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David Farrar has no idea about business nor apparently the role of government for business.

Written By: - Date published: 1:38 pm, September 18th, 2017 - 44 comments
Categories: blogs, David Farrar, Politics - Tags:

I see that David Farrar, the National parties favourite polling poodle, is trying to spin up the old line about politicians not being business people. He is a blithering idiot.

As a died in the wool private sector advocate who only works in the private sector, who specialises in exporting, who has had extensive arms length political experience, and who has done all of those things for more decades than Farrar has been alive – I’d say that Farrar is full of billshit.

The two roles are and should be pretty distinct and work at different timescales. One is concerned with making income for shareholders in a 2-5 year timescale, and the other is responsible for providing resources over much longer timescales. The most useful measure for that is the 20 years it takes for raising a child from birth to when they start getting productive in the economy and society.

This spin line of his in particular I found extraordinary

I was once like many MPs, thinking I understood business. I had worked for a charity doing their finances so thought I understood profit, loss etc. But then I worked for a small struggling advertising agency and found out first hand how hard it is. It isn’t just about your paper profit. It is about managaing cashflow, creditors, the IRD etc. It is about the business owners sometimes paying themselves less than the receptionist, so the firm survives.

David Farrar as far as I can see runs what I can only describe as being a petty small crony capitalist business that largely sells services to the National Party, some government contracts, and hopefully he also has a few private sector contracts as well. He has never had to export anything (apart from himself off on holiday), has never run anything that involved more than a handful of permanent employees, and as far as I am aware has never managed to make a single dollop of the overseas income that this country is so dependent upon.

It also doesn’t to my eye particularly involve any degree of risk outside of his own incompetence. But we can probably forgive his ignorance about business. He also clearly doesn’t have any training in how to run a business. He obviously lacks the clarity on how to structure business systems and projects.

I do. I come from a family who manage things, usually for other people. Traditionally these have been factories with hundreds of employees, and generally for ones that export. But we’re pretty good at managing anything. From nightclubs to programmer teams. We generally don’t bother owning business because that isn’t the interesting part of business.

As much as we love our entrepreneurs who like the thought of owning stuff and come up with the daftest things that occasionally work, they miss out on all of the fun bits of business. In my opinion, their bloated egos usually get in the way of making sure that everything that is currently there works and completes with the least amount of effort possible. We’re interested in making things work. But like everything else in business, it isn’t the individual that counts. It is how they work together to form something that is greater than the sum of its parts. Different skillsets working together works just as effectively in business as having disciplined

I am the black sheep of the family. These days I write code because that is what I like to make work. Today, I usually I mostly write it for networked devices, designed here, that is then sold and exported into vertical niche markets world wide.

The code that I write usually takes years to build and can have small or large teams working on it. I’m always a core part of the team on the software side because my expertise is in making sure that the millions of dollars of investment and thousands or work hours actually achieve the desired results. I have done this for decades for everything from small startup companies that I have helped found to corporates building a next generation product of their decades old system. My expertise usually involves being aware of all parts of the supply chain from the components to how the support team the customer finds it working. It also involves some pretty high degrees of risk and it only requires a single mistake early in the process to cause major issues. But it is also a hell of lot of fun.

But I didn’t start there. I got an extensive education in how government could distort rational business practices early.

Back in 1981, I came out of a earth science + business degree and started working at Ceramco at the crony capitalistic heyday of Robert Muldoon – when the number of our head office staff was dwarfed by the number of our lobbyists in Wellington fighting to keep the tariff barriers that made our profit high. The first projects I was involved with were putting tonnes of refractories into the Think Big projects. Neither the projects, nor my part in them really made much sense to me. As a country we were trying to build an industrial infrastructure that really didn’t use any particular advantages of our country.

While we were producing adequate refractory products. They simply weren’t up to the grade for what was required – we mostly wound up importing and selling all of the important high end components. The company was in it to make a buck. But I don’t think that I met a single person that thought the projects were much use beyond that. The freight costs and delivery times from NZ meant that the projects would always be marginal and our internal population was too small to adsorb even a fraction of the output.

After doing 4 years, I decided that I was simply missing something. So I managed to get into Otago’s MBA programme to train more intensively.

In my opinion, the most useful thing about business training isn’t what you learn. Most of that tends to fall into the blindingly obvious category of knowledge was you have a good introduction to it.

It is about becoming aware of all of the bits that you need to know about, but will never know well enough, all of the things that you have to depend upon in a business. So I learnt about the financial accounting, marketing, economics, and law along with a myriad of other interconnected pieces. But you learnt about the interconnections between these things through the innumerable case studies that explored these issues and the nascent business simulations of the day.

A decade later I led the team that commercially produced one of those business ‘games’, Mike Bikes and its assorted offspring, that several generations of business students locally and worldwide have had to endure over the net as an important part of their course work.

But one area that piqued my interest during my academic stint was the utter dependence of businesses on the supporting role of government. As well as utter dependence of government on the revenues gained directly or indirectly from business. I even grew to understand why Muldoon’s government was doing the weird things that they had done in the later 1970s and early 80s, and the forced but rather excessive response by the 4th Labour government.

Despite my start as the kind of government disliking business fool of the type that David Farrar is now trying to rile up for this election, presumably for the purposes of his pocketbook, I grew interested enough in politics to start studying it.

I have spent the last 30 years involved in one way or another with politics, while making sure damn sure that I didn’t spoil my own working fun by actually getting drawn into the maelstrom. It is a interest, albeit an important one in my life, that makes me help run this blog as a talking ground for political debate. Of course you can see my skills in it. It runs for $134 per month, is long lived, and I don’t do much of the heavy lifting – the authors and commenters do. 🙂 I’m a manager – my job is to enable others.

Frankly from my perspective, any business person with skills that are greater than their ego or greed wouldn’t want to get involved in politics. Too messy, too long term, and simply not that much fun. What you will get and what you’d expect to get are the people untrained in business. In fact they look just like David Farrar. And that is exactly what you see in the National lineup that he describes.

National’s lineup look like those who are parasitic on the internal economy and have little of no exposure directly to the world economy that many if not most people working for the productive sectors of business now work in. The problem is that they also appear to be pretty untrained and don’t understand their role either.

MPs are there to provide the infrastructures, both physical and legal, that the business community relies apon to build businesses over the long term. The skills that are required for that task are not those that the business community is any good at providing, nor is it something that they are trained in, and it is sure as hell not something that they are good at. The time scales are far longer than the business community are used to dealing with. And business people have a really bad habit in politics of doing special favours for their mates and themselves. You don’t have to look too far to see this. Start with Steven Joyce or with the farmers.

We don’t need or want crony capitalism in politics. It is far too expensive for the country as Muldoon successfully demonstrated in the 1980s, and as some of the MPs of the 4th Labour government (most of whom departed to Act) demonstrated leter in the 1980s.

Politics and government doesn’t mean giving special favours for little groups and shielding them from the world economy. If all of the urban businesses and residents directly pay for water and water treatment, then farmers should learn the costs of their ‘free’ resource as well. It is part of the cost of doing business, and you don’t want to waste it. I pay $1200 for my household of two annually and the businesses I work for pay far more. It is treated like a resource that can’t be squandered.

Having business amateurs like David Farrar trying to speak for the people who actually know how real non-crony businesses operate is somewhat insulting to those hard workers who generally stay out of politics, provide most of the underlying employment in the country, and who focus on the world economy that most of us are involved in. We don’t need the advice of a business parasite.

In government, business needs people who understand and can work with the long time scales of government and the physical legal infrastructures that we depend upon. Productive businesses working on a world stage don’t need or even want business failures like crony capitalists playing favourites there.

44 comments on “David Farrar has no idea about business nor apparently the role of government for business.”

  1. Pete 1

    He and his site contributors commonly regard those who do not work for themselves, run businesses or something similar as a lower species.

    Anyone who works for the Government or is paid by the public purse are some sort of non-people not living in the real world.

    Farrar’s cobbers want to go to private medical practitioners and have private schooling. If they could have shares in the company running the service, they’d want the Police to be a private business.

    Public servants are scum, who don’t know anything, don’t contribute and an evil, unfortunately a necessary one.

    Of course that is where much of the odium about teachers comes from, they can’t stand anyone knowing more than them.

    Ignorant snobs. Farrar is a good mouthpiece for them.

    • tracey 1.1

      Yes they hate bureaucrats except when they are the means for corporate welfare.

    • Carolyn_nth 1.2

      It’s always struck me as dd that right wingers see the world ofthe private sector as “reality”and that those working in the public sector, like teachers don’t know anything about the “real” world.

      Yet, teachers and many other public sector workers, engage with a range of people from communities – they see first hand the reality of many people’s lives, unlike people sitting behind desks, looking at spreadsheets, in the private sector.

      • lprent 1.2.1

        It depends what you are looking at/for and what you find important. Personally I find people to be easy to read and they hold little relatively little interest to me.

        What I find interesting is what could be best described as levels of risk and the strategies required to deal with it. When I’m talking to people, I can never find the interest in what peoples personal issues are except as they affect the projects I’m doing. The reality is that people have horrible tendencies of doing the same daft crap over and over again without either observing what happened last time or looking at the results of what happened to others.

        I get extremely interested in any systematic issues that look like they could need fixes. Often you can only fix things that you can ‘see’ and the only way you can fix systematic issues is when you can see the patterns with numerical analysis. Anecdote is a poor substitute and usually heavily flavoured with how people choose how to represent themselves. Spreadsheets and stats work to focus attention fairly where mere stories do not.

        I’d also point out that the few times I’ve been around the public sector have typically been when I have been most glad at my abilities to read and analyse things rapidly. They appear to drown in it, often pointlessly.

        • In Vino 1.2.1.1

          People who are dedicated to a vocation may not have your convenient flexibility, and may also be willing to fight long-term against a failing system run by vicious profit-gougers. I think people like Carolyn_nth deserve a little more recognition than you appear to allow.

        • Carolyn_nth 1.2.1.2

          Statistical data and analysis have their place – like a road map telling you how to find your way through a landscape. But they also tend to be reductive, missing the nuances and fine detail of long term community engagement.

          Being on the front line is about engaging with a range of people in a community. There are patterns that can become discernible from that, and these can be subjected to analysis. But that engagement also gives a feel of what people value, and of how diverse lives interact.

          And you can see directly the struggles and humanity of people’s daily lives. That’s not so easily discernible from spreadsheets.

          I wouldn’t underestimate the importance of the multi-sensory impact of experiencing people’s daily lives. It IS important to hear and see what people have to say in their own voice, not always filtered through someone else’s abstractions.

          When people and communities are reduced to data, it is through a process when someone, with all their own pre-conceived notions, selects details that they consider to be important. There is always bias in the process of converting human activities to numerical data.

          And it’s too easy to write some people’s lives off as being relatively insignificant when they are presented as part of numbers, rather than people engaged with.

        • John Stone 1.2.1.3

          I agree with you to some extent on the National line up, but I see Labour as worse. Who gives you confidence in Labour?

    • reason 1.3

      What spinners and Swirllers like Farrar never mention is the amount of wealth and money that private ‘enterprise’ can destroy or waste …..

      Take our ex-prime minister and the firm he worked for and made his money at …

      “Merrill Lynch is a case study in `corporate misgovernance.”^1…. insider trading and the works ….

      It vaporized and destroyed 44 Billion of money in eye watering quick time …..

      “by mid-December, Merrill Lynch’s pretax quarterly loss had ballooned to $21 billion”,….

      “the write-downs taken by Merrill Lynch ultimately surpassed $46 billion —
      incredibly, more than double the entire profit the firm earned over the four-year period preceding” ……

      Such efficiency in destroying wealth rests with the private sector ….

      The Governments bail them out ……………….. http://securities.stanford.edu/filings-documents/1038/MER_01/2009727_r01c_07CV09633.pdf

  2. tracey 2

    MPs also need to be good listeners, advocate for others, listen more and know when to bow to experts. In my experience most business owners had an idea and made it pay. Many grow and find themselves having to lead when they are not leaders and so on.

    Businesses and business owners a part of society not above it. We are all in this together. Business owners rarely thrive without employees. Farmers do not thrive without some indirect support from taxpayers. Help when flood or drought hits. Support by way of taxpayer funded R and D.

    This them and us shit has to stop and so does the habit of some businesses to only adhere to the requirement to return to shareholders as much money as possible at the expense of everything else.

    Bill English has never been in the business world. Treasury bureaucrat and then MP. But no one throws that at him. And nor should they.

  3. alwyn 3

    I hadn’t realised you were quite so mature Lynn.

    “As a died in the wool private sector advocate who only works in the private sector, who specialises in exporting, who has had extensive arms length political experience, and who has done all of those things for more decades than Farrar has been alive”

    Given that David Farrar has just had his 50th birthday that must make you at least old enough to be a recipient of Winston’s Gold Card.
    Welcome to the club.
    I am quite prepared to believe you were involved in politics in 1967 I find it hard to believe you were into exporting quite so early.
    Did you e-mail Winston him and say thank you?

    • tracey 3.1

      Cos that was the most important part of the post, how old is Lynn Prentice.

      Am laughing that you know Farrar just had his 50th.

    • lprent 3.2

      Born 1959. Pretty obvious if my first post uni job was in 1981.

      Have the born in 1959 tee-shirt. My partner got it for me. The young engineers I work with seem to find it as amusing as she did.

  4. greywarshark 4

    alwyn
    There are a lot of things you don’t realise and you never will.

  5. Ad 5

    I would agree with you that you need politicians who understand where all the elements join up. Farrar is making cheap shots, but this is the week to make cheap shots back and not get quite so caught up in the nuances.

    The people standing for election are standing for the public sector, not the private sector.

    Jacinda Ardern – Plenty of experience at the top end of 2 ruling Labour governments. Leadership of which is what she is applying for. Qualified.

    Kelvin Davis – Plenty of public sector experience. Qualified.

    Andrew Little – Massive union and employment experience as negotiator and as litigator, for public and private sector industries.

    Grant Robertson – Plenty of public sector experience.

    Phil Twyford – plenty of public sector experience including internationally, and knows how to deal to lobbyists because he was one. Qualified.

    Megan Woods – massive academic and practical experience in economic development. Qualified.

    Chris Hipkins – plenty of public sector experience. Qualified.

    Carmel Sepuloni – public and NGO experience in social welfare. Qualified.

    David Clark – experience in Treasury. Qualified.

    Think about that. Credibility and qualifications for applying for public sector jobs.

    Now compare that to the top nine for National.

    Bill English – tenant farmer of depressed and shrinking Southland village. Sound grounding in Treasury and achieved steady downward path for 80% of NZ population.

    Paula Bennett – disqualified by misusing public information, otherwise got a Churchill Fellowship as a perk of being a Minister. No policy contributions of any note in 9 years.

    Steven Joyce – No public sector experience. Messed up the Sky City deal, in charge of our largest purpose-built business-focused Ministry for 9 years and altered the productive economy not one inch.

    Gerry Brownlee – Public sector experience as woodwork teacher. Put in charge of the largest-ever building project in New Zealand history that has by every account ensured that Christchurch will never, ever recover despite having unlimited taxpayer, City, and insurance money to make it happen.

    Simon Bridges – qualified at taking over Labour’s projects (including Labour’s Len Brown City Rail Link project) and making them happen.

    Amy Adams – No public sector experience. As a result achieved fuck all in 9 years.

    Jonathan Coleman – General Practitioner and business consultant who by every measure of societal illness has made the health system worse

    Chris FInlayson – lawyer who did a lot of good despite being more neurotic than a Sharpei crossed with a Sheltie.

    Michael Woodhouse – No public sector experience. As a result stuck his face on the fire hydrant of immigration and couldn’t figure out how to turn the water off

  6. tc 6

    Ouch the logic it burns almost as much as DPF’s hypocracy…excellent Post Lynn.

    A parasite who is sucking taxpayer money and also doing national party polling so an audit of his segregation/chinese walls seems in order.

    If he’s such a legend in business he’s got nothing to fear has he and in such a high profile position he can’t say it’s not deserved…..but he’ll whine like all national manchildren do when made accountable.

  7. Sans Cle 7

    And lest we forget the insidious role he played over last nine years, John Campbell on Farrar/Key:
    “On election night 12 years later, having just been made prime minister for a third term, Key triumphantly thanked his pollster, David Farrar, by name: the country’s “best”, he declared, admitting, as the New Zealand Herald reported, that he had rung Farrar “night after night, even though he wasn’t supposed to”.

    The man who’d entered Parliament declaring a belief in something better than poll-driven politics had subverted himself. Gamekeeper turned pollster.”

    That Key chose to thank Farrar and Slater post 2014 election should NEVER be forgotten.

    • alwyn 7.1

      “That Key chose to thank …….. Slater post 2014 election.
      Really? Do you have any evidence at all for that?
      Or is it a fake memory that you are propagating?
      They are quite common you know, and this looks like one of them.

      • Muttonbird 7.1.1

        Farrar and Slater are identical in terms of their dirty politics. Key freely admitted consulting Slater and refused to show the correspondence.

      • Sans Cle 7.1.2

        I recall Key saying “cheers Cam” at the end of a speech. I recall being appalled at the time, as it was after Dirty Politics was published. I don’t think it’s a fake memory.

  8. adam 8

    We live in a country with so many mythological narratives going on, it is no wonder some one like Farrar spins the way he does.

    On top of the more classical ones, like ‘rugged men who built this country’. The new myths which accompanied the 4th labour government and beyond, have created a space in the sphere of politics, which is almost devoid of any attachment to reality.

    So big up’s lprent, for peeling back some of that mythology with this post.

    • popexplosion 8.1

      In order to sell more milk to provide for the demand in China, Key rushed to help dairy conversions. Now basic economics teachers if we sell something we get lots of foreign currency to distribute and buy stuff from overseas, balance of payments etc. Another way to divest NZ of the burden of a windfall is to trade currency at a loss to yourself in a foreign country. Aka where Farrar enters the fray, distorting the group think and keep attention away from how actually we can afford to invest in the future.

  9. greywarshark 9

    David Farrar’s expose’ of his difficult circumstances learning about business, reminds me of the one from Theotherside? recently about how hard it is to manage on over $100,000 for a family.

    Now they have true difficulties but these people are hung up on getting their soup ladle into the finest ice cream because they deserve it, while the majority merely go for the cheapest, and feel satisfied to have something reasonable.

  10. Scotty 10

    Farrar on the RNZ panel today with Ganesh Nana.

  11. Centre Forward 11

    As best as I can ascertain, the author of this post is not standing for election, so his/her credentials are irrelevant. What is relevant, is that the author has completely failed to address the key point of Farrar’s post, which was summed up as follows:

    “So anyway I thought it would be interesting to look at how many Labour front bench MPs have worked in the private sector. 87% of all jobs in New Zealand are in the private sector. Now some of those are non-profit jobs but I’d estimate around 75% of jobs would be in the for-profit sector.”

    So, let me paraphrase something this author wrote:

    [deleted]

    [lprent: I didn’t say that. Banned for 1 month for lying about what an author actually wrote. Read the policy. Trying to tell us what we actually said by ‘paraphrasing’ is still just being a really dumb liar. You can quote or you can explain your viewpoint. You may not tell me what I wrote.

    I guess you are a brown-nosing arse licking acolyte of Farrar. he is fond about lying about what other people actually are saying as well. ]

    • lprent 11.1

      As best as I can ascertain, the author of this post is not standing for election, so his/her credentials are irrelevant.

      David Farrar isn’t standing for election, but feels the need to comment on something that he knows fuck all about. I see that you follow in his example – being a blithering idiot.

      In my much better informed view, there are no business people in National’s front-bench. There appear to be some crony capitalists who don’t understand much about productive business or government. Try reading the post again.

      You won’t be able to comment because “paraphrasing” what authors or even commenters actually say is a very fast way to get banned. It is a cheap trick tactic that deserves contempt on the fools that use it. Usually Actoids who all seem to have had the same indoctrination.

  12. Sanctuary 12

    Farrar is on the panel – again – today. When Labour wins, and the new minister of broadcasting calls in the head of RNZ to distribute the extra cash for TV etc, I hope they have a quiet exchange of views on Mr. Mora’s show and his guests.

  13. ropata 13

    Crony capitalism is long standing National tradition. Remember the German company who set up in competition to NZ Gib board? A superior product and cheaper. But they could not operate here because the big suppliers have the market sewn up.

    Oravida is a much more egregious example. And it seems the road construction industry owns the National party purse strings. The “Roger Awards” demonstrate how big corps in NZ tend to operate.

    Private sector “credentials” in the little fish pond of NZ don’t mean jack

  14. simonm 14

    “David Farrar, as far as I can see, runs what I can only describe as being a petty small crony capitalist business that largely sells services to the National Party…”

    Well he has to do something for a living. No-one’s likely to offer him a modelling contract anytime soon, are they?

  15. ES Skeptic 15

    Nothing like a good old fashioned dick measuring competition. Farrer wins for having one.

  16. riffer 16

    Sorry, I worked at the same struggling ad agency as David. He was a snivelling Nats sycophant then, and he still is. He’s completely full of shit. Useless worker too.

  17. Incognito 17

    But one area that piqued my interest during my academic stint was the utter dependence of businesses on the supporting role of government. As well as utter dependence of government on the revenues gained directly or indirectly from business.

    The invisible hand in the velvet glove that form the iron fist that has been pounding the environment and us into surrender, subordination and slavery. Is it finally starting to lose its grip?

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