Fair and sustainable economics

Written By: - Date published: 12:42 pm, August 27th, 2016 - 168 comments
Categories: climate change, Economy, Environment, greens - Tags: , ,

Green Finance Spokesperson Julie Anne Genter put up a blog post yesterday on Fixing Our Broken Economy.

Citing various mainstream sources Genter starts with the demise of neoliberalism. She then moves on to what the real needs are, and then how we can address them,

To me, the changing discourse around “the economy” is exciting. Here I use quotation marks because too often the economy is talked about like a complicated machine that only experts can understand, and to which we much sacrifice human wellbeing or our precious natural environment in order to have jobs.

The economy should describe how we allocate resources and how we spend our time. We have tended to overlook things that aren’t traded. There are many activities – like caregiving, fundamental to the health of human societies – that are not undertaken for commercial gain. Natural resources tend to be treated as an input to a machine that creates “wealth” in the short term. Yet the resources themselves are not created by humans, they are used up or transformed. The natural world is fundamental to the health of human societies (and other life on the planet), and if we do not look after it responsibly, we will be worse off in the long run.

No longer can we justify ecological degradation and growth in inequality on the basis of being good, or even necessary, for “the economy”, because both are bad for human societies in the long run. We can and must structure our economy in a way that protects the planet we live on, and empowers people to have healthy, happy lives.

The two looming, unavoidable challenges facing humanity are climate change and inequality. The previously dominant economic paradigm exacerbated both, and cannot help us solve either.

What is the answer?

Thomas Piketty has a proposal for a progressive global wealth tax. Combine that with a global price on climate pollution. Allocate the revenue to countries on the basis of population, invest some of the revenue on socially beneficial infrastructure like energy-efficient housing, green transport, clean electricity, and make sure the rest is shared fairly. Protect the few remaining wild places, and manage natural resources responsibly for the long term. Encourage local, truly sustainable, food production.

Then see how people spend their time, and that will be an “economy” that can really serve human wellbeing for the long term.

This may seem too far from the current situation, and politically challenging to implement. But we can start the transition here in New Zealand with a range of Green Party policies that are sensible, and start to allocate resources in a fairer way:

It’s silly to say we can’t afford to do these things – the truth is we can’t afford not to.

Full post here.

Rather than arguing about neoliberalism and its serious level faults, I thought we could focus on what we can do differently, using the Green Party ideas as a starting point. The intention here is not so much to point out what is wrong with the GP approach (although constructive criticism is useful), but to use this space to bring out some of our collective ideas about how things could be different, especially where we can see a pathway from where we are now to where we need to be.

168 comments on “Fair and sustainable economics”

  1. KJT 1

    To keep flogging my favourite horse.
    A UBI in some form is essential. At least if we intend to go towards a socially and environmentally sustainable economy, with democratic support.
    Expecting those who are on moderate and low to no incomes to pay the full costs while it is “business as usual” for the better off, is not going to “fly”.
    A UBI takes away the compelling need we have now, to find ever more profitable ways of ripping off our fellows, and our environment, to make a living.

    The climate tax cut which is an incentive to use more sustainable forms of energy is a good start, but to deal with our current challenges we need the same sort of economic and human effort that we now put into bombing the middle East.

    Smarter farming that does not load costs on others is essential, but also removing the idea that we have to feed the rest of the world with expensively produced milk and beef.
    Who, judging by the current prices, do not need it.
    We can easily farm enough food to feed us and our Pacific Neighbours.

    In New Zealand terms the 20 billion on arms spending into a UBI. sustainable energy and investment and education for a low energy sustainable future. Mitigating the effects of climate change, will keep us much safer than simply bombing the shit out of the victims.

    Continual growth is incompatible with a finite world, but for our form of “beggar thy neighbor” capitalism it is essential.
    We can afford business such as family farms, market gardens small shops and the like. We cannot afford world wide oligopolies whose main function is to extract wealth from local communities.

    • barry 1.1

      UBI is a right-wing policy (it is just that the right is too stupid to see it).

      With UBI you can have:

      Flat taxes
      A gig economy (people can afford breaks between jobs)
      No minimum wage
      Zero hour contracts
      Dramatically reduced MSD payroll
      ACC premiums slashed

      If other countries introduced it then we would have to (or take them to the WTO for unfair subsidies)

      • Lanthanide 1.1.1

        “With UBI you can have:
        Flat taxes”

        That in isn’t inherently right-wing, because with a UBI the effective tax rate can be negative for some people, and in fact results in a continuously progressive tax regime.

    • Red Hand 1.2

      If UBI was compulsory some would reluctantly accept it, donate it or find some way of getting rid of it because they object to handouts. I might feel that UBI is a reason to despise the state and the bludgers and losers who rely on it. On the other hand I might happily accept it.
      Better to make employers pay higher wages by growing powerful unions. Some employers pay as little as they can get away with. A UBI might damp down the workers just demands for a decent living wage.

      • Colonial Viper 1.2.1

        The UBI helps lots of different classes of NZers who aren’t wage or salary slaves.

      • Do you donate away tax breaks because you “object to handouts?” Do you know anyone who does?

        It might happen a little, but don’t count on it. Even most people who object to tax exemptions for charitable donations still claim them, and you have to actively claim them there. A UBI would just show up in your account if you were a registered taxpayer.

      • Chris 1.2.3

        It’s the changing labour market and how we view/value employment that’s contributing to the need for a UBI, but that same change is also affecting the relevance of unions. Strong unions might make employers pay higher wages, but strong unions won’t reduce the need for a UBI because strong unions don’t create jobs.

        • jcuknz 1.2.3.1

          One of the problems today is that people get paid too much for what they do which leads to the DIY mentality where possible.

          • Draco T Bastard 1.2.3.1.1

            Part of the reason why people charge too much is because too few people can afford to pay for services.

            Lawn mowing is a great example. We’d all be better off if our lawns were mowed professionally but most people can’t afford it and so they don’t get the professionals in which means that the professionals have to charge more to cover the time that they’re not at work.

            The actual answer is to have the councils mowing everyone’s lawn. Then we’d get the scale up so that it’s cheaper to do that (i.e, actually uses less resources) than most people mowing their own lawns.

            • jcuknz 1.2.3.1.1.1

              Sorry Draco but I see it as a downside to successful unions getting pay rises for their members.

              • Draco T Bastard

                I said people charge too much as to the reason being why people didn’t use services. And the reason for them charging too much for the services is because not enough people actually use the services meaning that the service has too much downtime forcing the operators to charge more.

                I then used lawn mowing as an example of how we could decrease costs on home owners, ensure that the people doing the work are paid well, decrease use of resources and administration and ensure that the people and resources used to do that are fully utilised. Surprise, surprise – it’s a government monopoly.

                Now, to address how much people are paid we need to address excess pay to the administrators, excess money creation by the banks to decrease inflation and ensure that people doing the work are paid enough in the first place.

                • jcuknz

                  Simple solution to lawn mowing … don’t grow grass … leave it to the farming sector who have live mowers.

                  I enjoyed a good life on a fraction of the salary I retired on … got married on an even smaller fraction and raised a child.

                  • Draco T Bastard

                    I suspect that people living in cities don’t want to live solely surrounded by concrete.

                    • weka

                      Better to plant gardens, trees etc than lawns. Lawns are a huge environmental problem because of water and maintenance, as well as fossil fuel use. Some of those can be dealt with in other ways, but we’d be better off with far fewer lawns and far more trees and gardens.

                    • Draco T Bastard

                      Even gardens need some maintenance.

                    • weka

                      Yes, but they bring multiple benefits that lawns don’t, and their maintenance can be far less. There’s a whole body of critique about lawns from environmentalists and regenerative gardeners if you want to look it up.

      • KJT 1.2.4

        Don’t see anyone doing any of the above with our current UBI.
        Super and student allowances.

    • +1

      A UBI also goes some way to addressing the power imbalance in employment. When every person – whether they’re in paid work or not – is guaranteed enough to cover the very basics, employers like the Talleys or CrestClean can’t keep treating people like expendable, exploitable fodder, because people *do* have the option to just walk away and find a better job.

      • KJT 1.3.1

        Agreed. You can strike without starving.
        It also, which to me is most the important part, enables people who are contributing to our society as caregivers, volunteers and others in occupations that the capitalist world does not value enough to survive and even thrive.

        The social benefits are obvious.

        • An excellent point! Basically the UBI redefines work by erasing the false significance of “paid” work. All good in my books.

          It feels like a no-brainer for me, but unfortunately the conversation tends to be less values-based (equity, supporting families, giving people the ability to self-determine) and a bit more “look at my very detailed spreadsheet which shows how the costs are mitigated over time.”

          • KJT 1.3.1.1.1

            To many are buying into the Neo-liberal paradigm, that the only things worth while, are those that make money for someone.

            When we are all so much more than our paid work.

            The most important work in our society often is poorly paid, if it is paid at all.

            As I society we get excellent value from our current UBI. The volunteer work done by older people has a societal value way in excess of the super, for one.

            That is my big problem with Labour. They buy into the same framing, as the neo-liberal right.
            Saying that Labour are better economic managers than National, even though it is true, carries on the same paradigm that Government are simply business managers, maximising monetary value.

            When they should be representatives, carrying out our wishes, maximising social benefits, in the very broad sense of the term.

      • Chris 1.3.2

        We really need to hammer these kinds of arguments for a UBI. The UBI gets such a bad rap including within the left. Strengthening collective as well as individual bargaining is crucial to promote.

    • Draco T Bastard 1.4

      The climate tax cut which is an incentive to use more sustainable forms of energy is a good start

      Not really.

      Far better for the government to simply do the R&D, build the factories to produce the renewable energy and then build it. And do the whole lot using sovereign money creation.

      We can easily farm enough food to feed us and our Pacific Neighbours.

      Our Pacific neighbours should be feeding themselves.

      In New Zealand terms the 20 billion on arms spending into a UBI. sustainable energy and investment and education for a low energy sustainable future.

      Wrong. We really do need to have a defence force and we’d have both the defence spending and the UBI anyway. What we won’t have is private banks creating money as all money would be created by the government and spent into the economy.

      We cannot afford world wide oligopolies whose main function is to extract wealth from local communities.

      QFT

    • maninthemiddle 1.5

      Can you point to any country in the history of mankind that has paid every adult a UBI (including those who do nothing for it and those who already earn a high income) and whose economy has not collapsed?

      • One Anonymous Bloke 1.5.1

        Doesn’t understand basic accounting or statistics. Pretends to understand Economics and History.

        🙄

        • Draco T Bastard 1.5.1.1

          mitm is a great example of the Dunning-Kruger effect: Doesn’t know WTF he’s talking about, is too stupid to realise that he doesn’t know WTF he’s talking about and thus makes a loud, over-confident noise while thinking that he’s really smart.

      • KJT 1.5.2

        We had a UBI for children, in the 60’s. (Universal family benefit) Along with one for the elderly as well.
        Despite the family benefit existing when we had the highest ratio of children to earners ever, the baby boom, remember.
        Plus universal health care, a high standard of State education, and lots of spending on infrastructure.

        We managed to have the worlds highest standard of living, and one of the lowest levels of inequality and poverty, in the world.

        • maninthemiddle 1.5.2.1

          1. My question related to a proposed UBI, emphasis on Universal. Family Benefit was not universal.

          2. NZ’s standard of living in the ’60’s as largely due to two factors, a> mother england buying our produce, and b> the post war baby and economic boom.

          3. Universal health care in the 60’s was based on 1960’s technology and healthcare. Demands for 21st century advances in healthcare have placed enormous pressure on healthcare spending, and in the future those demands will never be universally met.

  2. Macro 2

    For more info on this topic I recommend
    http://www.sustainable.org/
    Here is what they are about:

    There are many definitions and there are many different ways for communities to attain a more sustainable future. The sustainability of a community depends on creating and maintaining its economic and environmental health, promoting social equity, and fostering broad-based citizen participation in planning and implementation. Communities that engage citizens and institutions to develop sustainability principles and a collective vision for the future and that apply an integrative approach to environmental, economic, and social goals are generally likely to be more successful.

  3. KJT 3

    Transition towns are another useful source of information.
    http://www.transitiontowns.org.nz/

  4. Colonial Viper 4

    None of this will work until you destroy the system of central and investment banking, as well as financial markets expecting a “return on investment”.

    • BM 4.1

      Why would you invest if there is no return,

      If there was no return, there is no financial market.

      • Colonial Viper 4.1.1

        Correct.

      • Imagine you live in a market where you pay interest on money you save, and that many investments outright lose money because they’re inefficient. In such a market, you might well invest in a company that achieves resiliency consistently, because hey, you’re not losing your cash to interest.

        That’s basically why you’d invest in an economy where gains aren’t guaranteed: because it prevents losses.

        Right now, the losses are camouflaged by emitting pollution, shortening family time, and casualising work, forcing society to pay the price. A fair market economy would involve companies being liable for the full cleanup price for any pollution they emit, and all other “external” costs they inflict on society. Under that model, no businesses make a profit at all and the supply of net prosperity is shrinking. Oh look, we’re in my hypothetical all of a sudden. What a surprise. 😛

      • Draco T Bastard 4.1.3

        Why do individuals need to invest?
        Why do people think that they’re entitled to bludge off of the work of others through shareholding and ‘investing’?

    • Draco T Bastard 4.2

      It’s not ‘central banking’ that’s the problem but the fact that private businesses create money. When we go to sovereign money it’d still be a central banking system.

      And part of that shift will have to be the shift away from the idea that having money entitles you to having more money.

  5. Bill 5

    Damn! For a second there, I thought she had it 😉

    The two looming, unavoidable challenges facing humanity are climate change and inequality. The previously dominant economic paradigm exacerbated both, and cannot help us solve either.

    This is true.

    But then she proposes more of the bloody same by referring to financial based solutions such as taxation and carbon pricing! That’s still treating the world like some icky thing at the end of a chrematistic barge pole. (And won’t work)

    Manage resources directly, not via some financial shenanigans and we might get there. And no (before someone pops up with this boring old chestnut) that does not mean abolishing money for the purposes of – also not abolished – trade.

    • weka 5.1

      Not sure what you mean by won’t work. If you mean it won’t bring about a revolution in economics, then sure (and I don’t think she is suggesting it would). I think what she is saying is the whole thing needs to change, we need to look at that, and in the meantime them lot in parliament can do these smaller things to bring about some degree of fairness of resource sharing.

      This may seem too far from the current situation, and politically challenging to implement. But we can start the transition here in New Zealand with a range of Green Party policies that are sensible, and start to allocate resources in a fairer way:

      As for taxation, that’s what would fund a UBI, so I don’t see how writing that off is useful unless you can present alternatives that might work.

      Edit, I think you might have edited and added the last paragraph.

      • Bill 5.1.1

        I mean it won’t work as a way to tackle global warming. Picketty, who she references, did a study on trying to find a way to raise monies for a global climate adaptation fund from taxes. He couldn’t figure out a way to do it.

        General taxation can redistribute material wealth and so ameliorate some of the inequality that the self same economy produces.

        UBI – yeah, been thinking about the UBI and reckoning I’m coming down on the side of being dead set against it.

        And can you please stop seeking to dismiss criticism on the basis that no positive alternative has been drawn up or formulated? If the criticism is that the tomato isn’t ripe, then the criticism is valid (from a salad kind of perspective) whether or not an alternative ripe fruit is offered in its stead. It doesn’t matter if I have an avocado ready to hand or not – you really don’t want to go putting that tomato into the salad because it’ll make for a crap salad.

        edit – In reply to your edit, I did.

        • weka 5.1.1.1

          I don’t think that her post is about solving climate change to be honest. My point stands. She is opening a discussion about post-neoliberal economics, and being reasonable pragmatic about the limitations of what a political party like the Greens can do in the short term. I don’t really want to rehash this, because I know we disagree (you think they should be more radical, I think they should use the power they have to push the culture towards change).

          “General taxation can redistribute material wealth and so ameliorate some of the inequality that the self same economy produces.”

          Yes. That is a primary role of the GP (or any left wing party in a NZ govt).

          And can you please stop seeking to dismiss criticism on the basis that no positive alternative has been drawn up or formulated? If the criticism is that the tomato isn’t ripe, then the criticism is valid (from a salad kind of perspective) whether or not an alternative ripe fruit is offered in its stead. It doesn’t matter if I have an avocado ready to hand or not – you really don’t want to go putting that tomato into the salad because it’ll make for a crap salad.

          True, but there are other things that the unripe tomato is useful for, so if you are suggesting that it be thrown out because you can’t make salad with it, that’s a problem and a waste.

          I’m not interested in the thread being about what won’t work. If people want to critique the GP ideas as part of proposing something else, that’s great. But simply saying ‘they’re wrong’ doesn’t take us anywhere useful IMO.

          I’m not suggesting that you present an alternate economic plan 😉 But you could for instance have made your comment 25% about the problems with the GP plan and 75% about managing resources directly, which sounds very interesting but I have no idea what it means (so your comment came across as mostly naysaying in a way that keeps us in a cul de sac).

          Edit, in case it’s not obvious, green tomatoes are good for frying or making chutney etc. We might be wanting salad, but chutney is what we’ve got the ingredients for today.

          • Bill 5.1.1.1.1

            My point stands. She is opening a discussion about post-neoliberal economics,

            Except she isn’t. The bit I cut and pasted suggests that she is, but then she straight up offers two broad ranging neo-liberal prescriptions under the heading “What is the answer?” (tax and price mechanisms) shrug

            • weka 5.1.1.1.1.1

              Maybe she just disagrees with you that taxation is inherently neoliberal shrug

              • Colonial Viper

                financialised mechanisms are inherently neoliberal. Even if they are tilted toward the 99% originally, just one National term of government will easily revise them to benefit the 1%.

                Remember that the banking and financial systems are owned and controlled by the ruling elite.

            • KJT 5.1.1.1.1.2

              Interesting perspective, Bill.

              As one of the Neo-liberal aims is to remove State, and hence Democratic power, to redistribute wealth by taxation.

          • jcuknz 5.1.1.1.2

            ..I simply put the green tomato on the window sill until it turned red and could be eaten. 🙂
            Not sure if that is relevant to discussion?

    • KJT 5.2

      Money has been the solution to the problems involved with direct barter, since almost the dawn of human history.
      I don’t see how we can ever, practically, get rid of the idea.
      Reducing the financialisation of our economy is the best that is practically achievable.
      Getting rid of the idea that money has value in itself, outside of the resources and Labour it represents, goes against what most people “know” about saving.
      We had functioning economies in the 60’s and 70’s, where the financial part, was an order of magnitude less than now.
      Managing resources, “directly”, has been tried. Most successful in communities such as the Kubbitz, and maybe others, like Gloriavale. Not something that has ever worked long term on a country wide basis, though some Authoritarian Dictatorships have tried.
      Allocating money so that people who need them have access to resources, works perfectly well for both our elderly, and University students.

      Taxing the true costs works for tobacco and many other externalities.
      Prohibition does not! As we know with dope.

      • Bill 5.2.1

        The ‘Free Petrol III’ post was a workable proposition for direct resource management that wasn’t in any way authoritarian.

        The Chrematistic Camel post illustrated, with linked studies thrown in, that taxes don’t work in terms of affecting radical shifts in behaviour or resource use.

          • Matthew Whitehead 5.2.1.1.1

            Bill is talking about radical shifts, so depending on how you define that, Bill has a point. That said, Taxation does reduce demand for sure. The question is what happens if you need to say, halt it, or reduce it more dramatically than taxation ever has. That is the fundamental issue with a carbon tax that doesn’t scale to make over-budget emissions violently unaffordable.

          • Bill 5.2.1.1.2

            Yeah, but as Mathew Whitehead points out below…so the NZ government wanted to more or eliminate smoking by 2025. They chose to do this via taxation.

            But as I linked to in the Chrematistic Camel post, the drop over about six years was only a couple of percent. And then (also linked) was the study by Anderson and Bows that suggested a price on carbon many times above the current level wouldn’t have much of an effect on behaviour (flying).

            In essence, the use of taxes to instigate large change is driven by ideology, and is bullshit – doesn’t work.

            • Andre 5.2.1.1.2.1

              Yes, to reduce flying by much the price on carbon would have to be enormous. Because there is no viable alternative to liquid fuels for most aviation. But a reasonable price on carbon would first shut down fossil-fueled electricity generators. Then as the carbon price got higher, more and more users of fossil fuels just for heat would move to alternatives, as would transport users.

              Just because a price on carbon won’t reduce one specific activity that you’ve got a big wriggly bug up your ass about doesn’t mean it isn’t a useful tool to help bring down emissions in other sectors.

              • Bill

                By that reasoning, the same holds for cars – car travel is fairly inelastic.

                You think the electricity generation sector will shift away from fossil and bio-fuel because of a tax? All that will happen is that poor people will suffer thanks to the sector passing on costs.

                Maybe you think a “tax and dividend” will work. It won’t. The richer people – the ones responsible for most emissions – will absorb the cost or much of the cost and emissions won’t come down anywhere near fast enough (ie – between 10% and 15% per annum)

                And I can’t see any dividend from a “tax and dividend” scenario being passed from Germans, Kiwis or Canadians to Bangladeshis or Nigerians – can you?

                • Andre

                  As far as I can tell, electricity from biomass and the likes of bioethanol from corn and the like came about from really poorly thought through subsidies. To me they’re an illustration of why trying to subsidise something we think is a good idea is actually a crap idea, and it almost always works better just taxing the undesirable activity.

                  Power generation will move away from fossil fuels if there’s a big enough tax on carbon. Because other sources will cost less. If the movement isn’t fast enough, increase the tax. Car users will go electric (or switch to public transport), because it will be cheaper. Goods transport will migrate to electric modes, because it will be cheaper. How fast those migrations happen partly depends on the price put on carbon. B.C. and Australia got measurable reductions in emissions from the miniscule carbon tax they imposed. Put on a realistic tax that will rise as quickly as needed to drive emissions to zero, and behaviour will change faster.

                  No I don’t see any carbon dividend being passed on to those that are already copping the effects of climate change. I really don’t think the paradigm changes needed to bring about any kind of climate justice for the parts of the world that are less responsible for the problem are politically achievable. I think the best actually achievable outcome is developing the technologies for those peoples that want to “develop” to do so in a way that is not as harmful as the way we have. Preferably in a way that as a byproduct even repairs some of the damage we’ve done.

                  • Bill

                    Seems we agree on most of this except for the idea of tax.

                    So okay, we have about 15 years to get the energy sector to zero fossil and a couple of years more to get it to zero carbon. So would we agree that an immediate and absolutely massive tax would be necessary to bring about a fast enough reduction?

                    I can envisage all the public transport and what not being laid in through that 15 years under the auspices of some announced and actioned ‘national emergency’.

                    I can’t see it happening as a side effect of higher taxation and I can’t see how poorer people could expect anything but hardship and suffering under onerous levels of tax.

                    And that’s before taking into account the spiralling costs for goods and services that would inevitably accompany a high tax regime.

                    Setting a hard sinking cap maintains equity and ameliorates many of the negative consequences of a tax while absolutely ensuring reductions are of the required magnitude.

                    Again – the argument was laid out in the “Free Petrol III” post and a slightly different one in the “Free Petrol II” post. To date, there have been no substantive rebuttals or robust alternatives offered in relation to the case I put forward in those posts.

                    Meanwhile, the idea of taxation was, I believe, shown to be woefully inadequate and slated to fail in the “Chrematistic Camel” post.

                    Now sure, we can go all wavy armed on it, or we can take a dispassionate look at it all in light of available studies and real world examples. I can’t be arsed with “wavy arms” on this particular topic, can you?

                  • Draco T Bastard

                    Power generation will move away from fossil fuels if there’s a big enough tax on carbon. Because other sources will cost less.

                    That’s a load of bollocks because people need electricity and so all that would happen is that the price and profits would go up.

                    Goods transport will migrate to electric modes, because it will be cheaper.

                    Electric trains have always been cheaper to run than diesel powered ones but we still have diesel powered trains. Again, this is something that only government will have to do because increasing rail and electrifying it will decrease profits across the board.

                • Draco T Bastard

                  By that reasoning, the same holds for cars – car travel is fairly inelastic.

                  Actually, it’d be great for cars as it would encourage more public transport use. Hell, one of the complaints from the RWNJs is that a carbon tax would make petrol more expensive. Of course, that’s the whole point of the carbon tax.

                  You think the electricity generation sector will shift away from fossil and bio-fuel because of a tax?

                  Nope, but then that’s just one of the several reasons why electricity generation should be a government service rather than a market product.

                  • jcuknz

                    The trouble Draco is that we are in a big hole which is almost impossible to get out of because so many rely on cars as previous and current govts have built roads instead of public transport … and the way of life prohibits any return to walking instead of driving.
                    Personally I cannot effectively walk any distance but shops are Km away and buses … 17 a day clustered around workers requirements. Insisting on a return on capital is a rot in the current system. Regional Council bus rate was $7 pa for a useless system …. I would happily pay much more for an efficient service which would be a good insurance for when my vehicle wasn’t available. Perhaps using people carrying vans rather than buses, like the airport shuttles giving door to door service.

                    Basically if you want good service/insurance you have to pay for it.

      • Colonial Viper 5.2.2

        Managing resources, “directly”, has been tried. Most successful in communities such as the Kubbitz, and maybe others, like Gloriavale.

        Gloriavale is funded by massive multi-million dollar business interests, just thought you would like to know.

      • Draco T Bastard 5.2.3

        Money has been the solution to the problems involved with direct barter, since almost the dawn of human history.

        IIRC, David Graeber in Debt: The first 5000 years says that no such bartering economy has ever been found. Most tribal/nomadic peoples simply share equally ensuring that everyone is well taken care of.

        Getting rid of the idea that money has value in itself, outside of the resources and Labour it represents, goes against what most people “know” about saving.

        Most of what people and economists know about saving is wrong. Saving money saves nothing. What we need to be focussing on the the efficient use of our resources. Cars are inefficient as they use more resources than public transport to achieve the same result and thus saving resources.
        Not burning fossil fuels would save those resources for other applications and even recycling while burning them simply destroys them.

        • KJT 5.2.3.1

          David Graeber can be proved wrong about tribal societies, with examples from our own pre European culture, for one.

          “Saving money” is an oxymoron, I agree.

          You can INVEST in something which increases our societies prosperity, sustainability and capability.

          Forgoing a few coffees now, (which actually means those trying to make a living making coffee, and the local community get less money).
          Then donating the money to a financial ponzi scheme in the USA, which simply generates zeros from zeros.
          Does not ensure that the generation growing up, can afford to give me some time and resources, when i am old and dodery.
          Better to pay more taxes now, to ensure the infrastructure, resources, functioning society and education are given to them, to ensure a future for all of us.

  6. Siobhan 6

    Put an end to “base erosion and profit shifting” (BEPS), that’s all those international companies sidestepping their obligations.
    Our next Government should have a Minister whose job it is too actively support all local and international efforts to corral the tax minimisers and encourage local manufacture and supply of goods and services in competition of cheap offshore crap. Like railway carriages for a start.

    Green Party and Labour have talked about this, but for some reason it sinks below the radar with voters.

    With that money we could make serious headway on that list.

    Its a hard issue to sell…the average voter wants decent wages, but they want cheap stuff from overseas. The cause and effect needs to be spelt out to them. Unfortunately both Labour and National are up to their elbows in Free Trade Deals(China and tpp)…so it may be best for the Greens to make it an election issue.

    • weka 6.1

      Is that things like FB and google not paying tax in NZ?

      • KJT 6.1.1

        And the Warehouse, McDonalds, Kmart, Microsoft et al extracting wealth, and using the infrastructure and resources from local communities, while contributing minimal amounts in wages, taxes and infrastructure.

      • Craig H 6.1.2

        Yes, that’s BEPS.

    • jcuknz 6.2

      Siobhan
      One of my pet fobbies is the use of carraiges when folk talk about wagons.
      Carraiges carry people, wagons carry goods. NZRail bought faulty wagons from China when Hillside could have employed local folk building them better if in domestic terms more pricey but NOBODY considers the true holistic costs.

      • Draco T Bastard 6.2.1

        If all costs were properly accounted for international trade would minimise. After all, a well educated person in China costs, in real physical terms, the same amount as in NZ.

  7. Ad 7

    Green policy to tax 40% of one’s income over $140,000 is not a great incentive to form and grow businesses with good salaries.

    I really like their idea of harmonizing trust tax levels with income tax. That would be quite a shakeup.

    Fully support pricing all water. Bring it on. With a national regulator.

    I appreciated her idealism but the global wealth tax is commie talk from sci fi land.

    Generally I’d like the Greens to stop talking about more regulations and more taxes, and a lot more about motivation, innovation, and export value. We don’t have to agree on optimum GDP, but which industries can be incentivised to generate better wages and salaries would be more practical than quoting Piketty.

    Kinda surprised she didn’t mention national parks and tourism. It’s one of the best advantages nz has against uneven spatial development.

    I like her. Would be an interesting Minister and I’m glad she hangs in there.

    • weka 7.1

      “I really like their idea of harmonizing trust tax levels with income tax.”

      What is that?

      “It’s one of the best advantages nz has against uneven spatial development.”

      What is uneven spatial development?

      Generally I’d like the Greens to stop talking about more regulations and more taxes, and a lot more about motivation, innovation, and export value. We don’t have to agree on optimum GDP, but which industries can be incentivised to generate better wages and salaries would be more practical than quoting Piketty.

      Now you make me want to agree with Bill 😉 I took her post to be a way of opening up a discussion about post-neoliberal economics. When you suggest incentivising industry around wages/salaries do you mean under the current system?

      • Ad 7.1.1

        The tax comment comes from her link.

        ‘Uneven spatial development’ eg Kaitaia v Cable Bay. Or Kaikohe v Hokianga southern edge. Really close physically, but world’s apart, and a chronic waste of people.

        I didn’t view it that way. She’s practising to be a Cabinet Minister. No time for fairy talk, and just enough headspace to get a few really well rehearsed policies done with real hard fight and work.

        Don’t care what “paradigm” she’s in.

        • weka 7.1.1.1

          “The tax comment comes from her link.” Yes, but I don’t understand what it means and I was hoping you would explain in the context of what you think is important.

          ‘Uneven spatial development’ eg Kaitaia v Cable Bay. Or Kaikohe v Hokianga southern edge. Really close physically, but world’s apart, and a chronic waste of people.

          I don’t know those places so don’t get the reference. Is that a poverty/rich split within a close geographical area?

          I didn’t view it that way. She’s practising to be a Cabinet Minister. No time for fairy talk, and just enough headspace to get a few really well rehearsed policies done with real hard fight and work.

          By which I take it you mean that she should stop with the post-neoliberal talk and be more cabinet-like.

          • Ad 7.1.1.1.1

            Ok understood.

            Trusts get a better rate of being taxed than most income tax. The rich hide assets there because it’s tax efficient.

            Next question: yes. And our conservation estate is huge enough to take more visitors and revive the villages around them. Not just Queenstown etc.

            Next question:
            hell yeah. This woolly stuff will be roasted next year. Defend specific costed policies and prepare to deliver them. She’s well overdue for it.

            • KJT 7.1.1.1.1.1

              The media doesn’t seem to have a problem with wooly stuff from National.

              I’ve yet to see anyone asking where they are going to find the money for a “pest free New Zealand”, when they can only find it to subsidise aluminium smelters.

              • Ad

                You’re telling me there’s a double standard in how National and the Greens get treated?

                Will always be so.

            • weka 7.1.1.1.1.2

              Thanks Ad. One of the things I was hoping from the post conversation was that I would learn things (and that might be true for people reading and not commenting too), so always good to have clear explanations.

              And our conservation estate is huge enough to take more visitors and revive the villages around them. Not just Queenstown etc.

              There’s a direct correlation between increased tourism numbers and degradation of the environment. If we really must make a living from tourism, it should be low number, high income tourism, not mass tourism. But those same villages will be exceptionally vulnerable when we hit tourism lulls or a global financial or oil crisis that drops the numbers suddenly. We should be creating diverse, stable and resilient local economies, and then creaming off the higher risk aspects if we need to make some money to create more sustainabile and resilient communities (myself, I think we should be weaning off tourism now, but I wouldn’t suggest a GP MP say that 😉 ).

              As for woolly, I don’t have a problem with the Greens doing periodic reminders of what the kauapapa really is (see it as a dog whistle to their core voters), and I don’t generally see Genter as being woolly, but this particular post did seem a bit thrown together to me (was it about post-neoliberalism or pushing some GP policy?). I prefer the Greens to be straight up pragmatic, and look forward to seeing how she does next year.

              • KJT

                Tourism is yet another “extractive” industry.

                There are plenty of examples locally, and around the world, of the mess that happens when “extractive” industries fall over.

                Not to mention, the real environmental costs of air travel.

                We are going to see one soon, when the Bluff smelter closes.
                And when dairying has used up all the fertile land, palm oil and water supplies.

                A sustainable economy has communities which are able to support itself, through mostly local resources.

              • Colonial Viper

                f we really must make a living from tourism, it should be low number, high income tourism, not mass tourism.

                What the hell do we need all this electronic numbers for???

                Why the hell should we contort the nicest places we have in this country into playgrounds for the 1%’ers???

              • KJT

                GP policies mentioned, are a push against Neo-Liberalism.

                To me, even the Greens these days seem to be heading towards tinkering around the edges, rather than a full on push, but we are trying to shift a very entrenched paradigm.

                • weka

                  True. I’d certainly prefer them to be stronger in pushing change, but I also assume they know more about how to achieve change from within parliament than I do.

                  • KJT

                    Very little beneficial change has ever come from Parliament.

                    It has always been from community organisation.

                    From the original anti slavery movement, women’s liberation, and the socialist movement which changed New Zealand politics so much with the first Labour Government.
                    Even the 1984 Labour Government policies were driven by outside money.

                    Parliament is too constrained and undemocratic.

                    We need to change the paradigm so most people demand change.

                    Change management is one of my “things”. For effective change, you need to bring most of your people with you.

                    Repetition of memes, as the rabid right wing is unfortunately too well aware, is one of the effective ways of bringing things to public consciousness.
                    That is why what we are doing here, is important.

                    • weka

                      I like what you are saying there KJT. I’m also interested in how change happens. I see govts as the enacters legislatively of change that is happening elsewhere.

                      “For effective change, you need to bring most of your people with you.”

                      Agreed, hence my relative acceptance of how the Greens and to an extent Labour are. They’re a mirror of the where the culture is at. I don’t see their job as being the radical leading edge, although I see the Greens as influencers. Which leaves us with where is the change being generated from and how can we have an effect on that.

                      Would love to talk with you more about this and hear where your thinking is at.

                    • KJT

                      Keeping the need to change, and how it would look, in front of people constantly is a big part.
                      As is involving as many people as possible in dialogue in designing the change.

                      I don’t now how much effect we have had individually.
                      But enough of us talking about UBI has bought it up to the level of public consciousness that it now has. It is being discussed seriously by the Greens and Labour.
                      Gareth Morgan, QOT, Stephanie, Karen, you, me, and no doubt many others, keeping it in the public eye, has turned UBI into a nationwide discussion.

                      Same, I think, with our initial mutterings about social justice with housing.

    • KJT 7.2

      The “trickle down theory” is still alive and well, despite all the evidence that giving more money to the well off makes us all worse off, not better.

      Taxing income over 30k at 60% in the early 80’s never stopped people from trying to earn more money. Including me.

      In fact the lack of taxation for investment in people, infrastructure and education since, has resulted in New Zealanders on the whole being much worse off.
      Something like 30% less GDP in New Zealand than countries which did not whole heartedly follow the dogmas of trickle down’, “cut State spending” and cut wages.

      Entrepreneurship comes from a high level of State funded education and research combined with a solid middle class with the time and income to pursue it.

      Amazing how many small businesses, employing people were started by those “evil” Cooks and Stewards, in Wellington, for one.

      “the global wealth tax is commie talk from sci fi land”. From Commies like the IMF, the French neo Nazi’s, and the US republicans? Yeah Right!

      • Ad 7.2.1

        I really want to believe in more state-directed entrepreneurs, funded by tax. I’d like to see a full-throated debate just on that.

        New Zealand is exceedingly entrepreneurial by every measure. So would high tax directed to entrepreneurs make a difference? Woukd it be worth disturbing the msm financial analysts and investors to find out?

        That’s the right field to debate.

        • KJT 7.2.1.1

          There is a book called the Entrepreneurial State. Very interesting read.

          On the whole, only the State, has the capability and long term focus to invest in “blue sky” research, where most innovation comes from.
          99% of Microsoft patents were developed in public Universities and research institutes.

          A lot of our entrepreneurship comes from Government centres such as Ruakura and The Forest research institute, along with our formerly excellent practical education.
          Though I dispute the idea the New Zealanders are particularly entrepreneurial, these days. (The statistics about truely entrepreneurial start ups do not agree with you).

          Then there is the type of entrepreneurship that is rewarded.
          Getting rich by paying your cleaning company, or rest home staff less than the opposition is theft, not entrepreneurship.
          Nor is removing tax payer dollars from the education system for an inferior charter school.

          • Ad 7.2.1.1.1

            I’m aware of the book.
            There’s plenty others.

            Little argument from me about funding research. In reality ‘blue sky thinking’ isn’t our problem.

            But the state as engine of innovation in the broad sense isn’t coming back. CRO’s barely hang on. Uniservices is doing not bad but it’s the only successful one.

            Risking public money on deals is really, really hard to get right. And only occurs in hindsight. Actually doing it is brutal and burns you out for no reward.

            No dispute we pay lowest dollar possible. We pay for that in so many ways.

            I find discussing the NZ economy profoundly depressing.

            • Pat 7.2.1.1.1.1

              “But the state as engine of innovation in the broad sense isn’t coming back.”

              any particular reason why not?

              • Ad

                It’s just been taken apart block by block, year after year, institution by institution. We’re a full 15 years after Easton documented it all in detail in ‘The Commercialisation of New Zealand’.

                No party is proposing putting the pre-commercialisation model back together again. It’s just one of those things like SMP’s, six-o’clock closing, and overtime pay: gone and never coming back.

                • Pat

                  quite happy to see the end of SMPs and six o’clock closing but never is a long time.

                  As with all things if the public pressure is great enough politicians can find wisdom they didn’t previously possess

                • KJT

                  It is going to be very hard to put back together after 30 years of unbridled vandalism, but the alternatives, if we do not try, are unthinkable.

    • Actually, evidence is that maintaining a personal income tax significantly higher than the corporate tax rate acts as an incentive for investment, because people invest precisely to take advantage of the tax difference and reduce or even minimise their income above the taxable rate. If people are feeling disinterested in setting up businesses, I would actually support lowering the company tax rate ahead of lowering the higher tax rates. (or just raising the income tax)

      • KJT 7.3.1

        True.
        The same as maintaining a capital gains and wealth tax at a much lower level than income taxes, encourages unproductive speculation and money/asset hoarding.

        It was Adam Smith who first published the idea that we stop taxing the things we do want, like productive Labour, and tax those we don’t, like rentier behaviour and land banking.
        In our case tax pollution, speculation, big inheritances and resource use.

    • gsays 7.4

      Hi ad, what does someone do that makes them worth paying $140,000?

    • jcuknz 7.5

      I liked Picketty’s taxation concept … read the book or synopsis as I did 🙂
      He admitted it was quite impracticable.

    • Draco T Bastard 7.6

      Green policy to tax 40% of one’s income over $140,000 is not a great incentive to form and grow businesses with good salaries.

      And yet we already know that greed isn’t a good incentive to form and grow businesses with good salaries for everyone who works in the business.

      And why does anyone need an income of more than $140k?
      How much does it cost a country to have people paid too much?

  8. Colonial Viper 8

    The death of neoliberalism huh? Anyone bring back compulsory unionisation, controls on capital flows, and tarriffs on imported goods?

    Because as far as I can see, transnational corporate sponsored neoliberalism is still the most powerful economic force in the world.

    • Ad 8.1

      Far too hard for whole countries to step out of that.

      Stepping out of it/off of it is the preserve of a very determined and usually very honorable few.

    • KJT 8.2

      It is pretty much set in concrete now. By trade treaties, corporate ownership of Government, people swallowing the religion without thought, and the whole idea that there is no alternative to “the market”.

      Which I suspect was the intention of the wealthy who benefit, all along.

      New Zealand was one of the very few, non Dictatorships, (Supposedly) to swallow it whole.
      Even subsidising and protecting our own industries, apart from farming, until they can survive in a world market, as the EU, the USA and the UK do is anathema to our “Free trade” zealots.

      • weka 8.2.1

        We’ve seen other set in concrete things change eg the fall of the Berlin Wall, the end of the British Empire, the end of slavery in the US. Change happens even to the people with supposedly all the power.

        • KJT 8.2.1.1

          The hope that we can change is why I still comment here. Thanks for your thoughtful postings, by the way.

        • KJT 8.2.1.2

          Note, though, that all of those things took a war to change.

          • weka 8.2.1.2.1

            Not all or wholly war though. And how much of the war was about time and place? I brought them up because I think it’s useful to understand how change happens and that it happens anyway. We might have some control in the direction and how things play out.

            • Colonial Viper 8.2.1.2.1.1

              How does change happen? What makes you believe that we might have some control over how things play out?

              The modern Left doesn’t understand power, leverage or force. Your opponents have an an excellent understanding of all of the above. That’s why they keep winning.

              As for the Greens statement. It’s 20 years late and 20 years out of date. You can tell it is that because after talking about the biggest challenges that humanity faces, it offers nothing but pie in the sky non-solutions to do empowering new globalised institutions and trans-national protocols.

              • mauī

                The solutions might not be perfect, but investing in more efficient, less energy transport (rail), a carbon tax, rethinking how we do farming, etc, puts us in much greater shape to deal with future impacts than the current head in the sand thinking. If 50% of the population had green thinking I think we would be half way there to deal with future issues.

                • Colonial Viper

                  No, no, that’s the incorrect way of looking at it.

                  We can’t afford to spend time, money and resources on what is, in the final analysis, a completely mistaken and outdated view of the situation we find ourselves in.

                  My perspective of what Genter is proposing is that it is a feel-good ‘pretend and extend’ strategy. She strives to reassure voters that capitalism and consumerism can continue on its way, albeit with some selective restructuring here and there, and no one will have to suffer any really big hits to the life style that they expect.

                  You still want that new Hyundai SUV? Cool. You still want to take your family on two overseas holidays a year? Cool. You still want to get a good return on your Wall St managed Kiwi Saver fund every year? Cool. You still want that new 60″ OLED TV made in an ultra modern factory in China? Cool.

                  • mauī

                    She doesn’t have much choice, most of NZ believes in consumer culture and in neverending growth. The Greens are a party that is dealing most in reality compared to the other major parties.

                    She isn’t selling a consumerist lifestyle either, the way I read it she wants us to shift our resource use into hi-tech things like light rail and solar panels. That’s nothing like pointless tv’s and cars. It shifts us towards more long term resource use and prolongs the industrial economy. How long we can keep it going is debatable, but the sooner we start down the track of a more sustainable world the better position we are in to adapt.

                    • Colonial Viper

                      Industrial economy needs to be dramatically slowed down in the next 8 or 10 years, then almost halted, and then carefully dismantled; not prolonged.

                    • Draco T Bastard

                      Industrial economy needs to be dramatically slowed down in the next 8 or 10 years…

                      Slowed down, sure, reduce resource use so that we can maintain happy and healthy lifestyles while being sustainable.

                      Shut down industry altogether? Nope, not going to happen and not needed.

        • Colonial Viper 8.2.1.3

          We’ve seen other set in concrete things change eg the fall of the Berlin Wall, the end of the British Empire, the end of slavery in the US.

          1) The fall of the Berlin Wall has seen German military units on the border with Russia yet once more.

          2) The British Empire is gone, replaced by yet another white male anglo saxon empire.

          3) US slavery is technically gone. But millions of blacks have been kept in private US prisons, making money for white corporate shareholders.

          • Psycho Milt 8.2.1.3.1

            1) The fall of the Berlin Wall has seen German military units on the border with Russia yet once more.

            I suspect even a Pravda writer would have felt a bit of shame while writing that one. Did you?

            • jcuknz 8.2.1.3.1.1

              One of the shameful acts by ‘the west’ in recent times… no wonder Russia is afraid.

              • Draco T Bastard

                Russia doesn’t appear to be afraid – the West does. Afraid of the change that we need to embrace to make our economy sustainable and fair.

    • Duncan 8.3

      It certainly is the most powerful force in the world. And there are far too many vested interests for this to change without most of the world being converted to rubble.
      Unless the whole pile implodes by itself, in which case most of the world will be converted to rubble.
      Transition to a new paradigm will not be a breeze. No matter how much we desire a new system or how necessary it already is.

  9. TheExtremist 9

    Great work from the Greens and great post Weka.

    You are fast becoming one of my favourite Standard commentators and authors. Keep up the good work!

  10. McFlock 10

    Good post.

    I think that the Greens will be the heart and soul of the next government.

  11. mosa 11

    Weka keep up the good work and thanks for this interesting post.
    I have always held Julie Anne Genter in high regard and listen seriously to any ideas she has on an alternative strategy to the Neo lib suffocation that we currently have to endure especially under this government that has turned it into an art form.
    We may have to wait some years before she plays a part in a wider progressive movement that will have a mandate to put in place what will become mainstream in the decade ahead.

  12. Stuart Munro 12

    It seems to be in the right direction – but folk who evade or suppress taxes will simply evade or suppress carbon taxes, as the current government has shown. My impression is that JG is testing the water, which is understandable, but neoliberalism is steering for the rocks and thus it requires a substantial change of course, not an incremental one. It was a substantial course change that brought it in.

    • Nic the NZer 12.1

      Following up on our discussion the other day, I found something which talks about investment quality.
      http://neweconomicperspectives.org/2016/08/minsky-meets-brazil-part-ii.html

      However the framework used by this analysis correctly states that the government sector faces no actual funding constraints, and this appeared to me to be the primary thrust of your discussion about quality (was the quality of government investment by National). But yes, quality of investments is important to the non-government sector which must make a return on its investments for them to be sustainable, that is undeniable.

      • Stuart Munro 12.1.1

        Interesting, thanks.

        The presumption that government ability to spend is infinite is also I expect unhealthy – not that the household budget model of economies is better, but that the prudent use of public money is as much a duty of governments as of private sector managers.

        I find macroeconomics riddled with assumptions that seem to me incautious – the author includes consumer spending directly in GDP for example – whereas I’d expect at the least some dissection for imports. I think the vagueness and frequent inaccuracy of such assumptions is a political convenience – it allows governments to do as they will and fake the public interest dimension.

        In a small country like NZ it is quite practical to peel back macroeconomic obscurity to assess real consequences – it is ‘curious’ that economic analysis rarely does so.

        • Nic the NZer 12.1.1.1

          Government spending is infinite, there are no limits to the cumulative numbers which the government can support in its accounts, accounts maintained by a government institution. There are also no impacts if that institution takes on all the liabilities and writes them off, because the RBNZ can function with negative equity, there is nobody to shut it down in that state (except the government which clearly would not do so). The question is what are the implications for the economy of this spending of course (particularly on inflation and employment).

          “I find macroeconomics riddled with assumptions that seem to me incautious – the author includes consumer spending directly in GDP for example”.
          GDP includes consumption spending, that’s not an incautious assumption. GDP=C+I+G+(X-M) where C is spending on consumption, I is spending on investment, G is government spending (including government spending on consumption), X is overseas spending on NZ product and service, M is NZ spending on overseas product and service.

          The problem with your position, of treating govt debt in the same manner as non-govt debt, it that there is no sound basis for believing this to be the case. As I said, the accounting implies there is no limit, so the basis is from some kind of economic model. Is that model realistic? and further is it accurate? All the models I have observed modeling this and leading to such a conclusion are not even remotely realistic and because of this catastrophically inaccurate. The actual reasoning is that the economy should be analysed in an ‘equilibrium’ state but ‘equilibrium’ is not a state that any economy has ever been in.
          But the implications of doing this is that there is an assumption that govt debt is exactly the same as private debt is made. This does not however make in any less of an assumption.

          • Stuart Munro 12.1.1.1.1

            The GDP calculation still seems optimistic. It conflates spending with obtaining value. Increasing electricity prices or rents will make it appear to lift – apparent productivity – but these are deadweight costs that erode competitiveness.

            It is less a matter of equating government debt with private debt than recognising that poor decisions have less beneficial effect than good ones. The classical example is free tertiary education vs incarceration – the latter is vastly more expensive, with vastly less potential to benefit society. A policy that shifts away from funded education towards more incarceration on the same spent sum is not equivalent, and mathematical assumptions that treat them as being the same foster lousy governance.

            We are suffering lousy governance of this variety now.

            • Nic the NZer 12.1.1.1.1.1

              The reason for this weakness is that GDP is a measure of income, not value. In fact exchange value seems pretty fundamentally immeasurable (its subjective and everybody can have a unique opinion anyway).

              While you can make an argument juxtaposing education (a good) with incarceration (a bad) and claim that the good is cheaper (at least in the long run) than the bad I don’t see any reason this is reasonable in general. I heard once that if decisions were made about the legislation changes and removal of lead from gasoline had been implemented on the basis of economic reasoning then there would have been no justification to do it (it would have been much cheaper to just allow the small but not insignificant harm of earlier gas mixtures). Economic rationale simply forms a poor basis for making social decisions. As most people accept you should not try to run government as a business, thinking government spending should be constrained is just another outgrowth of that line of reasoning.

              Actually pretty much the same goes for arguments that a country should be primarily based on profitable trade. That really is not a sound basis for having a country.

              • Colonial Viper

                Economic rationale simply forms a poor basis for making social decisions.

                I think you probably mean financial rationale, or financialised rationale there.

                Real physical world economic rationale – where things like people, capabilities and competencies are recognised not just electronic currency numbers – might be more useful.

              • Stuart Munro

                To the extent that economics reflects real-world phenomena it may be a useful analysis – especially if prosperity is a desirable end.

                What you describe – public policy uninformed by economic consequences – seems to render the existence of Treasury, and the bulk of political argument in NZ since the eighties a nonsense.

                The fact is, we know that economics has significant local consequences – not least of which are failures like the housing debacle. Since it is consequential, it must be considered by any assemblage of unattractive featherless bipeds pretending to be a government.

                • Nic the NZer

                  Well given that the Treasury modeling says that its imposible for there to be a housing bubble in the economy (an equilirium state contains no miss-pricing whatsoever) and most of those discussions since the 80s have been had on that basis, yes it appears kind of nonsense in practice.

                  What i am saying does not absolve representatives of responsibility for their actions at all. Its the staff (such as the reserve bank governer who evade responsibility). Representatives ultimately face re-election. Think about it for a second, the basis for the RBNZ acting independently is that they can keep inflation of 2-3% and that housing bubbles don’t happen. Both these things are false and even significantly higher interest rates didn’t prevent the pre 2008 bubble in NZ. Who is responsible? Why is it not the RBNZ?

                  The thrust of what i am saying is that we need policy to take the actual consequences of policy into account. Not some fictional consequences immagined by an economic model.

                  • Colonial Viper

                    As you know, the neoliberal push required that levers of power, like the central bank, be taken out of the hands of politicians, and put into the hands of unaccountable 0.1%’er technocrats.

                    • Draco T Bastard

                      That is certainly what has happened and why we need sovereign money. To take the power of the financial system from the rich.

              • Draco T Bastard

                Economic rationale simply forms a poor basis for making social decisions.

                Actually, that would be financial rationale rather than economic.

                Economics is concerned with resources and the health of the population is a resource and a rather important one. It’s why we have free health care and why we should be looking after the environment and several other points.

                Financial rationale on the other hand has private health insurance that produces huge profits for the bludging shareholders and executives while costing the population more and not actually being available to everyone. It also destroys the environment and unsustainably uses other resources such as iron.

  13. Richard McGrath 13

    CV: “Industrial economy needs to be dramatically slowed down in the next 8 or 10 years, then almost halted, and then carefully dismantled; not prolonged.”

    And replaced with… what? subsistence farming?

    • Colonial Viper 13.1

      It’s going to be replaced with much more localised modes of production of critical necessities, and far more limited creation of luxury items.

      We either do it now under our own control, or we allow it to happen completely chaotically in 30 to 40 years.

      • KJT 13.1.1

        In a Democracy, we still have to work within the possible.
        Short of a world wide dictatorship it cannot happen.

        We have to face the fact that over 4degrees C is already locked in and work within the reality.

        • weka 13.1.1.1

          Another option is that we get a sequence of events that prompt rapid cultural change. If that happened, do we have the infrastructure and capacity to make the changes in the physical world rapidly as well?

        • Colonial Viper 13.1.1.2

          In a Democracy, we still have to work within the possible.
          Short of a world wide dictatorship it cannot happen.

          What upsets me is almost no one is even seriously trying; lefties telling each other that we must stay within the confines of mainstream discussion and orthodox economics because there is no alternative.

          I now refuse to accept that.

          We have to face the fact that over 4degrees C is already locked in and work within the reality.

          I think 3 deg C to 4 deg C is locked in, and that it will happen quite quickly (say 2040s).

          If Mother Nature takes the steering wheel out of our hands (with positive feedback loops that we have zero control over) then I agree that 4+ deg C will happen.

          • weka 13.1.1.2.1

            “What upsets me is almost no one is even seriously trying; lefties telling each other that we must stay within the confines of mainstream discussion and orthodox economics because there is no alternative.”

            Maybe you are moving in the wrong circles CV. That’s not what I hear people saying. It’s certainly not what I am saying.

            • Colonial Viper 13.1.1.2.1.1

              Genter seemed to say that the era of post-neoliberalism is upon us.

              It’s not. Trans-national corporate neoliberalism is still the most powerful force in the world, by far.

              The fact that the Greens don’t seem to understand this obviousness is part of my worry.

              But I understand that the Greens need to chase votes, and they don’t want to be accused of being economically and fiscally radical, or of being anti-capitalist.

      • Wayne 13.1.2

        CV
        You have been promoting this idea of environmental, economic and social collapse for some time.
        I just don’t buy it. It seems highly improbable to me that we (humans) can cause the collapse of the ecosystem except in localised areas.
        So I think progressive adjustment over the next few decades will work out fine. In Europe the ecosystem is as healthy as it has been for decades. In short the whole world could reach European standards and be OK.

        • Pat 13.1.2.1

          “I just don’t buy it. It seems highly improbable to me that we (humans) can cause the collapse of the ecosystem except in localised areas.”

          Hmmm…so if I collapse my local ecosystem and you collapse your local ecosystem and everyone else collapses their local ecosystems, the system in its entirity will remain unaffected…yep, I can see the logic.

          Ladies and gentlemen…I present Dr Wayne Mapp…..God help us.

          • Wayne 13.1.2.1.1

            Pat,

            My key point is about Europe.

            Do you think Europe, probably the most densely settled and populated place of the planet (think Netherlands), but also incredibly highly developed is in an ecological crisis?

            Could the whole world provide European standards of living to everyone, and be sustainable?

            In my view the answer is yes. Europe is in a better ecological condition, measured in terms of air quality, water quality and biodiversity, than it has been for decades. Why can’t this be repeated throughout the world, as the prosperity of each region rises.

            It seems to me that as countries reach a prosperity peak, they then tend to fix up their environment. This process has occurred in Japan, the US, and is now occurring in China.

            • Colonial Viper 13.1.2.1.1.1

              Wayne, we can’t even provide a decent Kiwi standard of living to Kiwi kids, let alone top people all around the world.

              People are realising that the promises of your neoliberal system are false.

              You have been promoting this idea of environmental, economic and social collapse for some time.

              What are you talking about? Have you not noticed the revolving door of money, corporate influence, lobbyists, political party operatives and politicians now entrenched in major western countries? That’s societal collapse right there.

              Of course, if you have a range of six figure bank account deposits and on call asset portfolios, you get to live in a nice place and are very well insulated from the signs and symptoms of environmental, economic and social collapse.

              By the way, has your household water supply been permanently contaminated by cow shit, and your authorities have said that’s the way it’s going to be from now on? I don’t suppose that counts as environmental and political collapse in the pursuit of $$$ in your books.

            • Colonial Viper 13.1.2.1.1.2

              By the way hope you don’t have grand kids Wayne, because they’ll know that you were a government Minister who took this naive view when they are trying to deal with the resulting and inevitable SHTF in the 2030s and 2040s.

            • Pat 13.1.2.1.1.3

              Wayne, do you mean this Europe?

              http://www.wwf.eu/?266430/WWF-welcomes-EU-campaign-to-tackle-crisis-of-Mediterranean-fish-stocks-calls-for-urgent-and-collective-action

              and this USA?

              http://www.businessinsider.com.au/americas-about-to-hit-a-water-crisis-2015-4?r=US&IR=T

              and this Japan?

              http://www.japantimes.co.jp/news/2016/07/21/national/greenpeace-reports-jump-radioactive-contamination-fukushima-waterways/#.V8PpPVd4XzQ

              as for China….seriously? Yes they undoubtably have it all under control (lmao)

              But the most disturbing part of all is the impression from your original post that CC is not even considered in you thoughts……are you perhaps advising Paula?

            • KJT 13.1.2.1.1.4

              Interesting point of view, that Anthropogenic Global Warming is not an environmentally and socially serious crisis.
              And very scary that a senior, and influential, politician thinks it is OK as we are.

              Talk about denial of reality!

              The USA has not “fixed” their environment, just exported the pollution to China.

              New Zealand is “supposedly” more prosperous than we ever were, but our water ways are infinitely more polluted, our landscape is more degraded, our industries have been allowed to ignore air quality and particulate standards forever..

              Wayn Mapp and his colleagues are those that are primarily responsible.
              “Wadeable” FFS!

              • Draco T Bastard

                Talk about denial of reality!

                Denial of Reality is pretty much a requirement for a National supporter.

        • One Anonymous Bloke 13.1.2.2

          CV may not know his arse from his elbow.

          This from Nature:

          …on the basis of mid-range climate-warming scenarios for 2050, that 15–37% of species in our sample of regions and taxa will be ‘committed to extinction’.

          Off to find an oil company geologist who’ll give you a counterview?

          • Colonial Viper 13.1.2.2.1

            Humans are destroying, conservatively, 150 to 200 unique species of life a day, every day. But Wayne doesn’t know any of them personally, so what the hey, they don’t count.

            One day though, we’ll end up on that list.

        • Draco T Bastard 13.1.2.3

          In Europe the ecosystem is as healthy as it has been for decades.

          That’s probably because it was destroyed centuries ago.

          In short the whole world could reach European standards and be OK.

          Once we reach that standard the Earth’s fucked due to the massive loss in biodiversity.

          • KJT 13.1.2.3.1

            Britain, in particular, started from a pretty low base.
            For example London has had toxic smogs, since the industrial revolution.
            The Thames has been cleaned up from a toxic sludge.

  14. adam 14

    The golden age is over Richard, time to face the fact we have a serious problem.

  15. KJT 15

    Taxing the rest of us to support oil companies, and dairy farming, has worked rather well in changing the relative importance and pervasiveness of those industries. Not many people realise how much tax dollars has gone into the oil industry over the years, for one.

    There is no reason to think that similar tax and spend will not work for Climate change mitigating industry, such as local production and sustainable energy sources.

    Tax deductions for companies with high executive pay in the USA has driven the huge increases, while the lack of them in Germany and Japan has had the opposite effect.

    Hitting someones back pocket works rather well in modifying behavior.

  16. The two looming, unavoidable challenges facing humanity are climate change and inequality.

    Inequality might be annoying, unpleasant and pointless, but it’s hardly on the scale of climate change. By historical standards the level of inequality in even the most unequal of developed countries is low (eg, by comparison with the ancient world, feudal societies etc). It could get a hell of a lot worse than it is now and still be lower than inequality in most civilisations that have ever existed.

    • marty mars 16.1

      Inequality is a bit more than that if you are in the wrong side of it. Inequality devastated people, communities, countries and permeates our society polically, economically and socially. It stifles us, reduces us, and gives us fewer resources and energy to adjust to the new future unfolding.

  17. Draco T Bastard 17

    The economy should describe how we allocate resources and how we spend our time.

    Exactly and money is a tool that we’ve supposedly chosen to do that.

    Natural resources tend to be treated as an input to a machine that creates “wealth” in the short term. Yet the resources themselves are not created by humans, they are used up or transformed.

    The resources are the wealth and that is why we should not simply be allowing rich people to control them. And also why we shouldn’t be exporting them. The resources we have are limited and if we export them all we won’t have any wealth left.

    Combine that with a global price on climate pollution. Allocate the revenue to countries on the basis of population, invest some of the revenue on socially beneficial infrastructure like energy-efficient housing, green transport, clean electricity, and make sure the rest is shared fairly.

    Still making the mistake of thinking that money is the economy.

  18. RedLogix 18

    What a brilliant thread everyone. A real pleasure to read and absorb. 😊

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