Friday, September 20, 2013

Don’t try to diversify me…. read some history

Recent statements by the Deputy Leader of the Opposition and the Leader of the green Party claiming that the Government has failed to diversify the N.Z. economy are revealing of at least two concerns:

  1. The lingering notion that is the government’s role to “diversify economies” and that they should, forthwith, diversify. Worrying enough but likely to mean little more than the fact that the statement was made and endorsed for the usual petty reasons that seem to amuse politicians and make them feel better, but much more worrying is the possibility that:
  2. These people and their followers believe that it is possible for the government to diversify the economy, that government “knows” how to do that, that having chosen to diversify it would be able to and that its a good idea.

These ideas are especially loathsome in N.Z. where we have had considerable and bitterly costly attempts to macro and micro manage  economies in areas such as electricity production, fuel production, forestry, motor assembly, shoe manufacture, food manufacture and banking. In each case the result was heavy losses, eventual joblessness and high human costs as well as the imposition of high fiscal costs on generations.

Those struggling with the principles, the evidence and the experience simply need to do some serious – not politician’s – but serious study of history.

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