I am a hippy.  I even went to get a haircut and kept my hair long.

Give me a year and I’m sure I’ll grow out of it 😉

“It might be worth you defining what you mean when you say “we” and clarifying who’s inherant inequality you are concerned about.

Does “we” mean New Zealanders or does it encapsulate the whole global family of humankind.”

For sure, excellent point.  In so far as we view NZ like a labour union – just protecting itself and its capital – and insofar as we view NZer’s as myopic (as in the most likely circumstance total income will end up higher here as well – although this is not a definite I agree).

By we I actually meant something else, I meant as individuals who try to look at issues without a nationalistic hat on.  As individuals looking at a whole bunch of other nameless faceless individuals.

“By your own analysis labour market globalisation would hollow out the New Zealand middle class (leaving just the top and bottom) thus policies which facilitate rapid labour market globalisation would aggravate inequality for New Zealanders”

Note, this is in a worst case scenario 😉

PS – I find your belief that we should prioritise the alleviation of poverty internationally above the protection of middle class privilege domestically to be laudable. You’ll be pleased to know you are in great company:

Imagine there’s no heaven
It’s easy if you try
No hell below us
Above us only sky
Imagine all the people living for today

Imagine there’s no countries
It isn’t hard to do
Nothing to kill or die for
And no religion too
Imagine all the people living life in peace

You, you may say
I’m a dreamer, but I’m not the only one
I hope some day you’ll join us
And the world will be as one

Imagine no possessions
I wonder if you can
No need for greed or hunger
A brotherhood of man
Imagine all the people sharing all the world

You, you may say
I’m a dreamer, but I’m not the only one
I hope some day you’ll join us
And the world will live as one

PPS – You would never be elected on this platform you dirty hippie 😛

“Indeed – so why should we support policies that exacerbate the inherent inequality.  This seems weird to me.”

It might be worth you defining what you mean when you say “we” and clarifying who’s inherant inequality you are concerned about.

Does “we” mean New Zealanders or does it encapsulate the whole global family of humankind.

It’s an important distinction in the framework of market interventions (the visible hand). As a country we spend many billions in government revenue on Health, Education and Welfare spending to support New Zealanders but we spend well under the UN target of 0.7% on International Development Assistance to give the same support to people in other countries.

I think it would be safe to say then that our government’s priorities value the welfare of New Zealanders way ahead of the problems of global inequality (and I’d argue they would struggle to get elected if they did otherwise)

By your own analysis labour market globalisation would hollow out the New Zealand middle class (leaving just the top and bottom) thus policies which facilitate rapid labour market globalisation would aggravate inequality for New Zealanders. So the government is rationally acting in accordance with it’s democratically endorsed priorities – absolutely nothing “weird” with that.

I think in real terms its going to be interesting to see what happens to the distribution of income.  Changes in the factors of production and relative scarcity are the real drivers here – no matter how much people want to make it an argument about class war.

Technology is changing so quickly that the “social contract” we based policies on through government becomes quickly out of date, trying to understand and describe what is going on is going to be an important first step – because in my opinion there is no consistent and clear description of what is going on now, and there can’t be because the data is not there.

“But your also in favour of selling the Crafar farms to the highest bidder (ie an open market) and  it would seem that land based (?) industries are what we have a comparative advantage in.”

Yes.

If the seller is getting a price that represents the discounted present value of their return from the land, then that is fine.  They can use their new found liquid capital to do something else.

“The world isn’t  a level playing field. People aren’t born in response to high prices for labour; people have large families even though they live by picking over rubbish.”

Indeed – so why should we support policies that exacerbate the inherent inequality.  This seems weird to me.

“Another point: the things we buy are often junk and we end up having to sell what really matters (land and life style).”

People buy and sell things based on their desires and preferences, that is fine.  If other people want to base policy off NZer’s being stupid that is good for them, but its never an assumption I’m willing to make 😉

“To answer the question in the headline of your post. Because somebody is a member of the middle class that will be hollowed out.”

Indeed you are right 😀

“Be careful – you are evangelising here. I’m always wary when I hear an economist say something ‘will’ happen as if economics followed similarly immutable laws to physics.”

Fair point, I agree with your sentiment.

“It may well be that your assertion is correct in a number of circumstances – but it is not a certainty in all circumstances. So what you are proposing is for middle class workers to face the immediate certainty of job loss in exchange for a projected possible benefit to some other person in a far away country where they have no way of knowing for sure if that person will actually receive any benefit.”

I wouldn’t go that far.  In essence even if the middle classes are losing out I think we need to weigh any said loss against the fact that many people are moving out of poverty.

There are significant institutional issues in the developing world that will hopefully be solved through time – but I don’t believe that the current fair of “losing jobs” is consistent with that.

However, I agree with you that any free trade agreements need to be made with a moral basis – in so far as labour laws are weaker overseas, this can provide a justification for protectionism in goods markets in some sense.  However, I don’t think it aids the case for further protectionism in labour markets – which would simply make the perceived imbalance stronger.