Posts Tagged ‘redistribution’

GST exemption – follow-up comments

Tuesday, October 5th, 2010

James Caygill replies to David Choat:

First off, as I’ve said privately to David, I think this whole Two Views thing is fantastic – I hope others agree.

Second, a few things that need some correction/clarification. David risked putting words in my mouth, but pulled it off pretty well. I guess, right now, I would say that I’m in favour of a simple, exemption-free GST, and see it as an enduring achievement of the Fourth Labour Government – much like a lot of their enduring achievements, which while it’s unpopular to say, have stood the text of time. But I consciously didn’t want to get into that debate first up, I preferred to let it emerge out of our two pieces. I’m genuinely interested in arguments against GST as the pure system I think it should be – but they need to be clear and coherent arguments. I don’t think what I’ve seen from Labour so far meets that standard.

If you can convince me that GST (especially at 10 or 12.5%) is silly and we should abandon it, then I’m willing to move, at which point the tax should be abandoned, not kept in a half-hearted form. In that sense you’ll find me currently in favour or the tax, but against the exemption; and willing to consider changing my position on the tax, but not the exemption.

And to be clear, I don’t support a flat tax structure – I agree it’s anti-progressive and something Labour should be loudly against. So I’m half-way between the poles David paints. I’d far prefer that we were out there promising to make our income tax structure more progressive at the same time as lowering GST. We could make it really simple, by saying we’d repeal the entire tax-switch! How novel.

I’m also concerned that a lot of the literature, and studies that people point to seem to be based on a general food exemption, rather than just FF&V. For example, one of the biggest problems (if you accept it’s a problem – which I do) about the relative price of ‘bad’ food, is the price of soft-drink relative to other, healthier drinks. This policy does nothing in that direction, and I suspect that the health gains are therefore likely to be over-estimated.

I’m in favour of widening the range of policy mechanisms that David points to when referencing Ed Miliband, James Purnell and our own David Craig. But I have a high standard that needs to be met before I’ll accept that a new mechanism is worthy.

In that sense I’m not willing to accept David’s “anything sensible we can to positively impact the distribution of disposable income in a way that supplements more direct measures should be welcome (especially if it doesn’t attract howls that we’ve “turned people into beneficiaries”). Indeed I think we need to rebut strongly the ‘turning people into beneficiaries frame’ just as much as we need to widen our policy toolkit.

Most of all, what we need is good, open debate. And for the first time in a while I feel that David is doing just that here, and that is brilliant.


UPDATE Tuesday 5 October, 10.23 pm David replies to James:

Thanks for your follow-up comment, James, and for helping to make this ‘Two Views’ work. Thanks too for the two excellent comments we’ve received at the time of writing, from Darel Hall and Ayesha Verrall.

James, I think your statement that “you’ll find me currently in favour or the tax, but against the exemption; and willing to consider changing my position on the tax, but not the exemption” sums up why we’re probably not going to reach agreement on this issue. I see the the breadth of coverage of GST as primarily an administrative consideration — exemptions were a nightmare to administer in the 1980s but are somewhat easier to handle now due to computerisation, so long as they’re well-designed. You seem to see it as something more fundamental than that.

Similarly, while you say you’re “in favour of widening the range of policy mechanisms” used to achieve a more equal disposable income distribution, you add that “I have a high standard that needs to be met before I’ll accept that a new mechanism is worthy.” I’d venture to submit that in practice that means you’ll tend to default back to the ‘comfort zone’ of ‘Redistributive Market Liberals’, i.e. tax credits and targeted tax cuts.

As I’ve said, I support some further use of those mechanisms but I think we need to recognise that they will only take us so far, and the more use we make of them the more we risk ‘push-back’. Yes, we need to challenge the Right’s discourse about “turning people into beneficiaries” (were the wealthy people who got unneeded $200 a week ‘hand-outs’ on 1 October also beneficaries?). But we may also need to accept that, as David Craig’s post on this topic suggests, there’s a more fundamental sentiment than a few Crosby-Textor talking points underlying the sense that income that appears to take the form of a market-determined wage has more legimacy than a state-samctioned entitlement.

Now, obviously, the solution to this goes way beyond a 13% drop in the price of fresh fruit and veges. But I think if we’re going to move forward with “widening the range of policy mechanisms”, we’re going to have proceed with an open mind and a level playing-field. If we set much higher thresholds for action in new areas, and don’t ask hard questions about the efficacy of the old familiar mechanisms, then we’re just going to keep repeating what we’ve prevously done. And I’m not sure that’s going to take us that much further.

I guess what I’m calling for is a willingness to experiment a bit. However, your and Darel’s critiques have reminded me that the corollary of that is a commitment to rigorous evaluation, and being open to reconsidering what we’re put in place if it isn’t as effective as we hoped. As Ayesha said, the GST change should have “both scale and impact” (though it ought to be accompanied by other interventions around diet and activity). Let’s test whether it actually does make a difference to people’s shopping and eating habits. If not, perhaps we should be willing to say, “it was worth a try”, and invest the money somewhere else instead.


UPDATE Friday 8 October, 10.30 am James gets the last word:

I guess you are right David, I will default to the comfort zone of redistributive market liberals, but only to a certain extent.

I actually feel caught wanting Labour to be more radical, not less. But if they can’t be as radical as I would hope, then I feel they shouldn’t hedge. If we’re going to complain about the tax system then let’s complain about it! Let’s go for a Capital Gains Tax, let’s commit to higher taxes on the wealthy, let’s properly put a price on Carbon. Let’s get serious.

Most importantly let’s be clear about how government should raise revenue before we start spending it – because I feel that one of the reasons this announcement annoys me is that there’s a false dichotomy being used – “We can’t afford to reverse GST, so this is what we’ll do.” But we haven’t actually answered the first part to my satisfaction, so I can’t see how we should be asked to accept the second part.

In the end though (and here’s where I think this experiment of your’s is a huge success) if the policy is put forward on the terms you lay out – I can grudgingly accept it. I won’t agree with it, but I can find peace. But if it’s not; if this really is just silly populism backed by weak arguments then I’m really struggling to see how we’re going to make a case to be a credible government.

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Posted in Two Views | 5 Comments »

The progressive case for GST exemptions

Tuesday, October 5th, 2010

In the second part of this “Two Views” exchange, David Choat replies to James Caygill’s post.

First of all, I’d like to thank James for agreeing to participate in this ‘Two Views’ on GST exemptions. It’s not easy sticking your neck out and being the one to say ‘they’ve got it wrong’. As it happens, I think Labour have made the right move in deciding to remove GST from fresh fruit and vegetables, but I also think it’s important that progressives be willing to publicly debate the merits of initiatives like this. It’s more respectful to Labour (and the Greens) to assess their plans in a balanced way, than to feel that their merits are so fragile that only uniform unwavering praise from their supporters will get them through.

I can’t help thinking that a major part of James and my differing views on this initiative stems from our differing views on GST overall. At the risk of putting words in his mouth, James appears to see the establishment of a simple, exemption-free GST as an enduring achievement of the Fourth Labour Government. I have much more mixed feelings. I see GST as part of the Rogernomics reform of the tax system in the mid-1980s. And while I wouldn’t want to go back to all the complexities and rebates of the Muldoon-era tax system, the Rogernomics reform represented a significant rebalancing of our tax system in a less progressive direction, and was a major contributor to our becoming one of the most unequal societies in the OECD.

A combination of factors — including voter psychology, media ownership, the risk of capital strikes and perhaps some timidity on the part of progressives — mean that we are largely stuck with this settlement of a relatively flat income tax regime twinned with (regressive) GST.

So I don’t accept James’s dichotomy that we should either accept the current design of GST as sacrosanct or rethink it entirely. We don’t really have the freedom for the latter at this juncture, so we should treat GST as a not-particularly-beloved part of the furniture — not something we can easily get rid of, but something we have no compunctions about adding or removing the odd feature from, if it suits our current purposes.

So what about this particular proposed adjustment?

I’d accept James’s point that this isn’t necessarily the most brilliantly effective mechanism for redistributing money into the hands of the needy that could possibly be designed.

And that it isn’t necessarily the best mechanism conceivable for encouraging people to eating in a more healthy way either.

But I think it will make some progress on both those fronts. And not many initiatives have a ‘double-bang’ like that, especially on such important issues as those.

It also has the secondary attraction of acting as some form of repudiation to the Key-English-Hide government’s regressive and unpopular GST hike. Labour and the Greens were right to oppose the increase to 15% being imposed in the first place, but reversing it wholesale, as James suggests, would be a more messy prospect. Much of the so-called ‘tax switch’, other than for the very rich and the very poor, is largely ‘churn’, with Key-English-Hide giving with one hand and taking away with the other. But that means that reversing it would involve a lot of churn too.

Better to target the truly offensive aspects of the package (the impost on the poor, the giveaway to the rich) and put in place specific measures to address those (as Phil Goff has signalled by promising to restore the top tax rate). This initiative allows Labour to do that, without simply leaving the GST changes to stand untouched.

All of that adds up to quite an appealing résumé for a policy that, while costly, is not overwhelmingly expensive. A bit of context for that statement may be in order. My understanding is that taking GST off fresh fruit and vegetables would cost around $250-$300 million a year. That’s around about the amount of additional funding Labour put into schools and early childhood education in Budget 2008 (which included SchoolsPlus), or the (operating balance) impact of interest-free student loans. It is small enough to be paid for (albeit with considerable difficulty) out of the $1.1 billion (ongoing) already set aside for Budget 2012. Working for Families, by contrast, had a full-impact cost of $1.1 billion a year for the initial policy in Budget 2004 plus an extra $500 million a year for the extension promised in Labour’s 2005 manifesto. And the personal income tax cuts in Budget 2010 had a full-impact cost of $4.3 billion a year.

Returning to the GST exemption impact on redistribution and health, I should add that I’m also a bit more positive about this measure’s likely affects than James. He contrasts the exemption unfavourably with HEHA (Healthy Eating/Healthy Action), but I’m not so sure. There were some good measures in HEHA but my impression is that it was pretty targeted and reliant on public education and exhortation, which I tend to be a bit sceptical of. But James knows this area better than me, so I’m happy to stand corrected.

I’m pretty confident, though, that one important thing that HEHA didn’t do is alter the relativities between fresh food and fast food, which I see as one of the most important underlying drivers of our obesity troubles. As I often do, let me turn to Matthew Yglesias who shares the following graph (from David Leonhardt) showing the divergence between fresh fruit and vegetable prices and those of other food and beverages (especially fizzy drinks) in the US over the last thirty years:

In that context, I think there’s a real value in measures that try to target price directly. (And since the impact while be disproportionately upon the poor, who spend more of their income on groceries, I prefer a GST-free carrot to the stick of ’sugar taxes’.)

In terms of the policy’s other impact, on people’s pockets, James prefers a continuation of the sort of direct redistribution that progressive governments have focussed on recent years, through tax credits (like Working for Families) or targeted tax cuts. I hope we’ll see some of this in future, too, but one of the emerging themes on Policy Progress recently is that those sort of measures will not be enough on their own. We’ve seen that in the reflections of James Purnell, in the guest-posts of David Craig, and even from new UK Labour leader Ed Miliband.

The amount of change to our income distribution needed to make New Zealand a decent egalitarian society again; the limitations of trying to sail against the tide of market forces that are pushing widening income dispersal (without trying to change that tide); and the greater legitimacy that people ascribe to what seem to be market allocations of income. All these suggest that we need to widen the set of mechanisms we bring to bear on tackling inequality.

Obviously, simply removing GST from fresh fruit and vegetable is not The Answer to that challenge. But anything sensible we can to positively impact the distribution of disposable income in a way that supplements more direct measures should be welcome (especially if it doesn’t attract howls that we’ve “turned people into beneficiaries”).

Finally, I should address James’s challenge that the policy simply won’t work: supermarkets will pocket some or all of the reduction, so there will be minimal effect on prices. This is essentially an empirical question, so I did a quick search on Google Scholar. This quote from a paper from Latvian economist Alf Vanags seems to sum up the state of literature:

Hard evidence is somewhat thin on the ground but the studies cited in Blundell (2009) suggest that for “many goods we should expect a full pass on” (p 33) and that pass through is unlikely to be less than 75%.

This broad view is also taken by Copenhagen Economics (2007) who note “there is little doubt that permanently lowering the VAT rate on a particular good (or service) sooner or later will lead to a reduction in the price of the good more or less corresponding to the monetary equivalent of the lower VAT rate. If the VAT rate goes down by 10 percentage points on a good with a before tax price of €100, the price paid by the consumer will sooner or later drop by €10 for the vast majority of products. In economics jargon, there will be a strong tendency towards full pass-through” (p9).

I’m not claiming that GST-exemption on fresh fruit and vegetables is the best policy Labour has ever come up with, or that it should be the central plank of their election campaign. I’m certainly hoping for more from the next progressive government than cheaper groceries. But I think this initiative will be a worthwhile component within a broader suite of policies.

Coming up: short replies from both James and David.

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Posted in Two Views | 5 Comments »

It’s Ed!

Sunday, September 26th, 2010

The new leader of the UK Labour Party has been announced. The contest had turned into a two-horse race between the Miliband brother, David and Ed, sons of the prominent Marxian economist Ralph Miliband who each worked for many years as advisors for Tony Blair and Gordon Brown respectively, and then went on to become senior ministers in the Brown Cabinet.

The elder brother David entered the race as the favourite, but in the end the winner was Ed Miliband, the younger and reportedly the more leftwing of the two — although a set of parallel Q&As by the blog-site Left Foot Forward highlighted how similar they were on the substantive issues.

The victory makes Ed Miliband a central figure in the international progressive movement at an important period of renewal. His views and the way he goes on to shape his party will inevitably have an influence on the tenor of progressive thinking here in New Zealand.

So I thought it was worth citing the following statement (from those same Left Foot Forward Q&As), which I think sets out one of the central challenges for progressive governance in our time (as also discussed at Policy Progress, here and here):

Would you make tackling income inequality a specific goal of a Labour government?

Yes. It is the right thing to do for people on low incomes and it is the right thing to do for society as a whole. Strong, cohesive societies are ones in which hard work is fairly rewarded. More unequal societies are less well off in a range of ways, for example suffering with poorer physical health, poorer mental health and higher crime rates.

New Labour was too cautious on this issue, and as a result, despite us being the most redistributive government in history, inequality rose. So we need a different approach that targets the fundamental causes of inequality rather than focusing on just trying to use redistributive payments to correct for failures in our economy. That is why I am so passionate about a living wage and want to see tax cuts for responsible businesses who pay a living wage.

Many people are surprised to discover that taxpayers are paying more than £6bn each year subsidising low wages in our economy and I want that to end – improving pay and saving money for government. I want a High Pay Commission to sit alongside the Low Pay Commission and address the unfairness that comes when a banker earns in a week what their cleaner earns in a year. And I want a new industrial activism to build a new economy less reliant on low-wage, low-skill jobs and better at investing in people and in skills.

P.S.: Left Foot Forward offers some advice to the new leader.

P.P.S.: As does Malcolm Tucker (from The Thick of It).

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State subsidisation of low wages

Wednesday, May 19th, 2010

It’s great to see the debate on redistribution vs. altering market power and outcomes rolling out here. I think there’s a great deal of sense in James Purnell’s basic assertion that New Labour’s “unwillingness to be more hands on with the market” had “required it to be too hands on with the state”.

There are several aspects to this debate that I’d like to expand on. But let me start with just one. It has to do with the primary (non?) strategy for dealing with low wages and their emergence from the restructuring/ post 1987 recession, the ECA and the hollowing out of labour markets/ growth of the low wage service sector.

It is possible, though by no means exhaustive of the possibilities, to call this strategy ’state subsidisation of low wages’. I’ll expand a little below, but a fuller/ complementary account of important aspects of this can be seen in Gerry Cotterell’s recent University of Auckland PhD comparing Making Work Pay policy in the UK and in NZ [not online].

Essentially, (in my words not Gerry’s) starting in 1996 under the Nats with the child tax credit, there have been moves back towards a kind of (unwittingly) social wage. These have almost entirely involved using fiscal measures/ tax credits/ variously redistributive policy to subsidise low wages for families (not for individuals, who have remained classic standalone/ exemplary liberal subjects: and paid the price for it!). Obviously, as David notes in his post, more of this happened via the In Work Tax Credit and restoration of family support levels under Working for Families.

But importantly it didn’t stop there. Another ’state subsidisation’ measure was the accommodation supplement, introduced again targetted at families as a way to smooth a move towards a wider market model for housing provision; and since ensconced as a key subsidiser of that vital engine of growth, the (rental) housing industry.

But wait, there’s more: subsidisation of costs of work for families through subsidised childcare, 20 hours ECE, and other active labour market inklings.

And still more: subsidisation of training costs for employers (new apprenticeships) and professionals (interest free student loans).

And, finally, massive subsidisation of (mainly middle class) savings through Kiwisaver, which did also move to obtain some support from employers.

Now, I don’t think for a minute this cumulative effect was what the architects of  what John Kay in the FT called ‘redistributive market liberalism’ intended. But it accrued anyway, largely for reactive and political reasons: and largely driven by the state through executive means. It was highly borrowed (from the UK, and the Greens pushed some of it) and I think largely incremental/ path-dependent (as opposed to consistently strategic), as surprising and incremental fiscal headroom emerged. It responded to, perhaps rather than harnessed, a kind of viscerally felt ‘enlightened reaction’ or pushback against to low wages and wider neoliberal/ marketised insecurities. Karl Polanyi (The Great Transformation) and his seminal notion of the ‘double movement’ should be wheeled in at this point to explain!

On the other hand, it could be argued, given that neoliberal reform here as elsewhere itself relied heavily on the executive to ram through and protect its reforms, maybe the reversal needed the same executive action.

But either way, the main political points relevant now are:

  1. It benefitted mainly people in families, though student loans and kiwisaver also ‘helped’ more widely. So single people fell behind: both workers, and, if you are really looking for victims, single beneficiaries, who went furthest backward of any group against the average wage under Labour.
  2. There was massive fiscal churn going on here, especially as WFF In Work Tax Credit got shunted up the income levels.
  3. There was ongoing undermining of the labour market relations themselves (and especially any duty on employers) as a mechanism having to bear the brunt of worker and family costs: these were sent back to the state, which dipped into its burgeoning fiscal pockets and paid.
  4. With tax cut enthusiasm, liberal fears over Leviathan in the Economist, rising questioning of even the most basic fiscal aspects of the welfare state (eg in the current Welfare Working Group), and the sense that for all Labour did, child poverty is still unfinished business, we are in for a scrap over the fiscal pie, that could see some real half-thought radicalism, and prompt some of the basic/ turbulent binarism we see in US politics over tax happening here.

But meantime the net effect, as David and James Purnell note, is dulling of pressure on employers in an industrial bargaining sense. The state  subsidisies that away; or, a bit more helpfully, legislates that employers will pay more through minimum wage arrangements (but doesn’t put teeth back into the industrial relations legislation).

And, of course, all this did little or nothing to rein in the other great beneficiaries of unbridled market power in the distribution of assets and income, the rental properteers. Rather it started a pattern of subsidisation there that is only now starting to be reined in.

So, and not for lack of state effort, we are still stuck after 20 years of reform with this pattern of risen inequality.  Inequalities now need to fall, and low incomes rise: but leviathan is running out of grunt.

Real equivalised household incomes (BHC): changes for top of deciles, 1988 to 2008

So, some propositions:

  1. We have nearly reached the limits of fiscal based subsidisation (though there is more room in supporting family work/ care costs: watch this fiscal space).
  2. We all want higher wages, but have taken away incentives and mechanisms to re-organise industrially for them.
  3. Employers have been somewhat left off the hook, and unions left impotent, but no-one is the long term winner.
  4. We need a return to a better relationship between the employers, workers and the state that doesn’t involve the state in large-scale palliation of workers demands through Fabian style executive order/ fiscal churn/ policy based expansion of subsidy.
  5. This might in time spill over into better / more demands for political representation, including from underpaid singles and the folk currently referred to as the enrolled non vote.
  6. We need to continue to reassess as a whole the state’s contribution to housing, and in particular to the rental housing industry, and see whether the tax payer is getting value for money, etc.
  7. Interest free student loans? Compulsory or subsidised Kiwisaver instead of a pay as we go pension? Hmm.

So the irony/ disappointment is that, for all the well intentioned interventions so far, it seems we haven’t seen the shifts in real market and political power that might sustain equity. The market and the middle classes still have it pretty much their way, albeit now via a churnier state and all the backlash that causes.

One thing seems clear: to quote David and Jordan Carter, and channel Purnell, if real policy progress is to happen, the state can’t be the one to be doing all the heavy lifting here!  The beneficiaries of all this state subsidisation need to do their part too: and we know who you all are!!

But for this to happen (and to happen substantively and anytime soon), basic tripartite relations and powers — and political/ representational relations — may need to shift again.  And, as on the ‘Nixon goes to China’ principle perhaps only a Tory government could do, someone needs to continue to take on the landlords, and incentivise returns to industries workers can be a part of.

——-

David Craig is senior lecturer in Sociology at the University of Auckland, where he teaches around the history and political economy/ sociology of liberalism; colonialism and development; and urban sociology.

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Redistribution v altering market outcomes

Thursday, May 6th, 2010

In Tuesday’s post I covered a speech by James Purnell of the Open Left project that talked about how in Britain New Labour’s “unwillingness to be more hands on with the market” had “required it to be too hands on with the state”. In particular, I identified a theme in what Purnell was saying about the tension between redistribution after the fact on the one hand, and intervening to alter the initial market outcomes on the other.

I think this an important issue, and, as I’ll explain, it’s one that has a lot of relevance to New Zealand.

First, a bit of history. As Frank Castles has argued, during much of the twentieth century New Zealand and Australia had quite a distinctive “wage-earners’ welfare state” that relied more upon ensuring the standard male breadwinner could earn enough to provide for his family than upon generous social provision. In New Zealand, the Industrial Conciliation and Arbitration system was a centrepiece of this approach.

This broke down over the ’70s and ’80s, and by contrast the approach of the Fifth Labour Government has strong parallels to Purnell’s description of New Labour that I outlined on Tuesday.

There were attempts to influence market outcomes — the Employment Relations Act, minimum wage increases, an extra week’s statutory annual leave — but most of the heavy lifting was done through government redistribution, in particular Working for Families. This appears to have been a deliberate preference, as illustrated by the Paid Parental Leave policy, which was quite consciously designed as a government income-transfer programme rather than an obligation on employers, despite the preference of Labour’s coalition partner the Alliance that it be paid for through an employers’ levy.

Of course, there are some sound reasons for the state being cautious about trying to directly alter market outcomes, particularly in a globalised world. But not doing so has consequences.

For instance, I had often been puzzled by the vehement resentment many people seemed to feel towards Labour’s pro-family redistributions. In a time of general growth and prosperity (as it was up until mid-2008), surely a rising tide was lifting all boats, so who could begrudge a little extra assistance to those with extra mouths to feed?

But then I came across a figure in the 2008 edition of the Ministry of Social Development’s excellent Household Incomes in New Zealand series. It showed that for a single-person household without children under the age of 65, the real income of someone at the middle of the in income distribution (i.e. the median) had actually fallen between 1998 and 2007.

Based on data from Household Incomes in New Zealand: Trends in Indicators of Inequality and Hardship 1982-2008 (2009), Table D.4 on page 53. It should be noted however that, in this latest edition, this trend has turned around with the addition of the 2008 data.

Now, this is only one figure, but it does tend to show that not everyone was benefiting from the boom. That reflects the fact that growth during 2000-08 was generally extensive, i.e. it was manifested in employment growth (and thus impressively low rates of unemployment) rather than significant wage growth.

At least, not significant wage growth at the median: high-income earners continued their trend of increasing their incomes more rapidly than other New Zealand, further widening market income inequality (and meaning that any state system of redistribution had to run just to keep up).

To me, this illustrates the risks and limitations of relying primarily on after-the-fact redistribution as our main engine for ensuring inequality. I interpret Purnell’s lecture as indicating that we may need to think more radically and innovatively about how to achieve more equitable market outcomes in the first place.

The challenge, of course, is how to do that.

Here, Purnell doesn’t really offer us that much. At one point he does talk about aiming to “ensure that anyone who works hard earns enough to have a decent life” and suggests a combination of the national minimum wage, campaigns for a Living Wage, and offering a reduction in labour costs (in the UK this could be done through lower national insurance contributions,) for employers who have a higher wage floor.

On the one hand, this doesn’t seem very radical — it hardly seems likely to radically transform market outcomes — and on the other hand it still seems to rely on state spending pretty heavily.

I wonder, is it possible to envisage something that goes further than this? Possibly something that brings back the traditional focus of the New Zealand welfare state to find new ways to ensure that people can earn enough market income to provide a good living for themselves and their children. What would a 21st century distant cousin of the Industrial Conciliation and Arbitration system look like? It would almost certainly be less centralised and restrictive, and probably more focussed on skill development; perhaps it might involve some way of sharing out the dividend from productivity growth.

Is such a thing possible? Could a country like New Zealand find a way to influence the market system towards fairer outcomes? Or do we need to reconcile ourselves to largely accepting the market as it is, and then using the tax and redistribution system to distribute income in a more progressive way as best we can. What’s your view? Leave a comment below.

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Posted in Theoretical Foundations | 18 Comments »