Real, No-Fooling Socialism [updated]

The Alliance Party says the Government should take ownership of the Lane Walker Rudkin (LWR) Factory in Christchurch to prevent a disastrous loss of hundreds of jobs.

Alliance Economic Development Spokesperson Quentin Findlay says it is vital that jobs and incomes are preserved to prevent mass unemployment in New Zealand.

He says the Government should take control of failing enterprises and investigate options such as public ownership, employee shareholdings and worker ownership.

“The cost of positive action is far less than the human misery, financial burden and economic stagnation of mass unemployment.”

Mr Findlay says the cause of the LWR factory’s closure was both National and Labour led Governments supporting free trade deals and free market policies.

Ugh.

It’s hard to believe these morons won 13 seats in the New Zealand’s parliament in the 1996 election. I understand calls to compensate those who lose out from economic change (I know some very smart and reasonable lefties), but it is just beyond me how anyone could be so short-sighted as to think that businesses which do not produce anything of value should be kept afloat. Whenever someone proposes this sort of thing I generally ask them whether they would think it a good thing if ninety percent of people still worked in agriculture and had pre-industrial levels of wealth. I’ve never heard to reasonable argument for the idea that past, but not future, economic growth was worth the short-term costs of dislocation. There are some primitivists, of course, but they’re certainly a minority of anti-current progress types. I suspect a big part of it is the status quo bias.

Update: Paul Walker offers a very thorough and wide-ranging takedown of Alliance’s stupidity.

One Response

  1. http://www.worldbank.org/html/prddr/trans/m&j96/art9.htm

    Professor Jan S. Prybyla on the Price of German Unification

    The East German economy was in much worse shape than had been expected, not least because those in charge of it took seriously the intrinsically flawed communist idea—central command planning included—translating it with humorless but disciplined diligence into nonviable structures and catastrophic policies.

    With a view to corporate takeover, Volkswagen AG sent a Herr Heuss to Zwickau to find out how the Trabants (relatively cheap, East German cars) were made there. He emerged shocked from the huge plant, babbling “My God!” The Trabant operation was value-subtracting: valuable material, labor, and capital inputs went in at one end; shabby Trabies came out at the other, their bodies made from compacted trash. The final output was worth less than the sum of the inputs. What was not fully understood at the time was that East Germany’s whole economy was value-subtracting and cost-unconscious.

    That’s the end result of this line of thinking.

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