Thursday, 20 March 2008

The failing policies of the present

Now here's an economist doing what economists do best: economist Paul Walker, who posts at the Anti-Dismal blog (as in, anti "the dismal science"), summarises a post by economist Frederic Sautet at the Austrian Economists blog looking at productivity growth in New Zealand.

Sautet has looked at New Zealand's productivity growth over the last decade for labour, materials and capital (so called multifactor productivity), and for labour alone, and what he's discovered is that ... growth in both crucial yardsticks is going backwards.

Like all decent economists, he seeks a reason for this shameful outcome of a decade of Hard Labour government and has little trouble finding it and pointing it out -- it's government failure, he says:

The current Labour-led government has criticized the "failed policies of the past" (i.e. the reform period and the deregulation of the 1980s and 1990s) for not delivering enough. Instead of continuing to improve the institutional context for socially-beneficial entrepreneurship, Prime Minister Helen Clark decided, among other things, to increase government spending (and the number of government bureaucrats), re-regulate the labor market, increase taxes (i.e. distort the tax structure, thereby rejuvenating the tax planning industry), intervene in utilities markets, provide more welfare, reintroduce corporate welfare, and renationalize businesses. All this is surely reflected in the weak growth in multifactor productivity...

Read: The "Failed Policies of the Past" vs. the Bad Policies of the Present: Can Productivity Figures in NZ Tell Us the Truth?

1 comment:

  1. PC, I would like to emphasize the quote from Ludwig von Mises which you happily used in dismissing quantitative economics from the other thread on " When economists make predictions, just walk away ...", which I have cut & re-pasted below:

    Ludwig von Mises :
    Economic prediction can never disclose anything about the quantitative relations concerned. There is not, and there cannot be such a thing as quantitative economics ...

    In fact, my toilet cleaner who again alerted Falafulu, saying that PC shouldn't have posted, on this very thread, about the subject of economic Multifactor Productivity.

    I asked my intelligent toilet cleaner why, and he said, that Ludwig von Mises, would have surely dismiss economic Multifactor Productivity because it is quantitative. Ludwig von Mises said as that economic is a discipline that can't be quantitative. I said to my intelligent toilet cleaner, but sure that the equation for economic Multifactor Productivity (see wikipedia link above) is only qualitative and not quantitative which is perfectly in accords with Ludwig von Mises' definition that economic is only qualitative.

    His reply was, NO. The equation for economic Multifactor Productivity is in fact quantitative and anyone who is going to argue otherwise, must be ignorant & disingenuous.

    After this second tip from my intelligent toilet cleaner, I would like to ask a question to PC & LGM, (which they both seem to me that anything and everything in this world that are non-Mises, non-Reishman or non-AynRand must be completely dismissed, no ifs, no butts) if the point raised by my toilet cleaner that economic Multifactor Productivity is in fact a quantitative concept or not?

    If in fact that the toilet cleaner is right, then perhaps PC could delete those paragraphs that covered or mentioned economic Multifactor Productivity, since Von Mises wouldn't have approved the concept because it is quantitative and not qualitative.

    And another one point goes to the toilet cleaner (never read Mises in whole life) who tipped Falafulu about the self-contradiction made by PC (and of course silently by LGM , since he hasn't picked it up yet) and zero point goes to PC and LGM.

    Now, the total score is :
    Intelligent toilet cleaner : 2
    LGM and PC : 0

    Yeeha, bring it on folks.


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