Thursday, October 19, 2017

Good luck with that, Jacinda

The people have spoken - well, a minority of them anyway. We have a coalition government that doesn't even have a plurality of the votes. After a month of dithering, the leader of the New Zealand First Party, Winston Peters, who lost his own electoral seat in last month's election and whose party was reduced to 7% of the vote, decided to form a coalition with the New Zealand Labour Party. Combined, the two parties won 44.1% of the party votes - less than the National Party's 44.4% - and yet they have been able to form a government because the Green Party, with 6.3% of the vote, is prepared to support them on 'confidence and supply' (i.e. on budget votes). 

It is not as if the partners to the polyamorous affair have much in common. New Zealand First is a nationalist, protectionist, anti-immigration party and its leader moulds himself on Robert Muldoon, the authoritarian New Zealand prime minister from 1975 to 1984 who took the country to the verge of bankruptcy. Labour is a classic, left-of-centre social democratic party, and the Greens are a typical 'watermelon' alliance of environmentalists and Marxists.

The new prime minister, Jacinda Ardern, is not only New Zealand's youngest premier in over a hundred years, she is the least experienced, having never held a full-time job outside of politics and never having held even an executive position in government. She will need to rule over a rag-tag coalition with less mandate than National to govern and to keep the oldest political fox of them all, Winston Peters, from eating all her chickens. I give it less than twelve months until her government disintegrates and we have another election.

In the meantime, I wish Jacinda Ardern and her coalition good luck and implore them not to stuff up our great little country too much before the big kids take over again.

Tuesday, October 17, 2017

Greens enable Winston Peters to hold NZ to ransom

I wrote recently about why I thought New Zealand's electoral system was the dumbest in the world, and so it has proved to be. Nearly a month after the election we still don't have a government and while I don't think this is in itself a bad thing, watching our politicians jockeying for power has been unedifying. All the blind ambition, self-aggrandisement and incompetence we have come to expect of our politicians has been on display.

The uniquely unqualified, inexperienced and unproven Labour Party leader, Jacinda Ardern, who will become our prime minister in a Labour-led government, has been displaying a quiet confidence in her public comments. Bill English, the current prime minister and leader of the National Party, which won the largest share of the vote, is more inscrutable. Meanwhile, Winston Peters, whom the media have dubbed the 'kingmaker', cannot contain his delight at being the centre of attention again and continues to make the country wait for his decision. As the Guardian newspaper put it, Winston Peters and the anonymous board of his nationalist New Zealand First Party are holding the country to ransom.

This is all pathetic but the prize for the most damaging self-indulgence must go to the Green Party, the leftist environmentalists who have refused to consider negotiating with the centrist National Party, preferring to give Labour their proxy in coalition negotiations. This has, of course, strengthened Winston Peters' hand, an outcome for which their supporters surely could not have voted. A National-Green coalition could govern without New Zealand First's support and thus even the pretence of negotiations between these two parties would have taken the wind out of Winston Peters' sails. Many commentators have expressed disappointment with the Green's holier-than-thou attitude with even former Party MP Nandor Tanczos calling for his party to enter into negotiations with National.

Winston Peters may be holding the country to ransom but it is the Greens who have given him the means to do so. I hope the voters remember that when it comes to the next election, which, I am picking, may be not that far away.

Monday, October 16, 2017

The Hypocrisy of Hollywood

Hollywood has closed ranks against one of its most successful producers, Harvey Weinstein, who has been accused by dozens of actresses of sexual harrassment and even rape. Weinstein has been kicked out of his company and expelled from the Academy of Motion Picture Arts and Sciences. You may think that shows the American film industry has moral integrity, but I don't view it that way. Ironically it was Weinstein himself who said in 2009 that Hollywood 'has the best moral compass' while defending Roman Polanski, the director who is still on the run decades after pleading guilty to raping a 13 year old girl.

Hollywood has known for years that Weinstein was a sexual predator. In 2006, singer and actress Courtney Love publicly warned young aspiring actresses to avoid him. In 2013, comedian Seth MacFarlane joked on stage at the Academy Awards about Weinstein's predatory nature. Actress Rose McGowan, who says she was raped by Weinstein, has condemned Ben Affleck, himself the subject of sexual harrassment claims, for maintaining that he did not know about Weinstein's behaviour (incidentally, McGowan made the claim on Twitter and the social messaging service responded by suspending McGowan's account, a demonstration of that company's poor judgement when it comes to who gets suspended and who doesn't).

One could excuse Hollywood's convenient blindness where Weinstein is concerned if it wasn't for the industry's appalling hypocrisy. The American film industry presents itself as a paragon of liberal sensibility and tolerance, most recently in the attacks of many of its most prominent members on President Trump (e.g. Merryl Streep's speech at the Golden Globe Awards), but the Weinstein affair reveals that misogyny and abusive behaviour in the industry is far worse than anything Trump might have done. 

The holier-than-thou self-congratulation of the industry is sickening. Whether it is director James Cameron on Donald Trump or Leonardo di Caprio on climate change, those who have made a name for themselves directing or acting in films seems to think they have some special sanctity on the political and moral issues of the day. My view is the opposite - their privilege and fame has often distorted their perspective and they have little idea of the challenges facing the ordinary people who fill their box office coffers. They cannot understand, for example, why so many Americans voted for Trump, because they haven't suffered the economic and social privations of people in the 'fly-over' states whom they hold in such contempt. 

It is is the self-righteousness of Hollywood's leading lights that makes Weinstein's crimes all the worse. Perhaps if they all had a little humility, we could condemn Weinstein as an isolated fiend, but I am sure it is their very arrogance that enabled Weinstein to get away with his behaviour for so long.

Wednesday, October 4, 2017

The Mass Customisation of Politics

Business in the social media age is all about mass customisation. Industries such as telecommunications, banking and transportation have figured out that the key to success is to have economies of scale while allowing individuals to have products and services that are tailored to their needs. The commercial behemoths of old that insisted on one-size-fits-all have fallen by the wayside as new businesses exploit flexible manufacturing and service delivery models to accomodate individual consumers' needs.

Politics in the 21st Century is the same. Voters are increasingly unwilling to be boxed into traditional political definitions - left, right, socialist, nationalist. etc. Ironically, this is happening at a time when political labels such as 'extreme', 'Fascist' and 'Nazi' are being bandied about with increasing abandon and usually without justification. 

Many people, myself included, have a political philosophy that does not sit comfortably with most established party manifestos. We are a little bit left, a little bit right, and a whole lot completely outside the spectrum. This is not the same as being purely pragmatic - we have a philosophy that is well thought-out and articulated and are prepared to vote to maximise its realisation. We have little in common with the David Camerons and John Keys of this world who don't believe in anything much and who are willing to do whatever it takes to stitch together a coalition to keep them in power. We may vote for the lesser of evils but it doesn't mean we will accept the bland and uncommitted.

So how do we achieve mass customisation in politics when many countries seem to be locked into a traditional left-of-centre/right-of-centre, two-party paradigm? Partly it is achieved through breaking down the paradigm, and we have seen this with the rise of third parties in many Western countries. The other way it can be achieved is through localisation of politics.

Politics in many countries in recent decades has been characterised by greater centralisation. The European Community is the most obvious example and in the United States we have seen the growth of the federal government at the expense of the state or local government. The problem with this is that it means greater homogenisation and less opportunity for people like me, whose views don't fall into the traditional political buckets, to have our views represented. Localisation of political decisions means we can enjoy, at least at a local level, a more flexible set of policy setttings, and if we are not happy with the decisions of our local government, we can seek out somewhere more compatible with our political views.

It was the intention of America's founding fathers. particularly Jefferson and Hamilton, that the US Republic would be a place where different communities could experiment with different political and social settings, subject only to the universal rights enshrined in the Constitution. America today has become a highly centralised bureaucracy with the Federal Government interfering in every area of Americans lives from health care to what children eat in their school lunches. The complete dominance of US politics by the two major parties means that people who don't fall into the traditional Democrat and Republican camps have no real alternative, except that last year they chose a rebel Republican in Donald Trump to be president. Trump's support came from the disaffected middle and working classes, who rejected the big statism and identity politics of the Democrats and the social conservatism and crony capitalism of the Republicans, and is therefore understandable in terms of the mass customisation paradigm. Brexit was similarly a rejection of the traditional political choices.

Those who insist on seeing today's politics in terms of past dichotomies will continue to be surprised and bewildered by voters' choices. I think that the rejection of tradition political boundaries it is a very positive development but it needs to be accompanied by a decentralisation of political power if voters are to have genuine choices.

Tuesday, September 26, 2017

The Phoney War in NZ politics

In my last post I wrote about how MMP is the world's worst electoral system, but I have to concede that it has one positive attribute (which NotPC points out in this post on Winston Peters) that following every election there is a period of no-government (well, strictly speaking, 'caretaker' government) while the political parties jostle and negotiate to form a coalition. During this political equivalent of the Phoney War, the Wellington political establishment is in a stalemate and no decisions are made on anything of consequence, and that is a very good thing.

The New Zealand Parliament at any time has five hundred pieces of legislation in the pipeline from conception to royal assent. It is a relentless sausage machine that spits out laws that affect all of our lives, often in significant and negative ways. The sheer volume of legislation going through the machine at any time defies belief and no one could seriously argue that all five hundred bills currently in the works are critically important to the functioning of our society. Anything that slows down such a relentless machine cannot be a bad thing.

We need to constrain the ability of our governments to pass legislation. New Zealand has no upper house (having abolished it in 1951) or other constitutional checks on the ability of the House of Representatives to make laws. I have written before about how I like the Texas approach, where the legislature meets for no more than 90 days every two years, which means it simply doesn't have the time to pass too much legislation and has to be very selective in which laws it passes. This is surely one of the reasons Texas has been one of the few success stories in a moribund American economy in recent years.

I hope the coalition negotiations surpass in length those after the 1996 election, which took more than two months. In fact, if those involved could draw out the negotiations for about three years, the country would be much better for it.

Thursday, September 21, 2017

The World's Dumbest Electoral System

New Zealand has the world's dumbest electoral system. Saying such a thing in this country provokes the same reaction as when you say, "the world is not suffering catastrophic global warming", but sometimes one must speak truth to power. There is a reason why only one country in the world had the system before New Zealand adopted it and that country (Germany) has special historical reasons for having a system that ensures no single political party can ever govern alone.

Under our Mixed Member Proportional (MMP) system, you get two votes - the first determines who becomes your local electorate member of parliament, the second is for the party you prefer. The complication comes from the fact that it is the party vote alone that determines the make-up of parliament, which means the electorate vote counts for nothing in terms of legislative power. In effect, winning electorate seats costs a party list seats. A party can get into parliament if they get at least 5% of the party vote even if they have no electorate seats, or if a party gets at least one electorate seats, it's party vote counts as well even if it gets less than 5% support. Confused? Well, you are not alone - by some estimates, 80% of New Zealand voters do not understand how the system works.

The complexity of the system produces some weird effects. Consider the following two scenarios. 


In the first scenario, a centre-left government comprising Labour, New Zealand First and Greens is the most likely outcome because even though National has far more seats than Labour, the latter will be able to form a coalition with fellow opposition parties the Greens and New Zealand First (note that for the sake of simplicity I have ignored smaller parties and the impact of the race-based Maori electorates, which further complicate the picture).

The second scenario is almost exactly the same as the first except that the Greens get 0.1% fewer votes. This means they would be wiped out because they did not reach the magic 5% threshold to get party list seats in parliament (assuming, as is likely the case, they do not win any electorate seats). National would have an overall majority of seats and be able to form a government. So, 0.1% of the votes can completely change the outcome and make the difference between significant representation in parliament for a minor party or none at all. 

The libertarian ACT Party, which is polling at 0.3% in the latest poll, will likely have at least one seat in the next parliament because they will win the Epsom electorate, whereas the Green Party, which is hovering around 5%, may get none. As a libertarian, that is an outcome I would like to see but it is hardly fair.

The system could be easily fixed by separating the effects of the two types of vote. The party vote should determine only the proportion of the party list seats rather than the overall make-up of parliament. In other words, winning an electorate seat wouldn't cost you a party list seat. I believe this is exactly how most New Zealanders imagine MMP works, so it would be aligning the system with expectations. Under this proposal, the 5% threshold could be abolished - or at least lowered to level needed to get one party list seat - and this would eliminate the bizarre effects outlined in the second scenario above.

It is time for a change in our electoral system.

Friday, September 15, 2017

Capitalism is about trust

I was listening to Canadian psychologist Jordan Peterson's podcast the other day and he touched on a subject I found really interesting - the importance of trust networks in business transactions. He was talking about eBay (and it is equally true of New Zealand's equivalent, TradeMe) which, when it started out, had third party agents who would guarantee delivery of the goods people had purchased and payment to the seller. Very quickly those agents became redundant for the simple reason that the vast majority of people trading on the site were honest, often scrupulously so. This has been my personal experience - in fact, I have never had a trade in which I wasn't largely satisfied with the result.

eBay works on reputation, which it has formalised in its feedback ratings, but even without a track record of good ratings, the buyers and sellers tend to deal with each other with honesty and trust. I am not sure why people would be surprised by this as it is the common experience of most people in business. Even in the second decade of the 21st Century, many business deals are still sealed with nothing more than a handshake or, at most, emails of offer and acceptance, and in the vast majority of cases there is never a dispute that can't be resolved with a telephone call. I have had my own consulting business for about twenty years and incredibly I have never not been paid for services delivered (although sometimes I have needed to chase payment) and I have never had a dispute over the quality of the services I have delivered. I accept that the nature of my business is one that is especially dependent on personal relationships but I am sure most businesspeople, at least in civilised Western nations, could cite similar experience.

The popular impression of those not in business is that capitalism is dog-eat-dog and everyone is out to rip off everyone else. In my experience this couldn't be further from the truth. Businesspeople are generally incredibly ethical. This shouldn't be a surprise because capitalism by definition is all about voluntary relationships between people and no one wants to engage with another person they do not trust, particularly when there is a financial cost. A free market very quickly exposes fraudulent, shoddy and inadequate products and services, particularly in these days of social media and rating websites like Yelp. A restaurant that gives its customers poor service or a roofer who leaves a home owner with a leaky roof is likely to be exposed online very quickly. On the flip side, good quality products and services are extolled to the world.

The exception is in markets where there is a government imposed monopoly or cartel. Obvious examples of this are the airline industry and health sector, which are so regulated and controlled that you could hardly call them free markets. We endure appalling service in both industries, largely without complaint because complaining would be futile. The other sector where poor service is uncomplainingly accepted is government itself. We often put up with appalling treatment by government agencies and accept that we have no alternative or even the right not to use the services offered.

Government also undermines the trust we see in free markets indirectly through welfare and income redistribution policies. When you get something for nothing through state welfare, you don't need those trust networks that business people rely on. The idea of a fair exchange is corrupted because the state promotes a sense of entitlement - that poor people have a natural right to the earnings of taxpayers - which undermines the integrity of people on both sides of the transfer. There is not even the sense of generosity and gratitude that results from acts of charity. Welfare debases human relationships, which is, I think, the reason why crimes like child abuse are so high amongst welfare dependents, even compared with working people with the same income (see for example this report [PDF]).

Capitalism, perhaps ironically in view of many, brings out the best of human nature.