Reply to Martin Hames

(published slightly abridged, as a lead article in the NZ Herald, on 13/1/97)

Keith Rankin, Economics Dept., University of Auckland.

Martin Hames ("Free Thinking", Herald, 3 Jan), in his review of 1996, states that 1996 "was a year in which an Auckland University academic seriously claimed we would be better off with an industrial relations regime that produced more strikes. But he was trumped by one of his own colleagues, who claimed we would be better off economically if we all worked less hard".

I am 99 percent sure that I am the principal target of Mr Hames' sarcasm. The article concerned, about the problem of excessive working hours faced by many workers today, was in fact published in 1995 (New Zealand Political Review).

I am quite sure that I am the author referred to, because Rodney Hide (now an employee of myself and other New Zealanders) wrote an ad hominem polemic in 1996 (in the National Business Review) criticising my 1995 article. Hames' comments are so close to Hide's that I suspect that Hames never actually read my article, which would explain the confusion over dates.

Whether or not I am his target, Hames reveals a weak grasp of economics.

The basic notion behind economic theory is 'utility maximisation'. The idea is that economic welfare is greatest in a society which maximises 'pleasure' (eg consumption) per unit of 'pain' (eg work). It clearly follows from this central axiom that a society which reduces an excessive labour input without reducing its standard of living is "better off".

A society characterised by time-poverty - by the sacrifice of too much precious time - is not in good economic health, as a 1996 TVNZ Assignment documentary approvingly quoted from my 1995 article. A recent BBC Assignment documentary called "Killing Time" made the point about the health costs of overwork even more emphatically. Many economists indeed supported the introduction of the 8­hour day and 40­hour week, in the 1930s.

With respect to Mr Hames' other point, it should be noted that Stalin oversaw an industrial relations regime that produced no strikes. Hames' logic would suggest that our regime based on the Employment Contracts Act, which produces some strikes, must be inferior to that of the former USSR. Indeed Stalin was in the habit of undermining economists who disagreed with him; Bukharin and Kondratieff being two of his better known victims.

Mr Hames' writing would seem to be part of a campaign on the part of a small number of people - people with privileged access to the media who reflect the right-wing faction of a political party which represents the rightmost six percent of the electorate - to send the University of Auckland Economics Department to Coventry, if not to Siberia.

I am reliably informed that the present phase of tension between the University of Auckland Economics Department and elements of the business community goes back at least to the 1970s. Earlier phases go back much further; eg to the mid-1930s, when Professor Horace Belshaw used to commute between Auckland and Wellington on the Limited, liaising with W.B. Sutch and R.M. Campbell to form Finance Minister Coates' allegedly socialist 'Brains Trust'. In those days it was the History Department which took most of the flak, however, with the subsequently acclaimed Professor J.C. Beaglehole losing his job as something of a scapegoat during a period in which academic independence was under threat.

Tension also existed in the years before World War I, when the Professor of Mathematics contributed articles to the Herald espousing an individualist creed and empire free trade, while the Professor of Economics wrote for the Star in a more corporatist and protectionist vein.

Such tension, relieved by dialogue through a free press, is of course one central dynamic of democratic capitalism. Yet Mr Hames does not appear to be promoting a dialogue of equals. He seems more threatened by free thinking than a promoter of free thought.

The wider campaign of political correctness, as applied to economics by a re­emergent plutocracy, is an attempt to make economics into a tight­knit discipline whose truth derives, like biblical truth, from authority instead of from reason, dialogue and observation.

Genuine free thinking is constructive, accurate, and bold. Hames comes across as deceptive, defensive and under­informed. Real free thinkers, when critical as they must be some times, have the courage to name their targets. I can only feel flattered, however, that an article I wrote in 1995 might have been one of Martin Hames' highlights of 1996.

© 1997  Keith Rankin

Rankin File