Category Archives: Economics

A few fires started in 2011 that absolutely have not been put out yet, more or less across the entire gamut of “stuff that matters”. Our local mainstream media may have made it look like my fellow New Zealanders were living in some sort of stupor where the only thing that mattered was that John Key had a nice smile and that Dan Carter couldn’t make the footy finals, but that certainly wasn’t what was on the minds of *my* friends. So here is a really quick overview of a few interesting things that are (still) going on at the moment, that you may or may not be aware of.

Media: It’s increasingly clear that you can’t trust what you read. Anyone paying attention has known this for years, but the fact that more people are becoming aware of it indicates things are in for a bit of a shakeup. Or more of a shakeup. 4 more arrests in the Murdoch empire today. And I expect more in the weeks to come. And the impact of the internet on media, both news and entertainment, and increasing hybrids inbetween, is a subject for more books and blog posts than you can possibly imagine. Check out Jeff Jarvis. Or Clay Shirky. Or my friend Richard’s awesome ReadWriteWeb. But one thing I’ve noticed recently is the absolutely hopeless [1] coverage, particularly from the business press, on the world of..

Modern Finance and Macroeconomics: I read economonitor.com fairly often. These people are serious, hard core macro wonks, and they have been saying for months that the entire global economy, excluding more or less nobody, is on the rocks, for a list of reasons that goes on as long as my arm, and so far nobody has convinced anybody that they can see a way out of it. My opinion is that the way out will come from….

Technology: Technologists are making more magic happen every day. Kinect hacks are bringing reality modeling to the masses. 3D printing is bringing computer models to the real world. The internet gets faster every day. Smartphones that cost $1000 a couple years ago now go for less that $100. A smartphone has the sort of sensors on it that would have cost $10,000 or more not very long ago. I could keep on going on this subject for a very long time. But one under reported aspect, I think, is the impact technology is having on …

Politics: The US Congress has about a 9% approval rating. The Arab Spring continues apace. #Occupy are hunkering down for the northern winter but absolutely have not gone away. Incumbents worldwide are under the gun for having apparently failed to do anything at all useful for years, perhaps decades. What people define as “useful” of course, differs. But the key two things, I think, are that

(a) technology is transforming media, and those changes are transforming politics, and politicians who never got around to thinking about these changes are completely out of their depth.

(b) the technologists are making everything vastly more efficient, and that means that there is no way we are ever getting back to having enough jobs for everyone to do their 40 hours a week. It’s bizarre how little everyone talks about that. Perhaps it’s because the people in a position to know are having too much fun playing Angry Birds or marveling at the new advances in such areas as:

Physics. My friend Cathy Neil tells me we’re entering a golden age of Cosmology. This is apparently unrelated to the fact that Einstein may or may not have been wrong, and despite many many pre-prints on the arXiv since the initial OPERA experiment, no one has really ruled out the existence of FTL Neutrinos.

Anyway, I could go on about what 2012 may bring in the areas of Cognitive Science, Climate Science, Energy Efficiency, Sustainability, Eco-Housing, and so on and so forth, but in reality, I have work to do, and will be trying to stop thinking about all this as much as possible for a bit!

(Time to write this post: 30 minutes. Not bad. Maybe I should blog more often.)

[1] Ah, yeah, so my actual views on the business press would take at least another 30 minutes to explain clearly, and to some extent, I know, it’s about the audience. And so on. I may get around to explaining further. Apologies if anyone was offended, and it probably goes without saying that if you got as far as reading this blog post, you’re not one of the journalists I’m complaining about ;-)


A great tradition died recently. The fellowship exam for All Souls College, supposedly the “hardest exam in the world”, no longer includes the infamous “one word question” – a one word question demanding an essay length answer.  I find myself wondering if they ever selected the word “Protest” – because that’s a word I think I could write an essay length answer to at the moment.

On the other hand, I’ve never been much of a protester.

I went to a Peace Protest while I was in Wellington last year, the first I can remember going to since university days. The turnout wasn’t huge. New Zealand is the most peaceful nation on Earth (according to a recent global audit), and in that context one might think a peace protest makes no sense here anyway, but it was the start of a year long “global peace march”, and in that context, starting in NZ makes perfect sense. They’d also chosen to start on Ghandi’s birthday – which means it was my birthday as well, albeit many years later. The other reason I was going along was because I’d heard Richard Stallman was going to be there, and I wanted to ask if he remembered me from a certain 48 hour party we were at in Christchurch about a decade earlier (random factoid: the dude can dance). Anyway, as I said, there wasn’t a huge turnout at this protest. Maybe a couple hundred people. It was a workday, and they hadn’t done much advertising (it even took me some time to google the details of the march once I’d figured out it was happening)

Yesterday I went to a much larger protest – over 3 thousand, according to National Radio (vs “hundreds” as reported  elsewhere, a good example of how the media coverage of a protest impacts its impact!), in our local Cathedral Square, to protest the recent disbanding of Ecan (our regional government) by the national (National) government. I turned up late (this isn’t exactly unusual) but somehow ended up being the representative “protester” quoted in the press (The Press) this morning.

Protester Seth Wagoner, of Christchurch, said he was shocked at how quickly democracy was taken away and he was showing solidarity with the environment.” (link)

Which I figured would sound better than “Well, my friend was going, it was only a couple blocks away, and I wanted to see how many people turned up“, when the reporter asked me “Why are you here?”

But thinking about it in retrospect, I’m glad I was there, and I shouldn’t have been so ambivalent it. People should protest more often, even those of us who arguably have “more important things to do”.

I could ramble on about this for quite a while, but the truth is I do have quite a lot of important things to do, so I might come back to this later. After all, I’m not trying to get into All Souls College here. But if I was, here are a few threads I might try to weave into my narrative:

1) The reasons people choose names like “National” for their political party, or “The Press” for their newspaper, and whether we should let them do that.

2) The nature of ECan, a “regional council” that many people barely knew, and how the rights of hundreds of thousands can be appropriated by a few people who actually care, and understand what they need to do.

3) How the power change at Ecan – swapping out an elected “council” for an appointed “commission” may or may not effect the civil servants who actually do the real work – with a somewhat dubious analogy to the recent power changeover in Britain, particularly with respect to:

3.1) transitions of power in a democracy, and how the week long decision making process from the LibDems caused the media to condemn them for leaving Britain without leadership, even suggesting that the Queen should step in and do something about it, how the reporters from Europe laughed at this notion given the occasional 6 month coalition forming process they have to put up with, potentially diverging into a discussion of

3.1.1) the role of the Monarch in (a) Britain and/or (b) New Zealand, past, present, and or future.

3.1.2) advantages and disadvantages of different types of “representation”, with respect to:

(a)  in the case of ECan, replacing a “democratic” council elected mostly by local landowners, with a technocratic “commission” appointed by a government that was chosen nationally by everyone – both in general and in this specific case.

(b) in the case of Britain, the upcoming referendum on the AV “Additional Vote” , how the various stakeholders appear to feel about it, how the question of (more) proportional representation affected the coalition forming process, and why the referendum will (probably) be a historic moment in the world’s oldest surviving democracy.

(c)  in the case New Zealand, our upcoming referendum on the retention of the MMP electoral system

4) How Local Government ‘parties’ have formed in some cities that have only a loose affiliation with parties at the national level. In the legislatures of the USA, it is republican vs democrat all the way down, so far as I know. In NZ it is much more diverse. How affiliations between National, Regional, and Local government parties, and the movement of personal between the ranks may or may not affect how the votes go and the policies we end up with as a result.

5) “Headlines”, with respect to:

5.1) how this post started out with the title “Protest”, switched to “Democracy. Use it or lose it”, and then “Democracy. It’s complicated.”

5.2) the rarely mentioned role of newspaper sub-editors (who write the headlines, among other things) in the democratic process.

6) The media and their role in reporting on protests, other ways they affect public opinion, and their resulting power over both elections and sitting governments.

6.1) How the ownership of newspapers and other mass media affects the editorial positions taken, delving into the relationships between the owner(s), the owner(s) other media and non-media companies, the editor(s), sub-editors and reporters, giving examples such as:

6.1.1) Fox News, and their supposed disconnect between “News” content, which is supposedly fair and balanced, and “Talkshow” content, which clearly isn’t.

6.1.1.1) The phrase “Fair and Balanced”, how Fox tried to trademark it, what that would have meant, and how the EFF  stopped them.

6.1.1.1.1) A potentially lengthy diversion into the relationship between intellectual property law and representative democracy, by which time the essay markers would I’m sure have already decided to give me an “A” or an “F” depending on how they felt about indented intellectual diversions, but given that they’re expecting one to write an essay length response to a one word question, intellectual diversions are clearly something they are looking for.

6.1.1.1.1.1) Yet *another* potential diversion onto the subject of how one can clearly have “too much of a good thing”, for instance:

(a) “Freedom” in Market Economies, as demonstrated by the recent global financial maelstrom (with at least a footnote relating to the nature of the words “Free” and “Freedom” and how they are leveraged into new roles, eg by the “Free Software” movement started by Richard Stallman (mentioned in Paragraph 2 above) and also in respect to our new “Free (as in Speech) Beer” brand, which of course started out just as an opportunity to take the piss (hur, hur) but evolved into something approaching an actual business model, with it’s own domain name(s) and the beginnings of a new “open” licence  (but then I got distracted, which as you can see in my case, isn’t very hard) or;

(b) intellectual diversions, potentially enlightening but ultimately leading one further and further away from the original topic under discussion.

6.1.2) The venerable Wall Street Journal, recently purchased by the same media conglomerate that owns Fox News, has, as with most papers, different standards for the “News” parts of the paper, which tend to stick, roughly speaking, to reporting the known facts, versus the editorial pages, on which, particularly in the case of the Journal, the most absurd nonsense has often been printed, quite regardless of and often in direct opposition with the known facts.

6.1.2.1) This separation of policy as regards fact checking, at the world’s largest newspaper, is well known to sophisticated consumers of news content. However, to unsophisticated or inexperienced news readers, comprising perhaps 95%+ of registered voters, the imprimatur of the Journal, with it’s long history and imposing credentials, gives an undeserved advantage to said editorial content, no doubt fooling many readers into accepting as fact what is merely opinion…

6.1.2.1) Furthermore, when one considers the (relatively recent) co-ownership of Fox News and the WSJ…

6.2) A more general diversion into how consolidation of media companies, their ownership by other companies, or ownership by people who own other companies, may have an effect on their editorial policies, their news sourcing, etc, and by extension, have an effect on the “constituency” they share with the politicians.

6.3) Perhaps something about the fact that most printed news is sourced from only 3 big networks – the AP…(nuts, I’ve temporarily forgotten the other two…one is french…)  and suggest that editors should take a look at Allaboutthestory.com [disclaimer: owned by some Kiwifoo friends] and www.project-syndicate.org to freshen things up a bit.

6.4) And perhaps even attempt to drag in Chomsky & Herman, “Manufacturing Consent: The political economy of the mass media” which is really compulsory reading for anyone who’s serious about this sort of thing. I read it over a decade ago and was highly impressed. One key takeaway for me was that you really didn’t need some grand conspiracy to control the media and/or popular opinion, the economics of the situation pretty much ensured the ‘elites’ would stay in charge (these days I’m a bit more sanguine about that, and not in any hurry to try Chomsky’s desired experiments in Anarcho-syndicalism thank you very much). I haven’t seen the more recent documentary, which I expect was a bit less detailed. How relevant is it to the modern day media situation or countries other than the US? Not sure, but it’s worth reading anyway.

7) A personal connection. My friend’s dad lost his job when ECan was disbanded. He’s an interesting chap, as is my friend.

7.1) For instance, my friend put a footnote in his doctoral dissertation (on the geopolitics of the Patagonian toothfish, for what it’s worth), promising a bottle of scotch (I can’t recall if it was a malt or a blend) to any of his three examiners who actually read that footnote, for his feeling was that in general examiners rarely bother to read the footnotes, meaning they were likely to miss potentially vital details, such as the reason my friend had brought three bottles of scotch to his oral defence – none of which were claimed. Given the growing length of this outline of potential threads in a hypothetical answer to a demonstrative example of the question no longer being asked in a fellowship exam at a college I never plan to attend, I will attempt a similar wager. A pint of most excellent ale awaits the first three people who read this sentence and let me know they have done so.
8) Realising the end of the exam time period was drawing near, I would then valiantly attempt to draw several of the preceding (sub-)points into something approaching a conclusion.  Perhaps something along the lines of “In conclusion, protests perform a vital role in a representative democracy, a mechanism for the populace to display their displeasure with the actions of their leaders. Active suppression of street protests by police, or at worst, the military, is a sure sign of unhealthy democracy. However, the impact of a protest, its ability to spark ongoing debate, further protest action or to actually bring about the changes sought by the protesters relies crucially on the role of the media…

8.x) Democracy. It’s complicated.

————–

[1 week passes...]

Hmmm. Well in light of the fact that I haven’t managed to get back and actually finish this off, I think I’ll post it unfinished for your amusement. At least, I hope some of you will be amused. If there’s anything in there you’d like me to follow up on, let me know in the comments. I may come back and re-work this later, and add more links. I had at least a dozen more random threads to weave into the outline; here are the ones I’d actually started to write down:

The ongoing transition of power from Newspaper owners to aggregators, search engines, and now social media, why this matters

How I hadn’t seen so many people in the square since the funeral of Rod Donald, co-leader of the NZ Green party, a great man taken well before his time.  Of course, had he still been alive, Rod would have been a speaker at this event, and he ties into the themes of this blog post all the more greatly for his involvement with electoral reform and the nationwide MMP campaign, and also the transition to STV for our local government!

How a brilliant part of this particular protest was the cairn of rocks. What a great symbol. Top marks to whoever came up with that one.

The friend I came along with, who felt more strongly about the protest than I did, felt that she had let herself down by not wanting to go on the record (which is why I ended up on the record) out of (I think) concern for her current work in the public sector. Frankly I think she was doing more than her share  just by showing up, but there’s certainly a potential diversion there on the potentially chilling effects of a large public sector, and one might also be tempted to talk about the power of the public sector unions that are apparently now in negotiations around the entitlements that states in the USA can no longer afford…

Somewhere in the middle of writing this post I got a call from The Press’s tech reporter, clarifying a few details for an article mentioning my company’s products due to be published next week. So I was tempted to try and fit something in around chilling effects wrt work within the private sector as well – ie if a company director or CEO posts something that might be interpreted as critical a media organization (fortunately, in this case, The Press is a non-Murdoch owned newspaper!) , or any institution with the potential to affect the health of the company, are they in jeopardy of breaching legal or moral obligations to company stakeholders?

Social aspects of protest, why they’re important for reasons other than just the policy changes they seek to bring about…

Some other interesting protest examples:

* During the Bush years, whenever Bush spoke anywhere they set up “First Amendment Zones” - corrals where the police kept the protesters separated from the govt supporters and the media.

* Contrasted with: the people who showed up with guns to anti-Obama protests and were allowed to keep them because that’s the sort of state they were in.

* The protest Flotilla delivering humanitarian supplies to Gaza suffered the tragic loss of 9 lives, but it caused a media storm world wide that might actually lead to the human rights being partially returned to 1.5m people living in poverty in the Gaza Strip

* The protests around the time of the Coalition negotiations where they were attempting to force Clegg to stay true to his word, how this may or may not have helped the LibDems get such a great deal in the negotiations, whether Sky News reporters berating the protestors in their interviews was appropriate….

* The photos of the Christian “million man march” that ended up being re-purposed by right wing blogs and media as supposed pictures of tea party protesters.

A rationale for protest:  Use it or lose it.

Representative Democracy has a lot of problems – the main one being that the public really only gets to hold their politicians accountable every 3 to 5 years.  In between elections, one of the few ways you can exercise your democratic rights is getting out on the street in a mass protest. Plenty of people will tell you that this is largely a waste of time – the media will downplay the incident and the government will ignore it. Millions of people out on the streets didn’t stop the Iraq War.

How important is being on the streets vs more modern forms of protest, eg, tweeting and blogging? You can of course, do both at the same time…just so long as they’re not jamming outgoing signals from the area as they tried to do with the #flotilla.

How the flotilla protest was an interesting case as it was international in nature and the resolution came in international waters, and without trying to get into the details of that particular case (which could be time consuming and potentially hazardous!), attempt to put in some points about how democracy is constrained or enhanced by international treaties, the role of the UN, and yada yada, and perhaps also mentioning Sir Geoffery Palmer, the rumour that he might be asked to head an international inquiry into the flotilla affair, and why he would be well qualified.


[update: Well, I was wrong! But I think this is still an interesting read, and there are a few aspects I intend to follow up wrt proportional representation, how the coalition deal was a great political "hack" (and how the unexpected hack destroyed my analysis and just about everyone else's), the highly Liberal nature of this new "Conservative Led" government, and a few interesting things I noticed in the ongoing (mainstream and social) media coverage.]

Here’s the (much) longer version of my three tweets from yesterday.

I have been watching the UK election with some fascination since the results indicated a “hung” parliament. My knowledge of British Politics is scant – it simply hasn’t been all that interesting up till now for those of us with no British heritage (unlike the majority of my countrymen, my closest non-Kiwi relatives are Americans). But things have become very interesting indeed now that there is chance for massive political reform in the oldest democracy in the world.

I speak, of course, of the potential for the Britain to switch to Proportional Representation, which is, to quote Joe Biden, a big f’king deal.

The difference between “First Past the Post” and true Proportional Representation is like Dawn and Day. The Tories are right to fear PR – it’s a massive step towards ending generations of electoral injustice that have traditionally worked in their favour, and will do so even more if they get a chance to re-gerrymander the electoral map (Note, the British gerrymandering in recent elections has been far less egregious than it used to be long ago, it’s not a super-partisan process as they have in  the USA). To do so is actually one of their election promises, although their phrasing of that particular promise is something along the lines of “cut the cost of Westminster on the ordinary citizen by reducing the number of MPs”.

Even if it is done 100% fairly, redrawing the electoral boundaries won’t end the structural unfairness for long, and neither will it end members of the Duopoly suppressing 3rd party chances in the more obvious way: by warning the voters that a vote for a 3rd party is effectively a vote in favor of the other half of the Duopoly – thus compelling voters to vote tactically for the lesser evil, rather than strategically for the party they actually want to support.

The LibDem leadership surely knows this. They are not stupid. In fact, although I’d never even heard of him before, five minutes of listening to Lord Menzies on the BBC website this morning was enough to convince me that he is probably one of the smartest guys in the house.

Meanwhile, their deputy leader, Vince Cable, appears to be an economics wizard – he probably has folks like Stiglitz, Roubini, Summers, Geithner and Volcker on his speed-dial already, just waiting for his chance to get stuck in and help save our global macro-economic petard from the misdeeds of the last decade (or arguably, the last century).

And of course, Clegg himself appears to be pretty sharp. I am going to go out on a limb here, and extrapolate that the rest of the LibDem front bench are also highly competent.

So, as I said, these guys are not dumb. They know that a Lab-Lib coalition is going to be best for their party and best for Britain, and hence their A-team is likely in the midst of negotiating as good a coalition deal they can get from Labour and the rest of a required “rainbow” / “traffic light” alliance/coalition, while their B-team also negotiates in good faith, for a Lib-Con deal they believe Cameron can never follow through on – because his party would rather hang *him* than accept it.

Cameron himself would probably give the LibDems almost anything they want in exchange for the keys to Number 10, and presumably his front-bench would too. Their problem is that if they give the LibDems too much they risk of being given the boot by their own caucus in very short order – perhaps before they even get to the Queens Speech bit (this is one of those areas where a days worth of surfing the UK intarwebs, interspersed with updating my about page, and believe it or not, some actual work, is quite inadequate, I have no idea how fast the Tories could stage a backbench revolt).

Anyway, and this is a guess, the Achilles heel that will keep Cameron from number 10 is this: the common or garden unreconstructed Tory backbencher has ideological blinders so big he can barely see his chauffeur if he sits on the wrong side of the Jag.

Furthermore, his core constituency is likely similarly impaired (minus the Jag…) – or they wouldn’t have elected him.

I could be wrong on both counts. Maybe Cameron can overcome his own party and come up with an acceptable deal. But I wouldn’t bet on it, because any deal is going to have to get past not just Clegg but *his* backbenchers, due to the triple lock clause.

This is the sort of situation you end up with in an FPP electoral system where the electoral lines are redrawn only rarely – or worse are redrawn by the legislatures, as in the US Congress (and State congress) redistricting, in which incumbents always seek to feather their nest with a few more acres that match their demographic niche, while trading away the acres that have switched sides to neighboring incumbents of the opposing party, who are usually only too happy to receive them.

In a properly designed PR system, this sort of thing just doesn’t happen – the parties can gerrymander all they want and it won’t change who gets into power the next time around, so they don’t even bother trying, and the electoral needles gravitate back towards the center, eventually resulting in honest, centrist MPs who really care for their electorate – partly because their electorate really has a shot at turfing them out the next time around.

Perpetuating FPP, along with slow or biased redistricting, and backroom deals done with the usual suspects, is how a two-party duopoly maintains its power – for decades or even centuries. Chances to overthrow such a Duopoly and introduce Proportional Representation (AKA: Actual Democracy) come along less than once in a generation – and this is Britain’s big opportunity.

The LibDems have waited 90 years for this moment, and I refuse to believe that Clegg’s team are going to risk waiting another decade or three before it comes along again – regardless of what Cameron offers them in “other” inducements. They also know that to accept a Tory offer will require overcoming the “triple lock” voting formula that gives their backbench, and members, even more power than the Tory equivalents.

They will negotiate in good faith regardless, it puts more pressure on the A-team and their counterparts to come to a deal quickly, and regardless, it’s keeping an election promise from Clegg, and it’s important to start building up trust with the electorate. But eventually they will almost certainly follow the logical path from here into….

…a Rainbow “alliance” comprising: (1) a Lab-Lib coalition, (2) “anyone but Brown” in Number 10, and (3) as many minor parties as possible providing confidence and supply (for which they will rightly demand concessions, but coalition partners in theory get to pick and choose between a few competing offers, and given the urgency of the moment, sane voters from minor parties are likely to understand that a bird in the hand as big as Proportional Representation is worth a dozen in the bush, and thus they should not risk overplaying their hands.

Ideally, the coalition should bring as many of them as possible into the “big tent” in order to ensure continuity in the event of by-elections and greater legitimacy in the eyes of the voters (and as they say, better that they’re in the tent, pissing out of it…)

That’s how it gets done in New Zealand, and so far, it’s actually worked out pretty well – even with the oddest of parliamentary bedfellows. Of course, there are extremists on all sides who will swear blind that it’s been a complete betrayal – which is how you know that they’ve done the right thing.


The Author
Seth Wagoner is CEO and Geek in Chief at Interclue.

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The idyllic scene atop my blog is the view from my parents' place in Kaikoura, New Zealand. They rent out the upper floor apartment. It's not expensive to stay there, and I can sometimes even arrange mates rates if you ping me before booking yourself in.