Larger slice of the cake for workers under Labour

46 comments on “Larger slice of the cake for workers under Labour ”

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1. RedLogix 1

   30 July 2008 at 7:16 am

   Thanks for this Steve. It’s amazing how much raw politics is embedded in these numbers.

   The graph is even more interesting if you extend it back to the beginning of the source series, 1972.

   What we see is (Compensation of Employees/GDP) was historically around the 50% mark, peaking at almost 56% in 1981.

   But from there on in it has been a bumpy slide down, reaching a low point of 41% in 2002.

   That is a pretty massive difference. In terms of actual employee compensation has seen it’s share of GDP reduced by about 15% over this period, or in absolute terms a reduction of 30%.

   Which curiously enough is similar to the wage gap with Australia. Sorry I’m too lazy to do my own homework, but do you have a similar data source for them?
2. Matt Nolan 2

   30 July 2008 at 8:15 am

   Hi,

   I can’t get access to the data source for some reason (which is weird).

   I was wondering if you were using real wages or nominal wages – I find a different result if I use real wages vs real GDP. It comes out that total earnings as a % of GDP has been flat over the last 7 years.

   This is interesting as we have had an extremely tight labour market – which should of (all other things equal) increased wage bargaining power and lead to this ratio increasing. Of course investment in capital has also risen markedly over the last 5 years – which might explain it 🙂
3. RedLogix 3

   30 July 2008 at 8:33 am

   Matt,

   The number we are talking about is the ratio of Total Employee Compensation/GDP.

   So long as the source data is logically consistent, ie it does not mix real and nominal dollars, then the ratio will remain unchamged.
4. Matt Nolan 4

   30 July 2008 at 8:53 am

   “So long as the source data is logically consistent, ie it does not mix real and nominal dollars, then the ratio will remain unchamged.”

   Yes, which is why if it is a nominal wage track and a real GDP track the numbers will not be consistent.

   If the data source is not doing that, then I will have to try and figure out why my series is running flat while this one is increasing 🙂
5. Steve Pierson 5

   30 July 2008 at 11:30 am

   Matt – nominal wages and nominal GDP. Give me some credit, I wouldn’t mix the two, and of course if I did the graph would look far different from this one.

   I find the link sometimes won’t open if I already have excel open. Close your excel, then open.
6. Steve Pierson 6

   30 July 2008 at 11:32 am

   Pretty hard to argue with the numbers, expecially when the numbers confirm exactly what you would expect given the policy settings
7. Matt Nolan 7

   30 July 2008 at 11:51 am

   “Matt – nominal wages and nominal GDP.”

   Nominals make more sense than the reals I was talking about, so good move 🙂

   I still can’t get into the danged data sheet, I will just have to leave it for now I guess – I’m not disputing where your numbers are going, I was just surprised that my series, and the national accounts series I used didn’t give me the same results post 2001.

   When I’m able to get hold of the numbers I’ll see if I can figure out where the disparity is from – it could be interesting 😛
8. Steve Pierson 8

   30 July 2008 at 12:02 pm

   strange. I’ll post the link here, who knows it might work for you. http://www.stats.govt.nz/NR/rdonlyres/61D5633A-FC9C-4794-BFA9-23578BE9EC5A/23053/nayemar07revconsolidatedaccountsfullseries1.xls
9. Pascal's bookie 9

   30 July 2008 at 12:17 pm

   Completely OT Steve sorry, but:

   Any dismal science types want to comment on this sort of thing:

   http://www.newshoggers.com/blog/2008/07/crud-for-cash.html

   Should we be concerned about the health of the US dollar?

   What would be the impacts of a USD collapse?

   But Wall st bounced back yesterday. So woohoo.

   Socialise the losses.
10. Matt Nolan 10

    30 July 2008 at 1:28 pm

    Hi Steve,

    Still can’t get the data series up – I might try at home tonight at home as the internet connection here is playing up.

    I think the issue might come from me using inappropriate reals – as I was deflating one with the CPI and the other with the GDP deflator, which of course is completely wrong. I only just noticed that when I went back through it 🙂

    One thing I would note though, is that the increase in the wage share of GDP has risen as labour productivity relative to capital productivity has risen – which is also interesting.

    Also the trend shown in the graph only occurs because of the 2007 result – I have the 2006 figures, which is why the graph of the nominals looked so flat for me when I initially plotted it.

    The compensation in 2007 was so high because the labour market was so tight – we then have to ask whether this was the result of Labour’s economic policies, or was it the result of other external influences? Furthermore, the decline over the 1990’s could be put down to a fall in our terms of trade, and the increasing productivity of capital.

    It is definitely hard to analyse without a counter-factual, but I’m not sure that the data can clearly tell us that National is entirely anti-worker and Labour is entirely pro-worker.

    Hi Pascal,

    Most economists are concerned about the moral hazard issue associated with the Fed bailing out poor loans – however I wouldn’t be too concerned about a sudden crash in the US dollar, it’s value has fallen so much already 🙂

    The important thing for us isn’t going to be the strength of the US dollar per see, but the impact that events stemming out of the US has on world economic growth.

    The “fairness” of the bailout in the US are not an essential issue when we look at it in terms of NZ economic growth – although I imagine it is an important issue to people in the US 🙂
11. Pascal's bookie 11

    30 July 2008 at 2:07 pm

    Thanks Matt.

    I understand about the fairness business and how that in itself is irrelevant to us. (Other than that I don’t want to hear from capatalists about the moral hazard involved in giving unwed mothers the DPB for, let’s say 20 years)

    however I wouldn’t be too concerned about a sudden crash in the US dollar, it’s value has fallen so much already

    To paraphrase the char wallah from “aint half hot mum” :

    Just because you have lost your job the same day that your wife has run away with your best friend, and your dog just vomited on your shoe; this does not mean that your house cannot burn down.
    😉
12. Bill 12

    30 July 2008 at 2:14 pm

    Redlogix observation on the drop of wages relative to GDP between 1972 and 2002 “That (it)is a pretty massive difference. In terms of actual employee compensation has seen it’s share of GDP reduced by about 15% over this period, or in absolute terms a reduction of 30%.”

    The interesting point for me is that neo-liberal policies were meant to boost GDP and therefore (presumably) wages.

    I’d be curious of the growth %ages pre and post ’84. My guess would be that average growth slowed under the export driven neo-liberal model.

    If that is the case, then the question has to be asked why it is that the Labour party still clings to the failed economic mantra of export orientated growth and doesn’t pursue a wage driven growth strategy?
13. Idiot/Savant 13

    30 July 2008 at 2:28 pm

    You want Table 1.1 from the full series (second spreadsheet down) here:

    http://www.stats.govt.nz/products-and-services/hot-off-the-press/national-accounts/national-accounts-revised-year-ended-march-07-hotp.htm?page=para004Master
14. Matt Nolan 14

    30 July 2008 at 2:51 pm

    “Just because you have lost your job the same day that your wife has run away with your best friend, and your dog just vomited on your shoe; this does not mean that your house cannot burn down.”

    😀

    “You want Table 1.1 from the full series”

    Thanks I/S – I think it might be my internet connection today, as I just can’t access anything on the stats site! I’ll just download it tonight from home 🙂

    I’m sure the figures are right, although again I’m not completely behind the idea that the movement was the result of policy – but thats just because I’m skeptical of the aggregate impact of good and bad policy in the first place 😉
15. Steve Pierson 15

    30 July 2008 at 3:02 pm

    yeah but when the question you’re asking is ‘did did wages fall as a % of GDP or increase?’ and you have policies like not raising the minimum wage and raising it faster than GDP growth you are going to have an impact.

    Don’t underestimate the power of raising the minimum wage – the $11.25 to $12 rise this year directly increased 300,000 people’s wages (that’s 15% of workers) perhaps as many again are in the immediate helo of the minimum wage, when the minimum wage went up it gave someone who was already earning $12 a strong case to argue for a payrise – there is an expectation that the second-tier of low skilled jobs will be paid above minimum wage, especially those that involve added responsibility…. so, you’ve got first and second round effects pushing up perhaps 30% of workers’ wages, then you’ve got the economic stimulus from all those people getting a pay rise. Say that last increase resulted in an average 50 cent an hour increase for 600,000 workers, you’re talking an annual stimulus in the order half a billion dollars, that creates more jobs, tightening the labour market, increasing wages.
16. Stephen 16

    30 July 2008 at 3:29 pm

    The ‘more unemployment’ argument doesn’t run with you Steve?
    [the more unemployment argument is a load of crap without a shred of empirical evidence. It’s just an excuse to pay workers less. SP]
17. Matt Nolan 17

    30 July 2008 at 4:43 pm

    “then you’ve got the economic stimulus from all those people getting a pay rise”

    Businesses aren’t black holes of money though. I have discussed how a higher minimum wage could lead to higher employment before on tvhe, but it is more a special case than the rule.

    Unless we believe that businesses who hire people on the minimum wage have significant market power in both the labour and goods markets this story isn’t going to hold – firms will just exist the industry.

    As long as the employment bargain is based on voluntary action, I don’t think it is fair to demonise the capital owner – which is what this type of analysis implies. Why? Well the value the worker is gaining isn’t coming out of thin air – it is being extracted from the capital owner.
18. Steve Pierson 18

    30 July 2008 at 4:53 pm

    No-ones saying a business is a blackhole for money but I didn’t include the multiplier effect of increased demand arising from increased spending either… you usually don’t when you’re talking stimulus from a such a change.

    Matt. For 9 years, Business New Zealand argued that raising the minimum wage would increase unemployment while the hundreds of thousands of minimum wage workers and their families got poorer and poorer in real terms. Did unemployment increase when the minimum wage went up under labour? of course it fucken didn’t. Business NZ doesn’t give a fuck about the workers and some imaginary change in employment levels – they just want to keep more money for the bosses.

    It’s grossly insulting for people to hide behind some half baked neoliberal economic theory to justify the rich in our society ripping off the poor when it means real people suffering. You’ve got a good mind, you can do better.
19. Steve Pierson 19

    30 July 2008 at 4:57 pm

    “As long as the employment bargain is based on voluntary action, I don’t think it is fair to demonise the capital owner – which is what this type of analysis implies. Why? Well the value the worker is gaining isn’t coming out of thin air – it is being extracted from the capital owner.”

    This is an embarrassingly poor argument, especially considering you’ve just read a series of posts on how a capital owner can change the share of the value between itself and the workers. And you really think that a poor man or women with children to feed regards employment as voluntary? this is exactly why I got out of economics, you can’t see real life for all your theories.
20. Matt Nolan 20

    30 July 2008 at 5:03 pm

    “No-ones saying a business is a blackhole for money but I didn’t include the multiplier effect of increased demand arising from increased spending either you usually don’t when you’re talking stimulus from a such a change.”

    No you don’t as it isn’t an “external stimulus” – it is simply a transfer of income between two effective households.

    “It’s grossly insulting for people to hide behind some half baked neoliberal economic theory to justify the rich in our society ripping off the poor when it means real people suffering”

    I’m not doing that though. If you are irritated with Business NZ thats cool – but I’m still not convinced that the graph is saying that workers in NZ are being taken advantage of.

    I am all for changes that allow more equal bargaining positions – to me that seems completely fair. However, assuming that any change which benefits the worker is necessarily fair is not as self-evident.

    I am not criticising of promoting Labour or National policy – however, I’m not happy with the statement that the “rich are ripping off the poor”. As you can tell, I’m not much a far of the idea of class war and the holistic view of society 😉
21. Draco TB 21

    30 July 2008 at 5:03 pm

    Should we be concerned about the health of the US dollar?

    According to free-market theory – no.

    What would be the impacts of a USD collapse?

    In theory the US would stop buying up large amounts of Chinese made goods but this may not happen as the Chinese yuan is pegged to the US$. Chinese production relies quite heavily on pre-made products (specialist circuit boards etc) from other Asian nations and Europe so any decline in demand from the US for Chinese goods will adversely affect the majority of the world (Can’t recall the exact figure but a very large %age of Chinese made goods are sold to the US). They would stop buying products from other countries that have a floating exchange rate.

    This would, of course, allow the US to rebuild its industrial base and boost employment at home. It would also allow them to try and balance their trade deficit.

    Impacts would be a massive layoff of workers around the world while employment in the US increased but an overall decrease in trade. Best case scenario would be a worldwide decrease in trade over the short term and a rebalancing of trade in the mid to long term with only minor adjustments to living standards. Worst case scenario would be a deflationary spiral resulting in a worldwide depression. Total impact would be dependent upon how much trade decreased in the short term.

    Normal capitalist modus operandi.
22. Matt Nolan 22

    30 July 2008 at 5:13 pm

    “this is exactly why I got out of economics, you can’t see real life for all your theories.”

    Ok, wtf. Seriously, we have a generous welfare state, including subsidies to families, and enforced labour laws. This is sufficient to create a reservation value for labour, which does give them market power.

    I specifically stated that we need a society where the labour choice is “voluntary” as to be transparent – at least I blatantly admit my assumptions when I say something.

    As a result, it is obvious that I support policies that help equalise bargaining power and make the employment relationship a voluntary one. I am fairly confident that the current labour market provides conditions where employment is relatively voluntary – and as a result the demonisation of employers is a touch ridiculous.
23. Steve Pierson 23

    30 July 2008 at 5:21 pm

    Matt. So, in conclusion, no evidence that raising the minimum wage harms the economy or employment levels. Theory, theory that suits the bosses at the expense of the people, but no evidence, not a shred.

    Evidence that not raising the minimum wage hurts people – as if falling real wages aren’t slef-evidentally going to hurt – the 1990s social stats, the reappearance of diseases of pverty during that period, rising crime and suicide (if you need the stats, search our archives)… you might have been in a world where those things didn’t happen around you, but they were happening around me when I was growing up and it’s not pretty. Try watching Someone Else’s Country or In A Land Of Plenty…

    understand that when you argue against raising the minimum wage to at least match inflation, you are arguing for people to live in worse conditions, suffer more hardship, die more often… I don’t see any economic theory that justifies those costs.
24. Steve Pierson 24

    30 July 2008 at 5:25 pm

    Matt. I’m not demonising capitalists. I’m saying, give them political power via the National party and they’ll act in their rational self-interest – and that means screw over the rest of us. they did it in the 1990s, they’ve ruthlessly opposed every more to undo their actiosn inthe 1990s since then and they’ll do it again because it is their rational course of action to maximise their share of production.

    That’s not evil, that’s economics.
25. Matt Nolan 25

    30 July 2008 at 5:36 pm

    “you might have been in a world where those things didn’t happen around you, but they were happening around me when I was growing up and it’s not pretty”

    I’m not getting into one of these “who had a harder life” arguments – if you want to hear about some of the crap I went through when I was young then it would be better to do over a beer rather than as a way of framing an internet debate 😉

    “understand that when you argue against raising the minimum wage to at least match inflation, you are arguing for people to live in worst conditions, suffer more hardship, die more often I don’t see any economic theory that justifies those costs.”

    I didn’t argue about any of these things – this is a straw man argument!

    I am just saying that increasing the value of the statistic you have shown may not be a good thing – even for workers. What happens if a higher wage share to capital lead to a sharp reduction in capital investment and growth! I am not trying to say – lets screw the workers for growth, I don’t believe that at all. I just believe that your argument is better served by looking at situations where workers require help to have a fair bargaining position – so that fair and voluntary trade can occur.

    “I’m saying, give them political power via the National party and they’ll act in their rational self-interest – and that means screw over the rest of us”

    I’m saying that your evidence does not suggest that. To tell you the truth, as a neutral in the current political environment, National and Labour look exactly the same. They have been captured by the same middle class voters and will likely implement very similar sets of policies – given some of the strange policies associated with the small parties, I don’t know who the hell to vote for.

    Look I’m sure that you believe that there is a class difference, and fundamentally, I don’t. Now I’m sure that we are both wrong in our own little ways.

    As an undecided voter, the difficult thing for me is that I don’t feel that the parties are being honest to me. If I felt that I could trust a party – that they truly believed that what they were doing was to maximise social welfare, then I would run to vote for them.
26. lemsip 26

    30 July 2008 at 5:56 pm

    Hmm I may be wrong but weren’t National in power between 1996 and 1999? If they were (which of course they were) how do you explain the significant uptick in wage and salary growth? I presume you’re going to say something about a fall in GDP. But if that’s the case, could not a similar reason be forwarded for a fall in wages as a proportion of GDP in the mid 1990s when NZ experienced strong growth? Afterall wages can be quite sticky in the short run and National institutioned a tax reform package which provided businesses with an incentive to not raise wages and employees an incentive not to lobby for pay rises.

    Its also interesting to note that wages didnt really move much (compared to previous movements shown in the graph) in labours first two terms but have since moved a lot as growth has slowed and the labour market has become tighter. Additionally, couldnt low unemploynment be a large factor driving changes in wage growth i.e. more people earning wages and salaries? You may like to argue that the government is solely responsible for low unemployment or a large contributor but anyone with a shred of integrity knows that it is mainly down to other factors such as a previously strong world economy. As we see now with the global economy slowing more workers are losing their jobs.

    But do by all means bang on about the the minimum wage. However it would be nice to see some analysis that shows just how significant raising the minimum wage has been.
27. RedLogix 27

    30 July 2008 at 7:37 pm

    OK so if the minimum wage is such a bad thing, then how low do you wanna to go?

    After all in this globalised era even the proverbial ‘cup of rice a day’ could prove too much for employers looking to endlessly cut costs in a race to the bottom.
28. Idiot/Savant 28

    30 July 2008 at 9:55 pm

    So, in conclusion, no evidence that raising the minimum wage harms the economy or employment levels. Theory, theory that suits the bosses at the expense of the people, but no evidence, not a shred.

    But isn’t that the purpose of right-wing economics? To provide the justifications for selfishness and greed, and how oppression and poverty are “the natural order”, and bugger the empirical evidence?
29. RedLogix 29

    30 July 2008 at 10:32 pm

    Earlier in the thread (and in the day) I asked if there was any comparable data for Australia. Found it.

    http://tinyurl.com/67mupw

    In case the link doesn’t work the numbers are fascinating, and if they are being calculated on a comparable basis, clearly show that wages are higher in Australia because the Employee Compensation/GDP ratio over there is substantially higher. And by eyeballing the graphs we get the following aproximate series:

    1972: Aus = 53%, NZ = 50.3%

    1977: Aus >= 60%, NZ = 52%

    1982: Aus = 57%, NZ = 55%

    1987: Aus = 55%, NZ = 55%

    1992: Aus = 55%, NZ = 44%

    1997: Aus = 55%, NZ = 42%

    2002: Aus = 53%, NZ = 41%

    2007: Aus = 53%, NZ = 44%

    There is the hard evidence for you. New Zealand wages were roughly tracking Australia until the early 90’s. Then suddenly we drop roughly 13 percentage points or about 28% in absolute terms, and we have struggled to close the gap ever since.

    Given this track record, and given that nothing much seems to have changed in the National Party over the years, and given what little can be deduced from their pathetic list of bullet points they are passing off as policy, one has to conclude that anyone stupid enough to vote for them is also voting for a pay cut.
30. Razorlight 30

    30 July 2008 at 10:33 pm

    SP, you continously compare this Laboour goverment to the last National goverment, fair enough, keep providing us with these lovely graphs. I am sure they are turning the tide on National support. But my problem is some how you come out with the conclusion that the next National government will be the same as the one run by Bolger and Shipley. That is absurd.

    How close has the 5th Labour goverment been to the 4th. Not close at all. The policies and results were very different even though many current senior Labour MPs were in both cabinets. The one constant through out has been the Douglas economis reforms. These have remained largley untouched yet I do not think you will dwell on that.

    Same can be said between Muldoon’s National government and Bolger’s. Two very different governments with many of the same Ministers.

    So even if your graphs are accurate I do not join the dots and come out with the same picture you are drawing. Why is Key’s government going to be the same as Bolger’s
31. RedLogix 31

    30 July 2008 at 11:26 pm

    Why is Key’s government going to be the same as Bolger’s

    Why not? What has changed?

    The people have not.

    What little of the policy we know about has not.

    And of that little we do know, nothing in it points to improved wages and conditions.

    The 4th Labour Govt was essentially the as yet nascent ACT Party, an extremist right wing agenda that literally hijacked the Labour Party and eventually it ripped apart. The 5th Labour Govt is by both avowed philosophy and policy a totally different creature that spent many years in Opposition repudiating the extremist policies implemented by Douglas.

    Moreover it is a total nonsense to suggest that the Douglas reforms were left untouched. After the disasterous Muldoon era virtually any govt that took power subsequently would have been compelled to implement many liberalising reforms.

    The huge mistake Douglas made, (and he once admitted this in a radio interview I heard in the early 90’s) was that in his haste to push through his entire agenda he did things in completely the wrong order, greatly compounding the pain caused by his reforms. The result was so bad Lange could not stomach it, and he called for a halt.

    Some of what Douglas did at that time was bound to remain in place. For instance he floated the NZ dollar, but of course that is a commonplace in most nations. But much of his more extremist reforms, such as a flat 23% tax, have been rolled back. Besides if Douglas had achieved all he intended then why is he standing for ACT again this year?

    I do not see the current National Party offering any remotely comparable repudiation of the philosophies and policies of the 90’s Bolger/Shipley govt. On the contrary, everything I see about National in 2008, looks and sounds just like National in 1998.

    On the other hand Razorlight, if you have any actual evidence that I am wrong I am willing to consider it.
32. Razorlight 32

    31 July 2008 at 12:07 am

    Redlogix

    Isn’t the fact that National is being accused of being Labour lite clear evidence they are not returning to the 90’s policy platform. Yes they will move to the right. But the fact they are kepping WFF, interest free student loans, Cullen fund etc etc is evidence to me at least this is not the National Party Shipley/ Richardson etc took control of.

    This is a moderate National party under the control of Mr Key. A man who had nothing at all to do with the policies of the 1990’s.
33. RedLogix 33

    31 July 2008 at 12:23 am

    But the fact they are kepping WFF, interest free student loans, Cullen fund etc etc is evidence to me at least this is not the National Party Shipley/ Richardson etc took control of.

    Or that these policies have proven so popular that it makes tactical sense to go into an election making very non-specific promises about not abolishing them.

    On the other hand Key has also learnt to keep his real opinions to himself (as he openly and quite remarkably states in the Herald hagiography on him this last weekend).

    We also know that National has spent much of the last 3-5 years vehemently attacking these very policies that they now profess to support. We all know that Oppositions indulge in a degree of gameplaying, but personally I find these John Key rat gulpings a stretch too far.

    And we also know that it is one thing to commit to a policy, and authentically maintain it in good working order, quite another to pay it nominal lip service before an election, and then subtly undermine it or allow it to quietly run down once you are in power.

    It would also help the credibility of your argument if you could point to some actual documents that spell out in specific detail the exact policies that National is asking for a mandate on. Most of what we have so far have been John Key ‘verbals’, or vague lists of feel good bullet points that mean nothing concrete, and Blind Freddie could wriggle out of post-election.
34. Razorlight 34

    31 July 2008 at 12:36 am

    So you are basing your argument on nothing more than a gut feeling that Key will go back on his word.

    That is clearly scare mongering. Claiming Key is saying he will keep policies but will not follow through on it. This is based on what. Absolutley nothing.

    And by the way I am not convinced the 1990s were as bad as some you believe. 1999 was alot better that 2008
35. RedLogix 35

    31 July 2008 at 1:17 am

    So you are basing your argument on nothing more than a gut feeling that Key will go back on his word.

    I listed three major REASONS why I do not believe that John Key/National will deliver what the electorate is expecting.

    One is a statement made by John Key himself and quoted by the Herald just this last weekend, that he has learnt to not to be too open about his real opinions. We also know that a few years back his opinions we very right wing, and that he is quoted in the same article saying that he has not changed them. Therefore it is entirely possible, by his own admission, that he is only playing lip-service to his newly found ‘middle of the road’ positions.

    We know that National has spent years flat out slagging the very policies they now claim to support. They frequently went rabidly beyond rational opposition and firmly stated that they would repeal these policies if they got into power. No rational person could now believe that National is suddenly and wholesomely committed to backing policies that just months ago they professed to loath.

    We know that National’s policy commitments so far have been exceedingly lightweight and lacking in specific detail, often consisting of no more than lists of feel-good statements that would be child’s play to find some wriggle room with later on. There is a complete absence of thick detailed and specific documents that actually pin down anything meaningful.

    And any fool know how easy it would be for instance to go into the election ‘committed to Kiwisaver’, and then afterwards tinker with the settings to reduce its value.

    These are not ‘gut feelings’, they are facts.
36. Razorlight 36

    31 July 2008 at 3:51 am

    RedLogix

    I understand your argument but the same can be said for almost all MP’s. There is not many in that house that do not follow the Party line and shelve some of their core beliefs to make themselves more electable. That may be a right wing capitalist or a loony lefty. They are all front men for a party that has to moderate extreme views to become electable. Clark, Cullen, Key, Brash, you name them, they all do it. Hyde and some of those Green people are the few who stick to their core beliefs and dont compromise them.

    So even if Key is shelving some of his beliefs it does not mean his government will be the same as the one in the 1990’s. It simply does not make sence.

    Even if National had been in power since 1999, they would have evolved with time.

    SP’s argument that John Key’s goverment will mirror Bolgers is in my opinion absurd and based on nothing but a strange hatred for the right and more specifically National.
37. Matt Nolan 37

    31 July 2008 at 9:08 am

    “But isn’t that the purpose of right-wing economics? To provide the justifications for selfishness and greed, and how oppression and poverty are “the natural order’, and bugger the empirical evidence?”

    Absolute gold. I/S, do you not understand that these people you are attacking may actually believe that what they are trying to do is in the best interest of society as a whole? Even the people in the ACT party say the things they do because they think it is best for society as a whole – you might not believe it but its true!

    I discuss economic policies in the way I do because I genuinely believe that they are the best way to help people – not because I want the greedy and selfish to “win the game of life”.

    Expecting the government to account for all injustices is not realistic – by doing so they will simply create injustices of their own. The government does have a role to improve outcomes. However, the best way they can do this is by helping to provide a situation where individuals can trade freely and fairly – does this point of view make me a bastion of selfishness and greed?
38. Pascal's bookie 38

    31 July 2008 at 9:36 am

    these people you are attacking may actually believe that what they are trying to do is in the best interest of society as a whole? Even the people in the ACT party say the things they do because they think it is best for society as a whole

    Agreed. Really do.

    “However, the best way they can do this is by helping to provide a situation where individuals can trade freely and fairly,“

    This a bit sneaky, and I assume not deliberate.

    The bolded word is where the whole debate is hiding. Innit?

    I mean if I decide that the most fair system, that promoted freedom most efficiently, was one where a certain bookie owned the entire world, some might consider that selfish. Bastards.
39. Matt Nolan 39

    31 July 2008 at 10:28 am

    “This a bit sneaky, and I assume not deliberate.

    The bolded word is where the whole debate is hiding. Innit?”

    It was deliberate – as without mentioning fairness my claim wouldn’t be able to be applied to anything practical. However, you are exactly right that it is the whole reason for debate, and can explain the whole difference in the way we view what is “selfish” behaviour.

    That is why ACT, National, Labour, and the Greens can all support separate policies but still believe they are doing what is best for the nation – because they believe different things are fair.

    Now fairness is an interesting thing – ultimately, I don’t know what is fair, which is why I place so much value on transparent elections where society can state what it believes is fair.

    As an economist I believe that we can achieve “fair” outcomes in any sense of the word as long as we redistribute and then allow voluntary trade. The reason economists love the idea of voluntary trade so much is because we realise that we don’t know what people want, and by allowing them to trade they can “reveal” this information to us. Now there may be situations where the barriers to trade are too much, as so regulation would be better – if this case is provided for me then I will accept it.

    I guess I should define what I think selfish is. A selfish politician will try to get into parliament solely to benefit themselves, rather than as a way to improve society. I’m not happy that I/S believe that politicians on the left want to improve society while ones on the right don’t – they just have a different view of what a fairness entails. Calling them selfish for this is disingenious.

    I wish that the separate ends of the political spectrum would work to find out what they have in common, rather than constantly attacking each other on ideology – I’m sick of both sides treating the other side as stupid or selfish
40. Pascal's bookie 40

    31 July 2008 at 10:46 am

    “I’m sick of both sides treating the other side as stupid or selfish”

    Fair enough 🙂

    Bloody humans.
41. Matt Nolan 41

    31 July 2008 at 11:13 am

    “Fair enough 🙂

    Bloody humans.”

    😀
42. sean 42

    31 July 2008 at 3:49 pm

    Razorlight,

    Your argument is that we cannot judge the performance of the next (Key) National govt on the performance of the last (Bolger/Shipley) National govt.

    You make the analogy of difference between the Clark Labour govt vs the Lange/Douglas Labour govt. I think that’s a disingenious analogy.

    Between the 4th and 5th Labour Govt parts of the 4th Labor govt left Labour and set up their own organisation (ACT) which they then turned into a party, and we saw Labour make major public disavowals of the reformist approach the 4th Labour govt had taken. We see nothing similar regards the last and possibly-next National govts.

    Brash pushed National to the right, Key appears to be pushing it back towards the more centre-right approach Bolger took. So Key & English appearto be inheritors of Bolger’s National party.

    But there’s another party to this. Given the lack of firm policy details from National, who really knows. Until they start issuing real detailed policies all we can do is assume they’re a National Party and compare them to what National govts have done before. Maybe they’re the party of Bolger. Maybe they’re the party of Brash. Or maybe they’re the party of Mickey Mouse.
43. Matt Nolan 43

    1 August 2008 at 8:51 am

    Yah I finally got the data 🙂 damn computer has been a pain 😛

    I’ve noticed that you are using compensation of employees from the national accounts as the wage and salary figure. I’m not sure this is appropriate – shouldn’t you be using the wage and salary data?

    Compensation of employees uses GROSS wage and salary information (so includes tax) and also includes other compulsory levies and the such. In a sense, it is more of a measure of the cost of an employee than on the return an employee gets from working.

    Still its an interesting graph, keep up the data stuff 🙂

Links to post

1. Sorry, no conspiracy here « The visible hand in economics: posted on 30 July 2008 at 4:51 pm
2. A vote for National equals a vote for lower wages | Last Straw: posted on 30 July 2008 at 8:12 pm
3. Wages still growing strongly at The Standard 2.02: posted on 3 November 2008 at 1:48 pm

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