07 February 2012

Waitangi Day from a distance

Being a kiwi living in London, Waitangi Day is notable only because it is not hard to remember 6 February, although with the exception of a work colleague (Australian) mentioning it, it would be easy to forget it.

Despite the news, only reported in NZ, of the Waitangi weekend pub crawl (and only reported because one man complained about it), there is nothing to note it here.  It's refreshing for me, in part because of the cringe of the usual annual show is largely invisible. 

Waitangi Day has tended to be a time when mainstream politicians celebrate the purported partnership between the state and iwi (said to be Pakeha and Maori, a curiously romanticised albeit blatantly incorrect rendering of the situation).  It is a time presented as a chance for more "understanding" and raises the Treaty of Waitangi in a way that meets the desires of many who see it as quasi-constitutional.

Meanwhile, it is a chance for protests.  This time it is unsurprising that Hone Harawira's gang of Marxist ethno-nationalists have seen it as a chance to be rude and to make far from novel demands for the state to hand over property, power and money to those who his lot approve of.

Yet there is another view.  It is one that treats New Zealanders as individuals.  That doesn't mean must or should deny their ancestry, or claim whatever ethnic, national or other identity one wants.  It is not, despite the squeals of racists like Hone Harawira, about being "anti-Maori".  What it is, is about the state being colourblind.   It embraces the Treaty of Waitangi for what it is.  Not the creation of a distinction between the amorphous non-entity called "Maori" and the Crown, but the granting of individual rights and property rights to Maori residents, in exchange for ceding final authority to the state.  

It is a view that means that Maori language and culture can thrive, if those who want it to do so make their own efforts to promote it, whether as individuals or through iwi authorities, or other non-governmental bodies.  It is also the view that government doesn't promote culture either, but steps to one side not only from Maori, but everyone in areas where its role should not be as great as it currently is.  It means using property rights, contracts, rule of law, societies, voluntary groups, relationships and choices to build and develop the communities, institutions, businesses, sports, art, culture, inventions, discoveries and everything else that is the creation of humanity.

Yet, even setting aside my vision of a smaller state, there is a valid view that today, in the 21st century, the state should not treat individuals or corporate bodies differently depending on their ancestry or the ancestry of those who own or control it.

It rejects the infantile claim that New Zealand is bicultural, when it is populated by people of multiple cultures (the "bicultural myth" was generated by Maori nationalists wanting to portray Maori as being separate from the state which represented "Pakeha" culture.  Multiple cultures undermines the myth that Maori are also not represented by the state).  Cultural is not homogeneous.  It is not defined by ancestry, or ethnicity, or religion.  It is multifaceted.  In a world where people make connections across boundaries with modern communications technologies, people are themselves multicultural as they have relationships based on business, family, sports, arts and other interests.  The cold monaural world of "identity politics", which more than a few Maori educators inculcate among their students, is quite simply inaccurate.

The neo-Marxist "identity politics" view means that anyone who "identifies" as Maori is, by definition, disadvantaged by the state and society.  This is regardless of their personal wealth, education achievements, employment or own individual status.  Maori are, in the world of the likes of Harawira, automatically oppressed.  Daughters of lawyers and doctors, who are Maori, are deemed "disadvantaged" and deemed fit for affirmative action programmes, whereas sons of labourers or convicted violent criminals or cleaners, who are "Pakeha", are deemed to not be so deserving, as the state is presumed to be on "their side".

Identity politics have plagued much of the world for centuries.  It isn't just Europe or countries once colonised by Europeans that have been damned by it.  

Those that reject this view blithely and cheaply throw the word "racist" at it.  They think that for Maori to exist and be acknowledged, the state must treat Maori as a distinct entity, separate from the state and implicitly not represented by the state.  The Maori seats help entrench that by implying that a Maori voter is somehow, peculiarly, not represented as well as a non-Maori voter.  

Maori are separate from the state, as individuals themselves are.  However, it is time that the tired view trotted out by the likes of Hone Harawira, Margaret Mutu, Metirei Turei and other nationalists is confronted for the poison that it is.  It denies any need for the state to be colourblind, it demeans and diminishes the status and rights of all those who do not identify as Maori, and actually diminishes the individual rights of Maori by focusing on "rights" of corporate iwi entities, politicians and governmental entities.

There are three parties in Parliament that explicitly embrace the nationalist view of Maori relations with the state (Mana, Maori and Green), and three which appease it (Labour, National and United).  Could there be a party that rejects this without being so blundering in its language that it can be interpreted as being denigrating to Maori?

04 February 2012

French court punishes Google Maps - for being free

One of the many misrepresentations and distortions of libertarians is the belief that we all want to reduce everything to money, and for life and the world to be a collection of financial transactions.  It is a core part of the post-modernist leftwing critique of capitalism and free market liberalism, yet it is one that has no basis whatsoever in libertarian or capitalist philosophy, politics or even discourse.  Indeed it is Marxism that puts materialism about everything else.  It is seen in the incessant collectivisation of people into classes, based on incomes or wealth.  It was seen in the Soviet Union's ruthless pursuit of construction and production regardless of the cost to individual freedom or the environment.  Almost every policy proposal from the left of the political spectrum involves spending more money or taking money from people to spend on what they want.  For anti-capitalists the problem is invariably around there being "not enough money" for those they approve of and "too much money" owned or earned by those they don't.  The Khmer Rouge abolished money, but by then it had completely enslaved almost the entire population of Cambodia (after executing many) and people were all meant to work for the love of each other (ignoring they had guns pointed at them, literally, the whole time, and were all on the brink of starvation).

Yet I know many in the left will claim wide support for charity, and quite a few people in charitable endeavours and who provide assistance, time and money for needy people don't do so for money.  They do so out of genuine human benevolence for other people.  They want to see people lifted out of poverty, they want to see children getting education, they want people to be cured of diseases.   You see it is part of human nature to have some compassion for others.  However, if you consider mainstream political discourse, the left would claim that it represents a charitable view of the world, compared to that of the "right" which is all about people being individuals who care nothing for others.

Objectivists don't hold to that view, for we believe that human benevolence is a rational pursuit of one's values.  The most universal example is with families and close relationships.  Given humans raise children, an activity that involves dedicating a significant amount of time, effort and money to providing for others, demonstrates that it is inherent to give a damn about others.  Wider families and friendships see that happening informally, all the time.  Human beings are mostly social, they enjoy the company of others and get pleasure from sharing, interacting and giving and getting from each other, voluntarily.

Libertarians reject the characterisation of capitalists and free-market advocates as wanting to atomise humanity, and have people who "don't care about the poor", or who always want people to exchange goods, services or indeed any form of interaction for money or some form of predatory gratification.   Libertarians embrace one core principle -  voluntary adult human interaction.  Human beings should feel free to interact with each other as they see mutually fit, which can mean asking for help, or giving help.  If people refuse, then that should be respected.  For without the voluntary element, one is no longer being kind or benevolent, but is submission to force - a concept that is incompatible with benevolence.

So why have I gone on about this diatribe? Well companies often do not expect money for goods and services.  They may offer free samples for promotion, or they may simply regard the provision of common goods, services or even space as complementary to what they do.  Shopping malls are large privately owned common areas where people can spend considerable time with seating, warmth and bathroom facilities, for nothing.  Google Maps is a service that is available for free online, and offers a basic level of mapping to anyone wishing to access it.

However it has come afoul of French competition law, which apparently treats a company offering a service for free as being negative.  Competition law exists as a response to arguments that dominant businesses in a market can act in a way that prevents competition and is harmful to consumers.  Setting aside that libertarians reject this argument, what is going on in France is not about consumers.  It is about protectionism.

The French Commercial Court has decided that Google Maps offers "unfair competition" to a French cartography firm called Bottin Cartographes, and is fining Google US$600,000 for daring to offer Google Maps for free.

What has Google Maps done wrong?  Has it stolen any intellectual property? No. What it is offering is the product of its own efforts, purchased, produced and accumulated through voluntary interaction.

Is it harming consumers?  No. Quite the opposite, they are getting a useful resource for free.  They are benefiting from a large company offering a service they need not pay for.

The problem for the French is that Google Maps is undermining another business, a French business (this sort of economic nationalism is of course, racism practiced by socialists).  A business that rather than change what it does, focusing on value added or targeting specific markets, declares it has some high profile customers (Louis Vuitton), as if that makes it special.   So it should be protected from another business that offers its own maps for free.

This, is the French model of "compassionate "capitalism, unlike what they call "Anglo-Saxon" capitalism.   It is sometimes pointed out by socialists who see France as some sort of halfway model between free market capitalism and socialism, but this court case reveals it for what it really is.

French competition law is not about consumers.  They lose out.  Indeed France has long been one of the last EU Member States to open up its traditional monopolies to any form of legal competition at all, such as electricity, postal services and bus services.  That ignores the rampant protectionism of the agricultural sector, because French consumers can't be trusted to pay more for French produce (as they are expected to do).  So in France, this "socialist capitalism" actually means the ordinary citizen loses out, no free service.

French "capitalism" is about protecting old established businesses.  It is about entrenching a corporatist view that says it is more important that an existing business keeps doing what it is doing, making money from consumers that have little choice, and keeps people employed in that old business. 

It ignores the fact that if consumers had a choice, they may spend their money on something else, on something they want that isn't free, on a business that does have to compete for their money and which employs people.  A business (and employees) that suffer because of the protectionism of Bottin Cartographes.  It ignores that someone may set up a business or grow a business because a free map facilitates something innovative or affordable that was not when one had to buy a map from Bottin Cartographes.  Finally, it ignores that the people working for Bottin Cartographes might actually be innovative enough to diversify, specialise and generate more value by being different.

So in France, the country that rejects free market capitalism, when something is offered for no money it is offensive to the law.   It is offensive to me too.

The people of France may now get Google Maps blocked, sadly.  Whereas I think the right response to Bottin Cartographes is to boycott it.  Let this stinking little protectionism business, which uses courts rather than good products people want to pay for, not get money from those of us who do have a choice. 

Why should anyone, regardless of whether they are free market capitalists, or anti-capitalists want the law to step in and stop a business giving away its goods and services for nothing?  After all, it is not you paying for it, and you do not have to take what is offered?

01 February 2012

Syria's bloodshed is the legacy of anti-Western isolationists

Children shot dead by snipers.

The stories out of Syria has resulted in growing pressure and concern from many countries, anxious that the "international community" is sitting by whilst Syria's government kills its own citizens, who simply want to be free.

None of this is a surprise to Syria watchers.  Hafez Assad established a brutal dictatorship when he took power, and showed little hesitancy in engaging in torture, summary executions and massacres of civilians to maintain his personality cult driven regime.  The Ba'athist regime established a feared secret police force and knew how quickly it could bully thousands of Syrians to turn out to maniacal rallies to boost the ego of this mediocre bullying pilot.  Like North Korea, he passed it on to his son, so Bashar Assad today has the dubious honour of leading one of the world's two hereditary non-monarchical dictatorships.

The Assad regime has always had warm relations with Russia and the Soviet Union before it.  Even today, Russia maintains a naval base in Syria (at Tartus) - the only non-CIS country to still have one.  Syria's armed forces are Soviet/Russian supplied overwhelmingly.   There is evidence of Syria having both chemical and biological weapons.

You'll notice a deafening silence about Syria from one usual set of protestors - the so-called "peace" movement, "anti-war" protestors and the usual group of anti-American, anti-Western supporters of any victims of Western military action.   You don't see them protesting outside Syrian embassies, you don't see rallies outside Russian embassies, or burning Russian flags.  You see no marches organised for the people of Syria.  Some of them may say that there is no "war".  I bet a few Syrians would disagree.

You see there is a war, it is worse than a trans-border war, because then there is someone to fight for you. This is a state turning on its citizens, turning on the people it exists to protect.  However, the so-called "peace movement" has never really cared about how states treat citizens, having had significant support from the Soviet Union.

You see for them Syria doesn't have the usual list of bogeymen behind it.  It was never supported by the US or any Western powers.  It hasn't had any military intervention from the West either.  It is led by a dictator who has a Marxist pedigree.  All awfully inconvenient when you want to pursue your world view that so much that is evil in the world emanates from foreign policy in Washington, London, Tel Aviv or Brussels (NATO).  

Of course the Assad clan have always been murdering their citizens.  It's not new.  Its willingness to invade Lebanon and run it as a client state has rarely achieved the opprobrium layered at Israel.  Syria, you see, has always been off the radar as it hasn't been led by anyone that has ever been supported by the West.  Not worth the effort protesting about from the point of view of the anti-Western protest movement.

Since the end of the Cold War, there have been interventions, for humanitarian purposes, in Bosnia, Kosovo, Somalia, Sierra Leone, Haiti and Libya.  The interventions in Iraq and Afghanistan had humanitarian outcomes, but were primarily motivated by the desire to remove aggressive dictatorships.

However, the Iraq and Afghanistan wars have been costly, in money and lives, to those who participated.  It is inconceivable that any such actions would be repeated today.  The Libyan intervention only occurred because of determination by British and French governments to use air power alone to support the fall of Gaddafi, in part due to past guilt about the brief period of rapprochement that saw some appalling capitulations to that regime.

So "doing nothing" and certainly doing nothing unilaterally is consistent with the view of the leftwing so-called "peace movement".

President Obama opposed the war on Iraq and is keen to extricate the US from Afghanistan.  He is keen not to intervene in other countries, and indeed foreign policy has largely been left to the State Department.   European leaders gained little glory from Libya, and are far too solipsistic about their economic crisis to feel able to extend their power to Syria.   So attempts are made to use the UN Security Council to get consensus over sanctions - which of course will fail because Russia regards Syria, a country it taught to murder, monitor and maim, as an ally.

So anyone who sits by and gets angry and upset at why nobody does anything to protect Syrian civilians should take comfort - it is exactly the foreign policy of the radical left.  The Green parties in various countries, the backbone of the "Occupy" movement, the hard left of the Democratic Party of the USA, the so-called "peace" movement all support this strategy, as indeed does Republican Presidential contender, Ron Paul.  Governments should sit by and do nothing.

Does it mean that nothing should be done?  No.  Russia's support for the Assad regime is reprehensible and there should be loud and vocal protests against Russia and against Syria's government representatives elsewhere.  It should be legal for mercenaries to go to Syria and fight against the regime, but anti-mercenary legislation in New Zealand banned that.  You can thank the Greens and Labour for that.  The action against Syria should be privately led, by those who are willing to pay, supply or fight on behalf of opponents of the regime.

However, as despicable as the Assad regime is, I would not agree on an intervention by NATO or other forces without a clear strategy to replace his regime.  There is no appetite to do that.

Regardless, the conflict in Syria today has many dimensions.  It is Shi'ite vs Shi'a, Islamists vs secularists and Christians, it is a potential mess.  It is difficult to see how any intervention beyond economic sanctions and supporting any secularist opposition, and supporting broadcasts towards the country, could be useful without exacerbating the situation.

So while you witness the Assad hereditary dictatorship mow down men, women and children, and get upset about it, remember those who remained silent throughout the life of this murderous family's rule of Syria.  Note those who loudly proclaimed for the people of Iraq, after US intervention, but remain silent today.  Note those same people supported stopping you or anyone being mercenaries to fight for the opposition in Syria.  Note that they would, if consistent, loudly reject any measures by foreign governments to stop the Syrian government.

As Syrians fight to be free, note those supporting the government that oppresses them.  For they are based in Moscow and Tehran.  Given governments wont act without a UN Security Council resolution (which wont come because Moscow will veto it), you will see what happens when a state turns on its citizens and nobody provides those citizens with a means to retaliate.

The only moral response is for those, who know what they are doing, to conscientiously support forces of freedom, secularism and who oppose sectarianism in Syria against Assad.

There is no simple solution to Syria.  It might be that the previously inert Arab League may be able to exercise extraordinary pressure on Assad to step down and establish a transition to a new regime.   However, in the meantime more lives will be lost.    That is the price paid by people who face down a 40 year old Marxist personality cult laden dictatorship in an environment where no government dare try or even know how to use force to protect them.

31 January 2012

Envy, lies and the gutter of politics

If you want to know what Ayn Rand meant when she described the "drooling beast" in The Fountainhead, one need only look at the events of the past few days in the UK.  For in those days the Labour Party, Liberal Democratic Party and much of the media circled on the government appointed chief executive of the Royal Bank of Scotland (RBS) - Stephen Hester - whilst he was out of the country on holiday - because of reports he was to receive a bonus of just under £1 million in shares.

A witch-hunt of envy, hatred and smearing appeared, as MP after MP called on the government to intervene in the decision of the board of the company to breach his employment contract.  They sniffed blood, goaded on by the leftwing press and media, with the extreme leftwing "Occupy" movement displaying its usual ineptness of analysis by blaming RBS for the budget deficit.   It ended when Mr. Hester returned home from holidays to find his image and name all over the media, and him feeling like a pariah, understandably, and deciding to refuse it for the sake of a quiet life.  The braying left cheer on a small victory, but their true colours are shown not for their stupidity, but their clever, fact-evading, power-hungry bating of class warfare and old fashioned envy in their pursuit of populism.

In 2008, the British Labour Government decided to rescue the RBS, which was weighed down under debts and investments that were going to cause it to go to the wall.  The reason to save it was not to protect depositors, for a deposit guarantee system already existed to ensure anyone with less than £75,000 in deposits had them protected.  No, it was because Gordon Brown wanted to save the jobs, investors and the debtors to the bank, and he feared that letting it fall was worse than saving it.  So he did, by the government pouring in billions of pounds it didn't have, to essentially buy a majority stake in the bank.

That stake was put into an arms-length company so it would be run as a commercial enterprise, and Stephen Hester, previously chief executive of British Land (and having had a successful banking career before then), was appointed CEO with a salary of around £1 million, with bonuses if he successfully turned the company around.

The ownership of RBS and the appointment of Hester had all been by the Brown government.  Until this year, his salary and indeed his previous bonuses - under government ownership - had not been a political football.  This year it has been, and it is all because of a new fever of class envy, stoked hypocritically by Ed Miliband and the vampiric Labour Party, keen to lie, smear and hound for the sake of cheap headlines and gutter press coverage.

RBS has been turned around, in terms of its balance sheet.   It is now profitable, whereas it had lost billions when he had joined.   In other words,  Stephen Hester has been responsible for leading the bank into a state where it financially self sufficient.   Through his leadership, taxpayers have been saved many more billions of pounds - which helps put his £1 million salary in perspective, and indeed the around £960,000 bonus - in shares - that would only be available in a year's time.  Particularly when you consider that the salary and bonus are subject to 50% tax.  

Yet when it came out that he was likely to get this bonus, out came the wolves.   What easier way to stire up anger and envy than to point out to the lumpen proletariat half truths and distortions.  

So what were these half truths?
- "Why get a bonus for leading a bank that needed bailing out"? The fact that he was appointed BY the Labour Government AFTER the bailout to rescue it was blanked out.  You see the standard leftwing view is that they are all guilty - bankers are, after all, the scapegoats for everything.

- "This comes straight from the poor who are suffering from the cuts".  Unadulterated nonsense. It comes from a bank that is making a profit.  Taxpayer money is only from the investment, which of course was a decision by the government of the day.  

- "The bank hasn't delivered on lending to small businesses".  Well yes, maybe it hasn't loaned as much as politicians wanted it to,  but hang on.  Wasn't the fact that it had overstretched itself a primary reason why it was thought of as needing bailing out in the first place?  Do you want a bank that lends prudently, is profitable and safe, or do you want a risk-taking bank that might get burnt?  For financially illiterate (and power and attention seeking) politicians this contradiction is ignored and willfully evaded.

- "The share price is lower than when it was bailed out".  Yes it is.  However, this is common across the banking sector and reflects two trends that are outside Stephen Hester's control. One is the announcement of new heavy handed regulation that imposes significant costs on the banking sector (which politicians approve of) and the Eurozone crisis, which was caused by the sorts of overspending practices the Labour Party speaks with a forked tongue about (cuts are bad, except we know we need to do them, but wont say how, but the Tories must be doing bad cuts).

- "The government as major shareholder can "do something"".  Well yes, it could, it could sack the board and override its decisions.  However, if you were a private shareholder of the bank would you keep your investment in such a politicised bank?  What else would politicians do to it?  Forget that Labour happily let Hester get his salary and bonuses after he joined, it's just decided in 2012 to pursue him.  Government interference in a board of a bank set up specifically to run commercially so it could be privatised would be contrary to how it had been set up.

- "It was because of people like him that we now have a deficit crisis".  No it's not.  The budgetary crisis in the Eurozone, US and elsewhere is because of statist politicians addicted to spending money they aren't collecting in taxes.   This enormous lie is becoming part of the leftwing storyline about the crisis, and needs to be confronted head on as often as possible. 

What was left out?

- The success in turning around the financial results of the bank, and the scale of it.  What nasty little vindictive Labour MP could turn around a paper stand let alone an enormous bank?  Bear in mind these are people who gleefully supported Gordon Brown selling gold when it was the depths of its price and voted for ever increasing budget deficits.   The ignorance is palpable.

- Half of the bonus goes to the Treasury in tax.  Without the bonus the Treasury is not better off.

The government did badly out of this, politically, because it noted that his bonus was half that of last year's and because it insisted that interference would be more damaging (and it would have been).  It wasn't helped that the Chairman decided to forgo his £1.4 million bonus, but more appallingly this was all going on whilst Stephen Hester was on holiday overseas - so was unaware of the campaign of aggressive envy going on back in the UK.

So he has decided now to forgo his bonus, because he feels like a pariah.  What he has learned is that this is the price you pay for politicians selecting you, in good faith, to do a job, and do it well.  The same politicians who backed him to the hilt when they approved of his selection and his employment contract, are now baying for his blood, like the nasty, power hungry vindictive hypocrites that they are.

He could have told them to stick their job and that as far he is concerned they can go to hell, as he could walk into a job elsewhere with ease and without the hassle of petty little MPs surrounding him like hyenas.

As Allister Heath of City AM said today, "nationalising RBS was a monumental error; no bank must ever (be) bailed out again", but the real problem is that the bailout has changed the cultural and philosophical debate around capitalism and the role of the state.

In 2012 that debate will be central to politics.  At the moment it is characterised by the largely ignorant opposing capitalism but largely clueless about what else to do, but also an almost equally inept business sector incapable of arguing the moral as well as the empirical case for capitalism.

What the Stephen Hester bonus issue has shown is that politicians on the left are sinking their teeth into the old Marxist rhetoric of class and envy, with much of the press and media keen to ride on the back of it all.   By contrast, the politicians on the right are almost entirely incompetent and incapable of responding with anything other than some quiet arguments about practicality.

This year there needs to be a sound, loud, confident and intelligent fight for capitalism, or these sorts of mindless attacks will come again and again. 

By the way, you're no more likely to find intelligent and consistent moral defences of capitalism at Davos than you are in Pyongyang.

30 January 2012

New Zealand - far away without a care in the world

Having recently returned from a couple of weeks in NZ - almost entirely to see family and to get away from it all, I thought I'd start 2012 on the blog with a post about my observations as someone who has spent the last six year living abroad.  I've learned how much there is to appreciate in NZ, but also how much there is to bemoan.  It is something that can only really be understood once you have got used to how things work elsewhere, and what your expectations are around all sorts of everyday activities.

Whilst I was in NZ, the Eurozone crisis ticked over, Kim Jong Il died and Christmas happened.  However, the one thing you learn about being in NZ is that it is almost impossible to rely on the domestic media to know what is going on in the world, unless it is big.  Even then, you can rely on it to get things wrong - perpetually.

In NZ the economy appears to be ticking over nicely (no I didn't visit Christchurch) and there appears to be a level of optimism that is absent in Europe.  It can't all be the weather, as that was a bit patchy while I was there.  I put it down to naive lack of awareness of the stagnation in Europe and malaise in the United States.  Those I talked to about it appeared curious, but unaware of how it impacts New Zealand.  The real impacts are seen in how many more Japanese and Chinese tourists there appeared to be, relative to European and North American tourists, compared to previous years.  

The absurdly high New Zealand dollar is a crippler for tourists.   It was rare to ever think anything in NZ is cheap or good value.  The rip off prices for tourists seem absolutely ridiculous now.   Yes there are many items you can only buy in NZ that are quite unique and nice to look at, but they are not made by luxury brands in Italy, and they are not that special that foreign tourists are willing to fork out huge sums to buy them.   Asian tourists come to Europe for the European experience and will buy one or two luxury items while there, and a few items to remember it by.  NZ is not quite in the same league for shopping, what it has is scenery.

So anyway, what are the pluses and minuses I saw from NZ:

Pluses:
- Space!  You have LOADS of it, so much you don't appreciate it.  Why would ANY cities ever consider urban growth limits or intensification when you can offer so much living space to residents.  You do not appreciate how quiet and peaceful NZ is until you have spent lots of time in countries where you are never far away from towns or villages.
- Friendly service.  Service in the UK is variable, but rarely are retailers particularly friendly and helpful.  In NZ almost all were, including staff at food establishments that do not expect tips.  I nearly weeped with the standard of service I got at times, it was helpful without the "I'm obliged to try to sell you more" attitude that training foists upon some in Europe.  
- Supermarket packers.  Yes I know I mean New World, but it is brilliant to have someone pack your groceries. Ignore those infuriating self serve devices which have infected British supermarkets.  Far better to get a minimum wage teenager or grateful retiree to happily pack things for you.
- Well maintained roads.  I know why this is, and why it isn't like that in the UK and the US.  The more you keep politics out of decisions on road funding, the more that roads keep well maintained over everything else.  That includes signs, lines and lighting.  It is an absolute delight driving around New Zealand.
-  Seafood.  Seriously wonderful fish is available across NZ, even if at times it is a bit pricey.  However, you can't go past freshly cooked deep fried hoki or terakihi for fish and chips. Most British establishments absolutely wreck it by cooking cod in bulk so the top layer are dried out under heat lamps and the bottom drenched in fat. 
-  Bread.  Lighter, without the texture of freeze wrapped cardboard that much British mass produced bread has.  Almost all of it in NZ is far far more delicious than much of that which passes as bread in the UK.
- Ice cream.  Yes there are wonderful ice creams in Europe, but premium NZ ones are simply delightful.  I know Kapiti ice cream is Fonterra owned, but that hasn't done away with absolutely fantastic flavours.
- Scenery.  I only drove in the North Island and I have seen a lot of NZ over the years, but the one thing NZ has to offer over the UK and indeed many other countries is diverse scenery over short distances.  Driving in the UK is almost always tedious, with straight roads, few hills and little interesting scenery until you get quite remote into Cornwall, Devon, Somerset, Yorkshire, Wales and the Highlands.   Natural beauty with very few others to share it with is rather special.
- Rewarewa honey.  Beats Manuka.  It's truly heavenly.



Minuses
-  Braindead television news.  I once thought it couldn't get worse, but it has.  Stop telling people what to think about a story by slanting how you describe events a certain way.  Yes, you love disasters, celebrities and sport because your tiny minds can easily grasp the concept of good vs bad, you can't grasp politics or world affairs because your frame of reference is adolescent.  Seriously, NZ would be better off if TVNZ, TV3 and Prime all abandoned national news and broadcast infomercials instead, you would all be better informed.
-  Nanny State on alcohol. Why the hell can't I buy spirits or liquours from supermarkets?  Grow up New Zealand.  Yes there are some who have major alcohol problems.  Funnily enough you don't have less of this problem than countries which sell the lot at a multiple of outlets.  Beyond that, stop taxing it to buggery.   Yes it is cheaper to buy NZ wine in the UK, figure that one out.
-  Media mispronunciation.   Are there no people who can enunciate words?  TV in particular, but also some radio is full of cringeworthy butchers of the English language, and even worse butchers of foreign place names and personal names.  Who told you Kim Jong Il is pronounced Kim Yong Il?
-  Fruit juice.   Largely non existent in NZ, as most of the market is occupied by reconstituted fructose laden concentrate.  Freshly squeezed proper juices tend only to be orange, rare is apple available as a proper juice.  I know it is price, but there is no point drinking the cheap stuff.
- Yoghurt.  The lack of variety and with premium varieties resembliny desserts rather than actual yoghurt you want to eat, is rather dire.  What's wrong with rhubarb and vanilla, what about blueberry, what about boysenberry and blackberry?  Why so much damned sugar in it?
-  The accent.  Yes I've become a snob.  It's bloody awful.  If you have aspiration, try to de-nasalise yourself, otherwise it really can make one sound like you're a friendly naive idiot.  The PM leads the annoying accent stakes, but that may well be deliberate!
-  Rip off New Zealand.  How funny for the Honey Hive to be the most expensive place to sell its goods.  The pricing of "official outlets" and tourist spots is a serious rip off, when it proves not that hard to find the same products in other stores for 25-30% cheaper.   Yes I know it feels great targeting Johnny Foreigner because you think he's rich, but he's also not stupid. 

Oddities:
-  So many travel agents? Hasn't the internet been discovered yet?
-  Retailer websites with no useful information.  Why doesn't anyone put their products and prices online?  Why doesn't anyone offer to sell things online?  This is domestic websites, there should be no international bandwidth issues.   It is almost impossible to go online "window" shopping to see who sells what at what prices.  
- Ancient cars everywhere.  The Cuba of the South Pacific.  Mitsubishi Sigmas, Ford Anglias, Holden Kingswoods, Ford Falcons (XC, XD, XE), Holden Commodores, Ford Lasers, Mazda 323s, Ford Telstars, Ford Cortinas.  Seriously, someone should organise tours for UK car enthusiasts to have a look around. 
- Mr Ed on the Te Reo Channel.  Accidentally found this one, found it hard to stop laughing when I saw Mr. Ed on the phone saying "Kia Ora Wilbur".  Something inspired about doing that.

20 December 2011

Kim Jong Il's economic legacy

Let's test two of the great theories as to why North Korea is in poverty:

1.  North Korea has really only suffered since the end of the Cold War saw it lose markets and cheap oil.
2.  North Korea has also really only suffered due to the introduction of UN sanctions on trade with the country due to its nuclear programme.

Nonsense.  The effect of the end of the Cold War was to make things worse, but the relative decline is inbuilt in the system of rigid state socialism.

Look at this, from the Washington Post:

Source: Washington Post
Stagnation has been the norm in North Korea for 40 years.  The gap between rich and poor has been a gap between South Korea and North Korea.  From 1972 to 1987 South Korea was under the rule of a military led dictatorship and subsequently transitioned to a vibrant and very open liberal democracy.  However, South Korea's dictatorship allowed far more economic and personal freedom than North Korea.  Today the average South Korean has 20 times the income of the average North Korean, with freedoms and a way of life as distant from North Koreans as New Zealand does to Haiti.  

As the Washington Post notes.  East Germany had one-third of the per capita income of West Germany at the time of reunification.  North Korea has one-twentieth.

By contrast, South Korea is a pinup example of roaring success in economic development.  From 1953 when after the Korean War it had per capita income akin to that of Bangladesh, it is today effectively a developed country. 

Do we really need any more case studies of capitalism vs. socialism?

Kim Jong Il - A life of terror

It is difficult to exaggerate the absolute vileness of what Kim Jong Il presided over since the death of his megalomaniac father Kim Il Sung, he is perhaps only exceeded by Pol Pot, Hitler, Stalin and Mao in sheer numbers of those murdered, but the whole superstructure of the regime is such a layer upon layer of fiction that is defies easy understanding.  Almost everything about him and his regime was a lie, the reality evasion was on such a scale that millions died of mass starvation, hundreds of thousands lived and died in prison camps, including young children and the rest of the population lived under an ever present terror of facing oblivion due either to failure of the totalitarian state to deliver food and shelter, or because it would take them away.   

Kim Jong Il was born in 1941 in the USSR by his father, a small scale anti-Japanese guerilla leader who fled Korea with his wife Kim Jong Suk after a number of small successes in repelling Japanese imperialism and its cruel rule of Korea.  In the USSR Kim Il Sung learned of Marxism-Leninism and was impressed by the order and discipline imposed by Stalin.   Kim Jong Il would have been an insignificant small boy if his father hadn't been hand picked by the Red Army and Stalin's regime to be Moscow's plant in Korea.  He was brought along whilst the Red Army marched into the northern half of Korea at the end of World War 2.  Kim Il Sung had Soviet advisors and military assistance, as he set up a Korean communist party with Soviet alignment, which initially worked with and then purged and destroyed the indigenous Korean communist movement.  His ruthlessness, friendliness to Moscow and youthful charisma saw Kim Il Sung picked to lead the new state set up by Moscow to rival the UN/US backed Republic of Korea established in the south.  The Democratic People's Republic of Korea was born, and Kim Jong Il was 7 years old.

Kim Jong Il faced several childhood issues.  One was death of his younger brother to drowning, another was death of his mother in 1949 - allegedly exacerbated when she found out about Kim Il Sung's serial adultery (the "Great Leader" title not quite appearing yet though), and then the Korean War causing Kim Il Sung to evacuate with his children and new wife to be Kim Song Ae.

The world heard absolutely nothing of Kim Jong Il till 1973.  By then he had completed school and university, and was being groomed to be the successor.  Kim Jong Il had by then gained a penchant for expensive liquor, fast cars, young pretty women (he used his father's pleasure troops to recruit pretty young girls from age 13 to be trained to please him once they reached around age 15-16, in large numbers), guns and movies.   He lived the high life, drinking heavily (Hennessy especially), smoking and partying.  He never flew, and would happily arrange execution of those who displeased him.  His movie fetish became legendary.  He led establishment of a major film studio in Pyongyang, with multiple sets for different eras and countries.  He arranged kidnapping of actors, chefs and directors of Korean descent from south Korea and Japan, he also arranged for prostitutes to be brought in from various countries including Sweden.   It is notable his father died at age 82, but he couldn't manage past 70.

Yes, 70.  He is 70, not 69.

Between 1973 and 1980 he was referred to publicly in all media and books as "the Party Center" as he led day to day administrative business for his father.  In that exercise he successfully led various purges and ensured only loyal followers progressed to support him and his father, he also helped spear the unprecedented personality cult around his father, which after 1980 was duplicated for him personally.   The personality cult saw the glorification of a vacuous national ideology called "Juche", the constructions of statues and monuments across the country, and the completion of the cultural revolution that meant virtually all songs, films, books and art were focused on glorifying Kim Il Sung, the party, the state, Juche and all that was done by them.   Everything good was because of his father and later himself.  Everything that went wrong was due to the US imperialists, the south Korean puppet clique and the Japanese.

By the 1980s, Kim Jong Il had become the Dear Leader to his father the Great Leader and both operated as a pair.  Yet Kim Jong Il's high squeaky voice meant he was largely a recluse, living the high life, whilst ordering stories and tales to be written about his exploits.   Like his father it is claimed he gave "on the spot guidance" to hundreds of sites across the country.   What he did was perpetuate a system that create possibly the biggest and longest lasting prison state in history.

North Koreans have largely lived planned lives.   There is no private ownership of land, or indeed anything other than personal possessions.  Regular re-issuing of currency destroys savings.

Overseas travel was strictly prohibited, as was travel from one's own town or village.  Internal passports strictly regulated where anyone could travel, and life beyond one's home town was available only to few.  

News media was strictly under total state control.  All media reported to the people how lucky they were to live in the country and that people worldwide envied them.  They were told that South Korea was a state of slaves where Americans raped girls and kept Koreans as servants and mistreated them, starving them.  They were told everywhere else in the world was full of crime, starvation, war and deprivation.  Satellite TV was unavailable.  Foreign broadcasts were unavailable.   Radios were banned except for locally made devices with no tuning dial so that only local signals could be picked up.   The life in North Korea in the 1980s was hermetically sealed from the world.  Foreign popular culture was unknown.  Elvis Presley, Mickey Mouse, the Beatles and almost any movies, songs, fashions and brand from elsewhere were unknown, except to the elite.

Every day was planned.  Jobs included political education every day, people were constantly told to work harder and longer and never complain, be grateful and be frugal.   Every week every adult would go to criticism sessions where they must confess their own limitations and then accuse others of the same.  Every week one would fear being made a scapegoat.  Photos of both Kims were mandatory in every home, office, school classroom and public transport vehicle.  They had to be kept in perfect clean condition or punishment would be meted out.  Destroying newspapers with their images on them was forbidden.   All children were taken from their parents several hours a day into creches to learn their first words "Kim Il Sung (and latterly Kim Jong Il) is your father".  Children taught to owe everything to the Kims, and to put loyalty to them above their parents and friends.  Taught to be snitches for the leaders.  Taught to be part of the Police State.   Red Guards from their young teens, loyalty to leader and party first, and they would be rewarded if they reported on relatives and friends who were disloyal.

Kim Jong Il was a part of that and changed nothing when his father died.   When Soviet oil and aid ceased to flow, the economy was not reformed.   It remained centrally controlled and managed, entrepreneurship remained illegal, no freedoms were granted.   As a result, he continued to maintain a policy of terror.   Individuals feared that if they were found to be disloyal, they and all their relatives would be imprisoned in gulags - slave labour camps where they would work 16 hour days, 7 days a week, eating next to nothing.   Children from babies up would be included.  Abuse, sadism and torture are rife - reports have also come out of chemical and biological weapons tests being applied to some inmates.  

Even outside the gulag system the mass starvation of the late 1990s was due entirely to the failure of the entire economic system to be productive and let people respond to demand, supply and reason.  Adopting "non-juche" farming techniques was forbidden, so millions starved, desperately trying to eat wildlife, bark, soil, weeds, whilst propaganda signs urged them to "only eat two meals a day".   Kim Jong Il ate lobster, drank liquors and remained obese.

He could have reformed his country, what he did was next to nothing.  The biggest revolution has been the introduction of a mobile phone network that pre-selected elite can use, but which is effectively allowing people to network without easy state surveillance.  He has also seen, informally, the borders become more porous, as corruption and awareness of the outside world has spread among the more privileged classes, especially as technology has slipped into the country, with very cheap CD and DVD players, and CDs, DVDs from south Korea via Chinese sources.  He stopped a military coup by raising the status of the military into the most powerful force in the country, essentially usurping the party.   

North Korea today is a military state led by a personality cult family.  Its main businesses are arms, narcotics, counterfeit currency and minerals.   Kim Jong Il visited China several times and China showed him the results of its dramatic reforms, but he was unmoved - believing that it was too risky to allow Koreans to set up their own businesses and interact freely.  The result is a dark, polluted, cold, state of terror, horror, starvation and fear.

Unlike official propaganda, and the parroted propaganda from Pyongyang's useful idiots in the Korean Friendship Association, who stick their deluded evil tongues up their figurative fundament of Kim Jong Il, he will be remembered as a short inadequate playboy murdering tyrant whose policies and approaches resulted in the deaths of millions, and suffering of tens of millions.

What is left is a country with exhausted broken infrastructure, an enormous military armed with weapons of mass destruction, unproductive agriculture, massive untapped mineral resources, a police state and a people whose lives have been wasted through ideological education and decades of lies and terror.

Reforming, modernising, freeing and re-educating this country is a monumental task.  Consider fixing East Germany to be like helping an overweight smoker to become fit and normal size, fixing North Korea is like helping a senile centenarian become an Olympic athlete with a Ph. D.

19 December 2011

Kim Jong Il's death facts and sources UPDATES

I was driving near Taupo when I heard the news about Kim Jong Il's sudden death, and missed turning off.  Perversely you might think, I have a relationship with the DPRK, given it is the most totalitarian regime the world has ever seen - and know people there.  I studied it extensively in the 1990s and travelled there.   I am overwhelmingly joyous about his passing, but am thinking a lot about those who I know are there and who are looking for reform to come, knowing there must be change.  However, I am going to be driven nuts by reporters who are going to get a lot wrong about the place.

Let's get some points clear:

1.  Kim Jong Il was 70 NOT 69.  He was actually born in 1941 in the Soviet Union, not 1942 on "sacred" Mt. Paektu whilst his father was leading the liberation from the Japanese.  The 1942 birth year is a fabrication which appeared in the 1970s in publications.  The sole reason was to match his father, Kim Il Sung's, birth year of 1912.  So when Kim Il Sung turned 60, Kim Jong Il turned 30 etc etc.  The point of his birth in the USSR (near Khabarovsk I believe) is that Kim Il Sung had fled to the country due to the Japanese takeover, along with his mother Kim Jong Suk (who died in 1949 under circumstances that have multiple versions).

2. Kim Jong Un is expected to succeed him, but reality is likely to be quite different.  There is a significant power struggle about to happen (there was one when Kim Il Sung died as his second wife, Kim Song Ae sought to overthrow Kim Jong Il), and the list of members of the National Funeral Committee is very significant (see article here).  Kim Jong Un leads the list, number two is the rather  elderly Chairman of the Supreme People's Assembly Kim Yong Nam, Choe Yong Rim is third, and is Prime Minister and an ally of Kim Jong Il and Kim Jong Un.  Those two are close allies and expected to ensure Kim Jong Un leads.  Ri Yong Ho is number four, and is effectively now de-jure head of the military as a whole, and his ability to ensure loyalty to Kim Jong Un is likely to be critical.  At 69 he is not too old to achieve that, but his name will be one to watch.  Kim Yong-Chun is alongside him and may be expected to be a challenger as head of the army.

3.  Kim Jong Il's closest living relative is his sister Kim Kyong Hui, the most powerful woman in the country.  She may well seek to shadow Kim Jong Un because she is sole remaining issue of Kim Il Sung and Kim Jong Suk.  Kim Jong Il's half sibling Kim Pyong Il is not listed in the funeral committee, and was reportedly in Pyongyang earlier year because his mother- Kim Il Sung's second wife Kim Son Ae, is terminally ill.  He may seek to challenge Kim Jong Un, but has not be around in the country sufficiently to do so.   Kim Pyong Il and Kim Kyong Hui are the two people best placed to mount a civilian challenge of the leadership.

4.  North Korea is not as isolated as it once was.  The elite have mobile phones and are extensively aware of life in the outside world, with DVDs, CDs and other material circulating among the ruling classes.  Yet, the mass of the population do not have a clue, and may think the world is mourning with them.  They haven't the slightest clue of the wealth prosperity and freedom of South Korea.  Internet access is not available to anyone except a tiny elite, satellite TV is only available to that elite and in three hotels in Pyongyang, and it is a crime to own a radio that can receive foreign broadcasts.

5.  He died TWO DAYS AGO, which is astonishing.  It is telling that so much time passed compared to news of the death of his father.  Kim Jong Un will have sought to ensure he was not directly threatened.  However, it will be far more interesting in coming months.

The latest report is that the country is under curfew, under actual visible martial law.

If you want the most useful coverage of events then you will find it hard to beat the following sites:

- Daily NK - Providing the most regular, up to date and informed coverage of events.  In English, but originally Korean.   If you use any single source to follow events in coming weeks, use this.

- North Korea Econ Watch - Russian academic Andrei Lankov's excellent blog on events in the DPRK, with many sources of those who do business, travel and visit there.  Lankov is one of the world's leading DPRK watchers, with some fluency in Korean, as well as English and Russian, and a long history of visiting the place over many years.

- North Korea Leadership Watch - Self explanatory blog by Michael Madden, includes a great Kim Jong Il family tree

North Korea's own state monopoly news agency (no others allowed, absolutely no free speech or independent media or publishing of any kind) the Korean Central News Agency is here in English.

North Korea's international radio station, Voice of Korea in English
More will be added in coming days

UPDATE 1:  No foreign delegations allowed to Kim Jong Il funeral or for mourning.   Big questions regarding existing Western tour groups in the country.

UPDATE 2: TV3's Nightline coverage (New Zealand) is sloppy.  First, Kim Jong Il has NOT been the "Dear Leader" for over 10 years, but rather "Leader".  Secondly, the "military first" policy (Songun) is not "60 years old".  It dates from 1995 although is claimed to have arisen in 1961.

UPDATE 3: Daily NK is clearly managing to get unofficial reports from the DPRK presumably through a mix of sources.  Markets closed, night curfews, people prohibited for being outside.  Particular issues in the town of Musan.

14 December 2011

Norway's butter shortage and "food security"

This SHOULD be a no-brainer.

Norway has adopted the similar kind of nationalist/socialist environmentalist claptrap supported by the Greens.  The idea that trade and agricultural policy should be focused on local supply and "food sovereignty", which of course is just another word for protectionism and rent seeking by farmers.

Norwegian farmers get a lot of that.  Around NZ$400 million a year to Norwegian dairy farmers in price, income and other subsidies.  For that they can't even produce enough to meet domestic demand.  To top that off there is a 29% tariff on imported butter, so Norway already prices imported butter away from its market. 

Yet that's not all.  You might fairly assume subsidising dairy farmers might mean there is more production than would otherwise be the case, and that the lack of demand shouldn't mean that tariffs get in the way of imports.  You're right.  Norway also restricts imports to a quota.  Only 575 tonnes of butter can be imported under its quota with a tariff of 60% on that.

You see the 29% tariff is actually the general tariff it applies, which is meaningless because of the quota.  If there was no quota, the tariff would be 29%, but in actual fact Norway restricts imports of butter and then taxes it.

If there were New Zealand journalists worth their oxygen they would be off to Norway with the Minister of Foreign Trade suggesting a free trade agreement between NZ and Norway to include dairy products (which Norway wont accept, but the media there might raise questions about its ridiculous agricultural trade policies).

There is no need for any country to have a "butter shortage".  After all there isn't a sock shortage or a TV shortage or a light bulb shortage is there?

What the lobbyists wont tell you about the Kyoto Protocol

There are three types of countries that signed up to the Kyoto Protocol (the US is outside and now Canada is too):

-  Annex 1 countries:  Those that commit to reducing their emissions, covering both "industrialised countries" and "countries in transition".  New Zealand and the UK are in this category, along with all other EU Member States, Russia, Japan and others.  Total of 41.  So they all bear the costs of reducing activities that reduce emissions, or must buy emissions allowances, or mitigate their emissions.

- Annex 2 countries:  A subset of Annex 1 countries that also include New Zealand and the UK.  They not only are obliged to reduce emissions, but their taxpayers are required to subsidise the likes of others to reduce emissions.  This includes the "rich" EU Member States, i.e. Greece and Portugal, not Poland and Slovenia. 

- Developing countries: That is everyone else.  They are not obliged to reduce emissions at all, unless Annex 2 countries pay for them to adopt new technologies to allow it.  They can "volunteer" to become Annex 1 countries when they have developed.

The environmental movements don't challenge this.  Yet let's look at who is in the category of developing countries.  These are countries the New Zealand government, both the Clark and now the Key governments, have committed to helping subsidise to gain new technologies.

Qatar - Which has 6.8 times the per capita emissions of New Zealand and 6.2 times that of the UK, with per capita GDP (Purchasing Power Parity basis) 2.5 times that of the UK and 3.3 times that of New Zealand.  Bear in mind Qatar basically earns virtually all of its income from exporting oil, so it can earn money from "selling CO2 emission" then emit as much as it likes, and get money from poorer countries to buy new technologies. Nice.

UAE - Has 4.4 times the per capita emissions of the UK, 4.5 times the per capita emission of New Zealand, with per capita GDP 1.4 times that of the UK and 1.8 times that of New Zealand.  A similar economy to Qatar.

Bahrain, Brunei, Kuwait all have higher per capita emissions that the UK and NZ, and all but Bahrain have higher per capita GDP.   All richer more polluting economies, all making money from selling CO2 emitting energy, all expected to do nothing, all entitled to get taxes from NZ and British taxpayers to dabble in being more environmentally friendly.  Nice that.

China, Brazil and India of course are all classed as developing countries being poorer per capita, despite having significant foreign exchange surpluses and rapidly growing emissions.  You might ask quite why China is owed subsidies from Western taxpayers when it sits on a growing mountain of money it earns from exporting to those people.
A few other countries are classed as "developing" and deserving of subsidies, and able to emit all they wish, yet have HIGHER per capita incomes than New Zealand, such as Singapore, the Bahamas and Israel.

You might ask yourself quite why these little details are seen as acceptable by a government claiming to be looking after your interests.  Why you might have to pay more, whilst the descendants of oil sheikhs and Chinese millionaires need not face anything, and your taxes might even subsidise their dabbling in green technologies.

You might even wonder why nobody asked any of the major political parties those questions.



11 December 2011

What's going on in the EU? Part One - What's good

Finally, the UK government's rejection of a pan-EU treaty to create effectively an EU megastate, has started debate, albeit with many European politicians pointing fingers at British PM David Cameron for not playing ball.

Quite right, it is about time.

The tensions and politics around the EU are complex, so do try to resist the inevitable efforts of journalists across the political spectrum to over-generalise about what is right and wrong about the EU.  It isn't all bad and certainly isn't all good.  The Euro is not the key source of the problems facing the southern European states, but the EU is also not the source of peace in Europe since World War 2.  The EU does have several very good features that have promoted freedom and prosperity in Europe since the 1950s, but it also has carried some that have done the opposite.

What the terrible twosome of Angela Merkel and Nicholas Sarkozy are trying to do is paper over the tensions created by a union and project that has positively protected those governments which have embarked on decades of deficit spending.  It is seeking to combine the political goals of both Germany and France in a new EU - one that does not fundamentally accommodate the economic policies of many EU Member States and which replaces the flawed, limited but still real democratic accountability of Member States with an EU/EC/Council of Ministers led accountability.

In the next few articles I hope to present a step by step explanation of the EU - the good, the bad and the ugly, and present an alternative for the UK, and any other EU Member State that doesn't want to be part of a pact of central control, with socialism running right through it.

To outsiders the EU can look quite marvellous.  After all, if you produce goods in one part of the EU you can sell it anywhere else, with no customs barriers, tariffs or import restrictions.  Well, except for alcohol, tobacco, audio-visual services, literature subject to censorship, oh and quite a few services.  Free trade within Europe has promoted prosperity since the internal barriers to trade started tumbling down in the 1960s, and most recently the massive expansion from 15 to 27 Member by incorporating all of the former Eastern Bloc states, plus Slovenia and three former occupied Soviet Republics, has done wonders to improve competitiveness, create new markets and spur growth.   No Eurosceptics I know of want that to change, except the far left in the union movement and the British National Party.

Free movement of people has produced similar benefits, albeit with greater controversy.  Citizens of any one EU Member State can live and work in any other, creating a massive labour market and massive education market as people live, work, learn wherever they choose.  The controversy has been that this has allowed many from lower income Member States to work in higher income ones undercutting local labour.  For overpriced builders and plumbers in the UK, the arrival of hard working enthusiastic Poles has not been good for them, but it has been good for the Poles and their customers.   

Thirdly, with these measures have come the means for the European Commission to force countries to abide by rules to ensure open borders and competition between countries remains so.  Domestic markets in services such as telecommunications, bus services, banking, electricity, insurance, supermarkets, postal services, airlines and the like have been required to be opened up to create a single European market.   Low cost airlines would not have succeeded in Europe had the likes of Ryanair and Air Berlin not been able to open bases in other countries and fly from wherever to wherever in the EU in competition with national carriers.  Attempts to subsidise, regulate or otherwise interfere with some sectors have faced European Court action.  

If it all stopped there, then I'd be very happy with the EU.  Breaking down barriers and markets, enforcing deregulation and even stopping national governments from offering subsidies to protect domestic businesses (but not if the subsidies are available to any EU businesses) is a good thing.  To be fair, efforts in some of the newer Member States to tackle corruption, organised crime and the like in those countries at government levels have also been positive (although Bulgaria is hardly a model of government without links to organised crime). 

The thing is that you don't have to be in the EU to get most of that. Three European countries are not in the EU, but have free trade and free movement of people with it.  Iceland, Norway and Switzerland all have almost the same freedoms with the EU and each other, as Member States of the EU.  Their own domestic reasons for rejecting EU Membership are unimportant (protect fisheries from subsidised EU competition, protect oil incomes from funding EU transfers to poor countries, protect national sovereignty and independence), but notable for being inconvenient to EUphiles.  The European Free Trade Agreement (EFTA) which paralleled the EU, has provided a treaty bound mechanism to enjoy freedoms within Europe without the bureaucracy or the commitment to fund he EU.  Remember that, because it is important.  There is an alternative to the EU to get most of the benefits of the EU.

The downside of all of this comes with certain obligations which I will write about later.  These are:
- Welfare tourism.  Don't like the housing, health care, education or welfare benefits in your own country within the EU?  Move to another EU Member State and enjoy all it has to offer, without having had to pay for it.
- Fortress Europe.  Try getting goods or services into the EU from outside the EU/EFTA area.  Tariffs, import controls and other mechanisms means the EU has raised walls around itself as much as it has destroyed them internally.
- Common Agricultural and Fisheries Policies.  Call it, how to sustain the grossly inefficient farming practices of France and Spain (and fishing practices of Spain) using British, Dutch and German taxes, whilst impoverishing farmers from poorer countries in Latin America, Africa, Asia and Australia/NZ.   Nothing quite like having European taxpayers subsidising the properties of the British Royal Family though, especially when it is so unaffordable that farmers in the newer Member States are only offered one-third of the equivalent subsidies of those in the West.  There ARE walls within Europe, including the one that means a Greek farmer doing the same as a Bulgarian farmer gets three times the subsidies of the Bulgarian one.
- EU common regulatory framework.  The number of laws Member States must pass to meet EU wide obligations on everything from labour laws to protecting "human rights" (which are not all bad to be fair).  Micro-managing domestic legislation to iron everyone flat.
- Joining the EURO.  Other than Denmark and the UK, other Member States joined or are committed to joining the EURO.  That's a whole other story, for although it is much maligned, it is more a problem for being a transnational fiat currency than being a single currency.   Think of why Greece felt it could borrow endlessly from a high value low interest rate currency that was largely supported by German economic productivity.
- EU vanity megaprojects.  The EU has pursued more than a few large scale multi-billion Euro vanity projects to put Europe on a level with the US and other very large economies.  These have all proven to be wealth destroying political projects driven mostly by the Franco/Latin bloc of countries seeking to outdo the US.
- EU wealth transfers.  The massive set of subsidies, funds and loans from richer EU Member States to poorer ones, to lift them up to wider EU income levels without actually making them be more productive and to buy subservience from relatively low tax, open, ex. communist bloc countries to accept the socialism promoted by France and Germany
- EU arrogance.  Time and time again the European Commission and those pushing the EU project have implicitly recognised they could never get consent for the project from voters directly, so have resisted referenda or even making the European Commission or Council accountable to the European Parliament (which cannot actually initiate new laws itself).  If voters say no, the EU expects them to try again and give the right answer.  The entire project reeks of bureaucratic insistence of its own superiority over its subjects.  Those who reject what it wants are wrong and must be made to submit.   Worst, those who reject the EU are painted as wanting out of everything, as being nationalistic, narrow minded, parochial, even risking war and conflict.

In a later article I will also write about why things are the way they are, and what national interests and drivers motivate the biggest players, but also why it should be possible for the far more numerous others to get things to change, if they weren't all being bribed implicitly by the system that will ultimately harm their interests. 

02 December 2011

Know someone with a dog that wont leave your leg alone?

After a week or so of unbridled seriousness, some humour - except this item exists.

The perfect present has arrived. 

If you are easily offended by sexual material don't click and don't read on.  This isn't suitable for children, or those who prefer the mating habits of animals


Not a present you want in view of house guests, children, or anyone excessively sensitive.  

Not a present you want kept outside so any Tom, Dick or Rover can treat it as the town bike.

Not a present for someone who wont wash the "pink hole".

Not a present for someone who thinks such gifts for pets are a mark of the decline of civilisation.

Wait for the first owner to paint eyes and a smile on the toy, or dress it and wonder why it is no longer interesting to a real dog.

Wait for the first dog to tweet that Snoopy doesn't look how he does in cartoons.

Wait for the first comedian to  use it as a prop in stand up.  

Wait for the first animal rights activist to claim that castration of dogs should be banned, as they can be given one of these.

Wait for the first animal rights activist who will claim that anyone whose dog (not bitch) doesn't have a partner and doesn't have one of these, is having his rights infringed.  

Wait for the first A & E centre or fire brigade call from the jackass who decided to have a go himself and got stuck. 

Wait for the first images of someone actually doing that seeping its way online, as someone will somehow feel proud of what he did, in multiple positions.

Wait for the feminist animal rights activist who demands an equivalent toy for bitches.

Wait for the feminist animal rights activist who demands to know why there is only one hole.

Wait for the gay animal rights activist who demands that toys get made for gay dogs too.

Wait for the African-American rights activist who wants to know why the white poodle is humping the big black toy.  

Wait for the post-graduate thesis paper written on why the manufacturer wisely chose the smaller toy to be white and the larger one is black, and how that reflects changes in capitalism's recognition of the sensitivities created among African-American communities over structural inequalities, perceptions of subjugation, racism, sexual stereotyping, and sexist portrayals of black women.

Wait for the cat lovers who laugh that anyone thinking of making one for cats has never encountered a cat.


01 December 2011

Does tax evasion cost New Zealand?

The Press reports on research by an outfit called the International Tax Justice Network claiming that tax evasion costs the New Zealand Government more than NZ$7 billion a year in lost tax.

Let's be clear, the Government isn't New Zealand and so the loss is not akin to everyone suffering. 

It's a very simplistic view to presume that somehow this is lost sales, stolen money or anything of the sort, or that behaviour wouldn't change if people paid tax on the transactions listed.   Indeed it is quite false.

For a start, some cash jobs simply wouldn't be done if they were subject to tax.  The value generated from it wouldn't happen, and the consumer would spend the money on something else or save it, which may or may not generate tax.   In other words, tax changes behaviour and so the so-called "black" economy would be smaller if it was subject to tax.  That NZ$20 billion "shadow" economy would be less and so there would be less wealth overall.

When PWC tax partner Geof Nightingale says "If we could tax that shadow economy, we would either have more roads or hospitals or get out of deficit faster" he's quite wrong. For a start, he presumes the shadow economy wouldn't shrink significantly if it was taxed.
Secondly, it is a bold assumption to presume government would spend the money better than the people trading the goods and services.  Even if you go beyond unlimited free air travel for MPs into buying up an unprofitable railway, funding radio stations you don't listen to, paying welfare benefits to convicted murderers and subsidising businesses, government spending is far from frugal or careful enough to presume that people are not better off because they are paying less tax.  Certainly if the businessmen doing cash jobs buys things from my shop (even if I pay tax), I am better off, as are the businesses who sold me those goods, and the employees of those businesses and so on.   How does Nightingale know what is best for them? That sets aside the detail that roads are paid for by what are effectively user charges on motorists (try getting out of paying fuel tax, although RUC is easier to evade).   He could have said more cultural advisors, more planners, more policy wonks, more NZ On Air funded TV programmes, more overseas travel for bureaucrats and politicians, more assistance for hand-picked businesses, more welfare benefits so people subscribe to Sky TV more.   Why is that good?

Yet he then says "We anecdotally hear there's quite a lot of cash business going on in Christchurch these days".  You don't say?  So after the government basically told businesses down town "it's not your property now, you can't go near it" and "oops we demolished your building, forget to tell you or ask you", do you really think people in Christchurch have respect for paying taxes whilst they engage in voluntary productive exchange of goods and services?  Leave these people alone, they haven't hurt you and they are trying to rebuild their lives and businesses, businesses that create wealth, not take wealth.

In a low tax, small government New Zealand, Geof Nightingale may have to get another job, for at the most, taxation would be very low, very simple and as such few would seek to evade it, because it wouldn't be confiscating a sizeable part of your income.  It wouldn't be worth it for most businesses to bother hiring the likes of him.

Finally, it's important to point out to the IRD spokesman who said "our hidden economy and property transaction areas were showing a return on investment of $5.70 for every dollar invested" that this isn't an economic return.  It is just that for every dollar spent on a tax snoop (consider the psychology behind someone who chooses to spy on productive peaceful people to find out if they are coughing up "their share" to the state) the snoops recover $5.70 from the people they catch - catch not actually initially force or fraud on anyone, except of course defrauding the state - a state that will happily take taxes all its life from people and if you die before the age of national superannuation, not give your estate anything for your troubles.  A state that will promise one thing, and then deliver something else.  A state which when it fails to answer your 111 call, or fails to investigate the crime you're a victim of, or fails to get you healthcare when you need it, isn't accountable and wont pay you a refund. 

No.  Every dollar IRD takes is a dollar that otherwise would have been spent on a good or service someone wanted, or invested to make more dollars, or donated to help someone or something as a charity.  Because fundamentally, the difference between the money received by those in the cash economy and the money received by the state, is that in the former case, the person getting paid ASKED and couldn't use violence to demand anyone pay for whatever goods or services he offered.

When the state is small, and tax is low, the size of the so-called "black" economy shrinks (excluding the other "black" economy of banned goods or services) as evasion isn't worth it, simply because people have more of their own money.  That money isn't a loss to New Zealand, because it is part of GDP and because it circulates between consenting adults trading value freely.  The only concern comes from the government bemoaning that it hasn't got its slice of a cake that it had little to do with baking in the first place.

30 November 2011

Pay for our pensions, but don't expect to afford your own

That's the fundamental cry of the public sector unions which are going on strike today in the UK.  Around 2 million are going on strike, which most attention given to border control staff who by going on industrial action will see massive queues at airports as people arrive from international flights.  

The people going on strike are opposing having the age at which they receive their employer (read state, read taxpayer funded) pension increased to match the actual age at which people get the state pension, they are opposing having to contribute more and opposing a shift from final salary pensions (you know, the type you could only dream of in the private sector) to average wage pensions.

I like Old Holborn's proposed message to the strikers seen below:

People whose incomes and employment are dependent on the private sector generating wealth, hiring employees and paying taxes to pay for them, are wanting these same people to continue to carry the burden of paying the ungrateful sods pensions that none of the rest of us could ever dream of.   Yes, some are upset that they perform useful jobs (in schools and hospitals) and were "promised" final salary pensions when given them by previous governments.  Well here's the news, government promises are worthless - they are promising to spend money that isn't theirs, that they don't have and to pass on the bill to someone else and blame them when they can't deliver (let's call that the Labour Party).   Make your own plans for retirement, don't trust politicians to make them for you.

Sadly it was the unions' lackeys in power - the Labour Party - that sold their members this unaffordable, unfunded pup, that they relied upon for their careers, and now face losing because it can't be afforded.  

So the anger from the strikers shouldn't be directed at the government, it should be directed at their unions and the Labour Party - they were promised something that couldn't be delivered or afforded, and which demanded taxpayers pay for something they themselves could never get.  
The enormous lie perpetuated by the unions is to pretend the UK didn't have a budget deficit or substantial public debt before the financial crisis - it did.  The unions pretend the spending cuts are to "pay for the banks".  They are not, they are to get current spending balanced, and the banks haven't been funded by the state since Gordon Brown bailed out three of them only, two years ago.  Bank bailouts aren't happening every year.

The public finances in the UK are dire.  The UK's public debt is set to reach 94% of GDP in 2014-15, worse than Germany, France or the Eurozone average, only being better than Italy and Greece - no great achievement.  Public debt is set to increase by a total of £520 billion in the life of this government.   Debt isn't being cut, the growth of it is being slowed.  The total extent of government spending cuts in the life of the Conservative/Liberal Democrat coalition will only be 3.4% in real terms (after inflation) between 2010 and 2015.  Another 1.9% of cuts are forecast for the two subsequent years.  Hardly brutal, hardly radical.  Only then will be UK budget actually be in balance.  
Those striking are following the propaganda of those who want government to borrow more and more, and hope they aren't around when Britain has a sovereign debt crisis ala Greece or Italy, either that or they want to tax the "rich", which presumes they'll hang around for the privilege.   I doubt most would, and they would take their businesses and the jobs with them.

If the private sector said "sod it" and went on strike, and stopped working, stopped running businesses and stopped paying taxes, then this lot would truly be stuffed.  That's why the government should sit quietly, make sure people know that to give them what they want, there would have to be more borrowing (raising interest rates), more taxes or less spending elsewhere.  The unions don't say what option they want - let's call them out on this, and say no. 

Piggies in the trough

Stuff reports "Goodie bags containing iPads and smartphones and instructions on how to maximise your free air travel and accommodation perks – it must be induction day for Parliament's new MPs. Goodie bags containing iPads and smartphones and instructions on how to maximise your free air travel and accommodation perks – it must be induction day for Parliament's new MPs... Posters hanging in booths outlined their new perks – "unlimited domestic travel", exclaimed one".

All of the new MPs, National, Labour, Greens, NZ First, to a man and woman, soaked it up, took what they were "entitled to", at your expense.   I bet John Banks will too.

None of those talked to expressed disgust and remorse, including those who claim to speak on behalf of the poor. None showed interest in limiting their domestic air travel to trips to and from their constituency. 

Yet most of you voted for them, so really you only have yourselves to blame right?