The State is not a good parent

 "Reading the abuse in care reports, two questions requiring clear and compelling answers remain unanswered: Why? and How? Why were so many children and young people abused in such awful ways? How was it possible for so much and such appalling abuse to continue unchecked for so long? Without satisfactory responses to these two critical questions, the chances of history repeating itself must remain unacceptably high.

    "For some reason, however, the Why and How of Abuse in Care were not made the prime focus of the Royal Commission’s investigations. Its reports tell us the Who, When, Where and What of this horror story, but, those two key questions, Why? and How?, are not adequately addressed."

~ Chris Trotter from his post 'Report on the abuse of young people – two key questions have gone unanswered'

Productivity. But only in medals.

  

Economist Robert MacCulloch notes that New Zealand's productivity growth, as measured in Olympic medals, is astonishing.

In the 1924 Paris Olympics, New Zealand won one bronze medal in total. It was in athletics for the 100m by Arthur Porritt. The race was later immortalised in the film, 'Chariots of Fire.' NZ had a population of around 1 million back then. Just over 100 years later, the tally is 10 golds, 7 silvers and 3 bronzes*, which after adjusting for population increase, is a huge rise. Meanwhile the United States won 45 Golds at the 1924 Paris Olympics, a tally which has plummeted down to around 37 at the Paris 2024 Olympics. So productivity in this sphere in New Zealand, compared to other countries, is phenomenal.

As you're probably aware, for all sorts of reasons New Zealand is shit at economic productivity. 

So why the difference?

On this MacCulloch suggests the reason for this is simple: In sports, unlike elsewhere, New Zealanders value meritocracy "where the fastest, highest, longest .. the best .. wins, regardless of other considerations?"

Kiwis clearly respond to merit being rewarded and produce amongst the finest output in the world when it is. Meanwhile in many other spheres in NZ, everything but meritocracy is winning the day. And productivity is paying the price.

In microcosm, he's probably right. And it's great to see these athletes triumph.

Mind you,  if I were to carp — and I will, even if it's a mite too soon — I can't help wondering how much taxpayers and ratepayers are dunned for all this nationalistic gold. You know, how many millions it's cost taxpayers per medal.

Consider, Arthur Porritt paid his own way to Paris in 1924. So that was zero-taxpayer-dollars** per gold then. And now? Well, I'd like someone somewhere to do the calculation ...

* I've updated the totals.

** Yes, it was pounds then. But using that there would be too confusing.

Did you know you can see shit political economy from space?

 

Auckland: Eden Terrace's workers' cottages on the right, Mt Eden's California Bungalows 

beginning over the railway line lower left. (Photo showing the area before the Dominion Rd flyover,

from the Sir George Grey Special Collections, Auckland Libraries, 580-9498']

Did you know you can see shit political economy from space? Here below is the Black Hole of North Korea at night, too poor to have enough lights to switch on.

And you can see shit political economy in Auckland too, in aerial photographs. To be accurate: you can see shit political economy in the form of the effect of tariffs. ...

Let me explain.

Workers' cottage, Freeman's Bay

Victorian Villa, Grey Lynn

The first houses built here en masse were workers' cottages and then villas. When you fly over the city, you can see a ring of these villas around the inner parts of the city — especially so in Ponsonby and Grey Lynn — built right up until the First World War.

But after that war, something changed. It seemed to some that the United States had rescued Europe from its Great War, and had a lifestyle to which an increasingly prosperous population could aspire. It was the Jazz Age — the age of radio, electrification, automobiles, and the mass production (Fordism!) that made them affordable. In love with Americanism, in housing here it became the decade of the California Bungalow.

California Bungalow, Mt Eden

A villa is not a bungalow.  Like the California lifestyle it aped (and which the world would fully fall in love with after another war), the California Bungalow was freer than the more uptight Victorian villa, and reached out for sun and air. Their broad spreading gables form a second ring around the city in what we now call the "tram suburbs," a ring from Pt Chev through Mt Albert, Sandringham, Mt Eden, Greenlane, Ellerslie, and right around to the border of Meadowbank/Remuera.

Their popularity was immense. 

Their takeover seemed unstoppable. 

Until something happened.

That something involved a tariff. Brought in by US Senators Smoot and Hawley, their Smoot Hawley Tariff Act raised tariffs on imports by an average of twenty percent. Their intention (we're told) was to quarantine American manufacturers from the effects of the 1929 stock market crash. What it did do instead was to spread the misery and contagion around the globe, kicking off the Great Depression and all but shutting down international trade for nearly two decades.

John Bell Condliffe's "wagon wheel" showing the dramatic death spiral of world trade
following the disastrous implementation of the 1930 Smoot-Hawley Tariff Act

New Zealand economist J.B. Condliffe has a world-famous diagram describing the accelerating downward spiral of trade as every country and trading bloc in the world put up their own tariff walls in response. It was one of the most successful acts of intentional self-destruction in all modern history.*

Almost at a stroke, we fell out of love with the US.  In Britain, still the head of something called an Empire, an Imperial Preferences Act was swiftly passed making trade within the Empire roughly tariff-free — allowing many Commonwealth countries to escape the Depression first. (Not so the US of A, which had to wait until the death of a President and the end of a war to boom again.)

And trade amongst the Empire, rather than outside it, meant many more British goods replacing the previous love affair with American. Not least in housing. If the twenties was the decade of the California Bungalow, then the thirties was the decade of the English Cottage/English Revival. We can see these crabby, restrained offerings around the outer parts of the tram suburbs. (And you can see all these styles described in the Auckland Council's 'Style Guide,' pp 14-24)

In insulating itself from the world, America had not only shot itself in the foot economically, it also lost its influence with the rest of the world. 

Turned out it was a not-so-great way to Make America Go Away Again.

* * * *

* Until April 2, 2025, that is, with what Johan Norberg calls "the longest suicide note in economic history."

UPDATE 1: David Farrar notes that our average two-percent tariff rate (world's second-lowest after Singapore) becomes in the mind of the Toddler-in-Chief a twenty-percent tariff. (I use the word "mind" loosely.)

Johan Norberg has more on the effects of what he jokingly calls '"Liberation Day June 17 1930":

As he says, " I think the US was heading for trouble even before, but it certainly deepened the depression and spread it around the world, with devastating effects for European democracies. We would have had a depression anyway, but perhaps not a great one."

UPDATE 2: 

"Thomas Rustici identified the role of the Smoot-Hawley Tariff Act in exacerbating the Great Depression, particularly through its effects on trade, banking failures, and economic contraction. His seminal work, *Smoot-Hawley and the Great Depression: A General Equilibrium Analysis* (2005), presents a compelling argument that Smoot-Hawley initiated a trade war, triggered mass bankruptcies, destabilized the banking system, and led to deflation and depression. ... 

"Conclusion Rustici’s work provides one of the most comprehensive and rigorous explanations of how the Smoot-Hawley Tariff Act triggered a trade war, bankrupted farmers and businesses, destabilized the banking system, and created deflationary collapse. His analysis is central to understanding how protectionist policies can create economic catastrophe by disrupting credit, trade, and monetary liquidity. His insights remain critical in debates over trade policy and economic crises."