loan criteria making it difficult for people to access loans.

    Also I’d hate to know how much rents would go up if a CGT was implemented. You’d be hurting a number of renters. Same goes for Labour’s attack on offsetting losses. You attacked National for making renters pay more well renters under your scenario surely won’t be enjoying their 10 dollars a week tax cut.

    Comment by gingercrush — January 30, 2011 @ 10:40 pm

  7. I didn’t see much in the way of specific actions in Normans speech Graeme although there was the obligatory reference to neolib economics.

    Comment by leon — January 31, 2011 @ 6:59 am

  8. leon,

    I suspect Graeme was referring to stuff like this: http://www.greens.org.nz/policysummary/green-taxation-and-monetary-policy-summary

    Comment by Andrew Geddis — January 31, 2011 @ 8:00 am

  9. He may well have been Andrew and that summary is full of ‘begin’, ‘empower’, ‘support’,’review’, ‘consider’ and various other flavours of weaselspeak(Green TM). Also, they said they’d do this by 2011.
    ;)

    Comment by leon — January 31, 2011 @ 8:29 am

  10. That’s ’cause it was their 2008 election policy, I’m guessing. You might note, however, their pretty specific tax commitments … certainly far more specific than Labour’s recent announcements. Which was Graeme’s point.

    Comment by Andrew Geddis — January 31, 2011 @ 8:38 am

  11. Leon “Also, they said they’d do this by 2011.”

    Indeed. Since when has being in opposition been a valid excuse for not fulfilling all your election promises?

    Comment by kahikatea — January 31, 2011 @ 9:08 am

  12. Just seems kinda weird that leading up to the *next* election and your policy is the same and implementation dates the same-not sayin’ Labour are any better mind.

    Comment by leon — January 31, 2011 @ 9:22 am

  13. In isolation – ‘The true test of an economy is not the rise or fall of GDP. The true test of our economy is the wellbeing of our land, our water and our people.’ –
    … is demogogic BS. It qualifies non of the latter and any right-thinking person knows that Gross Domestic Product is the bench-mark against which economies are gauged.
    Let’s look at wellbeing just for one. How do you pay for hospitals and healh care, education and the aged if it isn’t by producing either enough wealth to pay for them or having enough collatoral to pay for them? Oh yes, by taxng pwople who produce – wait for it – ‘wealth’. . . etc etc God’s teeth and pople still buy into this nonsense. They should be put up against a wall and shot. But first, (possibly a worse punishment) made to bathe. . .

    Comment by Monkey Boy — January 31, 2011 @ 10:59 am

  14. Why would he qualify them? It was a speech, not a policy document or discussion paper, or anything else that would be an appropriate format to have a detailed discussion on how to measure those things.

    I know this might be hard for you to ‘get’, but he’s suggesting that only looking at GDP, and ignoring the consequences and drivers of that growth, and what is done with it, is a stupid idea.

    Comment by The PC Avenger — January 31, 2011 @ 11:54 am

  15. @Monkey boy, yes, GDP is a good guide to how much money is able to be raised through taxation to pay for things, but that is hardly the same as saying that GDP is itself what matters.

    One could just as easily say that economies should be judged by how much tax revenue the government raises, or how many work hours the average worker puts in, or how much steel the the economy is producing, because all of these have some impact on wellbeing.

    I’m sure Russel Norman is well aware that GDP is ‘the benchmark against which economies are gauged’. He would hardly have bothered to argue that that benchmark was inadequate if he did not believe that it was the one that was being used.

    Comment by kahikatea — January 31, 2011 @ 12:07 pm

  16. One could just as easily say that economies should be judged by how much tax revenue the government raises, or how many work hours the average worker puts in, or how much steel the economy is producing, because all of these have some impact on wellbeing.

    Except, all those examples are already included in measures of GDP… so it would actually be rather silly to say they’re an equal or comparable benchmark to GDP.

    Comment by Phil — January 31, 2011 @ 12:29 pm

  17. at one stage in the 1980’s nauru had the highest GDP per capita in the world, even higher than the uSA. Now its 361st.

    the dude who invented GDP in the 1930s told congress “GDP is just about the dollars – nothing else – dont treat it as the sign-post to heaven”. No-one listened tho…

    Comment by k.jones — January 31, 2011 @ 12:43 pm

  18. “Except, all those examples are already included in measures of GDP… so it would actually be rather silly to say they’re an equal or comparable benchmark to GDP.”

    actually, the steel production is the only one that’s included in GDP. Some of the alternatives to GDP that have been suggested actually include GDP as one of the factors that is taken into account in calculating them, so by that reasoning they could be said to supercede GDP in the same way that GDP superceded discrete measures like volume of steel production that were used instead of GDP in the Soviet 5-year plans.

    Comment by kahikatea — January 31, 2011 @ 1:04 pm

  19. “at one stage in the 1980′s nauru had the highest GDP per capita in the world, even higher than the uSA. Now its 361st.”

    a remarkable achievement, on a planet with only 194 countries.

    Comment by kahikatea — January 31, 2011 @ 1:05 pm

  20. Russell is arguing against a strawman. I don’t know a single political party that makes raising GDP its main goal.

    Comment by Hugh — January 31, 2011 @ 1:20 pm

  21. @kahikatea

    does your pedantry know no bounds? :)

    Although Steel Production is the only one explicitly included in the C+I+G+(X-M) ‘output approach’ of GDP, compensation of employees and tax revenues are rolled into the ‘income approach’.

    Either way, changes to all three obviously impact upon GDP, regardless of how you measure it. And that’s really the point, isn’t it?

    Comment by dougphil101 — January 31, 2011 @ 1:30 pm

  22. at one stage in the 1980′s nauru had the highest GDP per capita in the world, even higher than the USA. Now its 361st/194th

    That’s not an argument against GDP. That’s an argument against having an economy based solely on Bird Shit.

    Comment by dougphil101 — January 31, 2011 @ 1:35 pm

  23. “Russell is arguing against a strawman. I don’t know a single political party that makes raising GDP its main goal.”

    When Labour talked of getting New Zealand into the top half of the OECD, and National talked of closing the gap with Australia, I’m pretty sure they were both talking about GDP.

    Comment by kahikatea — January 31, 2011 @ 1:41 pm

  24. Bah, GDP is for nancies and neolibs. Let’s focus on raising the KarmicRealAlterntativeProductivity output of our country.

    Comment by leon — January 31, 2011 @ 2:14 pm

  25. Russell is arguing against a strawman. I don’t know a single political party that makes raising GDP its main goal.

    ACT’s 20-point plan was based solely around raising GDP. Each of the policies in it noted by how much it would raise GDP as a percentage.

    Comment by Graeme Edgeler — January 31, 2011 @ 2:46 pm

  26. dougphil101 wrote: “Either way, changes to all three obviously impact upon GDP, regardless of how you measure it. And that’s really the point, isn’t it?”

    well, no. If we were to take GDP, and combine it with some random statistic, such as the logarithm of the number of marsupials per square furlong, we would clearly get a statistic that incorporates GDP AND OTHER INFORMATION AS WELL, so it’s better, right?

    Likewise, GDP counts things that are not relevant to wellbeing, such as the amount of money spent of fixing cars damaged in road accidents (if we had fewer accidents, this sum of money would be less, but wellbeing would arguably be higher). Therefore, GDP includes red herrings only slightly less than the combined measure I mentioned above does.

    “compensation of employees and tax revenues are rolled into the ‘income approach’.”

    That’s the amount employees get paid, I was referring to the amount of time they spend working. They’re different measures, and they both have some correlation to production, but neither is perfect…

    …and anyway, I would argue that outcomes are even more important than production. The USA spends more per capita on health care that France does, so following the logic of GDP you would say that the people of the USA are getting more health care and therefore doing better in that regard than the French are. However, measures of health status, infant mortality and life expectancy suggest the French are getting better health from doing things the way they do them. GDP is the whole-of-economy equivalent of assessing a country’s the health system solely by how much money is spent on it.

    Comment by kahikatea — January 31, 2011 @ 7:23 pm

  27. (if we had fewer accidents, this sum of money would be less, but wellbeing would arguably be high

    Wouldn’t people just spend the money on something a little more conducive to their wellbeing instead of accident repairs etc?

    Comment by Stephen — January 31, 2011 @ 8:08 pm

  28. “Wouldn’t people just spend the money on something a little more conducive to their wellbeing instead of accident repairs etc?”

    Maybe they would spend the money on something else (making their wellbeing greater but keeping GDP the same), or maybe they would do a bit less overtime because they weren’t as financially stressed.

    Comment by kahikatea — January 31, 2011 @ 9:06 pm

  29. I think you’ll find the mechanic who fixes your car, and whose income is this GDP driver you speak of, wouldn’t share your view of his well-being…

    Comment by garethw — January 31, 2011 @ 10:05 pm

  30. “I think you’ll find the mechanic who fixes your car, and whose income is this GDP driver you speak of, wouldn’t share your view of his well-being…”

    too right we must all drive drunk so as to increase the income of mechanics and thus increase GDP!! hurrah!! someone call ACT, we have a 21st point for their plan!!

    Comment by nommopilot — January 31, 2011 @ 10:49 pm

  31. “a remarkable achievement, on a planet with only 194 countries.”

    Ah kahikatea – you sooo busted me!!!

    Comment by k.jones — February 1, 2011 @ 10:59 am


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