Adam Smith explained how the division of labour is limited by the extent of the market. When we have more people with whom to trade, we can all better specialise in our areas of comparative advantage. Read more
Once upon a time, when we were hunter-gatherers, life was poor, nasty, brutish and short (to quote Thomas Hobbes). But life was also very simple: Whatever had been hunted or gathered by a tribe had to be divided among them. Read more
Last week I wrote that the euro crisis was not over -- far from it (The calm before the eurozone storm, 14 August 2014). However, having just read the latest article by Wolfgang Münchau, a fellow eurozone commentator and Financial Times columnist, I have to agree with his suggestion that we should no longer call it the euro 'crisis'. Read more
Democracy is a very fine thing, yet is worth dying for, and it is humbling to think of all those who have. Yet general election campaigns do not bring the populace's best instincts to the fore. Read more
Imagine you are at a speed dating event, circling a room filled with people who, like yourself, are looking for love. The problem is, that besides a clutch of banal questions and answers, you have very little information to go on in deciding who is worth asking out on a longer date. Read more
It is a fine line between commemorating and glorifying wars. The centenary of World War I is a good opportunity to reflect what this war, and other wars, mean to us today. Read more
A few weeks ago, while browsing pianos on TradeMe, I came across a Kawai upright with bids having just passed the reserve price of $4,000. An interested buyer had posted a public question to the seller offering to ‘buy now’ for $1,500, stating they ‘really wanted’ the piano but ‘couldn’t afford’ the minimum $4,000. Read more
It would have been a stretch for us to relate X-rays or Xylophones to economics. Lucky for the ABCs of economic literacy, Harvey Liebenstein prefixed the word inefficiency with a big X when proposing the concept of X-efficiency in the 1960s. Read more
Dear New Zealand, We need to talk about racism. Because if the term continues to be misused, it will cease to have any proper meaning. Read more
Economics starts with the assumption that incentives explain the choices of individuals. But would a carrot and stick approach work in parliament, an institution not always prone to making rational choices? Read more
A two-page feature in the Sunday Star-Times (Aug 3) says Labour’s promise to introduce a capital gains tax and raise the top rate of income tax has put “equality” back at the heart of economic and political debate. The only concept of equality the article considers is one where the ideal is that everyone gets the same income regardless of how hard or productively they work. Read more
Roughly coinciding with the beginning of the financial crisis in 2008, anti-capitalism has enjoyed a global renaissance. The critics of capitalism may be quite diverse, but for many of them rising wealth and income inequality is a commonly shared concern. Read more
Recently, Transportblog.co.nz bemoaned the fact that Auckland CBD was running out of office space.The pro-transit and compact city advocacy group is concerned because central government is insisting that certain rail usage and CBD employment targets be met before it co-funds the $2.9 billion City Rail Project. These targets include the doubling of rail patronage to 20 million trips a year, and lifting the number of people employed in the CBD by 25 per cent (or 22,000 jobs) if the city wants the project to start in 2020. Read more
The biographies of top economists indicate that they were often motivated to study economics in order to be better able to contribute to the common good. But what is meant by the common good and what policies contribute to it? Read more
Last week some Aucklanders in the double grammar school zone (Auckland Grammar and Epsom Girls’) were upset to see that One Tree College and Selwyn College were looking at including them in their school zones too. They fear this may lead to Auckland Grammar and Epsom Girls’ shrinking their school zones, excluding their children from entry to these sought-after schools. Read more