Category: trading

VJMP Reads: The Interregnum: Rethinking New Zealand V

This reading carries on from here.

The fifth essay in The Interregnum is ‘Welfare and Precarious Work’ by Chloe King.

Unlike the other offerings so far, this essay actually resonates with people who are working class. Instead of waffling on about climate change and other shibboleths of the global elite classes, King focuses on real issues that affect real Kiwis: poor wages, poor security of work and a pitiful excuse for a social safety net.

This essay uses anecdotal examples of young Kiwis trying to make it in a workplace that is forcing them into ever worse conditions. The nature of work in New Zealand is becoming ever more stressful as things like the 90-day firing law undermine employment security, and the essay does a good job of showing how this leads to increased rates of mental illness.

It also correctly draws attention to the cruelty of the Fifth National Government. Paula Bennett’s welfare reforms now force people seeking a benefit to fill out a 48-page form of questions – obviously a considerable challenge to the kind of person whose literacy levels place them in precarious economic positions.

King also speaks to a very real sense of outrage when she writes about how mentally ill people are often bullied back into the workforce well before they are ready – a short-sighted approach whose shortcomings become obvious when the inevitable next mental breakdown occurs.

Describing something she calls “constricted choice”, King details a very real problem in the modern workforce: our choice of jobs has increased, but the average quality of those jobs has plummeted, meaning that Kiwis are essentially forced into taking poorly paid work out of duress. The fact that we have a wide choice of crap jobs doesn’t actually make it any better.

Ultimately, King hits the bulls-eye when she states simply that “Workers deserve to be paid fairly and treated with dignity and respect.” She is right when she points out that the nature of workplace relations in New Zealand have deteriorated to the point where the emphasis is on coercing workers into obedience rather than encouraging them.

The “politics of selfishness” is a very real thing, especially in New Zealand, and King rightly points out that she’s not asking for much when she posits that “no-one should work and be poor at the same time.” It’s not much to ask for, but we’re still not getting it, and the essay concludes with a call to collective action.

In summary, Chloe King’s piece strikes much harder and more accurately at the heart of the issue than the previous efforts in this book: poor living and working conditions right here, right now, not vague threats of what might happen in 50 years’ time. It is easy to get the impression that the left is going to do much better by proposing a universal basic income than it is by going on about climate change, and so for their sake they’d do better promoting voices like King’s.

VJMP Reads: The Interregnum: Rethinking New Zealand III

This reading carries on from here.

The third essay in The Interregnum is “Reimagining the Economy” by Wilbur Townsend. I must admit that reading a book that opens with several Marx and Gramsci quotes which then goes into radical economic intervention makes me think of the millions of people who starved to death in the 20th century. Despite that, I continue in the belief that the left must have learned to moderate its radicalism by now.

Promisingly, this essay opens by sticking to sober facts. Townsend points out that the economy has grown by 48% since 1990, but the average wage is only 22% higher, on account of that the dividends of this greater economic growth is not being distributed. Moreover, wages in finance and insurance have grown 62% while wages in hospitality have grown 3%.

“There is money being earned in this country but, increasingly, it isn’t being earned by us.” This is the central lament of this essay, and it’s a fair one. After all, neoliberalism and free trade are sold to the people as innovations that will increase the logistical efficiency of getting cheap goods and services to market. But it’s not worth saving $500 on a television if you also lose $15,000 in wages.

In an odd coincidence, the essay contains a reference to Luddites, in the context of people who opposed technological advancement on the basis that it destroyed labour opportunity, and who question the liberating potential of these advancements. Jonty Gillespie and the machine cultists in The Verity Key refer to people as Luddites if they’re not interested in going deep enough into a virtual environment to forget the outside world.

Despite representing working-class sentiments more faithfully than Morgan Godfery managed in his opening effort, the middle-class social justice warrior influence does shine through at some points in Townsend’s essay, such as when he laments that “Misogynistic workplaces” and “sexist bosses” are responsible for the dearth of female truckies and wharfies. One suspects that some of Townsend’s acquaintances would happily have a proportion of men castrated if such was considered necessary to “solve the gender gap”.

Like many in the left of today, biological explanations for gender differences are avoided with superstitious fervour.

The youthful idealism also shines through when he argues for a universal basic income.

No matter how good the arguments for a universal basic income are, we have never had one before and there are good reasons for this. Townsend possesses an eerie certitude about the idea that a universal basic income would lead to a sharp increase in the quality of life, and, although there’s good reason to agree with him, raising the spectre of people dropping out of society to move to Takaka and smoke bongs might not sell it to a Middle New Zealand that just put the National Party in power for nine years.

Townsend takes this idealism so far as to insist that the factories, machines and raw materials should be returned to the collective. He pre-empts the obvious criticism by acknowledging that historians don’t have much time for Communism, but he waves it away by saying “I suspect they just haven’t noticed it done well.”

Despite this, he makes a good point when he mentions that sovereign wealth funds could serve as the capital owners of a range of national assets or robot workfleets, and from there a universal basic income might become possible.

In summary, this essay mixes some good points with a terrifyingly nonchalant self-righteous belief in the primacy of Marxist ideas. It’s probably fair to consider this a piece inspired by youthful idealism, despite the intelligent points occasionally raised.

New Zealand Is Losing Badly From Our Refusal to Legalise Cannabis

As the technology and knowledge to best grow cannabis develops further in legal territories, New Zealand falls further and further behind

With news that the North American cannabis industry grew by 30% in 2016 to reach a total of USD6,700,000,000 worth of sales, savvy investors in North America are scrambling to get a piece of the action. Stats show that the cannabis industry is projected to grow at a compound rate of over 25% until 2021, a faster pace of growth than even the Internet managed during the dotcom era.

New Zealand could easily become one of the world leaders in the cannabis industry. Almost nowhere in the world has the same combination of excellent growing conditions and a passionate and knowledgeable workforce. But, sadly, almost nowhere else in the world has a political class as cowardly and short-sighted as ours.

The New Zealand Government and our business elites constantly stress the importance of innovation for our future economic well-being. We are told everyday that we need to be smart and be one step ahead of our competition. Well, our competition is blazing ahead – 21% of the American population now lives in states where recreational cannabis is fully legal. This equates to over 60 million people.

The 4.7 million people trapped on our archipelago at the bottom of the South Pacific are losing out, and because of the incompetence of our political leadership we are falling further and further behind. Every quarter that passes means that our competition in North America advances their business practices further ahead of ours, meaning that it will be harder and harder for New Zealanders to compete in this market once we are finally allowed to do so.

For example, much of the new investment money flowing into the North American cannabis industry is establishing a capital base that, if we keep sitting on our hands, we won’t be able to compete with.

New technologies such as sensors that precisely measure the environmental conditions inside grow rooms, and computer software that makes adjustments to these conditions for the optimal possible plant growth, are being developed and rolled out in territories where it is legal to do so. New LED lighting technology is making it possible for growers to tailor the precise wavelength frequency of the light in their growing operation to the specific needs of the strain being grown.

These are examples of the kind of innovation that is generating money for people in more enlightened jurisdictions. New Zealanders could be competing with the North Americans for a share of this market, but we’re not allowed to.

We are also falling behind our competition when it comes to knowledge.

This is a double mistake because much of the knowledge of how to best produce a cannabis crop is in the hands of Maoris, who are the most desperate for new economic opportunities. As demonstrated by Hikurangi Enterprises, who have conducted a successful trial for growing hemp, many of the most knowledgeable Kiwis when it comes to cannabis are Maoris, who generally never believed the Government’s bullshit about cannabis anyway.

Ironically, a former Waikato farmer, John Lord, has used the agriculture knowledge that New Zealand excels in to become one of the heavyweights of this burgeoning industry in Colorado. He states openly that if New Zealand legalised cannabis like Colorado did five years ago, it would be worth thousands of jobs to the New Zealand economy (his estimate is 15,000). This is over and above the $400,000,000 we would save every year from costs relating to prohibition.

New Zealand is missing out on a plethora of economic opportunities in the cannabis market for no other reason than that our ruling class is backwards, cowardly and ignorant. It’s a terrible waste.

How Well Did The Economy Do Under John Key?

John Key: made New Zealand wealthier compared to other nations, but not by as much as Helen Clark did

This article starts with a very straightforward proposition: that the prosperity of an economy and of the people in that economy is primarily a question of GDP per capita. Given that, we can measure the increase in New Zealand prosperity (if any) under John Key’s tenure by looking at the change in GDP per capita during that time.

The figures that this article uses are taken from the International Monetary Database. Here we calculate GDP on a price purchasing parity basis because we are ultimately trying to measure the change in standard of living.

In 2009, the GDP per capita of New Zealand was USD30,572. This placed us 37th in the world, just behind Italy, Japan and Spain, and just ahead of Greece, South Korea and Israel.

In 2016, the GDP per capita of New Zealand was USD37,294. This placed us 35th in the world, just behind South Korea (who leapfrogged us), Japan and Finland, and just ahead of Italy and Spain (who we leapfrogged) and Israel.

This makes for an increase of 22% over 7 years, which is about 2.9% per year if calculated on a compounding basis.

2.9% over a seven-year period can rightly be considered a decent effort of national economic stewardship from Mr. Key. That level of growth is far from remarkable, but it was enough to move us past a Southern European level of wealth and close to a Far East Asian level.

By way of comparison, the GDP per capita of New Zealand in 2000 was USD21,807, which makes for a 40% increase over the nine years of Helen Clark and Michael Cullen. This works out to just over 3.7% per annum.

Measured that way, the performance of the John Key economy was markedly poorer than the Clark/Cullen economy. However, one has to take into account that Key inherited a global financial crisis, and so it’s worthwhile comparing New Zealand to other nations instead of looking at absolute growth.

In the year 2000, New Zealand was considerably less wealthy than Italy (which had a GDP per capita of USD28,602), Japan (USD26,850) and Spain (USD24,053). It was also less wealthy than Australia (USD28,801), Britain (USD26,425) and America (USD36,433).

By 2009, the GDP per capita of New Zealand had increased from 76% of that of Italy to 89%; from 81% of that of Japan to 92%; and from 91% of that of Spain to 96%. Against other Anglo nations, the GDP per capita of New Zealand had decreased from 76% of that of Australia to 75%; had increased from 83% to 87% of that of Britain; and increased from 60% to 65% of that of America.

This means that under the Fifth Labour Government, New Zealand improved its position strongly against comparable countries, with the exception of the booming Australia.

By 2016, the GDP per capita of New Zealand had increased from 89% to 101% of that of Italy; had decreased from 92% to 90% of that of Japan; and had increased from 96% to 102% of that of Spain. Against other Anglo nations, the GDP per capita of New Zealand had increased from 75% of that of Australia back up to 76%; had increased from 87% to 88% of that of Britain; and remained at 65% of that of America.

This tells us that under the Fifth National Government, New Zealand improved its position against the Southern European countries but stayed the same compared to other Anglo ones.

Ultimately, therefore, we can see that New Zealand’s economic standing in the world is marginally better, in relative terms, after the Key Administration. Apart from the decline of Italy, New Zealand didn’t really improve in relative wealth. This contrasts sharply with the years under Helen Clark, during which time New Zealand improved strongly.