The ancient Greeks turned this tendency into a ritual called pharmakos. When plague, famine or another disaster struck a city, its people drove one of their own out to purge their misfortune. Victims of pharmakos had done nothing to cause the calamity, although they were usually considered socially undesirable.
The election campaign has revived this ancient ritual.
Finance Minister Nicola Willis has promised to empower the Commerce Commission to recommend breaking up Foodstuffs if the National-led government is returned in November.
If the Commission recommended separation, the government could force the two Foodstuffs supermarket chains, Pak'nSave and New World, to become independent companies. The rationale is that splitting the company would create more competition, thereby putting downward pressure on grocery prices.
Unsurprisingly, Foodstuffs is opposed to the plan. It commissioned a poll to see where most New Zealanders stand.
Forty-six percent of respondents supported the idea, with 37 percent opposed. Yet only 28 percent thought the policy would actually reduce prices. Forty-eight percent thought it would not.
So, at least 18 percent of respondents support the policy but don't expect it to bring down prices. That is the logic of ritual, not of effective policy.
But are the supermarkets to blame for rising grocery prices?
Whatever the merits of the competition case, supermarkets didn't cause the recent surge in food prices.
Rises in New Zealand's food prices have been in the OECD mid-range over the past 20 years. To be sure, there have been recent spikes but they largely reflect covid-era fiscal stimulus and global instability.
A few years ago, there was a sharp increase in general inflation, with food prices hit especially hard. That spike was caused by over-stimulus during covid.
The Ukraine and Persian Gulf wars have caused massive increases in the prices of fertiliser and oil, increasing both food production and transportation costs.
Food inflation hurts. People are struggling and understandably angry. Many want a target for that anger.
Governments and large corporations both make easy targets. New Zealanders love to hate 'useless politicians' and 'greedy capitalists' in equal measure.
By focusing attention on Foodstuffs, the policy invites voters to blame the company rather than the Government. But if the government is returned, Foodstuffs split up, and food prices keep rising, what then?
The public will be looking for another sacrificial victim.
Dr Michael Johnston is a Senior Fellow at the New Zealand Initiative. This article was first published HERE
If the Commission recommended separation, the government could force the two Foodstuffs supermarket chains, Pak'nSave and New World, to become independent companies. The rationale is that splitting the company would create more competition, thereby putting downward pressure on grocery prices.
Unsurprisingly, Foodstuffs is opposed to the plan. It commissioned a poll to see where most New Zealanders stand.
Forty-six percent of respondents supported the idea, with 37 percent opposed. Yet only 28 percent thought the policy would actually reduce prices. Forty-eight percent thought it would not.
So, at least 18 percent of respondents support the policy but don't expect it to bring down prices. That is the logic of ritual, not of effective policy.
But are the supermarkets to blame for rising grocery prices?
Whatever the merits of the competition case, supermarkets didn't cause the recent surge in food prices.
Rises in New Zealand's food prices have been in the OECD mid-range over the past 20 years. To be sure, there have been recent spikes but they largely reflect covid-era fiscal stimulus and global instability.
A few years ago, there was a sharp increase in general inflation, with food prices hit especially hard. That spike was caused by over-stimulus during covid.
The Ukraine and Persian Gulf wars have caused massive increases in the prices of fertiliser and oil, increasing both food production and transportation costs.
Food inflation hurts. People are struggling and understandably angry. Many want a target for that anger.
Governments and large corporations both make easy targets. New Zealanders love to hate 'useless politicians' and 'greedy capitalists' in equal measure.
By focusing attention on Foodstuffs, the policy invites voters to blame the company rather than the Government. But if the government is returned, Foodstuffs split up, and food prices keep rising, what then?
The public will be looking for another sacrificial victim.
Dr Michael Johnston is a Senior Fellow at the New Zealand Initiative. This article was first published HERE
4 comments:
It's such a stupid idea, one could be forgiven for thinking it came from the left. What was National thinking? They clearly weren't.
Just another example of Luxon's bullying, stifling any internal objections, in an attempt to emulate Labour even more.
Not a leader for NZ, not a leader that anyone sensible would follow anywhere.
Well said thank you Michael. I have found it alarming that a government should have the power to force private enterprises in the way suggested.
National jumped on this bandwagon (Something must be done about rising prices, this is something, so it must be done - Sir Humphrey Appleby Jan 8th 1988) to try to win a few votes.
Unfortunately all the other ideas about kicking the Supermarket villains had been taken by the other Parties so splitting Foodstuffs was the only one left.
The fact that Nicola Willis was “reduced to tears” when berated about this in Hamilton recently by a 4 Square owner, says much for the strength (or otherwise) of her convections.
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