The Dim-Post

June 2, 2014

Inequality, MMP, Internet-Mana and the Conservatives

Filed under: general idiocy — danylmc @ 7:23 pm

Here’s what I’ve been thinking about this weekend:

  • Inequality: the status of inequality in New Zealand isn’t controversial. We underwent a huge rise in inequality during the 1980s and 1990s. It dipped slightly under the Clark/Cullen government and its jumped around a bit under National. New Zealand (arguably) saw the largest increase in inequality of any OECD country since the 1970s.
  • MMP. We have the Mixed Member Proportional electoral system. It’s mostly a good thing, but many of the other unequal OECD countries – and all of the anglo countries that we compare ourselves to – have FPP style electoral systems that are dominated by two large parties.
  •  If you’re a very high net-worth individual – the number of which will increase as your society gets more unequal – and you want to influence the political system in an FPP nation you’re pretty much stuck doing so through the two dominant political parties, and if your agenda or policy needs are outside the window of what’s palatable for those mainstream parties you’re out of luck.
  • But MMP happens to be a system where (a) small parties can make it into government, and (b) they can have a disproportionately large impact on a government’s policy agenda if they can position themselves into a kingmaker role.
  • So while Kim Dotcom and Colin Craig and their self-funded political parties seem like weird highly individual cases, I wonder if they’re symptoms of two converging trends: increased inequality and increased electoral proportionality.
  • Most businesses and many wealthy individuals who want to influence the political system can do so through lobbying and donating to Labour and National, but for an increasing number of the very odd/very rich, setting up your own party becomes a much more viable, rational way to influence policy.
  • I don’t believe many (or any?) of the other countries New Zealand likes to compare itself to have this interesting combination of high inequality and electoral proportionality, so this might be a problem that’s unique to us.

53 Comments »

  1. Interesting, but there are a couple of point regarding inequality statistics here:

    1) The largest increases in inequality occurred at a time when the methodology and measurement of data also changed – and the tax base was broaden (eg fringe-benefit taxation, and improvements in tax reporting). So it isn’t entirely clear how much was rising inequality and how much was “measurement” related.
    2) Income inequality measures are, on the face of it, in the middle of the OECD pack for NZ – not high. In the relevant measure for this sort of thing (top 1% share) current shares are where they were in the early 1950s and up a couple of pp’s from their lowest ebb (http://topincomes.g-mond.parisschoolofeconomics.eu/).

    Don’t think it is necessary to tie inequality indices to get concerned about the type of entry we are having to the political sphere, and the disproportionate impact of extreme parties who have spent their way in😉

    Comment by Matt Nolan — June 2, 2014 @ 7:31 pm

  2. Scale is a factor too. To put together a national-level political party in a country with a population of ~4 million is probably an order of magnitude smaller than doing the same in the UK. So here you can simply be a millionaire, whereas in the US you would likely need to be a billionaire (e.g. Ross Perot).

    Comment by mikaere curtis — June 2, 2014 @ 7:44 pm

  3. A bit of a stretch, as Kim Dotcoms fortune can hardly be attributed to NZ inequality.
    He just happened to fly in with a huge bank account, got a bit upset with John Key and decided to fund an own political party.

    Colin Craig is rich, but hardly the richest individual and we haven’t seen many parties bankrolled to that extend. (maybe ACT)

    I do have my doubts that either parties will lead anywhere, even if either of them makes it into parliament. Single or limited cause parties seldom have the ability to attract voters long enough over a period of time to sustain a presence in parliament.

    I think they will both dwindle into oblivion sooner rather than later and prove a huge waste of money.

    Insofar I think in the long run if you have a single issue it is more efficient to donate an existing party and exert influence that way.

    Then again, we wouldn’t have that much fun as we do now.
    This is going to be an entertaining election.

    Comment by eszett — June 2, 2014 @ 8:04 pm

  4. A member of the reality-based community responds first. Well done, Matt.

    Comment by Tinakori — June 2, 2014 @ 8:28 pm

  5. It’s not clear what the “problem” is here. Some guys are passionate enough to have a crack at politics. Better that than trying to influence politicians behind closed doors.

    In general, starting your own political party had to be because of your ideology not because you are in it for personal gain. Lobbyers on the other hand are all about self interest, and don’t always operate out in the open. Obviously Kim Dotcom trying to influence his extradition is an exception to this, but even this is not really a problem given how completely transparent it is.

    Comment by Swan — June 2, 2014 @ 8:29 pm

  6. Yes but, Bob Jones
    Set up the NZ Party in the 1984 (highly disproportional) FPP election, had a big influence in getting Muldoon out despite winning no seats
    this was before the massive increase in inequality ‘coinciding with’/’caused by’ neoliberalism, floating dollar etc

    Comment by Mike — June 2, 2014 @ 8:31 pm

  7. Meh. An unprincipled politician is an unprincipled politician. Inequality is a different issue.
    I presume thats what you are actually talking about, given the names in your header.

    Comment by Grant — June 2, 2014 @ 8:35 pm

  8. You’d need at least one other strong political factor for the equation to work in this currently ‘small open economy’ – which you only mention in passing – a reason to want to influence the political landscape – arguably this is obvious in Mr .Com’s case – what was it for Craig again?

    Comment by Dylan — June 2, 2014 @ 9:39 pm

  9. Could inequality itself be such a factor?

    Comment by Dylan — June 2, 2014 @ 9:40 pm

  10. “…A member of the reality-based community responds first. Well done, Matt…”

    Chris Finlayson’s Mini-Me strikes again.

    Comment by Sanctuary — June 2, 2014 @ 9:58 pm

  11. “… So it isn’t entirely clear how much was rising inequality and how much was “measurement” related…”

    Nice try, but unfortunately a large part of the population was actually alive in the 1970s, and thus provide a substantial body of eye witness testimony that economists like you are bullshitters with agendas.

    Comment by Sanctuary — June 2, 2014 @ 10:00 pm

  12. “for an increasing number of the very odd/very rich, setting up your own party becomes a much more viable, rational way to influence policy.”

    Maybe it’s still a net gain for fair representation in some way, though? You still need to convince people to vote for you, and that often means compromise. eg. For a time, ACT sold its ideological soul for populist policies on things it’s never traditionally cared about to get votes, like overly simplistic and destructive (imho) policies on law and order, but the net result for a time was that all the people who wanted those policies actually had someone to vote for.

    Colin Craig is rich. He even set up a political party, but so far nobody’s voted for him despite all the money he’s spent. Kim Dotcom? I’m still confused, but whatever his motives it seems like a significant number of people are actually in sync with the policies of the party he’s created, plus they’ve made a deal towards ensuring that the Internet/Mana vote will probably be more closely proportional to those who vote for it than if a heap of Party votes were simply lost for not hitting 5%.

    If there’s a problem, I think much of it lies in what the MMP review identified with things like the coat-tailing rule. Ultimately that’s where influential people look to give more influence to favourable blocs of voters, and so try and skew the electoral results in their favour.

    Comment by izogi — June 2, 2014 @ 10:09 pm

  13. In more interesting news, the Taxpayers Union spruiks the GP’s proposed carbon tax.
    Tim Groser suggests this will cripple New Zealand but oddly, thinks a secret trade pact is just fine!

    Comment by Gregor W — June 2, 2014 @ 10:43 pm

  14. >So while Kim Dotcom and Colin Craig and their self-funded political parties seem like weird highly individual cases, I wonder if they’re symptoms of two converging trends: increased inequality and increased electoral proportionality.

    Perhaps, although I’m inclined to think it’s because we’re one of the smaller PR countries in the OECD. The total electoral budgets of the major parties here are small potatoes to rich people, and they have been for a long, long time. There have been weird self-funded independents since democracy was pretty much invented in every country that it’s allowed. What I find remarkable is more that this actually died off at all. The rise of Labour in the 30s practically finished independents off altogether. It took until MMP for us to actually shrug off this total stranglehold. I’m surprised that there haven’t been more vanity parties, really. It could be because that small budget does also mean that the power of money to sway voters is actually quite small, which is why ACT is nowhere now.

    Let’s also not count any chickens before they hatch. Neither Craig nor IP have any seats, and they may well still have none after the election. Then they won’t hold the balance of power and their failure will be as unremarkable as every guy in every country who has a tilt at politics with their cash and fails. Of those, there is no shortage.

    Comment by Ben Wilson — June 2, 2014 @ 10:53 pm

  15. “Maybe it’s still a net gain for fair representation in some way, though?”
    Well, only if your aim is to have money fairly represented in Parliament.

    Here we have a rich person funding a party of the left. While not unheard of, the general tendency is for rich people to fund parties of the right; for reasons which are probably obvious to everyone except the economists present.

    In response to Danyl’s implicit question : I think it’s a problem. In the current situation of political financing, I think it’s fair game (exactly in the same way that the abuse of the overhang principle is fair game — because the other side started it). In both cases, it’s a sure sign that the system should be fixed quickly, because the rorts have only just begun.

    Luckily, the solution is well-known. Most developed countries have some form of proportional representation; unsurprisingly, the same countries (and not the Anglo, FPP ones) tend to have public funding of political parties, based on their electoral popularity, AND strict caps on donations.

    Unfashionable, eh? But only because fashion leader Jonky doesn’t like it.

    Comment by AlistairC — June 3, 2014 @ 1:44 am

  16. Public funding of political parties is often pushed by parties who are experiencing a dearth of their own funding (i.e. those who are temporarily unpopular), and incumbent parties. For the obvious reasons that public funding would smooth out problems where people don’t like you (and therefore don’t donate), and that if you have public funding and also at the same time lock down private funding, then it becomes substantially harder to start new parties. It isn’t clear to me what problem would be solved by public funding – the current problem we have is that a party was established with donations prior to the party being formed, in excess of the existing limits. Obvious answer is to modify the law to apply to the “establishment assets” of a political party. It’s not clear to me how we jump from this to public funding.

    Comment by PaulL — June 3, 2014 @ 5:13 am

  17. The rise in inequality under national isn’t true. Just it suits your polictal agenda dosent make it true all data shows a continuation of narrowing of the gap

    Comment by Graham — June 3, 2014 @ 7:49 am

  18. Now my annual income is 3 times the medium income but I work bloody hard.
    Why should I be punished for working 70 hours a week and the stress of oweing 14 million dollars
    The best way of explaining this to a academic person is this
    Think back to university
    It’s not fair that not every passes exams
    To take that into account the people that study hard should sit twice as many papers so that can give 1/2 the passes to their mates who get pissed every weekend and can’t be arssed to study
    now do u get it!!!

    Comment by Graham — June 3, 2014 @ 7:55 am

  19. “Now my annual income is 3 times the medium income but I work bloody hard. Why should I be punished for working 70 hours a week and the stress of oweing 14 million dollars”

    Graham, what’s your equity?

    I’m not automatically against lower tax, but I get bored of hearing this argument as if it justifies lower taxes for high income earners. Some people work harder han others, but large numbers of people also work bloody hard for absolutely crap wages.

    We live in a complex society. It rewards some with opportunities, hinders others, and dumps luck on a few, frequently based on factors which are unfair. Work certainly has something to do with success, but it doesn’t have everything to do with success. When people earn large amounts, they’re doing so in a context which treads on people who do similar amounts of work to provide that reward.

    Comment by izogi — June 3, 2014 @ 8:20 am

  20. “Nice try, but unfortunately a large part of the population was actually alive in the 1970s, and thus provide a substantial body of eye witness testimony that economists like you are bullshitters with agendas.”

    Sigh – I probably shouldn’t bother replying as you aren’t interest in viewing me fairly. But I’m a sucker for punishment

    I’m not trying to say their isn’t inequity, or unfairness. I’m just pointing out that the data we have don’t necessarily suggest much (eg the top 1% shares are equivalent to what we see in Nordic nations – not places like Australia, UK, and the US, 1986 was a period where both our GDP and labour market figures were completely changed, the broad-base changes in the tax system are known to have changed the way people reported income).

    Individual experience, and the fact that groups reinforce myths about the past, often lead people to believe the past was somehow always magically better than now. Trying to use evidence that is a bit closer to being objective can be useful.

    I’m hardly an anti-inequality analysis person – I’m doing my Phd thesis on the measurement and changes in NZ’s income distribution. I just recognise that these things be complicated – and if we want to design policy we have to have a crack at understanding what the trade-off are and asking society what it thinks is fair given that.

    Comment by Matt Nolan — June 3, 2014 @ 8:22 am

  21. The problem with economists is nowadays they are completely out of credibility, so anything they write I generally view very skeptically and/or assume they have an ideological agenda. However, I may have been a tad grumpy last night so thank you for your patience.

    Comment by Sanctuary — June 3, 2014 @ 8:47 am

  22. “Nice try, but unfortunately a large part of the population was actually alive in the 1970s, and thus provide a substantial body of eye witness testimony that economists like you are bullshitters with agendas.”

    Yeah Sanc. Matt Nolan, one of the most even handed guys in the NZ internet scene is lying because you don’t agree with him. 40 yr old anecdotal accounts are obviously the gold standard of evidence on this issue aren’t they.

    Comment by Swan — June 3, 2014 @ 9:02 am

  23. MMP has stabilised the political sphere and reestablished an equilibrium. There will always be movements to disestablish that equilibrium, and in other locations they would either operate within the major parties, find a singular MP with a sufficient electoral base, or use political movements outside them to create that change.

    Nolan, nice handwave. You’d have to have pretty large measurement effects to meaningfully counter the recorded jump in inequality.

    Comment by George — June 3, 2014 @ 9:34 am

  24. …and thus provide a substantial body of eye witness testimony
    That’s true, and the optical coverage was pretty good for a bunch of Cyclops standing in a defensive ring.

    Inequality,….. inequality, …. inequality, …..
    Haven’t you heard? Pikkety’s theory appears to have been stillborn.

    Comment by Tom Hunter — June 3, 2014 @ 9:37 am

  25. Matt Nolan, one of the most even handed guys in the NZ internet scene

    Hardly. He was on the internet yesterday telling us that NZ’s climate change emissions are “a non-existant externality”, and that demand for low-emissions products and technologies is “irrelevant”.

    Comment by George — June 3, 2014 @ 9:55 am

  26. “Chris Finlayson’s Mini-Me strikes again.”

    Not the insult you might think it to be, Sanctuary. Anyone would be happy with his record as Treaty Minister.

    Comment by Tinakori — June 3, 2014 @ 9:57 am

  27. Is Australia’s Palmer United Party relevant here?

    Comment by Duncan Moore — June 3, 2014 @ 10:12 am

  28. Ignorant question here, do we have a cap on the amount parties can spend during the electoral cycle?

    Comment by northshoreguynz — June 3, 2014 @ 10:27 am

  29. *sigh* (dont ya just love that little passive agressive bullshit!??)

    Matt Nolan, I get that you’ve spent many years and put a lot of hard-work into learning the minutiae of neo-classical economics. I can well understand that it must be very hard to accept that you’ve essentially been brainwashed by what amounts to a propaganda project. But you really should consider just letting it go because the longer you cling to it the sillier you’ll look.

    In the 1960’s and 70’s a single income could easily support a family. Now? Hmm…

    In the 1960’s and 70’s unemployment was very low. Now? Hmm…

    In the 1960’s and 70’s job security was very high. Now? Hmm…

    In the 1960’s and 70’s etc etc on it goes. Not rose tinted nostalgia, just basic facts which show how far backwards we’ve gone as a nation.

    It is sad and ridiculous to be still debating this in light of the last 30 years of political-economic history, the GFC, and most recently, Picketty.

    Comment by lep — June 3, 2014 @ 10:47 am

  30. Hardly. He was on the internet yesterday telling us that NZ’s climate change emissions are “a non-existent externality”, and that demand for low-emissions products and technologies is “irrelevant”.

    @George – From an economic modelling perspective, both these statements probably correct.

    Comment by Gregor W — June 3, 2014 @ 10:48 am

  31. How come my erudite and thoughtful post got eaten, but when I try to post it again i am told I’ve already posted it? Is it because I signed a petition in support of net neutrailty?

    Comment by Sanctuary — June 3, 2014 @ 10:50 am

  32. A link would be good George – for context.

    Comment by Swan — June 3, 2014 @ 10:59 am

  33. @18 Graham: “It’s not fair that not every passes exams…”

    Yes, but that’s because an exam is nominally a test of capability (or learning, or similar). Hence, there is a standard to be met. If you don’t meet the standard, this is reflected in your grade.

    However, life is not a test. The essence of the argument to be concerned about inequality is that it is unfair that some people have plenty while others do not have enough.

    Of course, you can, as you seem to be doing, point at all sorts of reasons why somebody might have plenty while other feckless idiots do not have enough. However, that misses the point that we all eventually suffer if others do not have enough. Nobody is suggesting that resources should be distributed dead even; just that resources shouldn’t be distributed too unevenly.

    Finally, plenty of poor people work very hard indeed. It is just that through a combination of circumstance and opportunity their work output is not as personally profitable to them as the work output of some other people is to them.

    Comment by RJL — June 3, 2014 @ 11:04 am

  34. “Hardly. He was on the internet yesterday telling us that NZ’s climate change emissions are “a non-existant externality”, and that demand for low-emissions products and technologies is “irrelevant”.”

    George, I was discussing it in terms of terminology – which I then did a follow up post discussing once I realised it may have caused some confusion.

    http://www.tvhe.co.nz/2014/06/02/on-free-riders-and-externalities/

    Also, I am in favour of the tax – a point I made explicitly in both posts! I just wanted to note how we have to be careful with our frameworks.

    “Matt Nolan, I get that you’ve spent many years and put a lot of hard-work into learning the minutiae of neo-classical economics. I can well understand that it must be very hard to accept that you’ve essentially been brainwashed by what amounts to a propaganda project. But you really should consider just letting it go because the longer you cling to it the sillier you’ll look.”

    Lep, I’m am a trenchant critic of what has happen in the US – completely based on the data and evidence that has come out of that country. We simply haven’t had the same experience here when we look through the data.

    It isn’t about being brainwashed – it is about being willing to look at evidence with an open mind. I completely accept that people may view current policy as unfair – but then our argument should be based on those principles on fairness, not on ignoring data that doesn’t agree with our prior beliefs!

    Also I know Piketty’s argument very well – it is the same style of argument many of us have been making about growing automation and the role of government for many decades now. I’m glad to see him bring it up forcefully even if his narrative has flaws – I have a review that runs through the book here: http://www.tvhe.co.nz/2014/04/22/book-review-capital/

    “The problem with economists is nowadays they are completely out of credibility, so anything they write I generally view very skeptically and/or assume they have an ideological agenda. However, I may have been a tad grumpy last night so thank you for your patience.”

    Sanctuary. I’m sorry that some of the prior actions of economists have tarred all our reputations with respect to what we have to say – my key rule is that if an economist is telling someone what is “right” or “wrong” with regards to policy, they’ve stopped being an economist. Our role should be to talk about trade-offs and to try to dig into what the data, and terminology, represent in these debates – but we make mistakes, I know I certainly do.

    Comment by Matt Nolan — June 3, 2014 @ 11:13 am

  35. The problem, RJL, is that sometimes people need an indication that their work output is not as valued, allowing them to either choose to continue doing what they are doing (with low value), or to move to a higher value production. In other words, if we just subsidised buggy whip manufacturers, they’d still be making them (I know, an old story, but none the less accurate for that). I can agree that we need to make sure that nobody goes without – but we do that already in NZ. It is necessary to have a level of differentiation in pay in order for those that are doing low value things to get the signal to move to higher value things.

    One concern that people seem to have in our current society is that the rewards to talent seem non-linear – Roger Federer gets paid an awful lot more than a tennis player who is only a little less good. Warren Buffet makes a lot more money than a really good CEO of an investment company. When we have digital distribution and essentially unlimited economies of scale, first best is a lot better than really good. When you go to youtube to find maths instructional videos, you pick the Khan Academy, not some second best math tutor. Are we suggesting that we tax these people at 90% to stop them getting so much more? Are we sure that it’s even a problem – it’s not stopping those at the bottom from having “enough” – but it sure is exacerbating inequality.

    Comment by PaulL — June 3, 2014 @ 11:15 am

  36. “Nolan, nice handwave. You’d have to have pretty large measurement effects to meaningfully counter the recorded jump in inequality.”

    Sorry, I missed this on first run.

    I don’t disagree, the Gini coefficient did rise during the 1980/90s period irrespective of the measurment error. However, the “single year” leap that was recorded when the data was changed is a significant portion of the overall lift – and if that is in question, the magnitude of the lift is very much in question. I’m very interested in trying to separate the effects, but I’m finding it a touch difficult.

    Magnitude does matter – especially when a number of underlying characteristics (eg an aging population) are pushing up “static” measures of inequality, but won’t effect a “lifetime” view of inequality. As we care about such things on the basis of opportunity during a lifetime this becomes very central!

    Comment by Matt Nolan — June 3, 2014 @ 11:17 am

  37. @35: PaulL: “The problem, RJL, is that sometimes people need an indication that their work output is not as valued…”

    Every low paid worker is aware that their work output is valued to the extent that it is a job that needs to be done and that somebody is willing to pay for it to be done. However, every low paid worker is also well aware that they themselves are not valued enough to pay them a reasonable wage to do their job.

    Which is exactly the problem with large inequality. There is a vast underclass of low paid workers who know that “society” thinks that the work they do is valuable, but that the workers themselves are worthless.

    Comment by RJL — June 3, 2014 @ 12:15 pm

  38. >When you go to youtube to find maths instructional videos, you pick the Khan Academy, not some second best math tutor.

    Wellll, I certainly went to more than just the Khan Academy. Sometimes other people answer the question in a way that works better for you. Other times, they’re actually directly answering the kind of problem you’re working on, but Khan isn’t. But I’ll admit that Khan got a lot of use.

    Comment by Ben Wilson — June 3, 2014 @ 12:15 pm

  39. To add to Danyl’s list: we encourage rich people to buy citizenship.

    The US has had the likes of Ross Perot.

    Comment by NeilM — June 3, 2014 @ 12:49 pm

  40. “The problem with economists is nowadays they are completely out of credibility” Sanc @21
    Indeed, I laugh so hard when Bill Rosenberg opens his mouth, my wife gets worried.

    “Nolan, nice handwave. You’d have to have pretty large measurement effects to meaningfully counter the recorded jump in inequality.”
    Hmm, I suspect Matt was referring to the way that, post the introduction of FBT, many folk reverted to a large salary, rather than a modest salary plus-umpteen benefits that by-passed the tax system and therefore the data that has been used for inequality analysis.
    Let’s try this another way: didn’t Picketty use changes in tax data for much of his inequality measurements? If a decent chuck of remuneration came into the tax net from outside it, don’t you think it may have skewed the data..? So, there was, conceivably, no increase in total remuneration, therefore no increase in equality, merely an improvement in the REPORTING of income and hence inequality.

    Comment by Clunking Fist — June 3, 2014 @ 1:59 pm

  41. Matt Nolan: There are definitely nice new jobs being created, such as in ICT and engineering. The problem is that many of these new jobs have a steeper learning curve than the ones they replace, often requiring university/post-grad education. I’m curious to know how many ICT pros started out in a blue-collar industry, as opposed to training in ICT from the start.

    Clunking Fist: Funny thing is, the FBT was introduced in 1985 – under then Finance Minister Roger Douglas.

    Comment by DeepRed (@DeepRed6502) — June 3, 2014 @ 2:35 pm

  42. “Hmm, I suspect Matt was referring to the way that, post the introduction of FBT, many folk reverted to a large salary, rather than a modest salary plus-umpteen benefits that by-passed the tax system and therefore the data that has been used for inequality analysis.”

    Yes.

    “Clunking Fist: Funny thing is, the FBT was introduced in 1985 – under then Finance Minister Roger Douglas.”

    Indeed, as part of broadening the tax base. So it influenced the June 1986 year survey data used for these statistics.

    “Matt Nolan: There are definitely nice new jobs being created, such as in ICT and engineering. The problem is that many of these new jobs have a steeper learning curve than the ones they replace, often requiring university/post-grad education. I’m curious to know how many ICT pros started out in a blue-collar industry, as opposed to training in ICT from the start.”

    Indeed, I’ve wondered for a while if our low ICT take-up, our low productivity, and our low level of inequality corresponding to some measures (eg the top 1% share) are all related phenomenon:

    http://www.tvhe.co.nz/2014/02/05/ict-factor-shares-employment-and-inequality/

    Makes it important to think in terms of a framework that incorporates all three.

    Comment by Matt Nolan — June 3, 2014 @ 2:58 pm

  43. Matt Nolan #42: It’s part of a wider issue of high barriers to retraining & upskilling. Companies reporting big skills shortages often recruit experienced pros from overseas and complain about the education system not delivering the desired graduates. And yet such experienced pros were once freshers who had to start somewhere.

    Comment by DeepRed (@DeepRed6502) — June 3, 2014 @ 5:37 pm

  44. “complain about the education system not delivering the desired graduates.”
    Isn’t that a reference to too many arts grads, not enough maths and science grads..?

    “Funny thing is, the FBT was introduced in 1985 – under then Finance Minister Roger Douglas.” Yep, that’s the tax-base broadening that Matt references.

    Comment by Clunking Fist — June 3, 2014 @ 6:32 pm

  45. Lep, unemployment reportedly was quite low in the 60s and 70s, do you think there’s any correlation to how well a populace looks after it self when there’s little in the way of targeted social welfare on offer. We all got Family Benefit: my mum tells me that the $6/fn was plenty enough to keep me clothed (sounds a bit like a little-Big Kahuna).
    tbc

    Comment by Clunking Fist — June 3, 2014 @ 6:34 pm

  46. Clunking #44: That’s only part of the problem. Another major factor is that company-based training remains a bit unfashionable, possibly because of pressure from hedge funds, possibly because companies think the employee will skip to Australia when they’re fully trained up.

    Comment by DeepRed (@DeepRed6502) — June 3, 2014 @ 8:14 pm

  47. Nup, Matt Nolan, you dont get it.

    You’re still looking at the political economy through a lens of dispassionate transactions. When on a first order approximation it is crystal clear that the whole thing is a have, it’s a dirty rigged game and we’re the suckers. That sounds like a political, “normative” opinion, but that’s because it is a political situation, it isn’t an economic situation.

    It’s as though you’ve witnessed a thug stealing a handbag from an old lady and now you’re attempting to figure out which 2nd order, partial differential equation best fits the ‘data’.

    It’s absurd.

    Comment by lep — June 3, 2014 @ 11:24 pm

  48. Lep, anything with a conclusion “sounds normative” – there is nothing wrong with something being “normative”, as we require value judgments before we can reach any sort of conclusion. But I don’t share your opinion that the good and evil embodied in society now is clearer, or in any way worse, than it has been in the past – social issues deserve more careful analysis than appeals from one group that another group is evil. In the same way my interest in data seems absurd to you, your call to it being a rigged game controlled by an evil few sounds absurd to me. On this basis we’ll simply have to agree to disagree – something we can surely do so respectfully, admitting that we simply have very different views about how the world works!

    Comment by Matt Nolan — June 4, 2014 @ 6:33 am

  49. It is an interesting bit of metadata that an orthodox economist on a blog nowadays expends most of his time defending his “science” from attack from multiple quarters.

    Comment by Sanctuary — June 4, 2014 @ 7:03 am

  50. @Sanc: Climate scientists get a lot of flak on blogs too.

    Comment by kalvarnsen — June 4, 2014 @ 8:22 am

  51. Especially skeptical climate scientists…

    Comment by Clunking Fist — June 4, 2014 @ 12:37 pm

  52. “Another major factor is that company-based training remains a bit unfashionable,”
    Well, I’m in an unfashionable industry: graduate accountants need loads of training before they are any good for work

    Comment by Clunking Fist — June 4, 2014 @ 12:40 pm

  53. “It is an interesting bit of metadata that an orthodox economist on a blog nowadays expends most of his time defending his “science” from attack from multiple quarters.”

    I am a Phd student working on income inequality (as well as a working economist), saw something on inequality on a big NZ blog (which I read as a fellow blogger), and wanted to write down some of the things I’ve noted while doing my research – I’m not sure I’d read too much into me spending a few minutes of my time this week doing that Sanctuary😉

    Comment by Matt Nolan — June 7, 2014 @ 8:27 am


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