Economics... again. (Sigh.)

In April, New Zealand’s Labour-led government raised the minimum wage from $16.50 to $17.70 per hour. Basic economic theory, which I have perforce become acquainted with over seven years of taking undergraduate notes in a far-flung range of subjects, would predict that the unemployment rate must rise proportionally. Being also acquainted with the methods by which economists arrive at basic economic theory, I am therefore entirely unsurprised to read that

New Zealand’s unemployment rate fell to 3.9 percent in the second quarter of 2019 from 4.2 percent in the previous period, compared to market expectations of 4.3 percent. That was the lowest jobless rate since the second quarter of 2008, when it was 3.8 percent. Unemployment rate in New Zealand averaged 5.99 percent from 1985 until 2019, reaching an all-time high of 11.20 percent in the third quarter of 1991 and a record low of 3.30 percent in the fourth quarter of 2007.

—Trading Economics

In case you’re wondering, yes, the second quarter of 2008 was towards the end of the Labour Party’s previous term in government, as was that record low in 2007, and 1991 was in the first term of the National government before them. Trading Economics has a graph of the New Zealand unemployment rate for the last thirty-three years, which I’ve taken the liberty of colour-coding rather crudely in Paint according to the leading party of government. (Note for Americans: in New Zealand as in most of the rest of the world, the left-leaning party is branded red and the conservative party blue.)

I don’t want to read more into this than is warranted. National took the reins of government from Labour twice during this period, and both times came shortly after worldwide financial crises, so I’d be cautious about blaming them for the big upticks in unemployment at those times. Crises aside, the longer-term trend is downward. What I do want to point out is that there is no sign of the upward drift that orthodox economic theory would lead us to expect during Labour’s tenures, despite the fact that they raise the minimum wage every year by much bigger increments than National does.

This semester I’m taking a first-year economics class, again. It’s struck me right from the start how much it’s re-treading ground I’ve been over and over since the first time round, seven years ago. If that doesn’t sound surprising, by contrast I’ve been assigned to papers in various health professions each semester since 2013, and every year there’s been a module on cancer, and every year there’s new insights about how cancer happens and what healthcare providers can do to fight it. That’s what progress looks like. That’s how you know a discipline is open to learning new truths.

In fairness, this semester’s lecturer has mentioned a few things which, in previous economics classes I’ve been to, have been skated over completely. He did take care to point out, for example, that sometimes people don’t buy certain goods or services not because they don’t want to pay the market price but because they can’t – the first time I’ve ever heard this distinction highlighted. (Unfortunately he seems to have missed some rather major implications of it, but we’ll get to that.) Also he’s promised an upcoming block of lectures on market failures, which up till now I haven’t heard economists talk about to students below third-year.

Still, as in previous years, the lecture material treats labour as just another good or service, which workers sell and employers buy. When you draw a supply-and-demand graph, the demand curve slopes downward, meaning that the more something costs, the fewer people will be willing to buy it and the less of it will get bought. Meanwhile the supply curve slopes upward, meaning the more it costs, the more people will be willing to sell it and the more of it will be available for sale. Where the two curves cross, the amount people are trying to buy equals the amount available for sale, and the price at which that happens is the market price or “equilibrium” price. They’re called “curves” but they’re usually graphed as straight diagonal lines. The slope of each curve is called its “elasticity”.

I’m not allowed to ask questions in lectures, and after any lecture there’s usually a few students wanting to talk to the lecturer and their practical need for information obviously takes precedence over my idle curiosity. But after the lecture introducing the concept of a supply curve, I had a rare opportunity for conversation.

What economic and government systems do you think function best?

Last week one of my Tumblr followers asked me the above question. I wrote down as many things as I could think of in the time I had, which wasn’t everything. I started putting down justifying arguments for each point, but found that this was making it far too long for a Tumblr post. So I’m repeating my answer here, with a few more points and some argumentation to back it up and hopefully a bit more coherence (but you be the judge of that).

I try to keep my thinking grounded in empirical evidence, but I only have so much time for doing research and what I do find is inevitably biased by being filtered through my own perspective, which is not neutral but was formed through many years of political involvement. I began my political life in 1996, at the age of 18, in a protest against Otago University raising tuition fees. It was a big protest, because at that point New Zealand tertiary institutions had only been charging tuition for a few years and it had caught a lot of people by surprise. So there were a lot of dedicated protesters involved. Many of them were Marxists, so I started off as a kind of Marxist camp follower leaning towards anarchism of sorts. I still feel loyalty to this crowd, and there are some social values that I still think Marxism captures better than most other politics. But looking at the empirical evidence I am unable to endorse the prototypical Marxist plan for achieving those values.

In particular, countries that remodel themselves from the ground up with armed Marxist revolutions always end up as repressive, poverty-stricken dictatorships. I know of no exceptions. Some are worse than others – if I had to choose, I’d much rather live under Fidel Castro or Muammar Gaddafi than Pol Pot – but none of them have ever produced the communist paradise, or even the socialist interim state, that Marx envisioned. In a few places in the world you can see a Marxist regime and a liberal regime side by side, with the same geopolitical and environmental conditions, and compare their socioeconomic outcomes; the liberals (West Germany, South Korea, Botswana) always do better than the Marxists (East Germany, North Korea, Zimbabwe). And really, Marx should have known better, given that the prime real-life event he used to exemplify his theories was the French Revolution, which had exactly the same effect in installing the Napoleonic Empire.

Empirically, the systems which function best, in the sense of facilitating human life, health, knowledge, freedom, prosperity, and equality, are those known as “mixed economies”, like those of Scandinavia and Japan and formerly New Zealand. These combine open but well-regulated markets with stable democratic government, progressive tax systems, state-owned infrastructure, and high public expenditure on social welfare, health, and education. But of course there are still a great many areas in which I believe progress could be made. And here they are.

Is the writing on the wall?

At the top of this page, for the last five years, my blog header has announced that my job is to take notes in lectures at the University of Otago on behalf of students with disabilities. This is still the case this year – but it may not be next year. I love this job and I want to come back to it as long as I can, but I’m not sure there will be anything to come back to. I think the University (not the Disabilities Office but someone higher up) is trying to stealthily disestablish my position.

In mid-2012 when I started working here, I was given nine lectures a week – nearly twenty hours of work, since I have to edit the notes after I’ve taken them. Then from 2013 to 2015 it was more like fifteen or sixteen classes, dominated by dentistry, over thirty hours. Not quite full-time, but enough to save money for a holiday in Japan. In 2016 the hours dropped off a bit and I started an expensive course of dental treatment and my savings carried me, narrowly, through the summer. But then last year the bottom fell out of the student enrolment for the service I provide. From fourteen or so note-takers the Disabilities Office went down to two, of which I was fortunate to be one. Most concerningly, every one of the students enrolling had been enrolled in previous years; not a single one was new to the service. This year I’m back down to nine classes and, once again, all the student names are ones I’ve seen before. Sorry, let me rephrase that. Once again, both the student names are ones I’ve seen before. I gather I’ll have a few extra classes from a couple of additional students, but not every week. Something has gone wrong.

Apparently, according to my supervisor, the University’s official position is now that we shouldn’t be providing notes for people who don’t absolutely need them, because no-one’s going to be taking notes for them out in the real world and they need to practise doing it for themselves. I’m still not sure how that translates to absolutely nobody new signing up for note-taking; I suspect, but don’t know how I could find out for certain, that the University has stopped mentioning the service in their marketing or at Orientation or wherever my clients used to hear about it before. That means that when my current students graduate and leave, I – like a couple of hundred other Otago service staff members so far – will be out of a job.

(The other option, as I’ve been reminded since I first wrote this post, is peer note-taking, which is when the University pays another student in the disabled student’s class a lot less than they pay me to hand in a copy of their own notes. This has helped me out on occasions when I’ve fallen ill and not had time to arrange a swap with another professional note-taker. But it’s not going to be the same quality as what I do, because they don’t have the training I’ve had, they mostly don’t have my typing speed, they won’t have developed a good system of digital shorthand like I have, and being busy students they don’t have the time I do to devote to editing. Also, I’m told – I can’t substantiate this – if the disabled student and the student note-taker don’t get on, it’s not unheard-of for the note-taker to do bad notes on purpose to hand in while keeping the more accurate version to themselves. Hiring professionals does make a big difference. Switching to purely peer note-taking would still constitute a huge downgrade to the service the University offers.)

I know, I know, mine is not a neutral viewpoint. As both an employee whose livelihood depends on this service and a disabled person myself, I am obviously not going to feel very good about this. But frankly, the University’s reasoning is bullshit. It’s the same tired justification that’s always trotted out for denying accommodations to disabled people: “Take away the crutches and they’ll learn to pull themselves up by the bootstraps.” Well, see, the thing is, those are actually rather apt metaphors, but not the way their users intend. Taking away someone’s crutches and pulling people up by their bootstraps both, if you were to demonstrate them literally, have the same effect: the victim falls flat on their face.

But isn’t one of the goals of education to allow people to integrate freely in society and thus live life to the fullest extent of their capabilities? Absolutely. But taking away accommodations does the opposite of that. It’s true that the world outside the tertiary education sector doesn’t have many note-takers, but I would venture to suggest that that’s because the world outside the tertiary education sector doesn’t have many lectures. Dentists don’t have to type for hours every day, but dental students do. The University’s new policy will mean there’ll be people who couldn’t follow their dream career in dentistry because they couldn’t type; which, given Otago has the only Dental School in the country, is a gross dereliction of duty.

Some disability advocates declare that disability is “socially constructed”. This is neither false nor nonsense, but it’s so misleading as to leave people less enlightened after they’ve heard it than before, unless they’ve taken a cultural anthropology course or similar and learned what this progressive-intellectual shibboleth actually means. It emphatically does not mean that disability is all made up. It emphatically does not mean that people are only disabled because everyone around them treats them like they’re disabled. In fact, it’s pretty much the opposite. Let me explain.

The word “disability” is often used as a synonym for “impairment”, but there’s a subtle distinction which is worth highlighting. Impairments are not socially constructed in any meaningful sense. An impairment is what you physically can’t do with your body that most people can, or can only do with great effort that most people can do easily. (I’m including your brain as part of your body, obviously.) A disability is what obstacles your impairment poses for you as you participate in society – as you work, as you study, as you socialize, as you consume entertainment, and so on. An impairment cannot be removed at will, or it wouldn’t be an impairment. To remove the obstacles to social participation that constitute a disability, society must accommodate impairments. People with impairments are disabled because society doesn’t acknowledge the impairments enough.

An example to make the distinction clear. Short-sightedness, long-sightedness, and astigmatism are all visual impairments. But only very severe forms of these conditions are disabling in our society, because the accommodations for the milder forms – eyeglasses and contact lenses – are accepted without question as normal. If your bank made you take your glasses off “so we can see your face properly” and then made you fill out forms in tiny print without them, then you’d be disabled. If you had to take them off to get your driver’s licence photo and then weren’t allowed to wear them while driving so law enforcement could match you to the photo, then you’d be disabled. If all eyeglass-frames came in one ugly, ill-fitting style, and the people selling them told you you should be grateful to have glasses at all, then you’d be disabled. If strangers and casual acquaintances came up to you in the street suggesting you’d be rid of the need for that contraption on your head if only you would try the new eye-strengthening course they’ve been doing (it’s called Sight Naturally, it’s based on ancient tribal colour lore, you never see the tribespeople in National Geographic wearing glasses, do you?), then you’d be disabled.

There’s a confusion here, by the way, which applies especially to mental and intellectual impairments. Lots of people say they’re in favour of helping people with such conditions. But when they say that, they’re picturing treatments which will wipe away the impairment and turn the patients “normal”. Failing that, they’d rather mentally impaired people disappeared behind institutional doors than be out and about on the street where decent people might bump into them (think of the children!) At a disabilities conference that I, yes, took notes for to earn a bit of extra cash last year, one speaker described dinner party conversations where she would mention that she worked in a mental health facility. “It must be hard keeping them contained. Was the woman who killed herself one of yours? You’d feel sorry for them if they weren’t such a drain on society.” Then she would reveal the truth – that she was paid to test the facilities in the capacity of a client. “Oh, but you don’t seem like you’re about to stab us!” “No, but the night is young.” The goal of mental health treatment, as of all disability accommodations, isn’t to turn the client “normal”. It’s to give them their life back.

From all this it follows that, if you remove a disability accommodation that was previously available, you are creating disability. You are disabling people who happen to have impairments. That stain will be on the University’s hands if my job disappears next year or the year after. I hope their lavish new landscaping project is worth it.

Meanwhile, I have the rather urgent concern of finding an alternative source of income. Because I’m disabled too. I’ve previously mentioned the social anxieties which make applying for work a terrifying ordeal for me. But that terror is upon me. The writing is on the wall.

Economics, the evidence-free discipline – from the horse’s mouth

If economists wished to study the horse, they wouldn’t go and look at horses. They’d sit in their studies and say to themselves, “What would I do if I were a horse?”

Ely Devons, British economist

Ever since I started working in a job that periodically puts me in economics lectures, I’ve noticed that economists have a very different idea of what constitutes evidence for their statements than what scientists do. And when I say “noticed”, I mean it’s been thunderingly obvious. The health sciences, in particular, spend hours upon hours drumming into their students’ heads how much it takes to call your practice “evidence-based”. In economics lectures I’ve heard lecturers say outright, “If your analysis of the data disagrees with economic theory, trust economic theory.” Economics is at about the stage medicine was at in the mid-nineteenth century, when blood-letting and cold showers were the go-to treatment for every ill because physicians knew how the body worked, damn it, and didn’t need jumped-up empiricists coming in telling them how to do their job thank you very much.

But I don’t think nineteenth-century physicians ever proudly declared that their theories were evidence-free and thought it a mark of superiority. Yet I encountered economists saying exactly that, in an article from only a year ago, in a debate with a libertarian on Tumblr recently. I’m referring to the Mises Institute’s “Ten Fundamental Laws of Economics”. The list includes some uncontroversial items, but also contentious ones such as “Productivity determines the wage rate”, “Labour does not create value”, and “Profit is the entrepreneurial bonus”. It ends with Law 10: “All genuine laws of economics are logical laws.” This is explicated as

Economic laws are synthetic a priori reasoning. One cannot falsify such laws empirically because they are true in themselves. As such, the fundamental economic laws do not require empirical verification.

Which basically translates to “Anyone who disagrees with us is wrong by definition.” This is not about economics being a “soft science” rather than a “hard science”. This statement makes economics as practised by the Mises Institute not a science at all.

The phrase “synthetic a priori” is, in this context, pure bafflegab, but unfortunately it’s going to take a bit of unpacking. The philosopher Immanuel Kant divided truths along two lines. First, they can be “synthetic” or “analytic”. An analytic truth is basically simply a definition of a word: the usual go-to example is “All bachelors are unmarried,” which is true because being unmarried is part of the definition of being a bachelor. A synthetic truth is one that can’t be derived from the definitions of words alone, such as “I have two cats.” Second, truths can be a priori or a posteriori – Latin for “from before” and “from after”, respectively. An a priori truth has to be true in any conceivable universe; you know it is true before you go investigating. “One plus one equals two” is an a priori truth. An a posteriori truth is one that might or might not be true, and that you therefore can’t know is true until somebody investigates, such as “I have eaten the last of the cheese.”

Two lines of distinction potentially divide a set into four subsets, in this case analytic a priori, analytic a posteriori, synthetic a posteriori, and the one we’re interested in, synthetic a priori. Three of these are uncontroversial. All philosophers agree there is no such thing as an analytic a posteriori truth, and most philosophers agree there are analytic a priori truths and synthetic a posteriori truths. The big disagreement over Kantian philosophy is over whether there is such a thing as a synthetic a priori truth – whether there is anything that has to be true in any conceivable universe, but that can’t be reduced to definitions of terms and logical deductions from such definitions. The Mises Institute puts economic principles in this category. What would this mean?

Kant himself populated the synthetic a priori category with mathematical truths like “One plus one equals two”. Personally I’m inclined to the school of thought that mathematics is in fact analytic. There are arguments to be had on both sides, and I won’t go into them. I suppose the four-colour map theorem might count as synthetic a priori – no-one has ever created a map that needed more than four colours to fill it without any two areas of the same colour touching, and somebody has proved that this is indeed impossible via a computer program, but the proof is too complex for a human mind to comprehend. The point is that no-one can even imagine such a map. It’s inconceivable. For the Mises Institute’s “laws” to be synthetic a priori, it would have to be the case that no-one could even imagine a world in which productivity did not determine the wage rate.

The Mises Institute might respond that someone who thinks they’re imagining a world in which productivity doesn’t determine the wage rate is kidding themselves, just as someone who thinks they’re imagining a five-colour map is kidding themselves (your mental picture is just a vague squiggle; you aren’t filling in the details). But it is not at all difficult to imagine a shareholder-profit-maximizing corporation deciding to funnel 100% of the profit margin from a productivity boost into shareholder dividends instead of wages. Nor is it hard to imagine every other firm in the market doing the same, thus leaving no competing employer to whom the employees could defect. The Mises Institute is committed to the claim that this scenario is not merely implausible but unimaginable. Either that, or the phrase “synthetic a priori” in their statement is bafflegab.

Of course, if economic principles are not synthetic a priori, then what the Mises Institute is doing is making up excuses for why their beliefs shouldn’t be exposed to empirical testing, and if you find someone doing that then they’re up to something dodgy. My Tumblr correspondent claimed that societies organized according to these theories could produce and distribute goods and services “way more [efficiently] than any Marxist or Keynesian society can.” Well, that’s an empirical question. I have sat through more than enough economics lectures to be well aware of the theories as to why the free market is meant to be the most efficient means possible of maximizing production and optimizing distribution of goods and services. But only empirical data can tell us whether it is the most efficient means possible. Any attempt to put it beyond the reach of empirical investigation, such as the Mises Institute is here guilty of, suggests that its proponents fear it would disappoint them.

And before someone asks, yes, for all the respect I have for the Marxist community for the work they do in activism towards social change, I do have to concede that Marxists are equally prone to shielding their theories from the possibility of being refuted by reality. I have written about that elsewhere on this blog, if you care to go looking. But Marxist theories don’t at present dominate the global economic system. Capitalist ones do. The point is that only reality can tell you what’s true. Nineteenth-century medicine wasn’t dislodged by some other theory-driven approach; it was corrected by recourse to empirical evidence. In economics as in medicine, when the “experts” cling to their pet theories over reality, people die. We need evidence-based economics and we need it yesterday.

Were Māori the first New Zealanders?

(Spoilers: Yes. Yes, they were. Unequivocally, yes.)

In this time of resurgent racism and “alternative facts”, I suppose we should have expected to see yet another version of the “Māori Were Not Here First” myth bob up to the surface. And so it has. First, a couple of months ago, one Jaylene Cook posed nude for photos high up Mt Taranaki, which is sacred to the local Māori people, and so sparked a comment-war on Instagram. I’m not going to pass judgement on the photoshoot – I haven’t seen the photos and don’t know how sexual or otherwise disrespectful they were. I mention it because, during the comment-war, Cook stated that “Maori are not indigenous you ignorant t...” (redaction by Stuff).

Not long after that, some guy called Noel Hilliam dug up some Māori skulls and reportedly sent them to an Edinburgh University pathologist, who told him they were three thousand years old and Welsh. Whether he told the pathologist where they came from is a critical, and unanswered, question. See, if I were a pathologist and somebody sent me a skull, I’d assume they’d found it somewhere near my place of work and contacted me because I was local, and I’d start my search for matching features in nearby collections. To determine the age, you might first think of carbon-dating, but bones can easily be contaminated with ancient carbon and no archaeologist trusts an uncorroborated carbon-date anyway. I’d most likely look at the teeth, get some idea of what the person ate, and match it to a place and period when people seemed to be eating a similar diet – to a standard of “close as we’re going to get, probably”. So even if the nameless pathologist was an actual qualified pathologist (Edinburgh University denies having had any such contact), Hilliam’s ignorance of scientific procedure would pretty much guarantee a worthless result.

But, being so demonstrably ignorant of scientific procedure, Hilliam of course drew sweeping conclusions about New Zealand’s prehistory from this one piece of data. Or rather, he had already drawn those conclusions and desecrated a Māori burial site merely to confirm them. He went public with a “reconstruction” of one of the skulls:

There is of course no such thing as a distinctive “Welsh skull”, but there are some characteristic features you can use, if you come across a skeleton in the South Pacific, to tell whether it belonged to an Islander or an early European visitor. In this case, I have to say those are an awfully wide, rounded jaw-line and robust cheek-bones for a European woman; they would be entirely unremarkable in a Polynesian face. The hair, skin tone, nose profile and thin lips are all guesses on the part of the sketch artist. I gather Hilliam claims his “expert” told him this person had blond hair, which means that either he or the “expert” are talking nonsense. You can’t tell hair colour from a skull.

Hilliam didn’t get his notion of white pre-Māori New Zealanders from the facts, but he didn’t get it out of the blue either. These “alternative prehistory” ideas have been going around since at least the 1990s in certain sectors of the Pākehā (white New Zealander) population. No surprise, they’re closely correlated with racist politics. Hypothetically, it should be possible to believe that someone else settled New Zealand before the Māori did and still support Māori rights under the Treaty of Waitangi, since nothing in the Treaty is predicated on Māori being indigenous. But no-one actually seems to take that position. Conversely, people who publicly maintain that Māori are unfairly privileged by the Treaty disturbingly often turn out, in unguarded conversation, to also believe that Māori are a bunch of primitive savages who couldn’t possibly have navigated the oceans by themselves.

Jobs or wages: pick one

It’s getting to that time of year when the Government once again explains to the nation, with tears in their eyes, why they can’t raise the minimum wage to keep up with inflation. And it’s always the same excuse: employers can’t pay a cent more than they already do, so if the wage goes up there will be less jobs. Geez, you guys, you want steady jobs and livable wages? What rabbit do you want us to pull out of our hats next? Affordable education?

Well, they’d better be sure they’re right. Of all the reasons I’ve seen for why so much of the American working class voted for Donald Trump, the most convincing is that they were sick of the established order and Trump was a handy sledgehammer to bash it with, and the reason they were sick of the established order was that it kept telling them they had to choose between wages and jobs. Which doesn’t explain why they turned to the Right instead of the Left, but that’s an issue for another time.

They are sure they’re right, of course. In fact, to the National Party’s way of thinking it’s dangerously over-generous to have a minimum wage at all. It’s basic economics (and middle-level economics as well, come to that). A minimum wage is what economists call a “price distortion”. Here’s the theory. If the government sets a minimum price for any product which is above the natural market price of that product, some buyers can no longer pay for it – that’s what the natural market price is – so people buy less of it, the sellers have to compete to attract customers, and everybody ends up worse than before. Actually, in an economics class, any time the government lifts a finger you can pretty much jump straight to “everybody ends up worse than before”. And of course to economists labour is just another product, sold by the worker and bought by the employer.

There are several questionable assumptions here, but I’m going to focus on one key one, because without it the entire argument collapses. That’s the assumption that the employers are paying as much as they possibly can. This only follows if the workers have just as much power to turn down work as the employers have to set wages. If that’s not true, then the market will shift in the employers’ favour. By economic logic that would be a price distortion, which would reduce the wage below its natural market value.

So how good is that assumption? What indications might we look for? Here’s one. I’ve never gambled on the stock exchange or anywhere else, but you can’t sit through three semesters of finance lectures and not become familiar with the phrase “close of trading”. That basically means 5pm every weekday, local time, after which the stockbrokers all go home and do whatever stockbrokers do when they’re not broking stocks (I wouldn’t know). On Saturdays and Sundays they do no broking at all. Same as everybody else, right?

No, not everybody else. Before the National Government’s bold, exciting new job-creating economic policies forced it to close, the railway-carriage factory near my house was always busy. And I mean always. Didn’t matter what time of night you walked past it, you’d hear motors humming and sparks spitting, and there’d be lights in the windows. Factory workers work nights and weekends if they’re told to. Stockbrokers, despite the quadruple profit they’d get by trading all 168 hours of the week instead of just 40, don’t.

There are several possible explanations for this discrepancy. The one any economist will think of first is that factory work pays much better than stockbroking, with better bonuses and holidays, to encourage people to work nights and weekends. Or perhaps factory work attracts a demographic of people who love darkness and cold and closed shops during their free time, and sunlight and traffic noise when they’re trying to sleep. Or just possibly, and I really think this hypothesis might deserve some consideration, it’s that stockbrokers have more power than factory workers to determine their pay and conditions.

Now if some people have more power to influence the labour market than others, it necessarily follows that the less powerful people will end up getting less benefits than the more powerful people. If that’s the case, then the economic objection to raising the minimum wage is false. There is some slack in the rope. Employers could pay more than they do and still employ just as many people. They don’t because they don’t want to. The workers put up with it or lose their jobs.

In such a case the government would be well-advised to iron out the distortion, because not paying people enough is bad for the economy. Henry Ford (no friend to anything smelling of unions or socialism) paid his employees well and gave them the whole weekend off because he understood that they were also his customers. People who haven’t got much money can’t buy your stuff. Pretty basic principle, I’d have thought. Unlike the free-market apologetics above, I have yet to hear about it in an economics lecture.

The trouble with this is of course the free-rider problem. In an economy with lots of employers, each one can bet that nearly all their customers are other people’s employees, and pay their own ones less than anybody else. The first employer to do this will get big savings in labour costs and minimal loss of revenue. As more and more pile on, the whole system will go down the drain. But no matter how bad it gets, it will always be cheaper for any one person to pay just that little bit less. Rational self-interest won’t save us here.

Government intervention might – if we had a government that could be bothered to stand up to the employers. National obviously can’t, but there’s an election coming up in September. Just putting that out there.

Oh, the humanities

My employers’ employer, the University of Otago, has decided to cut staff positions in the humanities. Music is going to be hit the worst. As usual, the justification is money. It’s been suggested that maybe the University should ease off on its endless construction drive if it needs to free up some cash. (In twenty years I’ve never known the campus be without a big hole in the ground somewhere. Face it, Otago, the Richardson Building is a plug-ugly wodge of concrete and no amount of landscaping around it is going to change that.)

However, this wouldn’t fix the bigger problem, which is the government’s attitude. Statements from the Ministry make it clear – education is for fitting young people for the workforce; anything else is an indulgence. Here’s the official position in their Tertiary Education Strategy.

Skilled, knowledgeable individuals are essential to the success of businesses and other organizations. Access to skilled workers allows businesses to increase the value of their products and services and to pay higher wages. In turn, people are better off, healthier and happier, and New Zealand is a more attractive place to live and work.
For most young people, achieving a tertiary qualification is a crucial milestone towards a successful working career. Whether they study at a university, polytechnic, wānanga, private training establishment, or through an apprenticeship, a qualification gives them a concrete record of knowledge learned and skills gained that they can use to move up the employment ladder.

And in the Minister of Education’s own words, prefacing that document:

The new Tertiary Education Strategy 2014–19 has been developed to... contribute to the Government’s focus on improving New Zealand’s economic outcomes. The “Building Skilled and Safe Workplaces” programme of the Government’s Business Growth Agenda aims to materially lift New Zealand’s long-run productivity growth rate while maintaining our high rate of labour force participation. This requires tertiary education to better equip individuals with the skills and qualifications needed to participate effectively in the labour market and in an innovative and successful New Zealand.

Sure enough, Priority 1 in the Strategy is “delivering skills for industry”. There is nothing anywhere about developing insight or critical thinking. Public education, to this government, is solely a means of polishing up new cogs to slot into the commercial-industrial machine.

My instinctive response to this is a string of expletives, but that’s not the way to build a counter-argument. If you want rational debate, start by taking your opponent’s concerns seriously. Education costs society money; don’t we then have a responsibility to pay that money back? Granted that some people derive personal value from knowing all about, say, the anti-imperial politics encoded in the Book of Revelation or the practice of cannibalism in indigenous South American funerary rites, shouldn’t they stump up their own cash for it?

Bring back free education

Recently, for the first time in my life, I considered voting for the New Zealand Labour Party. Oh, they’ll have to smarten up a long way if they want me to do more than consider. The Greens are still far and away the best option on the table. But after a thirty-two-year love affair with neoliberalism, Labour are finally returning to the sort of policies that a Labour party ought to be built around. They’re offering free tertiary education.

Well, to a very small and limited degree compared to what everyone in this country had until 1989. I would be remiss if I didn’t mention that Labour were the ones who first charged students fees for their education. The National Party were elected in 1990 on a promise to remove those fees, which they did – and then cut funding to universities and polytechs so that they were forced to charge much higher amounts to stay afloat.

When I started university in 1996, paying for education was still a new and shocking thing. Many families had been blindsided, with no chance to save up for it, so we all had to borrow massive amounts of money to get through, and that became the norm. National set up the student loans scheme, which has become an ever bigger asset on the government books with each year since. We student activists fought back with marches and occupations and letter campaigns and various other tactics.

In 1999 we sent delegations to every political candidate meeting in town, not to disrupt them in any way but to make sure that education always got a mention at question time. That, along with the protests, helped push education from #6 to #2 in the “issues of concern” polls, and I think that had, well, more than a negligible effect on the election that year, when National was voted out and Labour in.

Issue #1 was taxes. National MPs went about that year with tears in their eyes for the skilled youth of New Zealand, who were apparently leaving in droves for other shores due to financial hardship induced by taxes. They called it the “brain drain”. I was one of quite a few people, I think, who pointed out to them that student loan repayments were a bit more oppressive, and a bit more specific to skilled youth, than taxes. I had the satisfaction of flummoxing Bill English with that one.

Apparently National did take heed, because now that they’re back in office they’ve introduced legislation – such is National’s compassion for skilled youth in financial hardship – to detain people who go overseas and skip payments. Obviously they can only do that when the people come back to visit, and a couple of weeks ago the law claimed its first victim.

As if to demonstrate what neoliberalism does to a culture’s soul, the first comment on my Facebook feed was “No sympathy for the dude who didn’t pay his student loan.” The general feeling of the conversation was that if we have to work so hard to pay for our education, then how is it fair that some people get it handed to them for free by swanning off overseas? There have been similar remarks about Labour’s proposal. I guess I can understand that. But I think the indignation is misdirected.

A plague o’ both your houses

Years and years ago, I earned a bachelor’s degree in cultural anthropology. I thought at the time I might end up in academia, but graduate study didn’t work out. This past couple of weeks, I’ve taken a couple of sociology lectures for another note-taker who was away. Most of my classes in the last three years have been in dentistry or other clinical sciences, so I found the sudden familiarity a little jarring, like Temuera Morrison’s New Zealand accent in that Star Wars prequel. And kind of embarrassing, actually. Blimey (I thought), we humanities students really think we’re all that, don’t we?

Lest you think I’m solely ragging on sociology: last semester, I took one of the two weekly lectures in an economics paper, to which I had much the same reaction, although there it was more comfortable because, as a former humanities student active in politics, I have a long-established habit of looking down my nose at the Commerce Division. And Health Sci too, now I come to think about it – “medicalization” is a favourite tut-tut word in certain academic circles. Well, Commerce deserved it, Health Sci didn’t, and we in Humanities really weren’t holding the high ground we thought we were.

Let me try and explain what it’s like. When I was a kid, one of the many books knocking around our house was a shabby little paperback from about the 1960s entitled “100 puzzles for kids” or something, and I remember it because it actually had 101 puzzles but the last one was a trick one that didn’t have a proper answer. A hotel has fifty rooms, and one day fifty-one people turn up wanting accommodation. The hotelier thinks for a bit. He puts the first guest in the first room, then takes the second guest aside and says “If you could just wait here while we get this sorted out.” Then he puts guest number three in room number two, guest number four in room number three, and so on until guest number fifty-one is placed in room number fifty and the hotel is full.

Now this was one of the first hints I had that my brain doesn’t work quite like other people’s. According to the book, most people are bamboozled – they know there’s a flaw somewhere, but they can turn it over and over in their heads for hours before they suddenly go “Of course! The second person hasn’t got a room!” But to me, reading the puzzle, it was so obvious that the second person hadn’t got a room that I turned it over and over in my head for hours wondering what the mystery was supposed to be.

In economics and sociology, it’s not a guest who hasn’t got a room; it’s a foundational concept that hasn’t got a basis. You introduce that concept, and proceed to derive the rest of the course from it. It becomes a sort of base-camp assumption for the students’ thoughts, like mass-energy conservation for physics students or Darwinian natural selection for biology students. By the end of the first semester, it’s become so familiar that they assume anyone who questions it is simply ignorant.

Don’t ask questions if you don’t want the answers

Back in August I blogged about a lecture on the “obesity epidemic”. Since then (under the roar of the election) it’s become clear that the scientific consensus, at least within the Health Sciences Division of the University of Otago, is that

• Obesity is a major contributing cause of a lot of health problems, most especially Type 2 diabetes
• The Body Mass Index (BMI) is a reasonable measure for most people, as long as you use a bit of common sense about people with high muscle mass
• What determines your BMI is a simple matter of calories in minus calories out; where complications arise is in what determines calories in and calories out
• However, shouting at people to eat less and exercise more accomplishes little to nothing

As I think I’ve said before, the scientific consensus is not always right. For about half a century after somebody thought up the idea of continental drift, the scientific consensus was that it was silly. Now it’s the underlying explanatory theory of geology, or rather plate tectonics, which explains why continents drift, is. However, the scientific consensus is always a better bet than politically-motivated maverick hypotheses. So I’m sorry, I can no longer endorse arguments against fat-shaming which rest on the BMI being nonsense, or weight being unrelated to diet and exercise, or weight being irrelevant to general health. Not until you show me well-evidenced scientific studies showing that (as it might be) weight is a confounder for the effects of diet and exercise, or something.
I think it is reasonable, however, to draw the conclusion that the free market is failing horribly to distribute food in anything like an optimal manner. The human brain’s appetite networks are not calibrated for a world where you can get fat and sugar on tap and you don’t have to walk ten kilometres a day if you don’t want to. We who live in developed countries consume more than is good for us and expend less energy than is good for us. That’s not so much a matter of us being wealthy – these effects hit the poor in unequal developed countries hardest – as of us being urbanized, industrialized, having work schedules that rely on pre-processed foods which give us a quick hit of energy to the brain. Meanwhile as people continue to starve in undeveloped countries, supermarkets throw food away by the tonne on the pretext of it not being “fresh”, and then prosecute people who retrieve it. I don’t believe most of the scaremongering that goes on around genetically engineered foods (because science, again) but I don’t think they’re going to solve nutrition poverty in the undeveloped world. Those GM supercrops are just going to end up in Western supermarket dumpsters.
So capitalism is not doing what it’s supposed to. But the one alternative to capitalism that anybody’s seriously tried in the past couple of centuries, that of course being communism, did even worse. That’s partly because queuing is not such a great system of goods distribution either, but it’s also in large part because they let their politics dictate their agricultural science. Crops were supposed to grow stronger if planted close together, out of class solidarity, you see. It didn’t work out. Can we please start letting the evidence drive our thinking, instead of the other way around?

When science and politics collide

Content note: fat-shaming
Today I took notes in a first-year biochemistry lecture. The students are starting a big module on metabolism, it seems, which is obviously a major part of human life and health. First-year health science papers tend to have a different lecturer every time. They’re often grad students or teaching fellows, but today we had a senior lecturer from the Biochemistry department with dozens of publications to her name. So, not somebody who I’m in a position to call out for bad science in her own subject.
And in this introductory metabolism lecture, this authority on biochemistry and health told a hall full of students that there is an obesity epidemic in the Western world and it’s all due to basic thermodynamics – people eating more joules than they burn off – and it’s causing a raft of health problems that she didn’t detail.
Now she didn’t say or imply that obese people are all lazy gluttons; in fact she pointed out that one problem with exercise is it makes you want to eat more. She didn’t say anything whatsoever about willpower or self-control. She did show us a list of countries ranked by the percentage of obese people in the population, and joked (by way of warning the class not to confuse correlation with causation) that speaking English is evidently a major cause of obesity.
What’s bothering me is that I could find dozens of sites, just a click or two a way from this blog, that say obesity is not something you can fix by changing your eating and/or exercise habits, and that weight as such doesn’t cause the health problems, and that the things today’s lecturer said are myths and constitute fat-shaming. And it’s quite clear that shaming people about their weight doesn’t help them in any way. In general, I think if you look at someone who has a problem that you don’t have, and your immediate response is “That’s ridiculous, why don’t they just—” no matter what you think they should just, you’re wrong. Sometimes people are stupid, but millions of people are not so stupid that they live in thrall to something you can solve with a snap of your fingers.
The point is that politically I agree with the latter group of people. Shaming people about their appearance is a heinous thing to do, regardless of whether they have a “choice” about it or not. But I can’t say that they must have science on their side just because they have morality on their side. Reality is regrettably amoral. If it’s true that Western diet and exercise patterns cause obesity and obesity causes health problems, then it’s true and no amount of cultural repositioning will change that. Equally, if it’s not true it’s not true and no number of people who think it is true will change that.
I’ve written at some length about the parallel issues I have with evolutionary psychology. There I concluded that most of what you see in the popular media is indeed bullshit but there is a core of science underneath that isn’t so easily discredited. I don’t know whether that’s the case on this issue. I would dearly love to stand with my political fellow-travellers here, but I can’t if they’ve got the facts wrong.
Of course scientific assertions are always open to correction. If there are facts I’m missing which support the “there is no obesity epidemic” side, I would love to hear them. But they will have to be facts that a published expert in the biochemistry of metabolism are likely not to have heard of.

This is how I write when I have a word limit

Earlier this year the Labour History Project held a competition calling for essays on people’s vision for New Zealand. I entered this, but – as you can tell from the fact that I’m blogging it – I didn’t win. My title was “We Can Do Better”, because I’d spent all the time available on the essay itself and had to come up with something vaguely snappy-ish at the last minute. Because it was written for an audience of politically conscious New Zealanders, I mention quite a few things in passing which I would have had to sit down and explain for an international audience. I’ve put in links that hopefully should be helpful there. I wrote this all before the recent revelations about the Auckland rape gang and the beyond-incompetent police response to it, or that would have been the major focus of the essay.
Yes, this is how I write when there’s a word limit. When I worked at a local student magazine my style was described as “brisk”. I guess it makes for quicker reading but I hate not being able to explain all the nuances.

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We humans are very good at coming up with solutions to our problems. Unfortunately, the solutions tend to create more problems. Plumbing means cleaner cities but dirtier oceans. Literacy means less ignorance but more squinting. The best we can hope for is that the new problems are smaller than the old ones. Then we can solve those ones, and so on.
So if you want to know what the future looks like, don’t look at the people celebrating existing ideas. Look at the naysayers, the people picking holes in them. Look at the Earth Hour people, not the “Human Achievement Hour” people. They’re where the next wave of improvements will come from.
That’s why I don’t take a Utopian approach to politics – any more than to housework. I’m never going to make the house perfectly clean, and it wouldn’t last long if I did. Instead my philosophy is what’s called meliorist, from the Latin for “better”. You see something that needs fixed, you fix it. You see something that needs cleaned up, you clean it up. You make things better than they were before.