The virus epidemic has brought in its wake an even bigger epidemic of stupidity, epitomised by an outbreak of “Buy New Zealand Made” pleas.
This advocacy is world-class stupidity. What if every nation adopted that line? The effect here would be poverty of starvation proportions in our cities as we shrink back to a late Victorian style economy.
The only growth activities in such a scenario would be breeding horses and making carts and coaches for them to pull, plus promoting socialist ideology, the standard cop-out by the desperate for someone else to ease their plight.
On that note, the incoming World Bank chief economist Professor Carmen Reinhart has issued a warning against the current Covid epidemic causing an ill-considered call by nations to be economically self-reliant.
The Professor’s credentials include expertise on historic government financial follies in times of crisis and she warns we’re on the cusp of a second great depression if this self-reliance anti-globalisation plea is not quickly nipped in the bud.
As an export-reliant nation we must scorn these ignorant Buy New Zealand cries. As I’ve written before, the greatest service ever done for our poor, outside of the first Labour government’s establishment of a European style, civilised welfare system, has been Sir Stephen Tindall’s creation of the Warehouse chain. It provides quality incredibly cheap necessities, all imported. I wish it had existed when I was a child.
Buy New Zealand made (for the ‘virtue’ of it) = subsidise New Zealand manufacturing = keep businesses that should fail afloat = lock New Zealand’s resources into low-performing structures = make us all poorer for nothing.
Yes – it’s stupid.
Andrew… Is that a little simplistic..?
NZ manufacturer has to comply with all sorts of costs, such as environmental standards, work safety, minimum wages…etc..etc.
Why is it that we don’t make Chinese exporters comply by the same rules..?? ( That could be done by way of a tariff.??). …. and of course any economist would argue that it is a tax on consumers. Thats the funny thing about economics. One can use inane logic to support any idea or premise and made it sound logically, economically, true. ( Gareth Morgans idea of imputed rental income that owner occupier home owner supposedly earn, comes to mind ). ie. Decide what we want and then create the economic argument to support that, and then call it evidence based policy.
I’m into rugby…. In rugby , all teams play by the same rules. In that way a “true” competition has a chance of unfolding.
I prefer the term fair trade , rather than free trade.
Charlie Munger wrote an interesting piece about free trade with China, and unintended consequences ( higher order effects). Its worth reading. There are higher order effects of trade imbalances ,,,etc ( He wrote this back in 2003, so we have the benefit of hindsight to see if what he said was a relevant ,kinda, map of things )
He also suggests that all human- systems are “gamed”. ( I hold this as an economic principle )
A good piece, as anything of Munger’s always is.
Agriculture I think at least is the easy example. With small scale agriculture you might “pay more” for food, but the amount we all save individually and collectively can dwarf any difference in price.
It’s about higher order effects.
Not to mention hyper processed foodlike product is expensive already.
Agriculture lends itself to decentralisation. It’s hard for anyone to monopolise food production, so you don’t have to worry about ‘only games in town’.
I do agree, BUT.
Much of the cheapness of chinese (for example) goods is due to us exploiting their lower wages. If kiwis are unemployed, would it not be better to pay them say $5 hour to produce the chinese imported goods? Rather than pay them benefits for doing nothing.
I know this does not work but it really comes down to our socialist leader believing that we have a right to a higher standard of living than her communist counterpart. Not because we are more productive, just because we expect it.
I understand the point you are making here but there’s more of a balance to it than is being made out.
The world is coming to terms with its having over-opitmised efficiency at the cost of resiliency.
It’s dawning on everyone the vulnerable position they are in when basic supply chains, such as for food and medicine, are in the hands of others far away.
The calls for re-shoring manufacturing etc. come out of the realisation that, despite the many many risks, Autarkic endeavors are important for survival and would also help to restimulate growth.
The primary example of course is the United States waking up to being greater at the mercy of China, who has been given more cards than was otherwise thought.
This comes out of a discrepancy between what was good for American corporations and their board/investors vs what was good for American ‘national security’.
One might say these moves will spark further tensions and inequality, which is why nations should continue to be free to trade, especially for luxury goods etc.
We all know the many merits of an open market and it’s production of oversupply for the consumer, but there’s a certain baseline of self-sufficiency that is just good sense.
We in New Zealand can be comfortable sitting on many of our essential goods as a food exporter, other nations cannot.
The shake up should be no surprise, now that the perils of distance, authority, and no skin-in-the-game are rising into public consciousness.
This doesn’t make distance ‘bad’ per se, in many ways with the internet it is now irrelevant (but certainly not for physical things).
One can realise that there is a greater alignment of positive incentives at work the more local something or someone is.
Trust and shared culture are important to be functional and focus on the future.
These values become more resilient and healthy when paired with the freedom of decentralisation.
(As a side note the time is ripe for New Zealand to poach the best and brightest tech workers, as they flee Silicon Valley for example, if we have the vision to do so.)
All this verbage is really irrelevant. It’s not NZ made that’s the issue its NZ sold.
The watchword should be buy from a local store. It matters not where the profits go it is essential that we go out and spend. In person not online for preference.
“Watch this Space” , is all I have to say on this.
The World is fast becoming our oyster or ‘lobster’ as Arthur Daly would say .
Cheers Tell !