I talked a little bit about measuring energy, and the unit of the 'joule', 'kilojoule', 'kilowatt-hour' and so on, as well as what power is (the rate of change of energy). At the end I asked the students how much they thought that a 'unit' (a kilowatt-hour) of electricity cost. That's the cost of having a kilowatt of stuff running for one hour.  

Now, I didn't really think that the students would have much idea. I mean, they aren't the ones forking out every month for their power bills (ahem! that should be energy bill - remember a 100 W light bulb running for one hour will cost you the same as a 50 W light bulb for two hours - it's energy that you pay for, not power). Estimates ran from 2 cents a kWh to ten dollars, mostly weighted to the several dollars end of the spectrum. I'm rather glad they're not in charge of the power companies if they wish to charge that price!  I suggested that they ask their parents to look at an electricity bill (and compare a summer bill with a winter one). 

But I was a little surprised that the two teachers in the room had no idea either (or, if they did, they weren't going to air it in front of their students). They knew what they paid roughly a month, but not what it cost, for (say) a light bulb for eight hours. One of them said that her parents told her that leaving a light bulb on for a few hours was equivalent to her week's pocket-money (probably a good way of getting her to turn it off). I think they were being rather harsh on this one...

An incandescent light bulb, at 100 W (a bright one), will go through 800 W in eight hours (e.g. if you go out for the day). That's 0.8 kWh, or 0.8 units. At current prices, of around 30 cents a unit (depends on what sort of contract you have of course) that gives about 24 cents cost. Withdrawing a week's pocket money for this offence is a bit unreasonable! Leaving all the lights of the house on, while you go on holiday for a week, however, is a slightly different story. 

To look at the economy, or areas within the economy, from a complexity viewpoint then would mean asking how it evolves, and this means examining in detail how individual agents’ behaviors together form some outcome and how this might in turn alter their behavior as a result. Complexity in other words asks how individual behaviors might react to the pattern they together create, and how that pattern would alter itself as a result. This is often a difficult question; we are asking how a process is created from the purposed actions of multiple agents. And so economics early in its history took a simpler approach, one more amenable to mathematical analysis. It asked not how agents’ behaviors would react to the aggregate patterns these created, but what behaviors (actions, strategies, expectations) would be upheld by–would be consistent with–the aggregate patterns these caused. It asked in other words what patterns would call for no changes in micro-behavior, and would therefore be in stasis, or equilibrium. (General equilibrium theory thus asked what prices and quantities of goods produced and consumed would be consistent with—would pose no incentives for change to—the overall pattern of prices and quantities in the economy’s markets. Classical game theory asked what strategies, moves, or allocations would be consistent with—would be the best course of action for an agent (under some criterion)—given the strategies, moves, allocations his rivals might choose. And rational expectations economics asked what expectations would be consistent with—would on average be validated by—the outcomes these expectations together created.)
…
If we assume equilibrium we place a very strong filter on what we can see in the economy. Under equilibrium by definition there is no scope for improvement or further adjustment, no scope for exploration, no scope for creation, no scope for transitory phenomena, so anything in the economy that takes adjustment—adaptation, innovation, structural change, history itself—must be bypassed or dropped from theory.

Chancellor Rt Hon Jim Bolger, Vice chancellor Professor Roy Crawford, academia, distinguished guests, students at all levels, my whanau, everyone.

This really is an extraordinary and totally unexpected honour that you have bestowed upon me. I find it very difficult indeed to adequately express what it means to me.   

When my daughter Janet handed me the letter from the University on Christmas day, she says it is the only occasion she has seen me speechless. I was truly gob-smacked ! So I will just say ‘Thank you’.

It is actually somewhat ironic, because in the late 1940’s, as a returned serviceman, I took a BSc (Agric) at Reading University, England, and passed with a ‘C’ grade.

But life was too full as a student, what with sport, starting an agricultural journal, getting married to a beautiful civil engineer  graduate of London University, living on a small boat, and many other activities better left unsaid, such that the ambition to attain a First Class Honours degree went by the wayside.

I did, however, become infected with the stimulating topic of science. Even as a 10 year-old, I pored over nature magazines. I still have some of them.

But I left university puzzled. I had been taught things which just did not make sense, such as the idea that mountain formation was due to shrinkage of the earth’s surface, while the concept of so-called continental drift was anathema. And the explanations of  heredity were far from complete or even believable.

It got me thinking about ‘truth’ and the realisation that truth is only that which is the current knowledge and thought, and that it is constantly being replaced with new ideas. And where do ‘facts’ tie in with ‘truth’?.

We moved to Waikato in 1960, and I have followed with interest the development of this University from paddocks to a landscaped campus. Your reputation has grown, and you can now boast of being a leader among NZ universities in the particular disciplines you have chosen to develop. Congratulations.

Universities have critical roles in society.

Research is a heavy responsibility. It is actually a huge privilege to be paid to research. You are a repository of knowledge, not only in your libraries and theses, but also in the research-based understanding lying in the minds of academia.

Then there are your teaching responsibilities, hence all these wonderful students hopefully fired by your inspirational lectures. I know I was by some unforgettable tutors.

But there is another responsibility, which I often feel is not adequately addressed. This is the role of a university as the public conscience.

It has long perturbed me that the public battlers and advocates for a better society are almost all lay people or NGO’s, whereas those very issues are probably being studied in depth in this institution.

It takes courage to step out beyond the walls of the campus and into the hurly-burly of controversy. There are noble examples at this University, and they will know to whom I refer, but I’ll mention one from Waikato, the late much-loved Dr Charlotte Wallace.

Besides being an assiduous researcher of snails, she was totally fearless in her environmental advocacy, and greatly admired and respected as a result. She virtually started, decades ago, the South Auckland Conservation Association. She made a difference.

We look to the Universities to be the champions, the leaders, for the big issues facing us. You have the knowledge. Please, make sure it is put to good use.  

I turn now to you graduates of all disciplines and interests.

I was born in 1924 (I can see you all doing some rapid mental calculations). In that year, there were only two billion people on earth.

Now, in this one person’s lifetime, that has more than tripled. There are three people alive now for every one alive then. Picture if that were to happen to you all present here in the world of 2013. It would seem impossible.

So believe me when I say that maybe I can personally appreciate the creaks and groans of poor old mother earth, and the pressures and stresses placed upon the populace and natural systems.

There are the issues such as climate change, peak oil, the health of the oceans, extinctions and the loss of biodiversity, the rush to urbanization, rising sea levels, let alone the forecasted inability of farming to feed the projected ten billion people.

We ignore at our peril the intricate web of millions of species whose interactions create our living conditions. We have a lamentable inability to recognise the implications of exponential growth, and the menace of the bell curve. The downside of that curve will turn round and bite.

These matters are all interconnected, and cry out for solutions that are also interconnected. My generation has failed to find those solutions, or, where they are blindingly obvious, failed even more miserably to implement them.

Many of these issues were faced by Maori some 5-600 years ago. Their previously known world of easily harvested fish and birds suddenly faced the impacts of resource depletion. Their reactions paralleled those that arose centuries or millennia before in many parts of the world.

Their first reaction was war, to safeguard their food supplies and other resources. The other reaction, to their great credit, was to impose upon themselves strict rules of harvest, through such mechanisms as rahui. There are lessons there for humans everywhere.

And so I look to you, our next generation, to whom we dodderers bequeath our one-and-only beautiful and magical earth. In some ways, it matters little the topic you studied here.

You have, I trust, been taught by this University to think, because you will need to use those analytical skills that are so necessary in any field of study, for the massive tasks you face ahead. You have to persuade both the wider population and the decision makers, of the root problems we face. There are doubters galore, both for commercial and political reasons or because of reluctance to face facts.

The centuries-old saying is ‘There are none so blind as those who will not see’. You have an absolutely necessary task ahead, which may seem daunting, and you may react by thinking ‘what can little me do’.

However, I say you can make a difference. You will recall the butterfly effect, as expounded by Edward Lorenz, he of the chaos theory. He postulated that the effect of a beat of a butterfly’s wing in the tropics could trigger a hurricane many kilometres away.

I say to you, be that butterfly.

It is a sobering thought that you, we, are each utterly unique, an assembly of atoms never ever seen before. You will each therefore by definition, have abilities that are also unique. To make that ‘difference’ I speak of, you need to develop those abilities, and grow a fire in your belly, a determination to see things through.

Many of our gurus talk of the need to have ambition, but they are usually referring to the ambition to make money. While important, money does not equate satisfaction or contentment. Of its own, neither will it solve the problems you now face.

Nor will you achieve overnight success. It may take years, even decades. You’ll suffer setbacks, but that is in the nature of things, and our world needs stubborn battlers.

You will need to learn the skills of working with, rather than against, and of respecting the right of others to hold opinions that are so divergent from your own that they infuriate you. Anger is no solution. I think Churchill is credited with the saying ‘jaw-jaw is better than war-war’.

Seek friends, make alliances, and above all be positive. So often, even those who you originally felt were opponents, were actually just looking for solutions. Find those solutions.

Many years ago, a truth dawned on me. I had been used to complaining that ‘they’ should ‘do something’. ‘They’ frequently didn’t. I then realised that therefore ‘we’ must do something. Again, ‘we’ sometimes failed, and the clear conclusion was that ‘I’ must get stuck in. If I didn’t, why should someone else ?

Then something magical occurred. My actions suddenly activated the ‘we’, and in some cases, the ‘we’ became a reformed ‘they’. So I say, never be afraid to stick your head above the parapet.

Nor should you be put off by time. May I quote the proposed National Wetland Centre, at Lake Serpentine, south of Ohaupo. It is beginning to take shape, 16 years after planning started. Given maybe two more years, it could be completed.

And another issue took 67 meetings to end up with a solution that was welcomed by all parties. The Waikato Ecological Enhancement Trust was formed. It now puts hundreds of thousands of dollars annually into the wetlands and waters of the Waikato Catchment.

Stick at it !

To date, you have been absorbing, assembling, knowledge. Today, from this moment, your role changes. You have been learners, now, while still seekers, you become teachers. You have been followers, now you must become leaders.

Your collective tasks are frightening in their necessity. I challenge you. Get out there. Don’t be afraid. Be determined. Make sure our planet earth continues to be a place of diversity and beauty we can all truly love and protect. Play your part.

Then, when you reach the age of 80, people will say,’ yes, you made a difference’.

I end with a quote from the inspirational Helen Keller: deaf and blind from early childhood.

I am only one, but still I am one.

 

I cannot do everything, but still I can do something.

I will not refuse to do something I can do.

 

Thank you.

This infographic lays out some of the major discoveries in both camps.

Source: NonProfitCollegesOnline.com

It does summarise the problem very well. But I am sure someone will disagree?

Monday, though, he got up my nose [no link -- sorry -- stuff.co.nz doesn't actually want you to find anything easily]. He was discussing the new DSM-5, which has courted controversy by redefining psychological pathologies. We are all — well, half of us — apparently in need of treatment by the very people who decide whether we need treatment.

In his brief history of the DSM, Brockie said that psychology moved away from Freud to science. The meaning of this is clear: there is real, true knowledge that is produced through science, and then there’s all that other stuff that people believe without it actually being true, and that’s where Freud (and by extension, Lacan) belongs.

There are two enormous problems with this. The first is that this statement is glaring proof of the social production of scientific knowledge. I’d venture to guess that Brockie has not actually studied Freud, and has little knowledge of the split between Freudian psychotherapy and Anglo-American psychology. What he knows is likely to be what he’s been told, the stories he’s heard along the way. Science proceeds not only ‘funeral by funeral’ but clique by clique, lunch table by lunch table. Waving the ‘Freud’s not science’ flag isn’t so much a statement of fact but a not-so-secret handshake that marks him as one of gang.

And what a gang it is. They are in charge of funding, and funding allows science research. That’s the second problem with Brockie’s statement. They’ll say they want investigator-led research; they’ll say they want to give researchers the ability to follow their curiosity and investigate all manner of topics, regardless of where they might lead. The truth is, they are perfectly happy to strangle research in the crib if they don’t like it.

I know this, because they have strangled mine, repeatedly, while intoning ancient rites of scientific concern. They have just done the same to novel research proposed by a friend and colleague. We can show the theoretical basis for the work, we can demonstrate the linkages to international peer-reviewed literature, we can link the primary research to the hypothesis — we can do all the things these quartermasters of science demand. And then, they say that it isn’t ‘science’ because the science hasn’t been done because it hasn’t been funded.

It doesn’t help that we are talking about inter-disciplinary research – research that falls somewhere in between the disciplinary silos. Call it economic psychology, or psychological economics, or decision sciences if you like, but it is just the latest area of research in which we develop theories of human behaviour and test them. I’ve tried to explain it here (pdf), Andrew Dickson tried a different angle here, and yet another perspective is here. And still we get things like this 2012 article saying ‘Surprisingly little scholarly work has linked food and Lacan’.

Maybe that has something to do with funding decisions rather than lack of curious researchers. You want to say that Freud is not science? Give me a few a million dollars over several years to do the research. If I fail, you can have your talking point.

The scientists controlling the money are like Abraham, driven by Yahweh to demonstrate their obedience by sacrificing the young Isaac. But Yahweh is I Am Who Am, certain in His existence. Science can also be a jealous and uncertain Master, a Cronus who must devour his young to protect his reign. When he guides Abraham’s hand, he doesn’t stay the knife.

Note:  I apologise in advance if this is a bit scattered – if you have questions or comments note them down in the comments, you’ll be doing me a favour

Paying our labour and capital

Remember that I stated in part 1 that we want to think about taxation, and spending, in terms of changing the allocation of goods and services.  This is not saying that goods and services are “fixed” and we are moving them around – no no no no.  It is saying that we are instituting policies that change the mix of goods and services, giving up some and increasing the amount of others.  We are thinking about how to use our scarce inputs to create outputs.

Now I have a strong preference towards private provision, given that voluntary prices are truly democratic and combine knowledge we don’t share as a society (but have internally as individuals), so let’s not get too ahead of ourselves in thinking we can “plan” the economy.

But, when looking at the issue we can say that we have a government sector, and a non-government sector. Labour and capital combine in both sectors to make goods and services … these are government goods and services and non-government goods and services.

Now if the government sector made goods and sold them to the public for a price, without raising any taxes, they would be just like any other firm.  In this case, the price paid for the government goods creates the income to pay for the labour and capital, and the labour and capital owners will purchase a mix of government and non-government goods at the relative prices

But government doesn’t work this way.  It pays for its goods by taxation instead of setting a price.  It uses this tax money to pay labour and pay capital when they create government products.  There is likely to be a reason for this, such as the existence of public goods, the urge to redistribute some products by providing them publicly, the desire for equal access to health and education.  That is cool.

In this context, the taxation is the government “claiming some proportion of non-government goods” to pay labour and capital with – since the labour and capital who produce government goods want to consume both government and non-government goods.  The government taxes non-government good providers, taking some of their output, and then sending over some of the produce of government production.

In this way, the tax exists in lieu of a price.

Now, while a price would see government goods and non-government goods produced with respect to their relative market value, taxation and spending is unlikely to lead to this same case for two reasons:

1. The government goods are explicitly being produced beyond their relative market value – as we believe there are non-market benefits associated with it.  This is redistribution through tax and corresponding spending.  In of itself this isn’t necessarily inefficient – with a lump sum transfer relative prices will just adjust.  We can view this as changing the “endowment” of underlying resources for different people.
2. Depending on the type of tax there are relative price effects, which reduce efficiency directly.  This occurs because it creates a gap between the cost of the good for the person buying it and the return for the person selling it (the “wedge”) – and so the very existence of the tax changes where people work, what they consume, and where capital ends up relative to the case where prices represent underlying value given the allocation associated with the government transfer.  This only occurs with taxes that influence relative prices – so not lump-sum taxes.

A web of prices, an ideal frontier, the fundamental welfare theorems

Now here is the way I see this idea when we think of spending, taxation, and the economy.

There is a set of resource (land, labour, capital, enterprenuers) and agents are endowed with some quantity of these resources.  Through trade, and the establishment of institutions and contracts, this leads to outcomes.  Prices in this case represent a set of relative values, and there is a frontier of outcomes (depending on initial endowments, that can be changed through lump sum government transfers) that can be seen as “pareto optimal”.  This is really just the fundamental welfare theorems which hold for perfect competition.

When we have a tax that isn’t lump sum, so it creates a wedge between the buyers and sellers price in a market, we end up in a situation “below” this frontier, which is in turn pareto inferior to a potential outcome.  This is why you will often see economists arguing for the idea of a poll tax with a progressive transfer system.  I’m not entirely sure – as I inherently see the transfers as having the same impact in terms of labour supply (unless we actually delink the benefit system from work), and believe that when equity concerns are taken into account some of these outcomes are not truly “pareto inferior”.

Now we don’t have perfect competition, it is more likely that we have monopolistic competition and the associated inefficiencies of that.  Modern policy oriented models do assumes this (eg DSGE models) and work from there.  However, even given this the tax principles are not terribly different – and as a result, I stick with useful simplifying assumptions to describe tax policy.

Furthermore, issues of information, incomplete markets, endogeniety and co-ordination failures, and oligopolistic competition do push us away from this idea, and provide scope for government interventions that are win-wins!  But at the current margin we already allow for those with policy – the “marginal” concept of taxation is very much along the area of trade-offs I’m discussing in these articles.

Trust me, these additional issues do play a significant role in how we try to discuss interventions – and many current interventions are based on it (eg monetary policy that tries to close output gaps, government intervention in markets over competition and consumer issues). Even if we “unrealistically” assumed perfect competition and perfect knowledge, the distributional impact of tax changes are insanely hard to work out – the best we can do (and that I’m aiming to do) is to provide a flavour for the direction of the different trade-off between taxes, not the magnitude or an implication of what we should do.

When we look at a range of marginal ideas such as “shall we try to ramp up healthcare” we are facing the traditional transfer problem akin to the fundamental welfare theorems, and this sort of exercise is useful.

That is so unrealistic, man economists say such stupid thing

I have tried to be honest about assumptions.  Often when an economist does this, someone is a dork and says something like the above.  If someone appears that feels like commenting in this way, I am replying to you right here.

Excuse me for admitting that allocation is an incredibly complicated issue that requires great care and thought when setting up a policy.  Why don’t you just go back to telling the world about your “make everyone better off by magic plans” and not bother talking to me again.

Why am I bothering with this comment – because there are innumerable people out there who simultaneously believe:

1. There are really obvious and easy solutions to economic problems.
2. Economists make really dumb assumptions and are stupid.
3. Economists massively overcomplicate issues with maths and terminology.

I find those assumptions mutually inconsistent, and whenever I meet a person like that (which is far too often) I can’t help but feel that there is really something wrong in their life that they are trying to make up for.  If I had any empathy I’d be sympathetic – instead I’m going to write this part of my post to insult them.

To everyone who has avoided their snark and has constructive things to say – thank you, I want to give you a hug.

Conclusion

Hopefully these examples helped to clear up the idea of burden and distortion – it is an interesting issue, and one that requires careful analysis when we actually go to investigate policy!  Next week I will have an article up with some “ideal taxes” (poll taxes, land taxes, ability taxes), and I will touch on ideas of horizontal and vertical equity!  With all that we will be ready to hit factor taxes and consumption taxes the following week, inflation taxes the week after, and externality taxes the week after that.

Where I have gone in parts of this post is beyond where I’m heading on the Rates Blog posts – quantitatively I am talking about the same results, but the description involved is more involved.  It wouldn’t be fair to burden that on the larger public on Rates Blog who are less likely to be as nerdy as anyone over here … unless they are interested in the ideas, in which case I hope they see it!

By the end of it, we should all have an idea about the framework we view tax within.  Given that, we can make our own judgments about what is fair, and interpret the evidence about burden to try to figure out whether that makes much sense.  To be honest, all of that is far beyond me

The Wellington Demo Day saw highly polished presentations, with clear development plans and just as clear ‘here’s how we and our investors are going to make money’ to about 300 people at Te Papa’s Soundings Theatre. About half the audience were financiers.

Any investment secured goes to the next stage of development and expansion into global markets.

My initial underlying thought was jealousy.

Why? Because the participants have obviously learned so much.

Tui Te Hau, CEO of Wellington startup incubator Creative HQ up summed this rationale better than I can.

“Lightning Lab is turning out 30 entrepreneurs with a harder edge and keener and smarter drive to succeed than many. How far they go is up to them, but these companies are 12 weeks old and they already have more scars than most get in several years.”

These nine companies were whittled from 87 applications to LL late last year, and each received $6000 per head from a set of founding investors. By being part of a three month intensive acceleration programme, their digital concepts have been validated, built and established with early customers.

The startups have been mentored by local and international advisers, faced hard deadlines in growth targets and a structured model for accelerating early stage business growth based on international best practice.

When Te Hau talks about scars, she’s not exaggerating – but obtaining them so quickly and with the ability to ask advice such as “what should we do now” in such a concentrated manner – is something so valuable it really can’t be priced.

What is patently clear is that the 30 participants, and their wider networks, have had such an injection of entrepreneurial spirit and possibilities that multiplier spinoffs and benefits can only result for Wellington and New Zealand.

Put another way; this programme, with its hand-holding, arse-kicking and question-asking intensiveness will create a virtuous circle of increasing wealth.

And sure, like all of us, these startups have, and will make mistakes.

But, they know what needs to be done to get back on track, or alternatively how to fail-fast (and then get on with another project).

Because the Demo Day was asking for money, what can be reported publicly is limited.

Suffice to say that (and you’d have to imagine that the mentoring has been also strong in this area) the investment dollars being asked for by the startups seemed reasonable and appropriate.

Many of the companies had potential exponential growth rates, but realism ruled.

It is now up to the individual companies themselves to reveal if or what investment(s) have been made in them – and as this becomes known Lightning Lab will have its own raison d’etre validated.

For the record, those presenting were:

LearnKo – delivers online learning programs to English language organisations in Asia, harnessing Australasian tutors, training them and providing them with content to deliver through an online classroom

Publons – platform for crowd-sourced peer-review of academic articles, where academics build a reputation for their contributions. An alternative to the extremely slow, expensive and closed status quo of the past 300 years of academic publishing

Adeez – specialist mobile marketing platform, enabling brands and their agencies to increase their ROI on mobile marketing

Expander – tracking and analytics platform that protects brands by providing them with powerful tools to combat counterfeit, while connecting manufacturers and consumers

teamisto – turn a typical business sponsorship donation to an amateur sports club or team into an effective advertising channel with measurable results

Questo – works with organisations by providing a platform to create activities with incentives and rewards to engage their visitors. A mobile app and analytics engine provides the ability to track, measure and evaluate their visitors’ behaviour

promoki – social media platform that gamifies photo and video contests. Help brands co-create advertising campaigns with their audience and distribute crowd-filled media across multiple social networks

Kidsgomobile – software device to help parents teach their children to become responsible users of their first smartphone. Tool that notifies parents if their child engages in potentially risky phone behaviour and helps them resolve these issues

WIP – platform that enables professional video makers to share their work-in-progress videos with their team and clients to gather precise and meaningful feedback

Without doubt, some of these startups will go on to become much larger businesses. Without doubt too, most of them would not have got to this ‘go’ position without Lightning Lab.

The learning has been immense, and a thumbs up to those investors and sponsors who put their hands in their pockets from the get-go to kick the whole thing off.

Applications for the next Lightning Lab 2014 will open in September this year.

Gerald tries working out New Zealand growth rates for 1946-1952, contrasting Maddison’s data with others. The Reinhart-Rogoff data doesn’t look like Maddison’s. Then commenters, likely including at least one data maven from the bowels of the NZ bureaus, start helping out.

Commenter Oscar first points to an FT piece showing that Maddison uses calendar years while the Stats NZ series uses March years. Then Silverberg starts wondering whether 1951 was due to the waterside lockout or to the wool price boom, quipping:

Who would have thought that you would have to become an expert on NZ wool exports and labor relations in 1951 to decide if public debt affects economic growth.

It gets much much wonkier from there. Mark Sadowski provides a short history of the waterfront dispute and the wool boom:

I was convinced from the start of the HAP/R&R controversy that the New Zealand part of this story was explained by the 1950-1951 New Zealand Wool Boom and not the 1951 New Zealand Waterfront Dispute.

The 1952-53 New Zealand Yearbook shows that wool sales were 47.1 million NZ pounds in 1949-50, 107.5 million NZ pounds in 1950-51 and 52.7 million NZ pounds in 1951-52.

Most of this was caused by a change in price, not a change in output. The average price of wool rose from about 38 NZ pennies a pound in 1949-50 to 88 NZ pennies a pound in 1950-51 and fell back to 40 NZ pennies a pound in 1951-52. (There were 240 pennies to a New Zealand pound.) Production was about 298 million pounds in 1949-50, 294 million pounds in 1950-51 and 315 million pounds in 1951-52.

According to the HAP/R&R dataset New Zealand’s nominal GDP (NGDP) was 1.101 billion NZ pounds in 1949, 1.396 billion NZ pounds in 1950 and 1.446 billion NZ pounds in 1951, so that was a substantial proportion of New Zealand’s economy.

A good paper about the New Zealand Wool Boom is here.

I can’t locate a free copy, nor can I save a PDF file I can cut and paste but I would summarize the episode as follows.

Demand for wool had been strong since WW II ended but supply had been unresponsive to elevated prices. When the Korean War started in June 25, 1950 there was an immediate elevation in the price of wool. Between that date and March of 1951 the price of wool went up two to three fold depending on grade (lower grades went up more, mainly because that was the kind of wool the military was buying). Demand wasn’t simply driven by US military stockpiling as retailers actually used rising prices to induce even higher sales.

In January 26, 1951 the United States Office of Price Stabilization (OPS) imposed a general price ceiling measure designed to freeze the pre-war price-wage structure. The price ceiling on wool brought trading in Boston (the central US wool market) to a standstill and caused US participation in New Zealand wool auctions to more or less cease. This led to falling New Zealand prices until February 7 when an emergency exemption was granted to the US military through April 1. This caused prices to recover but once the exemption expired prices fell sharply. By June 1951 they had fallen by 50% and by March 1952 they had fallen a total of 70%.

Now, my sense from reading the history of the Waterfront Dispute is that it was less a strike than a lockout. The government brought in 3000 troops an unknown number of scabs to keep the dockyards running, and thereby crush the union.

The 1954 New Zealand Official Yearbook shows the Cargo Manifest Tonnage “cleared” (exports) fell from 1,163,934 tons in 1950 to 1,129,629 tons in 1951. It rose up to 1,173,577 tons in 1952.

In other words the mass of cargo moved fell by only 2.9% and rose by 3.9% the following year.

What about the actual value of exports? Exports *rose* from 183,752,000 NZ pounds in 1950 to 248,127,000 NZ pounds in 1951, and fell back to 240,561,000 NZ pounds in 1952

Wool exports rose from 74,653,000 NZ pounds in 1950 to 128,176,000 NZ pounds in 1951 and fell to 81,998,000 NZ pounds in 1952. Note that wool exports increased by over 70% in 1951 and amounted to nearly 52% of all exports that year.

So it would appear that the 1951 Dockyard Dispute had little effect on actual exports.

[note: links tidied from source]

And all of this over one cell in a rather large Excel table. Raise a toast tonight to the wonks whose work provides every cell of every spreadsheet on which we rely.

* Except at Worthwhile Canadian Initiative, somehow.

No, seriously - ignore the atrocious cover image & listen to the ideas therein. (I suppose one could argue that the image would get more people to view Thunderf00t's message than a more mundane title, but would those who came for the cars & women stay for the serious sci-comm message?)