Saturday, October 22, 2022

Ananish Chaudhuri: Legitimate Grievances Must Be Heard

We shun protesters at our peril

I am not a fan of Brian Tamaki. But one does not need to admire or respect Mr Tamaki to concede that many of those gathered under his banner have legitimate grievances. It is folly to write them off as misguided, racist, homophobic, transphobic or antisemitic. Of course, some of them are. But then all political parties harbour such elements within their ranks.

In many ways, the support for Mr Tamaki mirrors the support for Donald Trump in the United States and this is driven by similar motivations.

Commentators have tended to write this off as a clash of cultures; right-wing values espousing entrenchment of the traditional patriarchy against progressive values arguing for greater inclusivity.

Yes, there is a clash of cultures here, but it is not what most commentators think.

It is also a clash of the classes.

One fact not adequately appreciated by our ruling class is that globalisation has not been a boon for everyone.

In poorer countries like Bangladesh, globalisation via trade has lifted millions out of a life of poverty. But in developed countries, the benefits of globalisation have accrued only to those at the very top.

Those in the middle, particularly those without college degrees, have seen their standards of life fall precipitously as many of the jobs that they had traditionally held were outsourced.

This has come to be known as the “elephant curve” of inequality with gains to the poor in the global South and to the very rich in the North.

Like the US, NZ society is beginning to come apart at the seams. Our inequality as measured by the Gini coefficient is higher than the OECD average, while our productivity and per capita GDP are lower than the OECD average.

Our zero Covid mindset has exacerbated the class and cultural divergence.

Faced with the pandemic, the Labour Government responded with lockdowns that were more stringent and longer lasting than most others. As it became clear that these lockdowns were going to be recessionary, the government set off on a massive program of deficit spending accompanied by printing money to keep interest rates low.

The “laptop class” of white-collar workers who could keep working from home were not affected by the lockdowns. They took advantage of these low-interest rates to set off a massive boom in both house and share prices. But the blue-collar workers bore the brunt of the downturn. Their kids missed out on school. They got no advantage from the low-interest rates since they do not have enough money saved for a down payment. The net result of this will be a dramatic increase in current as well as inter-generational inequality.

The massive money printing has now led to a sharp increase in the cost of living. Blue-collar workers are now faced with a double whammy. Rising costs and falling real wages.

The Australian economist Gigi Foster refers to New Zealand (along with China, USA, Canada and Australia) as “Covid Cultists”. Foster says:

Over time, Covid Cult governments changed their objective from ‘flattening the curve’ to eliminating the virus, a transformation that necessitated stronger suppression of dissent and the tightening or extending of restrictions. These countries suffered enormous collateral damage, widespread abuse of power, and mass invasion of privacy.

The first nine days of our April 2020 lockdown were considered “unlawful” by our courts. Both vaccine mandates and the managed isolation and quarantine system were deemed partially illegal. New Zealand’s prime minister now has the unilateral authority to suspend Parliament on the advice of the Director General of Health. New Zealand citizens were denied the right to return to their own country.

The coercive vaccine mandate, in particular, caused massive damage to social cohesion.

In August 2020, Fiona Godlee, Editor-in-Chief of the BMJ commented that we are “heading for vaccines that reduce severity of illness rather than protect against infection, (and) provide only short lived immunity…As well as damaging public confidence and wasting global resources by distributing a poorly effective vaccine, this could change what we understand a vaccine to be. Instead of long-term, effective disease prevention, it could become a suboptimal chronic treatment”.

But even conceding value for the vaccines, Denmark, another country of 5 million people has managed to get higher vaccine take-up by trusting its citizens, something we refused to do here although New Zealand is also recognised as a high-trust society.

The people gathered under Mr Tamaki’s banner are there because none of the main political parties seems willing to recognise or address their grievances. If we really want to keep Mr Tamaki out of the mainstream, then the only option is to accept the validity of those concerns and articulate them in the political arena. We shun these protesters at our peril.

Ananish Chaudhuri is Professor of Experimental Economics at the University of Auckland. Besides Auckland, he has taught at Harvard Kennedy School, Rutgers University, Washington State University and Wellesley College. This article was first published HERE


Anonymous said...

Thank you, Professor Chaudhuri. I agree with you. I don't think the government was wrong to act as it did, as the whole world was in doubt - I guess they did the best they could, as did their advisors. That was then.

I think where they have failed seriously since is in being so ideologically driven that they would not rethink their purpose in governing. NZ does not need a re-organised broadcasting system, co-governance is patently contentious, Health needs re-organising - ultimately - but practically demanded they got on with BAU. They have flailed about, throwing money mindlessly at another consultancy, project, endowment etc. We seriously need a change, but it appears that the possible alternatives need to heed your advice and be much more thoughtful in their approach.

Anonymous said...

The author's title at AU is interesting as Professor of Experimental Economics.
I don't want to make fun of it as I have respect for Professors generally and I appreciate the insights of the article.
However I am wondering if a certain Awesome RBNZ person would have attended an experimental economics course. His experiment in NZ's economy seems to lack a focus on social outcomes.