Is the New Zealand economy Doomed?

 

First understand how economic development works. Capital investment leads to handsaws being replaced with chainsaws, which increases productivity per-hour worked. But capital investment only happens when investors decide your country is a better place to invest in, over some other country. That's the concern.

When governments raise taxes, over-empower union movements, spend too much on welfare, advance protectionism, take bribes (cronyism), waste recourses on political projects, etc, then investors will [rightly] see your country as a bad place to invest in. In turn your nation will be left behind, as the rest of the more capital-friendly world takes off. 

Socialist governments do this. They scare away investors and the result, inevitably, is declining productivity which leads to poverty. Venezuela is the perfect example. A once rich nation that then voted like fools, with a now desperate and growing poverty class. So what have the Venezuelan people done? Learnt nothing (sadly) and voted for more socialism. 

This isn't where New Zealand is today, but there's a growing threat that we should be thinking seriously about - and the threat is literally staring us in the face.

The current Labour government is making bizarre economic mistakes, largely driven by misguided ideologies and its powerful special-interest base - the trade unions. But this is not the greater problem. The greater problem is in the fact that Labour are still extremely popular, even though their performance record is tragic - they've failed with almost everything. The voters blindness, more than anything, will be scaring investors. 

The critical point, is that the sensibility of the voter is much more important than the sensibility of the government of the day. The state of the voter tells investors what the government will look like tomorrow. 

Sure, if a National-Act government gets back in power, and eventually they will, they still won't give confidence to the all-important investors - and no matter what constructive reforms they might pass. Investors can see clearly enough that there's a dominant voter base in New Zealand easily won-over by the socialist side of politics. So regardless of what a National-Act government might do, investors can know that it will presumably be undone by the next leftist government, a few years down the track. 

Sadly, New Zealand has become a bad place to invest. Capitalists and entrepreneurs will be looking to other countries that are demonstrably less risky. The destructive effect of deflected investment will snowball...

A secondary effect of a failing New Zealand will be the rapid out-migration of intelligent New Zealanders to Australia, gutting New Zealand of its most economically important people. Insofar as this happens, and insofar as remaining New Zealanders keep voting left, it might well doom the nation economically.

Time will tell. But again, already New Zealand is recognised as a high-risk nation for investors. The cost can only be paid for one way: Low wages, a talent exodus to Australia, and the replacement of the native population with people from [mainly] India and China.

The individuals solution? Migrate to Australia before New Zealand can't afford to take care of you, in old age. That would be the less risky option.

The national solution? Educate the nation on how economic development works. Make them better voters. Or maybe even demand that they get a basic civics education before being allowed to vote at all.

The video below is my own best attempt at a critical education (about 35 minutes).

The included video is a more direct expression of how economic development works.

-Andrew Atkin

Do RoboTaxis need to be a Government Initiative?

Here's the commercial bottomline. Driverless technology is a dream come true for car manufacturers. They can at last offer fresh appeal to the consumer that goes beyond the cosmetic and trivial. Having a car that can drive itself 90% of the time, so you can sip your coffee and even play on your phone, is an advantage that will make plenty of people hungry for a brand new car.

However, level-5 automation (which is where the car does everything and requires no human supervision at all) is a car manufacturers nightmare, because Level-5 automation means robotaxis. And robotaxis will provide a service that will decimate new car sales.

Think about this. You dial up a car with one touch of an icon, it gets to you in 60 seconds, it drives you (or you drive it, if you like) to the front door of your destination, and once you get out you simply press the "log off" button and the car moves on to the next customer. And because most cars would be super efficient single-seaters, to match real demand, it will cost about a third of what you pay for your traditional car - not including parking savings.

It's obvious. Once a commuter robotaxi system comes out, people will see that most cars will be close to going the way of the CRT screen - that is, not even worth the real estate they occupy. Who's going to buy a new car for $50,000 feeling sure enough that they won't be able to sell it for $2,000, just a couple of years down the track? Nearly no one. 

Have the automotive manufacturers worked this out? They're not stupid. Of course they have.

I've already described the Step-1 for implementing a practical robotaxi system, which could have been initiated five or more years ago (see here). Clearly you should employ small commuter cars first, and those commuter cars should operate in driverless mode only when empty-sending themselves to customers. 

Safety risks are trivial with a tiny car that's nearly impossible for pedestrians to miss, and weighing a mere third of a conventional sedan. To stress, when people use their commuter car, it will not be operating as a driverless car. To start, people should have to drive the cars themselves so to eliminate all concerns (real or perceived) associated with riding in a driverless car. Full driverless operation can come later.

With this simple model, alone, your robotaxi network will support at least 70% of urban transport demand and collapse new car sales to the end of it, bankrupting all the major automotive manufacturers overnight. At this point, nearly everyone will choose to hold onto their existing car or buy secondhand, over buying new.

Automotive manufacturers (and software developers) want robotaxi like you and I want a hole in the head. If they say they're trying to build a robotaxi system, you can bet your left arm that whatever it is they're creating it will be designed to fail - or be prohibitively expensive. They'll co-opt robotaxi only to kill it - and kill its publicly perceived potential.

But what if automotive manufacturers are in love with helping the world, and wilfully fall on their sword? If car manufacturers don't try to kill robotaxis they are abandoning their responsibility to shareholders, which is literally criminal. The corporate machine is designed to make money - only. Robotaxis must die if they can be rid of them. Nothing personal. People are lovely but the corporate machine will dictate.

This is why, I believe, every example and discussion on driverless cars that I've thus far seen never brings my simple model to attention. All proposed robotaxi systems are hugely expensive, do not match real demand, and are loaded with safety risk-factors that do not need to exist. The CEO's are doing their job? Probably. 

And this leads to my conclusion. What we're seeing is a market failure. When monopolistic dynamics seriously interfere with [otherwise] capitalism at its best, then this is where we can argue for the government to step in.

It might be time for governments to investigate the conflict of interest between robotaxi development and the drive for new car sales. From there, the government can choose to develop a basic robotaxi system for themselves - and be the first competitive force to hold the automotive industry to account. 

Car manufacturers are not going to fall on their swords, so maybe we need government to give them a little hand?

-Andrew Atkin

Are we all still working class Grinders?

It's interesting that so many of the great thinkers and explorers of classical times were rich - often very rich. No doubt a major reason why people such as Charles Darwin were able to achieve what they did, in their time, was because they were free from that all-consuming preoccupation with making a living.

Another thing that's interesting, was the relationship the regal elite had towards the other class of wealthy people, that they called 'new-money [people]'. The pompous elite were old-money people - their wealth was mostly inherited. As it has been said, old-money people were not typically fond of the new-money people, in an interpersonal sense...

So why did old-money people tend to snub the entrepreneurial new-money people? Apparently, it was because new-money people were still preoccupied with money. That made them boring to the old-money people. The new-money people were probably unrefined to them, as well. New-money people were commercially savvy, but they were still working class as people. They were still all Donald Trumps - not Prince Charles's.

The true elite don't think about money. They just have it. They're past money as a preoccupation and in turn they operate on a "higher" level. It's the working classes who can't get the preoccupation with success out of their minds. And that is the key point.

I look at my society, today, with its obvious capacity to let everyone live the good life, and without the tedious (non-independently directed) education, and without the long working hours, yet we still talk about becoming commercially successful as though it's expected to be part of our religion - or, more specifically, as though commercial success is something we have to so specifically strive for and worry about.

We're still mentally zoned like the old working classes - yet we shouldn't be. There's no need if we organise things properly. Our technology and production infrastructure have come too far. Success should be easy for practically everyone in the industrialised world, today.

Frankly, I think it's a trick. We're tax slaves. And we're driven to work so hard because we're afraid of feeling inadequate if we don't. Look closer and you'll see that we don't aspire so much for success - but the avoidance of shame. That's not freedom. That's your ego-hungry parents stuck in your head.

And alas, the exaggerated concern with success puts our minds on a trivial plane, that ultimately makes us intellectually sterile. Profitable? Sure. But sterile.

I hope one day we can see through the trick and get things in perspective. And collectively focus to improve our systems so to avoid meaningless consumption and stupid inefficiencies. That is, structure our townships in a way that takes full advantage of modern technologies. It's not hard.

Then, we can get over money and success - at last. And free ourselves from that grinding working class mindset to join the pompous old-money elite. Much more relaxing - much more interesting. Success for life - not life for success.