Rational repression

Perhaps it is apropos to start the new year’s blogging with a look back at history. A working paper reported at Vox examines Stalin’s gulags from an economic, rather than political, viewpoint. In Western capitalist economies it is the threat of losing one’s job that motivates effort in employment. If you shirk and are caught then you get fired. However, in a centrally planned economy there is no possibility of getting fired: everyone has a role to play and nobody is left out. How then is a dictator who’s done the hard yards planning out the lives of an entire country for five years to motivate his workforce? Miller and Smith suggest that Stalin used the gulags as a device to enforce discipline among workers. Read more

New Zealand articles

If you are desparately in need of some New Zealand focused economics over January, take a look at the archive of Infometrics articles for the Dominion Post.

The next Dom Post article will appear on January 26th, hopefully the team hear will be back to writing by then.  If you would like more information on any of the articles just leave a comment and I’ll work with the author of the article to make a blog post on it.

Fuel taxes and firms: A cosy partnership

January will be a quiet month for blogging here, but once the numbers start rolling out I’ll start writing again. One thing that I saw that interesting me was this short quote from Greg Mankiw’s blog:

The nation’s largest business group said Tuesday it will oppose big tax increases in 2008 but might support increases targeted at improving aging U.S. roads, bridges and railways.”

Now many of our clients at Infometrics also feel the same way (many of which are transport firms). Why do you think firms’ currently support an increase in taxes on fuel but not on labour? Does this relate to the same factors that have made firms’ in NZ not care too much about an increase in the minimum wage?