Monday, June 6, 2011

Trade economy Versus domestic economy

Andrew D Atkin

I get a bit worn out with the media and government constantly promoting the idea that we need to export more to have a higher living standard. But why?

A good life means: Good houses, good food and good health. The other stuff is not fundamental. If your economy can provide for the fundamentals cheaply, and well, then it's hard to lose.

Obviously the trade economy is essential because there's too much that a country like New Zealand cannot make on its own, like laptops and cars etc. But the idea that the trade economy should define our base living standard is a bit ridiculous, I believe.

In a country like New Zealand the tools are at hand for everyone to own an affordable home, and have easy access to excellent food, because all these things are (or can be) provided for only too easily within the domestic economy. Yet, we have all these people struggling to make ends meet, even with the basics. So what's really going on?

The biggest evil is our under-supply in houses. If you don't get on top of that then a poverty class is guaranteed, because buyers have no choice but to bargain with whatever monies they have to not be the guy who misses out, or be forced into over-crowded conditions. This is the sort of thing that creates poverty - not a lack of exports, as such.

This obsession with the trade economy looks to me like an obsession with an economy of the type that allows rich people to go on exotic holidays every year and import massive SUV's. That is, the stuff that doesn't really matter, or matter as much.

New Zealand, just 50 years ago, had no difficulty housing and feeding itself with just one family member earning a 40-hour wage. For all our so-called economic growth we can't even dream of doing this today. So please, media and government, spare us this crap on "rising living standards". We're operating a rich man's economy, and that's an economy structured to make luxuries cheaper and the fundamentals more expensive.

If we reduced our international purchasing power, then that would mean less frequent computer upgrades, slightly less exotic clothes, and maybe cars that don't accelerate so explosively at the traffic lights. Who cares!!

We need to focus first on the domestic economy, and before anything that means getting rid of under-supplies on the fundamentals. Once housing and food is cheap, everything else becomes much easier. And I haven't spoken about education because research shows that money, after a minimal point, only wrecks it.

But why has our economy been engineered this way? Best guess: Population control. When the basics are cheap you can have as many kids as you want. Personally I believe in population control, but not like this. You should introduce direct caps via reproduction licences.

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