Scoop Feedback: Keith Rankin Demand Versus Supply
Dear Sir or Madam
Concerning the latest Keith Rankin column, Demand Versus Supply, the interesting description of the economics of prostitution seems marred somewhat by the following passage: "An efficient economy was an economy in which supply was responsive to changes in demand. By that definition of economic efficiency, the pre-1985 economy was efficient. Almost everybody participated positively, choosing careers that offered both personal and financial rewards. On the other hand, the post-1987 economy, with its considerable misallocation and non-allocation of labour, became quite inefficient".
In rather obviously pushing for what he describes as a "genuinely free post market economy" Mr Rankin seems to have crudely edited New Zealand history to suit his argument. Anyone who can describe as efficient the pre-1985 economy with its imports, exports, labour force and taxation 'controls', is away with the fairies. Back then many of us journalists came to believe that we were getting the worst of two possible worlds...we had neither an efficient government centrally run economy nor the benefits which can come from competition. Don't get me wrong, I'm not in favour of a savage marketplace because that basically gives participants encouragement to create artificial monopolies in goods or labour and squeeze them for all they're worth. But somehow, enlightened self interest and energy has to be harnessed for both the individual and common good.
Using the single consistent (if not necessarily the best) measure of unemployment going back years (Registered Unemployed), some of us older journalists remember unemployment becoming 'endemic' or 'intrinsic', about 1976/77, reaching its first peak about 1984 before falling back a little in 1985 and then resuming its climb to a peak in 1991 before falling again.
Perhaps a closer look at New Zealand's economic history might help Mr Rankin introduce a little more sophistication to his admittedly interesting analysis, a la Rifkin's "The End Of Work".
Regards, Bill Alexander