Brian Easton

Listener 23 December, 2000.

Keywords History of Ideas, Methodology & Philosophy

Take two people, A and B, who do not know one another. Give person A $100. A has to offer to B a share of the $100, say $x. If B accepts the offer, then each keeps their share (that is, B keeps $x and A keeps $100-$x). If B rejects the offer then neither gets any of the money. That is the ‘ultimatum game’.

A response to an Economist article of 30 November 2000.

Keywords: Growth & Innovation; Macroeconomics & Money; Political Economy & History;

A summary of The Economist’s position of the New Zealand economic reforms might be:

New Zealand had to change its economic policies from at least the early 1980s. The path of the reforms was riddled with ‘blunders’ and ‘hubris’. The Economist enthusiastically supported them at the time, despite warnings of the weaknesses that the microeconomic reforms were extremist and the macroeconomic reforms faulty. The outcome has been a much poorer performance than other countries – such as Australia – which tackled the same problems with a more thoughtful, incremental and technically competent approach. This conclusion applies even ignoring the rising inequality and the social distress. Nevertheless, The Economist thinks New Zealand should continue to pursue the policies which have failed in the past. Victory is about implementing ‘right’ policies, not getting better outcomes.

The Story of Our Economy has been one of Secret – and Occasionally not so Secret – Debt Crises.
Listener 11 November, 2000

Keywords: Macroeconomics & Money; Political Economy & History;

In 1939 New Zealand faced a debt crisis. The government had to roll over £17m of debt and borrow a bit more to pay for imports in excess to export revenue. The Minister of Finance, Walter Nash went to London to obtain the money. The terms initially offered were so harsh that expressions like ‘bankruptcy’ were used. Privately, of course, for the public had no idea how close a run thing it was. Writing up this story recently led me to think just how much the story of the New Zealand economy has been one of secret – and very occasionally not so secret – debt crises. Listing all of them would take more than this column, but many readers will recall the currency crisis of 1984.

Listener 28 October 2002.

Keywords: Macroeconomics & Money;

Wanting to avoid the Great Depreciation of the 1930s, the leaders of the world established the International Monetary Fund in 1945. It has a number of purposes but a major one is to provide enough international liquidity should a 1930 type crisis ever occur again. Think of the IMF as the international equivalent of a reserve bank, and don’t confuse it with the International Bank for Reconstruction and Development (a.k.a. ‘World Bank’) whose purpose is to provide international capital for development investment, not short-term liquidity.

Should the Economic Reforms be Intensified or are New Policies in Order?
Listener 14 October, 2000

Keywords: Growth & Innovation; Macroeconomics & Money;

There is a debate going on about what to do about the economy. The loudest view is that it is the fault of the new government, and that we only have to return to the policies of the last fifteen years and everything will come right. There are three reasons why this is not very compelling. First, the Labour-Alliance government does not seem to have changed policy that much. Second, the ‘collapse’ began in early 1999 or even 1998, well before the new government took power. And third, over the fifteen years the performance of the New Zealand economy has been the worse in the rich OECD, inflation excepted. So the past policies have failed, and are unlikely to succeed in the future.

Dictionary of New Zealand Biography, Volume Five (1941-1960), 2000, p.504-506.

Keywords: Political Economy & History

William Ball Sutch was born in Southport, Lancashire, England, on 27 June 1907, the third of five children. He arrived in New Zealand at the age of eight months, when his family migrated to Wellington. His father, Ebenezer (Ted) Sutch, was a journeyman carpenter, and his mother, Ellen Sutch (née Ball), a dressmaker. Both had determined characters, and were widely read in the social fields, despite having only elementary schooling. They were staunch Methodists and were involved in the United Ancient Order of Druids Friendly Society. The household allocated various tasks to each child, independent of gender. Bill’’s included making the soap, jam, pickles and Yorkshire pudding, polishing the floors, turning the mangle, bringing the findings (such as cotton thread) for his mother’’s work, and minding the baby. His strong-minded and financially canny mother, whom he adored, gave him a lifelong commitment to women’s causes.

Listener 30 September, 2000.

Keywords: Macroeconomics & Money;

It is extraordinary how much economic debate in New Zealand is oblivious to any evidence. Recent advocates of the New Zealand economy going into monetary union with Australia or the US seem quite unaware that it has spent over half of the time since 1840 in one, and is currently in one. We can learn from both experiences, but the lesson is not what the advocates want us to hear.