Guest Post: “Pesseconomists”: A Rebuttal

A guest post by Robert MacCulloch:

A post on Kiwiblog recently took a swipe at one of my colleagues, Tim Hazledine, who wrote an opinion piece in the NZ Herald called “Why the transtasman income gap is larger than it appears”. Hazeldine’s says that “the Australia / NZ income gap is actually larger than it appears. It’s not just that we earn less, it’s also that when we spend what we earn, we get less value for our money. NZ is a pricey country.”

The blog said that Hazeldine’s article “shows how he thinks of fellow Kiwis … His vision & solution is simply to be resigned to this state of affairs because Kiwis are by and large a bit lazy and don’t care”. But that line is simply not true. Here’s the evidence. Hazedline’s article seeks to explain the transtasman income gap and asks “Could it be the workers’ fault? That is, are NZ’ers, on average, lazier and / or duller than Aussies? Well, we can kick that one into touch straight away. Transtasman migration is basically free trade in people. Anyone can do it and thousands of ordinary Kiwi workers do … all quickly find themselves earning a premium of about 20% over their income from the job they left behind”. That is, Hazeldine specifically rules out an explanation that Kiwis are lazy.

Instead he puts part of the explanation down to the “different tastes” of Kiwis compared to Aussies – that is, Kiwis put great emphasis on overall quality of life. In Hazeldine’s words “We pump out less material gross domestic product than Australia (or the US) because, as a nation, at a deep cultural level, we have somewhat different priorities about what is the Good Life and how to lead it”. The Kiwiblog post characterizes this view as “pessimism”. Since when is acknowledging that different people, cultures and nationalities may have different tastes and priorities, “pessimism”?

By the way, I concur with Tim Hazeldine’s view. There is serious evidence to back it up. Kiwis report one of the highest levels of subjective well-being in the world – higher than Aussies – even though our productivity in terms of how efficiently we “pump out” GDP is lower.

What’s more, the failure of the National Party to comprehend what are the true objectives of the majority of Kiwis is a big reason why the Nats got wiped out at the last election. Good luck to them making fun of the “well-being agenda” and making disparaging comments about what Kiwis truly and deeply care about. Keep doing so and the Nats will get wiped out at the next election again. Instead the Nats should acknowledge the objective of maximizing well-being as a good one, and then show how they can do it better than Labour.

For sources, see:

Tim Hazeldine’s opinion piece:

https://www.nzherald.co.nz/business/why-the-transtasman-income-gap-is-larger-than-it-appears/BENTJLKAJYJ2QNEIQ6ARV6GV7E/#:~:text=The%20transtasman%20income%20gap%20is%20larger%20than%20it%20appears%20because,less%20value%20for%20our%20money.

as well as the article called “Pesseconomists”at:

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