The Dim-Post

November 29, 2012

Various arguments

Filed under: Politics — danylmc @ 8:17 am

DPF links to a column in the Dom-Post arguing against Sue Moroney’s redundancy bill, and adds:

Redundancy provisions should be negotiated on a case by case basis in collective or individual contracts. One size fits all laws are bad and kill jobs.

That’s the classic libertarian stance. The problem is that – as usual – the outcomes are completely perverse. People with valuable skills can generally negotiate redundancy clauses, but they can also, generally find new jobs really quickly. Most workers who don’t have valuable skills won’t have the bargaining power to win redundancy payouts, and in the event of an economic downturn they’re the most likely to lose work, and they’ll find it harder to get re-employment.

As is usually the case, the libertarian argument here is a privatise the profits, socialise the costs argument. Having the flexibility to sack marginal workers at no cost is great for business, but those workers still need to eat, pay for accommodation, support their families and so on, so the taxpayer picks up the cost via the unemployment benefit. (I guess the real libertarian argument is that everyone who can’t negotiate redundancy should shell out for unemployment insurance.)

Also, this Herald piece by Rodney Hide on child abuse. His argument goes like this:

Police statistics on violent crime show that many children who are killed are murdered by their mother:

Five of the 15 children killed by mum were newborn babies whose mothers concealed their pregnancy and killed their babies immediately on birth. Six children were victims of their mother’s suicide.

Hide applies his intellect – that put the ACT party where it is today – and tries to figure out what’s causing this. Turns out it’s the welfare system. Because life on the DPB is so awesome, young woman are murdering their own babies and/or committing suicide to avoid it.

I’ve made this point before, but the primacy of the ACT party in New Zealand public life is so weird. The Mana Party consistently outpolls ACT, but if there’s a left-wing government I really doubt we’re going to see Hone Harawira get to revolutionise our education system while Annette Sykes and John Minto get put in charge of Commissions to figure out how to ‘fix’ New Zealand’s economy, and Malcolm Martyn Bradbury gets a Herald column.

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73 Comments »

  1. Obviously welfare makes young mothers kill their babies and themselves. Not, just for example, a mental health disorder that women who’ve just given birth are notoriously susceptible to… On Planet Hyde post-natal depression is something only sissies get.

    Comment by lucyjh — November 29, 2012 @ 8:26 am

  2. “I’ve made this point before, but the primacy of the ACT party in New Zealand public life is so weird.”

    Maybe weird, but certainly simple: money buys influence.

    Comment by billbennettnz — November 29, 2012 @ 8:27 am

  3. *Martyn Bradbury. But yes, it is an incredibly perverse world we live in where Rodney Hide gets a nationally syndicated column about anything, apart from political mismanagement.

    Comment by Chris Bull — November 29, 2012 @ 8:27 am

  4. John Minto has (or had?) a Fairfax column.

    Comment by Graeme Edgeler — November 29, 2012 @ 8:32 am

  5. Malcolm Bradbury would argue eloquently against ultra violence in the home.

    Comment by Jake — November 29, 2012 @ 8:43 am

  6. no, Labour just gave us Winston Peters and might do again.

    Comment by NeilM — November 29, 2012 @ 9:20 am

  7. “I’ve made this point before, but the primacy of the ACT party in New Zealand public life is so weird.”

    as billbennettnz said really – its only weird if you see ACT as a unique party with its own purpose as opposed to a front for the same wealthy backers who also drive/fund other right wing policy and parties

    Comment by framu — November 29, 2012 @ 9:36 am

  8. NeilM wrote: no, Labour just gave us Winston Peters and might do again.

    Indeed, and National gave us Winston Peters twice, and might do so a third time.

    While Winston Peters is irritating and disingenuous, he is irritating and disingenuous in a sufficiently centrist way as to be a popular coalition partner for both National and Labour

    Comment by kahikatea — November 29, 2012 @ 9:36 am

  9. Malcolm Bradbury? The History Man? http://en.wikipedia.org/wiki/The_History_Man

    Comment by Rob — November 29, 2012 @ 10:31 am

  10. Most people can’t see anything wrong with redundancy law being brought in which solves the problem for once and for all. Compulsory redundancy payments are important because they reflect and elevate loyalty to a firm, which includes working consistently, not taking too much time off (if any), upskilling in the workplace, etc. The problems arise when there are discrepancies, eg, when private negotiations can legally be made. Redundancy needs to be a certain amount of weeks per year, such as two weeks redundancy for every year worked for a company, up to a maximum of twenty years.

    There is no reason why compulsory redundancy cannot be brought in. Companies have enjoyed lower tax rates and lower ACC levies over the last four years. The only thing that has been raised is their contributions to KiwiSaver, and that’s still not even compulsory. ACT is, in other words, The Dinosaur Party, worse in some instances than National when it comes to workers’ rights.

    Comment by Dan — November 29, 2012 @ 10:54 am

  11. Malcolm Bradbury? The History Man?

    I have actually read that, and think of Bomber whenever I see it on my book shelf. Fixed.

    Comment by danylmc — November 29, 2012 @ 10:55 am

  12. Also, Bomber has a Wikipedia page!

    Comment by danylmc — November 29, 2012 @ 10:57 am

  13. I must admit I do enjoy it when Hide gets on Nights on RNZ, he has a way of explaining lunatic rightwingery in a measured manner that makes sense. Brings a bit more civility into political debate.
    The thing is though is that views such as his are so often presented as common sense, and I think the manner in which they are delivered has a lot to do with that. ACT speakers and other right wing ideologues tend to be very well educated, very urbane, good at presenting their arguments as rational. In contrast Minto, Bradford and Bomber shout, wave their arms, say things HAVE TO CHANGE NOW!!! etc. I happen to agree with most of what they say, but I think left wing viewpoints would get a lot more airtime if the communicators of them presented themselves in the way economic right wingers do. It would certainly help explain why Russel Norman has been doing so well, he’s barely ever seen in public not wearing a suit.

    Comment by alex — November 29, 2012 @ 11:08 am

  14. if Hone Harawira introduced something like charter schools I would have no objection. There’s been a few maori-based education initiatives introduced and I think they’ve mostly been a success.

    i wouldn’t let him near mental health though.

    Small parties with disproportionate influence is one of those things with MMP and small parties tend to have narrow focus as they are aiming for a niche.

    Comment by NeilM — November 29, 2012 @ 12:03 pm

  15. While Winston Peters is irritating and disingenuous, he is irritating and disingenuous in a sufficiently centrist way as to be a popular coalition partner for both National and Labour

    irritating, disingenuous and xenophobic.

    Comment by NeilM — November 29, 2012 @ 12:11 pm

  16. > We know in times past that such irresponsible souls wouldn’t have had children. Or if they had the children would be offered for adoption.

    Really? I thought they would have just had loads of kids anyway and they’d be put to work in the factories. Which is probably what Rodney secretly wishes for.

    Comment by JB — November 29, 2012 @ 12:17 pm

  17. i wouldn’t let him near mental health though.

    Now, that was funny.

    Comment by Psycho Milt — November 29, 2012 @ 1:02 pm

  18. “Most workers who don’t have valuable skills won’t have the bargaining power to win redundancy payouts, and in the event of an economic downturn they’re the most likely to lose work, and they’ll find it harder to get re-employment.”

    Its hard to understand why smart people like Danyl continue to miss the point when it comes to incentives in the labour market.

    IF IT IS MORE EXPENSIVE TO EMPLOY SOMEONE*, ALL ELSE BEING EQUAL, IT IS LESS LIKELY THAT THAT PERSON WILL GET EMPLOYED.

    *TAKING INTO ACCOUNT ALL ACTUAL AND POSSIBLE COSTS FOR THE DURATION OF EMPLOYMENT.

    Hopefully that is clear enough for y’all.

    One reason the ACT party gets air time is that they use actual truth seeking logic.

    Comment by swan — November 29, 2012 @ 1:16 pm

  19. Amazing part of DPFs post is that he starts with:
    “Redundancy provisions should be negotiated on a case by case basis in collective or individual contracts”
    then at the bottom of the SAME POST he highlights the quote:
    “a recent United States study indicated about 57 per cent of men negotiated employment agreement offers, whereas only 9 per cent of women did.”

    But rather than pointing out that the stat kind of undermines his earlier ceterus parabas wonderland assertion, he uses it to blame women for getting paid less…

    Comment by garethw — November 29, 2012 @ 1:32 pm

  20. “… they use actual truth seeking logic…”

    Do you looney tunes ever get outdoors or does re-reading Atlas Shrugged and fantasising about Hostess Twinkies when you go Galt take up all your time?

    Because it seems the searing truth seeking logic that you speak of has so far delivered us the GFC, climate change denial, Charter schools and an approach to economics that can be usefully likened to Orwell’s boot stamping on peoples faces forever.

    Comment by Sanctuary — November 29, 2012 @ 1:34 pm

  21. As for DPF – the more to the right this National government lurches, the more he simply moves further to the right of that; I have yet to see his right wing fantasies satiated by anything not in a comic book. His political views are increasingly being revealed of those of an outlier extremist, not the liberal he likes to portray himself as.

    Comment by Sanctuary — November 29, 2012 @ 1:44 pm

  22. >His political views are increasingly being revealed of those of an outlier extremist, not the liberal he likes to portray himself as.

    He’s socially liberal. His economics are neoclassical. So he’s a neoliberal. It’s not really that much of an outlier of a position. It used to be, and it may become so again, but both Labour and National moved the political center that way, alternately focusing on social or economic “liberality”. This is why ACT died – they actually achieved their goal.

    Comment by Ben Wilson — November 29, 2012 @ 2:06 pm

  23. “ALL ELSE BEING EQUAL, IT IS LESS LIKELY THAT THAT PERSON WILL GET EMPLOYED.”

    but all else isnt equal is it – so nice theory, but kinda gets munged up when reality and people get added to it

    Comment by framu — November 29, 2012 @ 2:07 pm

  24. What I love, is how the right-wing liberals like Farrar and Hide (Ben W is right, Sanctuary) constantly harp on about how bosses won’t abuse the 90-day ‘sack for no stated reason’ laws because of the *huge* costs of hiring and training replacement staff. But if that were the case, the bosses would have no problem with compulsory redundancy payments, as the boss would never use such costly payments unless genuinely justified by sustained downturn in business.

    Of course, compulsory redundancy does add an extra cost to business, but it is relatively small boost in wage costs, and no real burden to any business if they budget and set the money aside at the time that cost is accrued. A firm so unstable that these extra redundancy costs push it into bankruptcy would probably fail in short order anyway.

    There is a real problem with firms not setting aside such redundancy (and pension) funds though – see the Big Three US motor firms when the GFC hit. Which highlights the need for redundancy and worker pension funds to be held in trust, with no crossover of trustees from the firm’s management, and with criminal penalties for nicking the worker’s cash.

    Comment by bob — November 29, 2012 @ 2:59 pm

  25. Aaaack! Should read:
    …as the boss would never use such *cheap* redundancy payments unless genuinely justified by sustained downturn in business, as the cost of hiring and training replacement staff would be greater than the redundancy costs.

    Comment by bob — November 29, 2012 @ 3:02 pm

  26. “Orwell’s boot stamping on peoples faces forever.”

    I thought that was Jack London.

    Comment by billbennettnz — November 29, 2012 @ 3:02 pm

  27. Yep. Jack London, The Iron Heel (1907). “If you want a picture of the future, imagine a boot stamping on a human face – for ever”.

    Comment by billbennettnz — November 29, 2012 @ 3:07 pm

  28. Bill,

    The line you quote is from Orwell’s “1984” (it’s O’Brien’s words to Winston Smity).

    Orwell (probably) was inspired by London’s line in “The Iron Heel”: “This, then, is our answer…We will grind you revolutionists down under our heel, and we shall walk upon your face.”

    Comment by Andrew Geddis — November 29, 2012 @ 3:49 pm

  29. Fair enough, I read the Iron Heel more recently than 1984 and those words were awfully familiar.

    Comment by billbennettnz — November 29, 2012 @ 3:51 pm

  30. Hide became yet another victim of hubris. He appeared to love power and its trappings slightly too much for a classical liberal. It’s a political niche still vacant in NZ.

    A classical liberal party with science-based environmental sensibilities. Is that too hard an ask.

    Comment by NeilM — November 29, 2012 @ 6:30 pm

  31. Framu @ 23 ”but all else isnt equal is it – so nice theory, but kinda gets munged up when reality and people get added to it”
    Unlike left-wing theory, which stands up to scrutiny, eh?

    Comment by Clunking Fist — November 29, 2012 @ 7:15 pm

  32. “I’ve made this point before, but the primacy of the ACT party in New Zealand public life is so weird. The Mana Party consistently outpolls ACT, but if there’s a left-wing government I really doubt we’re going to see Hone Harawira get to revolutionise our education system”

    Well, Mana hasnt been around that long, and in the 90s ACT used to poll in the mid teens. Even as recently as the mid 00s, they reliably got 5% of the vote, which is more than Mana has ever got. I think part of their success comes from their ability to convince National that their sub margin of error vote was a temporary blip and that they would eventually correct to more respectable levels.

    Having said that, another reason they were taken seriously was simply that ideologically there was a massive overlap between ACT and National. DPF is a great example of this – he identifies as an ACT supporter, not a National supporter, but I have never actually seen him criticise an ACT policy, let alone from the left. A lot of people are basically ideologically 100% for ACT and only support National because they want to support a party that will play a major role in government. So it doesnt cost National much with its supporters to throw policy bones to ACT, not in the way it would cost Labour to throw them to Mana.

    And having said THAT, I think its possible to overestimate ACTs policy contribution. I struggle to think of a policy that ACT was allowed to enact that the National Party wasnt totally OK with. Rodney Hide wasnt really single handedly revolutionising anything, for all he liked to say he was, he was just fronting up what was, at best, a joint National-ACT policy.

    Comment by Hugh — November 29, 2012 @ 7:31 pm

  33. “So it doesnt cost National much with its supporters to throw policy bones to ACT, not in the way it would cost Labour to throw them to Mana.”
    So you acknowledge that the nation is more right-wing than left wing? If Lab throwing Mana a bone meant a loss of support, then you must mean that folk are more centre-right, centre or centre-left than outright-left. Which, of course, is commonsense.

    Comment by Clunking Fist — November 29, 2012 @ 7:44 pm

  34. @Fist: Whoaaah there! Im talking about National party supporters, not the nation as a whole.

    I definitely “acknowledge” that National supporters see ACT as less extreme than Labour supporters see Mana. (On the whole – I am sure there are some Labour supporters who like Hone). Whether this arises from a general right wing tendency in the nation as a whole, or some other combination of factors, is a discussion for another time, and another person*

    *e.g, not me **

    **e.g, someone more interested in internet political discussions where everybodys head is firmly implanted up their own ass well before the halfway mark is reached

    Comment by Hugh — November 29, 2012 @ 7:48 pm

  35. In my view, DPF typifies the kind of person who has never had to really confront the harsher realities of life.

    Those who are so secure in their little bubbles they actually believe they are bullet-proof and life can be reduced to simplistic mantras like ‘Hard work = reward’ and that the poverty stricken (who are often from ethnic minorities) are to blame for their own predicaments. Essentially, they live in a 1950’s Disney movie.

    Comment by Lee C — November 29, 2012 @ 8:27 pm

  36. #34: Particularly severe downturns bring out the Social Darwinist in certain people –

    #35: Or if they claim to have grown up ‘poor’ and joined the ranks of the nouveau riche. In Aussie they used to be called the ‘white shoe brigade’.

    As far as the Randroids are concerned, they can get away with everyone else starving to death in a ditch, so long as they have a few Blackwater mercs protecting their arses in interior-designed bunkers, and ferrying them around in armoured cars with Corinthian leather seats. And of course, assuming that the starving don’t discover any literature by Che Guevara.

    Comment by DeepRed — November 29, 2012 @ 10:49 pm

  37. Oops, my first sentence was incomplete. It meant to read:

    #34: Particularly severe downturns bring out the Social Darwinist in certain people – especially the ‘precariat’ and lower middle classes who feel they’re competing for jobs with those below them. Crank it up to 11, and you have the collapse of the Weimar Republic.

    Comment by DeepRed — November 29, 2012 @ 10:52 pm

  38. “In my view, DPF typifies the kind of person who has never had to really confront the harsher realities of life.”

    oh and the comment posters on this white middle class blog have?

    Comment by gn35 — November 29, 2012 @ 10:57 pm

  39. Swan says: “Its hard to understand why smart people like Danyl continue to miss the point when it comes to incentives in the labour market.

    IF IT IS MORE EXPENSIVE TO EMPLOY SOMEONE*, ALL ELSE BEING EQUAL, IT IS LESS LIKELY THAT THAT PERSON WILL GET EMPLOYED.

    *TAKING INTO ACCOUNT ALL ACTUAL AND POSSIBLE COSTS FOR THE DURATION OF EMPLOYMENT.”

    Then what happens? You are operating an extraordinarily simple static model here, I genuinely don’t think you have thought of what happens next.

    On ACT, education and DPF, has anyone noticed his comments on charter schools becoming increasingly simplistic, wishful, out of touch with reality, and quite frankly bizarre?

    Comment by Michael — November 29, 2012 @ 11:45 pm

  40. @DeepRed: As I say, I was talking about National party supporters, who are such a small part of the population that their fondness for ACT does not, in my opinion, reflect any general howling right-wingedness on the part of the general public.

    Comment by Hugh — November 30, 2012 @ 1:48 am

  41. gn 35 – I can only speak for myself – so yes.

    Comment by Lee C — November 30, 2012 @ 4:18 am

  42. Clunking Fist “Unlike left-wing theory, which stands up to scrutiny, eh?”

    well obviously not all of it does – so you wont get any argument from me there.

    But i would say that about any theory that tries to explain something in the real world (like say… human interactions and power relationships in the employment market) by trying to explain it with a hypothetical that only works when it denies the reality its trying to describe.

    It doesnt matter where the idea comes from, if your theory relies upon things that can only exist within the theory then its a crap theory

    eg: “heres a range of numbers from 1 to 9. If they were all 2 …..”

    Comment by framu — November 30, 2012 @ 7:45 am

  43. “any theory that tries to explain something in the real world … by trying to explain it with a hypothetical that only works when it denies the reality its trying to describe.”
    Except that’s not what “all other things being equal means”. It means, taking one component of a complex system at a time and taking time to understand that components contribution. If you take the time to understand all the components, you have a better chance of understanding the effect that changes in components will have on the whole (although I’m not suggesting that means that surgeons and taxidermists are the most considerate lovers or life partners).

    Truthfully, do you REALLY reject the assertion that making one of the costs of employment more expensive will have no effect on the willingness of small employers to take on an extra worker? Remember, (studies have suggested, I understand) that most employment is created in small businesses, where the owners (often a husband & wife combo) have all their worldly possessions at stake. If the business fails, not only do they lose their income, but they often lose their savings and many of their possessions as well. I accept that redundancy isn’t fun: I was made redundant once, but it’s not the same as a near-total loss. My parents suffered that once, so I feel I can make the comparison.

    Comment by Clunking Fist — November 30, 2012 @ 8:11 am

  44. “It means, taking one component of a complex system at a time and taking time to understand that components contribution”

    Yeah i get that

    but how can you accurately undersrtand that components overall effect when placed into the real world if you dont include the interaction of all the components as a whole?

    Sure its a usefull tool when discussing, developing, dissecting and testing theories – but surely it only serves that function within the theory – as soon as you shift into the real world you dont get to go “we’ll isolate this one little bit…” without getting some inaccurate and misleading results?

    “truthfully, do you REALLY reject the assertion”

    not at all – i just reject trying to prove it without looking at a full picture. It doesnt strike me as very “truth seeking”

    Comment by framu — November 30, 2012 @ 8:33 am

  45. Well, unemployment is high at the moment, and not improving as fast as economists excepted (and politicians hoped). There’s your full picture. Now then, shall we blame:
    a) cuts in govt spending (sometimes called “lack of investment”)
    b) benefits too generous (those lazy beneficiaries)
    c) prevailing wage rates too high to clear the labour market
    d) business uncertainty due to the lack of growth overseas (global meltdown not yet done)
    e) business hesitation due to high exchange rate & no sign of “improvement”
    f) difficulties in obtaining credit (the “evil banks” theory)
    g) ACC levies too high
    h) businesses busy deleveraging
    i) evil unions
    j) businesses investing in technology for productivity gains (rather than employing more staff)
    k) many or all of the above
    l) too hard to tell
    m) no one knows
    n) other factors I forgot to include (earthquake trauma?)

    Comment by Clunking Fist — November 30, 2012 @ 1:46 pm

  46. It really is amazing that all of our social problems will disappear if only we faithfully followed neo liberal economics as promoted by DPF an Hide. Extraordinary that NZ has not done so.

    DPF is fond of overseas travel, odd that he has not noticed poverty, starvation and desperation on his travels to countries with no welfare systems worth discussing.

    Comment by peterlepaysan — November 30, 2012 @ 9:10 pm

  47. That is because such people are like ‘extras’ only present add presence to the miss-en-scene of his fantasy narrative.

    Comment by Lee C — December 1, 2012 @ 6:31 am

  48. Rodney Hide wasnt really single handedly revolutionising anything, for all he liked to say he was, he was just fronting up what was, at best, a joint National-ACT policy.

    I agree. Hide put through the Auckland local body amalgamation which National supported and which in fact was initial put in motion by Labour. And despite Labour’s contrariness in opposition – it’s all a Remuera takeover etc – was a good idea and has worked reasonably well in practice.

    And then Charter Schools – its hardly revolutionary given the variety we already have in the education system.

    He liked to portray himself as a rather revolutionary, and Labour via its over-heated rhetoric aided and abetted that image, but in reality he wasn’t.

    Comment by NeilM — December 1, 2012 @ 8:02 am

  49. Nicely illustrating the voices that could have made an interesting difference to parliament if Hone had got his funding! Certainly wouldn’t be afraid of both those veteran hard workers getting a chance to be part of our national discussion- they certainly represent a proportion of the community.

    I mean Banks! FFS.

    Comment by sheesh — December 1, 2012 @ 4:33 pm

  50. @NeilM #48: Has anyone still taken the self-proclaimed Perk Buster seriously, since being caught junketing on the taxpayer?

    Comment by DeepRed — December 1, 2012 @ 4:44 pm

  51. Do as Rodney Hide says, not as he does. Once again.

    Comment by DeepRed — December 2, 2012 @ 4:22 pm

  52. DPF is fond of overseas travel, odd that he has not noticed poverty, starvation and desperation on his travels to countries with no welfare systems worth discussing.

    Did you ever stop to think just for a moment that the reason those nations don’t have welfare programs is because they are poor, not that they are poor because they don’t have welfare programs?

    It is the wealth generated by capitalism that allows for state welfare in the first place. Those nations with greater economic freedom are also those with the least poverty and the greatest level of human development. Poverty reduction is closely associated with institutions and policies consistent with economic freedom. Indicators of economic freedom such as openness to trade and small size of the government are robustly associated with poverty reduction in developing nations.

    The global poverty rate was cut in half in the 25 years to 2005 and it was cut in half again from 2005 to now. See: With Little Notice, Globalization Reduced Poverty Never in history have so many people been lifted out of poverty in such a short period of time. Traditional poverty reduction programs have done little to alleviate poverty. So what was the cause of this? It is has been globalization and the spread of capitalism, economic liberalization within nations, as in China and India, and trade liberalization between nations. Precisely the neoliberal policies you so abhor. As the authors argue

    These factors are manifestations of a set of broader trends – the rise of globalization, the spread of capitalism and the improving quality of economic governance – which together have enabled the developing world to begin converging on advanced economy incomes after centuries of divergence. The poor countries that display the greatest success today are those that are engaging with the global economy, allowing market prices to balance supply and demand and to allocate scarce resources, and pursuing sensible and strategic economic policies to spur investment, trade and job creation. It’s this potent combination that sets the current period apart from a history of insipid growth and intractable poverty.

    Comment by Quoth the Raven — December 2, 2012 @ 7:04 pm

  53. Oh don’t be so empirical, QtR!

    Comment by Clunking Fist — December 3, 2012 @ 12:25 pm

  54. It is the wealth generated by capitalism that allows for state welfare in the first place. Those nations with greater economic freedom are also those with the least poverty and the greatest level of human development.

    I guess if you ignore the Soviet experiment – you know, the one that dragged them out of feudal serfdom and put a man in space within 50 years – then this holds true.
    And to pre-empt the inevitable “Show us your successful Soviet system now then” response, the point was merely to illustrate that capitalism is not the only driving force of human achievement.

    Indicators of economic freedom such as openness to trade and small size of the government are robustly associated with poverty reduction in developing nations.

    These indicators are also robustly associated with the concentration of vast wealth to a select few, politically connected insiders while the peasants get some slightly larger crumbs so I guess it’s all relative.

    Comment by Gregor W — December 3, 2012 @ 1:22 pm

  55. I guess if you ignore the Soviet experiment – you know, the one that dragged them out of feudal serfdom and put a man in space within 50 years – then this holds true.

    The Serfs were emancipated in 1861 decades before the Bolsheviks came to power. And what happened to them after the revolution? Millions were deported and forced off their land or sent to Gulags, for every Kulak deported three or four poorer peasants were deported, millions were murdered, and millions more perished in the famines that followed the revolution.

    Russia was industrialising rapidly in the decades before the Bolsheviks took power. In fact after 1880 Russia’s industrial growth was more rapid than its European neighbors. By some estimates by 1913 its national income had reached the level of the United Kingdom. Pre-revolution agricultural production was higher than the UK. After the revolution it declined precipitously and famine set in leading to millions of deaths. Industrial production crashed and hyperinflation began. Until the NEP was enacted which re-legalised private trade and the economy began to grow. When the NEP was done away with and the first five year plan enacted famine took hold again. Millions more perished. By 1950 despite the postwar economic growth, the capital accumulation and industrialization, per capita consumption had only increased 0.5% from 1913 levels. The 50s were the high point for the Soviet system from then on it was decline. Soviet output decline substantially from the 50s to the 80s. The centrally planned economy was simply unable to deal with the complexity of modern production processes. So no, despite the Cold War self-glorification of putting a man in space, I do not believe that the Soviet experiment which resulted in the death and enslavement of millions was a driving force of human achievement. It was a bloody horrific failure.

    Comment by Quoth the Raven — December 3, 2012 @ 3:32 pm

  56. Thanks for the correction QtR. I shall rephrase:

    “…you know, the one that dragged them out from under the thumb of an autocratic monarchy and put a man in space within 50 years – then this holds true.”

    So no, despite the Cold War self-glorification of putting a man in space, I do not believe that the Soviet experiment which resulted in the death and enslavement of millions was a driving force of human achievement. It was a bloody horrific failure.

    Well, you can’t really sensibly pick and choose your successes in human achievement premised on ideology can you.
    Otherwise I could reasonably claim that millions of dead and enslaved dead south-east asians, africans and arabs would attest to the horrific failure of 20th century American capitalism.

    Comment by Gregor W — December 3, 2012 @ 3:52 pm

  57. There you go AGAIN, QtR, quoting facts and figures in support of your argument when lefties just KNOW that two legs equals BAD.

    “These indicators are also robustly associated with the concentration of vast wealth to a select few, politically connected insiders while the peasants get some slightly larger crumbs so I guess it’s all relative.” True dat, Gregor. Why, I have to go through life with just a house, 2 cars, a colour television, a trip overseas only every second year or so. I also face the prospect of retiring at age 67 or 70-odd, whereas in past times I could expect to happily work to my dying day.

    Comment by Clunking Fist — December 3, 2012 @ 5:56 pm

  58. Why, I have to go through life with just a house, 2 cars, a colour television, a trip overseas only every second year or so. I also face the prospect of retiring at age 67 or 70-odd, whereas in past times I could expect to happily work to my dying day.

    Thanks cumulated effects of a mixed economy!

    Comment by Pascal's bookie — December 3, 2012 @ 6:08 pm

  59. “…you know, the one that dragged them out from under the thumb of an autocratic monarchy and put a man in space within 50 years – then this holds true.”

    Only to put them under the thumb of a murderous totalitarian dictator.

    I hope your whole comment was meant to be glib and flippant and not a serious response. Because you don’t actually believe the Soviets were an improvement over what preceded them do you?

    Comment by Quoth the Raven — December 3, 2012 @ 9:42 pm

  60. “Thanks cumulated effects of a mixed economy!”
    Hmm, one part of the mixture produces ever cheaper and better goods and services. But how are your rates, PB?

    Comment by Clunking Fist — December 3, 2012 @ 9:43 pm

  61. Geez the rabid commies are frothing at the bit tonite eh. You must have hit a nerve CF.

    Comment by phil — December 3, 2012 @ 9:57 pm

  62. Indeed, Phil. All i said was “Who pays all thes taxes?! Who?! WHO?! WHO?!” and the things went a bit weird from there.

    Comment by Clunking Fist — December 4, 2012 @ 7:24 am

  63. Actually Phil, it’s when QtR shares her wisdom with us that the cats here go crazy! Ever watched a cat that can see a bird, say through a window? Their little jaws move up and down in a motion that appears involuntary, and little nonsense sounds come out.

    Comment by Clunking Fist — December 4, 2012 @ 7:26 am

  64. True dat, Gregor. Why, I have to go through life with just a house, 2 cars….

    @ CF – QoT was specifically referring to ‘developing nations’. But all power to you if you can find a peasant in Uttar Pradesh who can support your middle class dream on Rs20,000 a year.

    I hope your whole comment was meant to be glib and flippant and not a serious response.

    It was, but no more glib than your tired trope of “free trade, globalisation and capitalism = awesome, every other politico-economic construct=rubbish.”

    So while it is absolutely correct to say ‘free-er’ trade creates significant benefits by moving more individual into the exchange economy to barter their goods and services, it is disingenuous to merge that theme with “free trade” and “globalisation” within the same statements as though one case exist without the other.

    It could well be argued that judicious use of tariffs and a policy of Mercantilism are more valuable tools to developing nations in enabling the creation of a robust domestic economy than any notion of international free trade.

    An alternate view on the pros and cons of free trade referencing NAFTA from that slalwart proponent of International Socialism, the <a href="http://www.cfr.org/economics/naftas-economic-impact/p15790"Council on Foreign Relations

    “Many economists agree that NAFTA has had some positive impact on overall U.S. employment. But most also agree that gains have been accompanied by some painful side effects. Edward Alden, a senior fellow at the Council on Foreign Relations, notes that wages haven’t kept pace with labor productivity and that income inequality has risen in recent years, in part due to pressures on the U.S. manufacturing base…

    Opponents of NAFTA take a starker position. Thea M. Lee is policy director for the AFL-CIO, which opposes NAFTA and lobbies against other free trade agreements as unfair to U.S. workers and corporations unless they include provisions that require signatory countries to raise labor and environmental standards. Lee argues one of the main upshots of the deal has been to “force workers into more direct competition with each other, while assuring them fewer rights and protections.”…

    Since 1994, Mexico’s GDP has increased at an average annual rate of 2.7 percent, below the average growth rates of 3.3 percent and 3.6 percent in the United States and Canada, respectively…In addition, experts say trade liberalization between Mexico and the United States has brought broad positive consequences for regular Mexicans, not just Mexican business interests…

    But some analysts argue the deal hasn’t benefited Mexico much. Alejandro Portes, a Princeton sociology professor, notes stagnation in the country’s labor market: “Economic growth has been anemic in Mexico, averaging less than 3.5 percent per year or less than 2 percent on a per capita basis since 2000,” Portes writes. “Unemployment is higher than what it was when the treaty was signed; and half of the labor force must eke out a living in invented jobs in the informal economy, a figure ten percent higher than in the pre-NAFTA years.”

    Comment by Gregor W — December 4, 2012 @ 9:35 am

  65. apologies for the messy link

    Comment by Gregor W — December 4, 2012 @ 9:35 am

  66. ““Many economists agree that NAFTA has had some positive impact on overall U.S. employment. But most also agree that gains have been accompanied by some painful side effects. ”
    Many economists agree that spending on dfences systems to ward off alien attack are justifiable ways to stimulate the economy.

    http://www.huffingtonpost.com/2012/06/21/paul-krugman-alien-invasion_n_1612973.html

    Comment by Clunking Fist — December 4, 2012 @ 1:17 pm

  67. So what’s your point, CF?

    Comment by Gregor W — December 4, 2012 @ 1:27 pm

  68. On the one hand “In addition, experts say trade liberalization between Mexico and the United States has brought broad positive consequences for regular Mexicans, not just Mexican business interests…”
    On the other “But some analysts argue the deal hasn’t benefited Mexico much.”

    Of course, Mexico is a fully functioning democracy with a great respect for law and order, so the lack of investment confidence and growth is a complete mystery, I tells ya.

    Comment by Clunking Fist — December 4, 2012 @ 1:32 pm

  69. My point comes back to “every other thing being equal”.
    So Mexico and the USA have liberalised trade. Excellent! But Mexico is, err, not the least corrupt country in the world. And USA is undermining confidence and investment through its central bank printing money and handing it to the goverment to spend. If reductions in restrictions on trade were matched by increasing levels of confidence and improving fiscal and monetary management and law and order, then it would be less diffocult for folk to say “see little or no improvement”.

    ‘It could well be argued that judicious use of tariffs and a policy of Mercantilism are more valuable tools ”
    Yep, valuable to politicians: access to those tools becomes an important way of bestoying favours on members of your constituancy. In other words, corruption. And corruption tends to be a bit of a brake on growth and investment.

    Comment by Clunking Fist — December 4, 2012 @ 1:41 pm

  70. But Mexico is, err, not the least corrupt country in the world….And corruption tends to be a bit of a brake on growth and investment.

    Let’s take a quick look at the top 10 in GNP growth over the 2011-12 period (all over 8%) from the CIA factbook: Qatar, Ghana, Turkmenistan, Iraq, China, PNG, Argentina, Mongolia, Turkey and Sri Lanka.

    Nothing to see here, officer…

    Comment by Gregor W — December 4, 2012 @ 1:58 pm

  71. So while it is absolutely correct to say ‘free-er’ trade creates significant benefits by moving more individual into the exchange economy to barter their goods and services, it is disingenuous to merge that theme with “free trade” and “globalisation” within the same statements as though one case exist without the other.

    Globalization is more than just free trade, it is more than just economic integration, it is cultural integration as well, it is about the free exchange of ideas as well as goods and the erosion of the nation state, but free trade and globalization are inextricably linked. The economist Joseph Sitglitz defines globalization with specific reference to free trade as “the closer integration of the countries and peoples of the world which has been brought about by the enormous reduction of costs of transportation and communication, and the breaking down of artificial barriers to the flows of goods, services, capital, knowledge, and (to a lesser extent) people across borders.”

    It could well be argued that judicious use of tariffs and a policy of Mercantilism are more valuable tools to developing nations in enabling the creation of a robust domestic economy than any notion of international free trade.

    It could be argued, but not very well because the overwhelming weight of empirical evidence is against it. One can always find malcontents who rally against globalization and free trade (I’m sure your just playing devil’s advocate and don’t count yourself among those reactionaries). See for instance, this paper Globalization, Inequality, and Poverty since 1980.

    Dollar and Kraay, 2001b, identify the top one-third of developing countries in terms of increases in trade to GDP over the past 20 years and label them the “post-1980 globalizers.” So, by construction this group has had a particularly large increase in trade: 104%, compared to 71% for the rich countries. What is striking is that the remaining two-thirds of developing countries have actually had a decline in trade to GDP over this period (figure 6). The globalizing group has also cut import tariffs significantly, 34 points on average, compared to 11 points for
    the non-globalizers (figure 7). The list of post-1980 globalizers includes some well-known reformers (Argentina, Brazil, China, Hungary, India, Malaysia, Mexico, the Philippines, and Thailand). These countries have moved ahead on a wide range of reforms involving trade and
    investment liberalization, stabilization where necessary, and property rights reforms in the transition economies such as China and Hungary. The recent globalizers have experienced an acceleration of their growth rates, from 1.4% per year in the 1960s to 2.9% in the 1970s, 3.5% in
    the 1980s, and 5.0% in the 1990s (figure 8), while rich country growth rates slowed down over this period (figure 9). What about developing countries not in the “globalizing” group? They had a decline in the average growth rate from 3.3% per year in the 1970s to 0.8% in the 1980s
    and 1.4% in the 1990s (figure 10). Thus, in the 1990s the globalizing developing countries were catching up with rich countries, while the non-globalizers continued to lag further and further behind.

    Here’s a paper which finds that the more globalized parts of Mexico have done better than the least globalized parts in the interior and the South. Globalization, Labor Income, and Poverty in Mexico

    Comment by Quoth the Raven — December 4, 2012 @ 2:19 pm

  72. @ Qot

    One last point re the theoretical benefits of mercantilism: It could be argued, but not very well because the overwhelming weight of empirical evidence is against it.

    Would that be the empirical evidence that ignores how well it worked out for several major European powers over a period of 300 years or so, creating lucrative and extensive empires?
    Admittedly it probably didn’t work out well for those powers in the final accounting, but it sure as shit made sense at the time – a phenomenon I suspect that we will see manifested in the fullness of time by the ideology du jour and panacea for all human ailments, Globalisation.

    Further, I don’t think neomercantilism can be dismissed out of hand for developing nations – as a ‘stepping stone’ policy setting – having had it’s successes (certainly up until the 80s) in both Japan, China and Singapore.

    Comment by Gregor W — December 4, 2012 @ 2:58 pm

  73. “Let’s take a quick look at the top 10 in GNP growth over the 2011-12 period (all over 8%) from the CIA factbook … Nothing to see here, officer…”

    Hmm, take a look at a single year whilst ignoring the low bases many start from: e.g. post(ish) war Irag, Argentina crash n burn 2002 (i.e. negative 14.7%), unease about the accuracy of Chinese GDP data, etc.
    Historical for each country:

    http://www.indexmundi.com/g/g.aspx?c=ar&v=66

    Comment by Clunking Fist — December 4, 2012 @ 6:21 pm


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