An inspiring and visionary look at the NZ economy

If you want a clear and exciting alternative to “More dairy, more mining“, look no further than this! Sir Paul Callaghan busts some common myths about ourselves and puts for a vision for our future that everyone can get excited about.

Watch the presentation on YouTube. Sadly embedding of the video has been disabled for that video.

If we care for our environment and create a just, equitable and creative society, a “place where talent
wants to live”, then we can attract the best in the world, and provide opportunity for our most talented Kiwis to see their future here. Imagine what we could achieve if we built a strategy around, and made central to our thinking, the existing success of our emerging knowledge sector, gearing our education system accordingly.

I am not 100% about the detail of the policy suggestions he makes very briefly in one slide near the end but it is clear that there are hard environmental limits to how much further we can go with what we have been doing so far. In the future we need to think differently, not double-down on what worked in the past.

33 thoughts on “An inspiring and visionary look at the NZ economy

  1. Forget becoming millionaires or lackies to them…
    Small scale local economics, we produce enough food, harness the horse to bring it to market, and have wind-farms, tidal power, use solar powered battery cars if yu must otherwise walk or public transport, local seage recycling in the back-yard…..
    Rebuild your local community like the family next door….. quite simple or I am just being simple.
    Capitalism is on the way out as too many need to borrow to survive.
    In NZ you can be on the min wage and be paying rent of $306 in Lwr Hutt. With the two kids you get FTC and IWTC, and an accm supp/landlord subsidy of $140 That is, the wage earner gets around $430 net (sorry I have not got the up to date PAYE tavb\bles) about 160 in the employer subsidy and 140 landlord subsidy. Effective marguinal tax rate is over 40% after $538/gross as this is when the accm supp begins to reduce and it is over 60% after WFF starts abating….. Litle incentive to work harder even if the boss will increase the pay….
    Meanwhile commodities, including dairy iare over valued due to speculators. Dairy farmers buy new land in the hope boom will not explode and we have over-valued mortgaged/diary farms….. more debt…
    Capialism in NZ is nearly dead, just that economists and bankers dare not admit it otherwise the frustrated will ask what comes after capitalism.

  2. BJ,

    but that does not make him wrong in his examination of the failings of the NZ economic base in the current economic environment.

    When I said he’s wrong in everything he says, I mean he is wrong to suggest we devote any time or energy trying to grab a bigger share of the global pie. It’s just not a sensible thing to do when business as usual is leading us to destruction (yes, dbuckley, he’s arguing for business as usual – we’ll have to disagree on that).

    is particularly telling. Especially considering that I had explicitly set growth in consumption apart from this.

    I’m not sure why you mentioned that, I was explicitly referring to your comment about your desire for growth in control of our environment.

    but making our economy something less damaging and more intelligent and more lucrative for its participants isn’t “wrong””

    Maybe, but do you really think that’s what will happen if Peter Callaghan gets his way? As I asked dbuckley, what do you expect our much better paid workers will spend their extra cash on? He’s wrong to focus on monetary gain. That’s business as usual, in any language.

    The problems of New Zealand include being economically uncompetitive

    OK, if you want to argue within the context of business as usual, then you’ll get no argument from me. Within that context, you’re right, and dbuckley is right, but, as you acknowledge, it’s not inspirational, nor is it of any long term use to New Zealand. Your suggestions on the money supply would be of much more benefit but that would not be business as usual.

    our economic weakness is a problem that will drive away our best and brightest

    Do you mean those people best able to make money and sell people stuff they don’t need and, in many cases, don’t really want? I’m not sure that the sorts of skills that NZ loses, as a result of economic uncompetitiveness, are the sorts of skills we need long term. You came here, didn’t you? That’s a win for NZ.

    It is a VERY real problem for us so long as there is BAU

    So an inspirational presentation would be one that gets away from BAU.

    but if we are to do anything useful in the meantime we have to do it within the context of the CURRENT economic system and the CURRENT accounts of Aotearoa-New-Zealand.

    Sorry, your logic escapes me. If we want to get away from the current economic system and from being regarded as “consumers”, we have to extricate ourselves from that system as much as we can, not do the opposite. I realise it’s not easy but that doesn’t mean it’s impossible. It would also be more useful, if we are to avoid collapse but I suppose you accept that collapse is inevitable – in which case, what Peter Callaghan proposes is of no use whatsoever.

    It only hears what it wants to hear.

    Ain’t that the truth.

  3. BJ

    The problems of New Zealand include being economically uncompetitive and having to work harder for every dollar we earn than anyone else in the OECD. Which will remain a problem until the collapse of the global economy.

    This is where we (and Sir P) disagree. We could change our economic and environmental positions, if we collectively had the will so to do.

    And that is the central theme of Callahan’s lecture: the only thing preventing such an improvement is us. Its our fault we are where we are in both of these areas, there is no-one else to blame.

    And as to “stiff” carbon taxes; applied as they are today (I’ve blogged elsewhere on how to make them more effective) they will do exactly the same good (and bad) as raising all of our income tax rates by, say, 10%. Its just a tax that has to be paid, and if it is a stiff tax, then people will suffer, the least well off suffering most.

    I want to see a reduction in carbon emissions, not paying more for the same emissions. “Fixing” dairying (by which I mean downscaling) would be the single most effective thing we as a country could do to reduce our carbon emissions. But we simply can’t afford to do that in the current economic situation where dairying keeps New Zealand alive.

    Which is where Sir P (and I) came into this.

  4. dbuckley

    The development of fracking and shale oil and tar sands has made it clear that the peak-conventional-oil issue will not (at least not in time) resolve the environmental problems caused by burning stuff. It is going to take carbon taxes, and stiff ones, to reverse this trend.

    As a nation we have our trading scheme (because the banks HAVE to have their thieving fingers in everything in the current system), and within that framework we might prevail, and be able to tax imports according to their failure to meet our environmental standards, but overall this isn’t going well at all.

    We need a new route for SH1 80 meters above mean high water. We can expect the Waikato to turn into a salt marsh in the longer term. TePapa and Britomart are going under. We are toast…. in the longer term.

    respectfully
    BJ

  5. Tony

    Callaghan is wrong in almost everything he said in that presentation because his focus is on monetary return.

    No, this focus does not make him “wrong in almost everything”. There is nothing wrong with making more money. There is nothing wrong with producing things of little environmental cost but higher value and selling them for more money. He IS discussing economics inside the current paradigm for economics, which contains the economist’s cornucopian perspective, but that does not make him wrong in his examination of the failings of the NZ economic base in the current economic environment.

    I wouldn’t want growth in the “control over our environment”. I’d want growth in our appreciation of the environment and in consideration of our environmental impacts. is particularly telling. Especially considering that I had explicitly set growth in consumption apart from this.

    You’ll give up being able to prevent global warming in favor of telling people to do without things. Good luck with that combination platter. I don’t think you will sell even one to the general public.

    That isn’t to say that we won’t ultimately have to tell people to “do without”. That particular denouement is almost certainly in the last dealing of the cards, and to what degree depends on our preparation.

    Our ability to prepare depends on our economic position, which for all the work we do, sucks. Which is what he addresses. True he is nowhere near doing what is really needed with the monetary system and the banks, but making our economy something less damaging and more intelligent and more lucrative for its participants isn’t “wrong”.

    I’d accept the argument that this is not “inspirational” or even radical. I expect more from my ideas if they are to be labeled so strongly. However, he isn’t “wrong”.

    Until we start to look at the bigger picture, we’ll never make good decisions about our futures.

    We are humans. We won’t look at the bigger picture until it impacts with our noses.

    No, no no. The problems of the planet ARE the problems of New Zealand. Callaghan was assuming business as usual and then looking at what he sees as NZ’s problems in that context. It’s a bankrupt cotext and so Callaghan was, and is, utterly wrong. Just remember the title of his presentation.

    I disagree somewhat. The problems of New Zealand include being economically uncompetitive and having to work harder for every dollar we earn than anyone else in the OECD. Which will remain a problem until the collapse of the global economy. Global problems are NOT entirely NZ problems. We are not (for instance) grossly overpopulated compared to our renewable resources.

    Moreover, as long as we are functionally within that global economy, our economic weakness is a problem that will drive away our best and brightest. It is a problem that will reduce our ability to adapt to what is going to happen to the planet. It is a problem that will interfere with our ability to educate our children, care for our elderly and poor, treat the sick. It is a VERY real problem for us so long as there is BAU and there will be BAU until the economic system is collapsed. GLOBALLY.

    Which isn’t happened yet.

    Within that context he is correct.

    That the economic system has to be “collapsed” is not part of his vision, it is something that we see, but not something he understands or at least, would publicly admit to. He enjoys his credibility… and the public and the media still find the notion of economic collapse incredible.

    Despite the warning rumbles of the past few years.

    You know my solution to this is to stick a pin in the global monetary system and encourage it to collapse. Until we can do that there is nothing wrong with making more money for the work we do. He explains pretty well what steps we ought to be (but won’t be) taking to get there. I wouldn’t regard the speech as quite so powerful as to deserve “inspirational” but I don’t call for putting on the hair shirt either.

    THAT is unelectable until the global economy actually collapses and we can’t go there until that happens. I know you want to, and I know we’ll get there in the end, but if we are to do anything useful in the meantime we have to do it within the context of the CURRENT economic system and the CURRENT accounts of Aotearoa-New-Zealand.

    It isn’t easy being right and knowing the world is not. It is less easy to figure out ways to change the course the world is set upon, and harder still to know when NOT to say everything you know. You’ll know when you’ve mistaken that boundary, because the world stops listening.

    It only hears what it wants to hear.

    respectfully
    BJ

  6. The reason we are at loggerheads is that you are chosing to discard the worlds most widely used system of determining “value”, and whilst that continues to be the case, for everyday Kiwis, you’ll be part of the problem, rather than part of the solution. You probably wont agree with me on this, but by not supporting (what I see as) the right sort of change – now – you are tacitly supporting more of the business as usual, and the continuing downward spiral.

    What Callaghan (and I) are arguing for is a huge distance from business as usual in New Zealand. We want to improve New Zealand relative to the rest of she world, and relative to where we are today and have been in the last few decades, both financially and enviromentally, but within and using the concepts familiar globally.

    What you’re arguing for is a huge distance from pretty much everyone on the planet. But that isn’t a criticism of what you’re advocating; its respect for the scale of change that would be required to make your concept a global reality, and it cant happen on a scale of less than global. You’re right that the driver will, of course, be collapse; civilisations have proved themselves to be unable to do the right sorts of things until they are forced to do so.

    I’m hoping Peak Oil will be a positive educating influence, but I suspect I’m very wrong on that.

  7. He (and I!) want to dramatically raise New Zealand’s the value of New Zealand’s workforce. In the current economic model (more of which anon) people generally work for a wage to enable them to support their family

    But that’s not visionary, it’s simply the current way of thinking.

    It’s odd that you chose software development and tossing burgers as examples because I’m a software developer but I don’t consider what I do to have much value, if any, for society, probably about the same value as tossing burgers. I used to get paid a lot but I don’t any more; I’m about average wage now and that seems more than adequate. But Callaghan wants me to be paid more. Why? I don’t, so why should he? He wants more of me, but I don’t. It’s work of very little real value.

    Now you are arguing (in your visionary capacity!) for a new form of society, and I’m down with that, but I dont think its something that is ready for prime time yet.

    I’m glad you’re down with that. But you’re now arguing that we’ll have to put off such reform until more people naturally come over to that way of thinking. It’s not going to happen if people applaud and support those like Callaghan who just want to perpetuate the current model (though, of course, trying to get NZ up to the top table), which, if successful, means it will be perpetuated until it collapses.

    In the meantime, I’d like to return New Zealand back to where it was in world terms half a century ago, and improve our environment, and use less resources for better outcomes.

    I’d like to improve the environment and not only use less resources but use them sustainably. I’m not interested in some notional position that New Zealand may or may not have in some artificial league table.

    the increase in NZ’s GDP which could be called “growth” is actually from anti-growth, getting more for less.

    Except it’s not. If Peter gets his way, do you think all that extra dosh will just be buried in the back garden? No, it will get spent on stuff (probably imports of trash). It’s a dream to think we can all be richer (in monetary terms) but not have more stuff. That’s what standard of living is measured in, having more stuff.

    You’re right, though, the GDP figures are garbage. However, resource consumption and energy consumption still continues to grow. I suspect that the supposed decreases in energy intensity is not really happening; instead the GDP figures are being inflated. But that’s another issue.

  8. But, dbuckley, Callaghan measures success by monetary return and the value of a job by the revenue produced.

    Yes. He (and I!) want to dramatically raise New Zealand’s the value of New Zealand’s workforce. In the current economic model (more of which anon) people generally work for a wage to enable them to support their family; for that work they do I want them to get a lot more money. For that to happen there needs to be better economic return on their work. An hour spent writing software has a higher economic value then an hour spent flipping burgers. But McD cant charge $10 (or whatever) for a meal and then pay their workers $50 an hour. You cant just put the wages up, you need to improve the value proposition.

    Comparing a $50/hr programmer with a $12/hr burgermeister is not about growth, its about value.

    And that is what Sir P was arguing. I also argue that but go further, in that once we have an economy that works without being beholdent to farming, we can then have a serious conversation about farming and its impacts. And through the availability of more money it will enable better social and societal outcomes.

    Now you are arguing (in your visionary capacity!) for a new form of society, and I’m down with that, but I dont think its something that is ready for prime time yet. Note ‘yet’ – as the world begins to have visible, significant problems brough upon by our use of resources, then that conversation will probably ensue. But it will be a global conversation.

    In the meantime, I’d like to return New Zealand back to where it was in world terms half a century ago, and improve our environment, and use less resources for better outcomes. Thats a big enough problem to solve.

    And as to growth – growth is measured in GDP, a/k/a currency, and as we well know, for the last few decades currency is no more than numbers in commuters; it doesn’t actually mean anything. So economic growth, despite it almost universally be used as such, is not really a good indicator of anything really, and thus isnt worth getting worried about.

    Measurement of growth is also based on the assumption that a country did roghly the same last year as it did his year, and thus growth indicates that they are “doing more”. Sir P and I are arguing for rewriting the script, the increase in NZ’s GDP which could be called “growth” is actually from anti-growth, getting more for less.

    BJ advocates linking (the value of) money to energy, which is possibly another visionary concept, and again, one whose time has not yet come…

  9. But, dbuckley, Callaghan measures success by monetary return and the value of a job by the revenue produced. Thus, he advocates infinite growth. It was the title of his presentation, man: Sustainable Growth. He will never be satisfied until a significant portion of NZ businesses have per job returns that compare with the best overseas, and that would always be a moving target, in a business as usual world. He never gave a target after which we should stop doing better (in his terms). That is infinite growth.

    What I hope we all want is a time when New Zealand has a better standard of living, a higher minimum wage, less wealth disparity, better education and health care, and is a better global environmental citizen.

    All of those except the first two because I don’t want a world in which those things matter. Quality of life doesn’t equate to standard of living, once you’re past a certain level. Study, after study shows that. How do we get there? Certainly not through business as usual thinking but by ditching our official economic view of the world and the notion that consumption is good, therefore more consumption is better. That’s the view that Callaghan has.

    A visionary is someone who sees things differently to the rest of us.

    Thanks for the endorsement!

  10. However, the big picture has very little to do with Callaghan’s view of the world, for reasons already mentioned.

    Au contraire – “for reasons already mentioned”, when translated, mean “we dont get it”, which is because of the lack of big picture thinking. There is a fault in the reception, not the transmission.

    You’re hearing “infinite growth” (bad outcome), I’m hearing “opportunity to transition from a low value to high value economy” (good outcome).

    Why a good outcome: because a high value economy is a highly productive economy, and highly productive means doing more (important bit coming up) with less. To repeat, with less. Less raw materials, less energy inputs, less pollution. Isn’t that what we all want?

    What I hope we all want is a time when New Zealand has a better standard of living, a higher minimum wage, less wealth disparity, better education and health care, and is a better global environmental citizen. If these things are important to you, you need to ask how we are realistically going to get from where we are today to then.

    The vehicle to make all that stuff happen is money, in short, more export earnings than we have today. More farming and tourism (especially tourism; think Peak Oil) simply isn’t going to cut it no matter how much we do, for reasons I’ve explained many, many times, and more farming will mean even more destruction to New Zealand’s environment. As we continue this “business as usual” we will continue to sink down the standard of living indicies as we have been for the last fifty years, and not really improve our environmental position.

    Perhaps you’d like to define “visionary”?

    A visionary is someone who sees things differently to the rest of us.

    In this context, a person or group of people (maybe even entrepreneur(s)) who has an idea to do something and has the gumption to get off his/her/their arses and make it happen. And in this context is has to be a high value something, something the world wants or needs, even if the world doesn’t know it yet. They will end up employing people, and paying them a multiple of the average salary. There wont be huge numbers of people in the organisation (hundreds at most). And these people will end up saving New Zealand. Saving us from ourselves.

  11. dbuckley,

    Perhaps you’d like to define “visionary”?

    You have a small point with Fonterra being too big but it’s only a small point in the big picture.

    I agree that environmentalists treat the environment as a series of single issues (or, at least, it appears that way). However, the big picture has very little to do with Callaghan’s view of the world, for reasons already mentioned.

  12. Ok, I cried when I watched that, because all Sir Paul says are the same things I’ve been saying for some time, so its not just me out of step, there are others of the same opinion. Only he’s a Sir, and speaks more eloquuently than do I, and hopefully has a bigger audience.

    Now, to the wannabe environmentalists that wonder where the green is in this, let me explain slowly.

    As Sir P pointed out, Fonterra are the biggest gorilla in town. They are also the biggest polluter, in terms of greenhouse gasses, and in fucking up the country. But… because Fonterra are the big gorilla, and, in reality, the most important game in town, no government of any colour (including Green) can substantially rock the Fonterra boat, because the consequences for doing so are just too severe for New Zealand. As Sir P almost said, we are Fonterra.

    Now if we had a mixed economy of another (say) hundred visionary companies, the Fonterra would be a much smaller part of the mix, just a part of our export earnings, and thus not able to hold the government to ransom. So then we could start the process of making dairy pay for and fix its impacts (including low methane cows), and then the dairy industry will either man up and do the right thing, or shrink, wither and die. And all without risking sending NZ into real third world status and a living standard comparable with (random inappropriate choice) Ethiopia.

    Either way its an environmental win.

    And that illustrates the problem with most “Green” folks on this blog (and generally); they treat the environment and protecting it as a series of single issues rather than as a big picture. There are dots to be joined and jigsaws to assemble.

    (And I only disagreed with literally one word Sir P said – he described our dairy industry as “wonderful”. It is true it is the only game in town, but that doesn’t make it wonderful, more a necessary evil, its definitely part of the problem rather than part of the solution)

  13. Hey, SPC, if you’re happy with growth in all things that don’t consume resources and that don’t damage the environment, great. I hope you reach that nirvana, I really do. However, I think you’re living in a dream world if you think that kind of growth is what governments around the world are striving for and what, still, most people (especially in developing nations) are striving for.

    More economic activity has always meant more consumption. More stuff and services being offered and bought (and sometimes used). I don’t think that’s magically going to change because you want it to.

    BJ, I wouldn’t want growth in the “control over our environment”. I’d want growth in our appreciation of the environment and in consideration of our environmental impacts. It is utter hubris to believe that humans are somehow the pinnacle of evolution/creation and have, or can have, dominion over the earth.

    Callaghan is wrong in almost everything he said in that presentation because his focus is on monetary return. That’s his total focus (at least from his presentation). That should not be an inspiration to anyone.

    When you pointed out that “Callaghan does not discuss the planet’s problems at all”, you take that as an excuse for his position in the presentation. I take it as a weakness and a reason to ignore his views. Until we start to look at the bigger picture, we’ll never make good decisions about our futures.

    Which means that for the nation as a whole, Callaghan is exactly correct. He was not examining the problems of the PLANET, just the problems for New Zealand.

    No, no no. The problems of the planet ARE the problems of New Zealand. Callaghan was assuming business as usual and then looking at what he sees as NZ’s problems in that context. It’s a bankrupt cotext and so Callaghan was, and is, utterly wrong. Just remember the title of his presentation.

  14. There is a point here, that “growth” is more likely bad than good. The definition of growth being missing causes ambiguity.

    Growth in our knowledge is good. Growth in our control over our environment is good. Growth in our ability to supply the needs of civilization is good. Growth in our consumption of our environment is bad.

    Economics remaining in the dark ages, using fractional reserve banking, measures only the meaningless and regards growth as god.

    So we have a lot of interpretations of what Paul Callaghan is saying, each correct from their own perspective on what that growth means but not in agreement with one another.

    The NZ economy is based on farming and in particular dairying and Callaghan is right that we are working harder than others for less return because we aren’t working smart. He is right to call on us to work smarter. He is right that we need more R&D and better support for the tech sector that actually provides good jobs at decent pay and minimal environmental impact.

    Which is still growth using the economists notions of good and bad.

    Such growth is not evil. Growth in consumption of the planet is evil. The OVERALL problem for the planet is not addressed by the presentation. Callaghan does not discuss the planet’s problems at all. He is discussing and describing New Zealand. So he is correct within the limits of his discussion.

    We have a way to “grow” and I STRONGLY suspect that we can do better than we have.

    As for whether other nations being able/willing to pay for our products, paying us more and receiving more technology oriented “stuff” than milk powder in return is “sustainable” I suspect that it is not.

    I don’t think a lot of people recognize that most of the civilized world is simply bankrupt however, and they are going to continue to borrow to spend as long as they can keep the delusional reliance on fractional reserve alive.

    In other words, in the LONG run and that is to say, a lot longer than any election cycle (even in places like Libya), the folks buying our “stuff” will run out of stuff of their own to sell… and the global economy will collapse… OR they will consume rather MORE of the planet than they currently are consuming in order to buy our products. Which is a bad thing.

    To the extent that their consumption of our environmentally sustainable goods is a displacement of their less sustainable consumption, it is neutral or even good. This is not something to ignore however, and the broader problem of the economists and banks and fractional-reserve is not going to be solved by New Zealand “taking one for the team”. We have to change our monetary system. That is a separate issue.

    Which means that for the nation as a whole, Callaghan is exactly correct. He was not examining the problems of the PLANET, just the problems for New Zealand.

    BJ

  15. The share of the global economy that is based on natural resources is declining, the share based on human capital/R & D/new tech value is increasing.

    The rest is more complex than simple finite limits on resources would suggest.

    A transition (in terms of energy) from old (carbon resource) to new economy (renewable energy – for a time including nuclear) is to occur and then we face totally new equations as to what limits on growth are. What are the limits on the amount of renewable energy we can create?

    Other factors are food production and limits on the essential minerals that are required for modern tech goods – then there are the possibilities and limits of nano technology in providing solutions to that and then other new areas of research on human biology and health care that could revolutionise medicine.

    So I’ll just stick with

    The share of the global economy that is based on natural resources is declining, the share based on human capital/R & D/new tech value is increasing.

    Sure the prospect of future growth based on the declining share of the world economy (barring a temporary inflation led nominal lift because of price/scarcity) is low. But that is not the totality of the economy and where it is going.

  16. SPC, how can the global economy continue to grow without increasing pressure on natural resources and the environment?
    Surely the problem is an outdated ‘frontier’ type approach to economics and a culture that encourages us to submit to ever increasing consumption.

  17. Sure there is the problem with using mined carbon energy such as oil has an end use impact (so balance would require the royalties to be used in mitigation or green tech investment, a carbon tax or some requirement to invest oil profits in electric vehicle battery development and the like), but as for gold mining and the like contracts can specify full restoration where this is deemed possible …

    As to the total economy – countries such as China have stored reserves whereas we have debt – that is from a past balance. The new balance requires us to grow in exports and for them to increase their imports.

    And the total economy can grow in total value because some of that value is now associated with the added value of intellectual capital and new tech (things not limited to the old economy of physical labour and natural resources).

  18. SPC,

    On the balance point, I suppose that if the environment could be restored to what it was before the economic intervention, and it actually was restored, then there is no compromise. However, the chances of that happening are slim to non-existent either because habitat has already been destroyed or the profit motive will ensure that full restoration isn’t carried out or the use that the mined mineral is put to itself destroys the environment. But it’s nice to dream, I suppose.

  19. SPC,

    Think of the global economy as a whole. Clearly, in order for some other country to pay more for our exported extended value goods, it has to expand its own economy. Perhaps they can sell increased value products to us, to pay for the ones we export to them. No, I think not. Simply increasing the cost of something doesn’t grow the economy.

    Debt will never be paid down, overall. All money comes into existence through debt but with interest added, which needs more debt to pay for it. Economies have to expand to service ever increasing debt.

    Sustainable growth is an oxymoron. Think about it.

    What we have no choice in is abiding by the limits of nature. On a finite planet, growth much end. That’s simple. We can choose to end it ourselves, or we can carry on as we do and have events overtake us, with much worse consequences than if we intentionally jumped off the growth train.

  20. As to the point about balance – that’s a matter of perception

    If it was to say mine gold – balance would be committment to invest in restoring the area once mining ended and mining in a way that did not pollute. This may also exclude some areas from mining.

    If it was oil, regulations to minimise environment risk and place liability on the explorer (or some insurance to cover their potential liability) for the costs of any pollution etc. Some areas might also be excluded if the potential environment harm from any pollution was too high a risk.

  21. Not true Tony, most of the growth we can create will occur in the form of increased export value – and the money will be used paying down debt. Just as farmers do when dairy prices go up, they pay down debt – that’s sustainable growth.

    Our existing economy being fueled by unsustainable increases in debt gives us plenty of leeway to grow in a sustainable way (paying down debt) and we have no choice in this.

  22. Frog,

    Yes, the first slide talked about growth and the bulk of the presentation was about growing the NZ economy and comparing us, negatively, with other countries. He wanted to hugely increase exports, income per job, and so on. It was a presentation about growth.

    Mark, growth is a dirty word when applied to the economy. Economic growth destroys the environment.

    SPC. Growth is not sustainable in a real economy. You’re talking about growing the economy simply by adding value, in some vague way but a real economy needs goods and services. A growing economy needs growing goods and services. We can certainly grow knowledge and increase quality but where does the extra money come from to pay for those extras, if they’re charged for? We can’t measure success by GDP any more; that way lies ruin. We need to measure success by happiness, quality of life.

    I’m not sure what you mean by balance, between environment and economy. That usually implies that it’s OK to degrade the environment provided enough people get richer. That’s not defensible. The environment must always come first; it’s the only one we’ve got.

  23. I don’t like to do this … but it is true that there can be a balance between environment impact and economic development … I am just not sure that there has been any sign from this government that they know where that is.

  24. Tony,

    Sustainable growth is entirely possible. It is only the old economy dependent on scarce resources that cannot grow. And even the old economy can grow by adding value to resource products.

    Growth occurs within IT and the related creative sector (also increasing number of applications in the applied technology sector/R and D modelling etc) – people knowledge and technical development is not limited by scarce resources.

  25. The Number ‘Zero’ is an human invention – in reality one can only grow or shrink (numerically speaking).

    Actually NZ is quite foolish in trying to ‘ape’ the growth of others (btw they aren’t growing either).

    Economically, one cannot stand still. Though Countries try.
    There are many ways to enhance our economy without doing damage and ‘growth’ shouldn’t be a dirty word.

    Innovative thinking comes hardest to the Conservative mindset.

    There is no doubt in my mind we are going backward and that the current Economic Thinking has no profound answer to this.

  26. @Tony I have to admit the mention of the word ‘growth’ on the first slide sort of slipped past me. It didn’t seem important and he didn’t mention the word often (at all?) in the rest of the presentation so it didn’t seem like a major feature to me.

    We need to be open to good ideas from any source, even if that source has that ‘growth’ word on the first slide. Most of the things Paul Callaghan mentioned like high productivity work, high skill+high wage jobs and selling into niche markets seem compatible with a steady-state economy, to me. Please educate me if I am wrong.

    I don’t agree with everything in the presentation but for me it was a really welcome change from the “there is no alternative” drumbeat of mining and dairy coming from the government. Your milage may vary.

  27. Outside of that for a mo – found another interesting and perhaps relevant view today:

    “If you slash government spending, lay off workers, and trim the deficits, then spending will slow, incomes will shrivel, GDP will wither, and the economy will slip back into recession.”
    Mike Whitney

  28. Yes, Shunda, but my point is that the presentation was not visionary at all, in green terms, and I wouldn’t expect any green to be inspired by it. Yes, it attacked some of the myths of this country but he spent most of his time explaining why making more money per job is good and why doubling exports is good. The guy is entrenched in the consumer economy (and the growth economy), which is why I was surprised frog thought greens would be inspired by it.

    Frog, perhaps you could explain your enthralment, in green terms?

    To the two people who marked my post down, can I ask you to explain why my thoughts on the presentation are wrong?

  29. Frankly, I’m shocked that this is here and presented as some kind of beacon for us. I watched it through to the end, thinking there must be some reason why frog thought it worthy of a post. There wasn’t.

    Tony, while I think I understand some of your concerns, I don’t think your criticism is really completely fair.
    The fact for us as a nation is that we have a population that is not beyond the carrying capacity of the land, so we can sustain agriculture for our needs and also engage in technology based industry without affecting our environmental sustainability.

    I think there are some important issues raised in this video that need to be very carefully thought about.
    We as a nation are living a total lie when it comes to being ‘green’ but it isn’t to late to address this, and to some extent, this has clearly begun.

    We as New Zealanders need to get passionate about this remarkable land we live on, an environmental patriotism if you like.

    Imagine how hard it would be to take the top off a hill or fill rivers full of crap if the majority of the country saw it as unpatriotic.

  30. Wow. Why is this on a Green blog and why does frog think it’s visionary and inspiring?

    Did you not see his opening slide: “Sustainable Economic Growth for New Zealand”?

    Has it not sunk into Greens that sustainable growth is an oxymoron?

    This guy wants to double our exports with products that have zero environmental impact. Yeah, right. He sees no problem with New Zealand stepping up to punch above its weight in an environmental wrecking global economy. And he doesn’t want New Zealand to do useful things, he wants all the useful stuff being done elsewhere, with New Zealand beefing up its knowledge economy. To Paul Callaghan, the only measure of usefulness (productivity, he calls it) is how much money can be wrung out of us for goods of variable value. Apple is far more productive than most of our useless lot, because they pull in several million dollars per job, instead of a paltry few hundred thousand.

    Frankly, I’m shocked that this is here and presented as some kind of beacon for us. I watched it through to the end, thinking there must be some reason why frog thought it worthy of a post. There wasn’t.

  31. Oh how I hate Key’s kind of thinking: “a balance can be struck between environmental impact and economic development”.

    He seems to be incapable of grasping that the economy is a subset of the environment and that the environment is the thing that sustains us. You can’t compromise on that, for the sake of a short term illusionary economic gain.

  32. Compare that with http://www.stuff.co.nz/national/politics/5094448/PM-backs-mining-souths-lignite/

    Prime Minister John Key has no objections to lignite being dug up and turned into briquettes near Mataura and thinks a balance can be struck between environmental impact and economic development.

    Speaking in Invercargill yesterday, Mr Key said he supported Solid Energy’s plan to dig up lignite and turn it into briquettes, saying the Government wanted companies such as Solid Energy, which is Government-owned, to expand.

    “At the moment companies like Solid Energy are growth companies and we want them to expand in areas like lignite conversion,” Mr Key said.

    Pretty lame!

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