Year: 2014

There is something that is undoubtedly special about Britain. It is not just a small, rainy island in the North Atlantic. It is not just another mid-sized northern hemisphere country. In many ways, Britain has been, and still is, much more than that.

Politicians play with the price system at their peril. Yet there are minimum wage laws, rent controls, price controls and other ways of distorting prices. Usually introduced with best intentions, these measures prevent markets from working properly.

What we are seeing now is a continent barely held together by the monetary alchemy of its central bank. But you have to hand it to the ECB: it has developed extraordinary skills in concealing the real nature of its actions. No other central bank could so beautifully camouflage subsidies to banks and governments as help to the private sector.

The global convergence of productivity and incomes means there are no realistic chances that lower skilled workers in developed nations will be able to move up the wealth ladder. This means they will either have to become more skilled or they will become poorer in relative terms, and possibly also in absolute terms.

What is democracy? Well, usually democracy is when the people vote in an election and the winner then happens to form a government. It is as simple as that. And what is European Union democracy? It is when the people vote in an election and, regardless of the outcome, German chancellor Angela Merkel decides on the next president of the European Commission

By all accounts, these European elections have shaken political landscapes in many countries. Over the coming years, we will find out what these developments will mean in practice. However, the fragile consensus that hitherto governed Europe — closer integration and bailouts against austerity promises — will be hard to maintain.

Published in The National Business Review (Auckland), 23 May 2014 (PDF) Budget day last week was dominated by the usual focus on the return to surplus, some new spending pledges and discussions of potential future tax cuts. Soon afterward, however, commentators and politicians discovered the Treasury papers contained some political dynamite outside the core of fiscal […]

Bill English’s achievements of the past six years of adversity are remarkable. He now has to defend them in the coming years of plenty.