Speaker by Various Artists

Read Post

Speaker: Generation Zero: Let's Grow Up

132 Responses

First ←Older Page 1 2 3 4 5 6 Newer→ Last

  • Matthew Poole, in reply to Rich of Observationz,

    Why on earth would anyone borrow against savings? That’s just gifting money to the bank

    Say you had a long-term term deposit with hefty break penalties...

    Auckland • Since Mar 2007 • 4097 posts Report Reply

  • Sacha, in reply to Rich of Observationz,

    Leverage. Hey our whole financial system is based around gifting money to banks. :)

    Ak • Since May 2008 • 19680 posts Report Reply

  • Angus Robertson, in reply to Sacha,

    It is right now.

    If the bank is too big to fail.

    Auckland • Since May 2007 • 984 posts Report Reply

  • BenWilson, in reply to Angus Robertson,

    That said (just between ourselves) I’m pretty sure even those idiots can’t be trusted to go for it long term, because their growth is jobless.

    I don’t think it will go on either. My point above is to show the madness of it, that there isn’t some natural minimum interest rate, after which it is impossible for lending to be profitable, and thus it will just stop by itself. The only really natural end point to lending is when the lenders own everything, after which it hardly matters to them if they make a profit or not. But I doubt that it could get to that because social collapse would happen sooner.

    I don’t know about the jobless side of it, though. The future vision of endless growth with steadily reducing employment is not only not inconceivable, it’s not even necessarily bad. It would only be bad if unemployment meant no access to the goods of society. If everyone became unemployed, but remained rich, and growth continued steadily, we’re actually talking about utopia. It’s not even that hard to imagine, in an age of automation.

    Unfortunately both mainstream left and right economics have no place for increasing unemployment. In that they resemble each other more than they realize. They obsess about keeping everyone employed, even though there is a steadily declining need for people to actually be employed. There simply isn’t any plan for the reality of where industry and automation are inevitably taking us, other than to find more and faster avenues for growth to soak up the need for full employment.

    It’s insane, seen from the outside. There are also a number of ways in which it could easily be fixed. Decoupling access to the goods of society from the work that people do is a start – for the rich this is already a reality anyway, so it’s not like there isn’t a model of such a society to look at. People would probably still work, they’d just work on the things they want to work on, as rich people do. Since the idle rich are where the lion’s share of the most important ideas, art, science and other high level goods have come from historically, it’s not like this would be a terrible thing.

    Auckland • Since Nov 2006 • 10629 posts Report Reply

  • Islander, in reply to BenWilson,

    ince the idle rich are where the lion’s share of the most important ideas, art, science and other high level goods have come from historically, it’s not like this would be a terrible thing.

    The idle rich *may* employ or commission the intelligent creators but very bloody few of 'em actually CREATE-

    Big O, Mahitahi, Te Wahi … • Since Feb 2007 • 5643 posts Report Reply

  • andin, in reply to BenWilson,

    Since the idle rich are where the lion’s share of the most important ideas, art, science and other high level goods have come from historically, it’s not like this would be a terrible thing.

    Really? I would question your interpretation of history

    raglan • Since Mar 2007 • 1881 posts Report Reply

  • Sacha, in reply to BenWilson,

    Since the idle rich are where the lion’s share of the most important ideas, art, science and other high level goods have come from historically...

    Says more about who defines history.

    Ak • Since May 2008 • 19680 posts Report Reply

  • BenWilson, in reply to Islander,

    The idle rich *may* employ or commission the intelligent creators but very bloody few of ’em actually CREATE-

    Fair enough, but they made the creation possible in those cases. The "idleness' needed to make the works was supplied by the patronage.

    Auckland • Since Nov 2006 • 10629 posts Report Reply

  • BenWilson, in reply to andin,

    Really? I would question your interpretation of history

    Well I did mean "for most of history". Recently, in the developed world, a lot more people have enjoyed levels of wealth and comfort that have given them time to work on things of their choosing. That's one of the best things about modern times.

    And I was careful not to say "all goods". Naturally that is not the case, most people who have lived have spent their lives making goods of one kind or another. I said only "high level goods", and I'd define that rather circularly as the kind of good that emerges only for cultures that have sufficient spare time in the hands of enough people. People who are required to hunt or farm all day simply have a far smaller amount of time to dedicate to, say, writing a novel, or painting a masterpiece. They are also far less likely to spend the time getting educated, or to have the money for it.

    I'm not trying to glorify the wealthy and say that poor people are crap. Just trying to suggest that a world in which poverty disappeared entirely, and people enjoyed a tremendous amount of spare time compared to what has been available in the past, would not be a world in which people stopped doing anything useful automatically. I was heading off at the pass the argument that poverty is necessary to drive any usefulness out of people.

    It would be probably much harder to find people to do unpleasant work. For such work as still required people to do it, I don't have a clear idea what the best method is. Either it should be very well remunerated as an incentive, or allotted fairly by some compulsion. I'd rather the former. It's one of the worst things about capitalism that this is not how things are - that the worst kinds of work are often paid the worst too, they fall on the most desperate and powerless. I think that would change if poverty disappeared.

    Auckland • Since Nov 2006 • 10629 posts Report Reply

  • BenWilson, in reply to Sacha,

    Says more about who defines history.

    People who have the time, education, and inclination to write it. It should be everyone. Throughout history, including now, it hasn't been.

    Auckland • Since Nov 2006 • 10629 posts Report Reply

  • Bart Janssen, in reply to Islander,

    but very bloody few of ’em actually CREATE

    He's probably referring to the history prior to the mid 20th century. In those times the only people with the time available to create, invent, discover were the rich. Everyone else spent every waking hour staying alive (usually with mixed success).

    As you point out even then only a few of the rich bothered, or were able to create. But because they were the only ones with opportunity then all the inventions etc came from the rich.

    In the early to mid 20th century that changed. The entire middle class had time, even the poor had more time. As a consequence the generation of ideas, discoveries, art etc started to come from all levels of society. Again most folks didn't create anything significant but now the few that did could be poor or middle class rather than only the rich having that time.

    It's a really interesting change in culture and not one many folks see. Even those who look at the history of science sometimes miss that change. It has impacts on where people applied their talents, the rich tended to be random in their efforts, the poor often had very specific goals. Hence art suddenly depicted a broader swath of society, science targetted needs of the poor, since it was ebing by folks who grew up poor.

    All of which is completely off-topic. And all of that applies to Western culture and history and is not entirely true elsewhere.

    Oh and as a side note, you borrow against savings if your return on investment is greater than the cost of the money. It's how the genuinely talented rich have succeeded - the ones who have built empires from scratch rather than being gifted them by parents or buddies.

    Auckland • Since Nov 2006 • 4450 posts Report Reply

  • Sacha, in reply to Bart Janssen,

    The entire middle class had time, even the poor had more time.

    Yes. Clay Shirky's 13-minute TED Talk about cognitive surplus is worth a watch.

    Ak • Since May 2008 • 19680 posts Report Reply

  • BenWilson, in reply to Sacha,

    Yes. Clay Shirky’s 13-minute TED Talk about cognitive surplus is worth a watch.

    Cognitive surplus! Nice phrase. In Praise of Idleness here by Bertrand Russell is something I read long ago on the same topic. It's interesting to see views on this topic prior to WW2, when Godwinning was not even possible.

    Auckland • Since Nov 2006 • 10629 posts Report Reply

  • BenWilson, in reply to BenWilson,

    In the book named after this essay he also has some interesting views on architecture, too, how much it can influence the ability to create "cognitive surplus". Just to be a little bit more on topic.

    Auckland • Since Nov 2006 • 10629 posts Report Reply

  • BenWilson,

    It is an essential part of any such social system that education should be carried further than it usually is at present, and should aim, in part, at providing tastes which would enable a man to use leisure intelligently. I am not thinking mainly of the sort of things that would be considered 'highbrow'. Peasant dances have died out except in remote rural areas, but the impulses which caused them to be cultivated must still exist in human nature. The pleasures of urban populations have become mainly passive: seeing cinemas, watching football matches, listening to the radio, and so on. This results from the fact that their active energies are fully taken up with work; if they had more leisure, they would again enjoy pleasures in which they took an active part.

    Says what I was trying to say a whole lot better.

    Auckland • Since Nov 2006 • 10629 posts Report Reply

  • Angus Robertson, in reply to BenWilson,

    The future vision of endless growth with steadily reducing employment is not only not inconceivable, it’s not even necessarily bad. It would only be bad if unemployment meant no access to the goods of society. If everyone became unemployed, but remained rich, and growth continued steadily, we’re actually talking about utopia. It’s not even that hard to imagine, in an age of automation.

    What the West is achieving is endless asset growth. The asset based goods of society are grown out of reach of the poor to accentuate the wealth of the rich and props are created so that the rich cannot fail, but the poor get subsidised and need to work less. A seeming corporatist/socialist utopia is being achieved.

    Unfortunately to finance this growth the society as a whole must accrue significant debt. But that is okay because, that debt is backed by a growing economy and all is well. Until something happens and the asset bubble you have been creating pops. Then no one is willing to loan you even more money, you cannot accrue more debt and the whole system falls apart. Leaving rich people with all the assets and poor people with all the debt.

    Oh and as a side note, you borrow against savings if your return on investment is greater than the cost of the money. It's how the genuinely talented rich have succeeded - the ones who have built empires from scratch rather than being gifted them by parents or buddies.

    On a side note to this side note: it is even better if you can get someone else to borrow the money and give it to you.

    Auckland • Since May 2007 • 984 posts Report Reply

  • BenWilson,

    What the West is achieving is endless asset growth

    If by asset growth one means "the asset actually improves in some way" then it's a good. If we just mean "the asset's price went up" then we're talking about inflation which is not clearly either a good or a bad. So long as everything else is inflating at the same rate, it's not bad or good. But if it's inflating relative to other goods, then it's good for owners and bad for non-owners, particularly if that good is something necessary, like a roof over our heads. And the more it goes on, the badder it gets. The same comment goes for deflation.

    Which suggests that an easy solution to it is to simply match the inflation by inflating other things. Property prices don't need to deflate, so long as incomes inflate faster. That could be achieved by putting a limit on the property inflation and pushing up incomes.

    Auckland • Since Nov 2006 • 10629 posts Report Reply

  • Keir Leslie,

    Actually lots and lots of non-idle-rich created things. (The cathedral masons. The folk arts of the world, by definition..) And lots and lots of things were paid for by groups that weren't the idle rich.

    Since Jul 2008 • 1452 posts Report Reply

  • BenWilson, in reply to Keir Leslie,

    The cathedral masons.

    They were generally commissioned by the aristocracy or the churches, though. They happened because rich people wanted them to happen.

    And lots and lots of things were paid for by groups that weren’t the idle rich.

    The things you're talking about mostly came from idle time. Folk arts are things folks work on when they have the time for it. This does happen from time to time even to poor people, that there are times of plenty, times of idleness. Long cold winters indoors. Post-harvest times. Any time you managed to catch a whole pig just for your family. I only mention the idle rich because they have this is a near permanent state, so their idle time can be spent on sustained attention to whatever interests them, and often with no connection to an eventual paycheck at all so the scope was greater, no investigation or art or thought too uneconomic to be allowed. Also, they had resources - if what they were interested in required some expensive input, they could fund it. If knowing about it to any sufficient level required education, they could get that education.

    Again, I'm not glorifying the existence of the idle rich, or saying they were better than everyone else. Just that their mode of existence could be a blueprint for what things would be like if everyone was like that. And it's not a world of nothing happening, all economic activity ceasing, all motivation gone. On the contrary, it's one where the only motivation is for what people want, and the only activity directed toward that, and that it can create amazing things, because it has done that, throughout history. Essentially, I'm saying that the connection between remuneration and work is not straightforward and obvious as a way of directing human behavior. It doesn't necessarily bring out the best in people, because many of the best things of all time have been created by people working entirely for free enabled by no concern for their roof, food, health, safety, and freedom.

    Auckland • Since Nov 2006 • 10629 posts Report Reply

  • Kumara Republic, in reply to Angus Robertson,

    What the West is achieving is endless asset growth. The asset based goods of society are grown out of reach of the poor to accentuate the wealth of the rich and props are created so that the rich cannot fail, but the poor get subsidised and need to work less. A seeming corporatist/socialist utopia is being achieved.

    Unfortunately to finance this growth the society as a whole must accrue significant debt. But that is okay because, that debt is backed by a growing economy and all is well. Until something happens and the asset bubble you have been creating pops. Then no one is willing to loan you even more money, you cannot accrue more debt and the whole system falls apart. Leaving rich people with all the assets and poor people with all the debt.

    TL;DR: A jobless recovery.

    The southernmost capital … • Since Nov 2006 • 5415 posts Report Reply

  • andin, in reply to BenWilson,

    I was heading off at the pass the argument that poverty is necessary to drive any usefulness out of people.

    It would be probably much harder to find people to do unpleasant work.

    Who's making that argument?
    Its always hard to find people to clean toilets(for example) unless its well paid.
    And has all this idle time been of benefit? That is open to question. A lot of dubious benefit has ensued from this "idle time" never forget that.
    We sit here now, perhaps pissing advances made to "life styles" away.
    It seems about time humanity pulled its collective head it, we arent alone on this planet, never forget. Just (it seems at times) alone in the universe. Only because we dont know how to communicate with other life forms.

    raglan • Since Mar 2007 • 1881 posts Report Reply

  • BenWilson, in reply to andin,

    Who’s making that argument?

    Who would try, when the pass is held? (that's the point of heading something off at the pass)

    Auckland • Since Nov 2006 • 10629 posts Report Reply

  • James Bremner,

    Well, lots of discussion but no suggestions as to how to make housing in Auckland and more generally around New Zealand, more affordable. Does anyone have any examples of intensification lowering the price of housing? I don’t know of any.

    At Interest.co.nz BNZ chief economist Tony Alexander sees floating mortgage rates hitting 8.5% within the next three or four years. If land supply was relaxed, house prices wouldn’t increase so fast and interest rates might be able to be lower. Rates are on the way up, the Fed is making noises about winding down QE infinity, and the ass has dropped out of the price of gold over the last few months which tells you what people think of the future direction of US interest rates and the value of the US$ (up). So that makes housing even more unaffordable for people wanting to enter the market, and for many that already have floating mortgages.

    So let’s just review the situation. Due to a desire to reduce urban sprawl, some cities place urban boundaries to restrain growth (in area) of a city. Populations grow and are expected to continue to do so, so for an extended period of time demand for houses grows faster the supply of houses, which can only result in increased prices. The urban boundary makes land banking and speculating on property a one way bet so lots of people pile in and prices increase even further. I don’t blame them, they are only responding rationally to the situation created by local and national governments.

    Intensification is hard to do as people don’t want their neighborhoods changed or apartment block next door. I don’t blame them either, but screw them; the land that their house is on was once an open field wasn’t it?

    Housing gets a lot more expensive, in Auck the median house price is now 7 times the median income, up from 3 times 30 years ago. The less well off have a much harder time buying a house or renting, the well off are better off as the value of their assets increases faster than it otherwise would have. So urban boundaries have made the less well off relatively less well off and the well off better off. I hope you like your city with less sprawl, it has exacted quite a price.

    Poorer New Zealanders have been hurt by artificially restricting something New Zealand has a lot of, land, which seems absolutely nuts. NZ is only 1% built up, and has plenty of space. Auckland is already quite dense relatively. Auck is 2,400 people per sq km, Sydney and Melbourne are around 1,600 per sq km, and Sydney and Melbourne are much larger cities in terms of area and are often described as very livable cities.

    The desire to have less sprawl has hurt the less well off and distorted the economy so that too much of NZ capital is tied up in non productive property, slowing economic growth and job creation and productivity growth. Building a few more roads and subdivisions and burning a bit more gas to get too and from work or the bus or train seems like a much, much smaller price to pay that the havoc that boundaries have created.

    What to do? I am all for an all of the above strategy.
    As much intensification as fast as possible, although I don’t think what can be achieved with intensification will ever come close meet increasing demand due to the NIMBY effect restraining how much intensification can be done.
    As much expansion as needed to drop the price of land so some more affordable houses can be built on the outskirts of Auckland. Look at a map of Auckland, Auckland is on a narrow isthmus that spreads out to the north and south, there is plenty of land close to Auckland that could be used for houses without growing out that much further.
    If the Auckland Council and the Govt say they will make sure enough lands will be released to maintain a good supply to keep prices in check, that will take most of the speculative money out of land and property as future gains will be much less certain.

    What can’t go on for ever wont. Housing can’t keep increasing as fast as it has, you either need more supply or you are going to get a nasty crash and some serious economic and social carnage when the bubble pops. And increasing interest rates are just around the corner.

    I would still like to hear from the Gen Zero guy, Dr Singh, who wrote the article that prompted this thread. How does he and Gen Zero propose to address affordable housing.

    NOLA • Since Nov 2006 • 353 posts Report Reply

  • BenWilson, in reply to James Bremner,

    What to do? I am all for an all of the above strategy.

    I agree with much of what you say here. You don't really get intensification just by banning sprawl. You have to take positive steps to encourage intensification, and that means density and building restrictions in areas where intensification is desired have to be loosened. Even that might not be enough, and active development by the government of intensified housing might be needed.

    Does anyone have any examples of intensification lowering the price of housing?

    I'd be surprised if it did that, to be honest. Not in terms of actually dropping prices of existing houses, or creating similar dwellings for lower prices. It would only make the city more desirable, attracting more people to live in it, which would drive prices up.

    What we could do with, though, is to create a different strata of property that actually is more affordable. Essentially apartments that aren't hovels, but they also don't have any land. Single people and couples would be especially attracted to that. There really isn't much of this in Auckland.

    To actually bring property prices down is a whole economy problem. Our entire banking system is predicated around property and the ownership thereof. Residential property is most of the capital in the country. You can't fix something that massive by little piecemeal measures - everything about the way our money enters supply, interest rates are set, our currency gets it's international value, etc, are all tied up with the way residential property is financed. Short of massive changes in the basic structure of that setup, prices are only going to go up because the most powerful financial institutions here do everything in their power to make that so. A collapse in property is politically unthinkable.

    That being so, an enforced stability is created which, as in so many other complex systems, creates an instability. It can look stable, indeed it can look like it's getting more and more stable, right up until the whole thing flips on its head. Stability creates instability.

    Why this somewhat strange statement is true is not that mysterious. If an investment is "safe as houses", then it encourages more and more people to invest in it, to take the profits. You can't get more and more people taking the profits without the profits declining. So if you engineered a situation where profits must not seem to decline, then their inflation is to a large degree artificial. It can ride on sentiment, and when that eventually collapses, it is bailed out. The bail out means that people become more confident that collapse is impossible, so sentiment improves, and rides higher. When it stalls, we get another bailout. Of course you can only bail it out so many times, before there's no more bailout money. Then, it crashes down in a screaming heap. The scary thing is that it hasn't happened yet. We've had a property shock, some minor bailouts, and now property steams ahead again. We can keep doing this, until the coffers are dry, because the banking sector is the one group that both left and right governments will always bail out. The entire time, property will rise, right up until the money is gone. This is true both in NZ and the rest of the world - there could easily be another debt fuelled American recovery, followed by an even bigger crash that makes the GFC look tame.

    Or we could have the longest recession in history, by holding the stability line hard, the policy of austerity, allowing the banks to punish the poor, cutting every kind of government expenditure so that more and more taxation can serve to buffer the finance industry against the risk it is actually creating. Essentially we can regress to third world social equality status. This has been the plan so far.

    Or we could take a different path...but we'd have to choose it.

    Auckland • Since Nov 2006 • 10629 posts Report Reply

  • Sacha, in reply to James Bremner,

    Due to a desire to reduce urban sprawl, some cities place urban boundaries to restrain growth (in area) of a city. Populations grow and are expected to continue to do so, so for an extended period of time demand for houses grows faster the supply of houses, which can only result in increased prices.

    Only if the market does not function properly by building more dwellings per patch of land. Housing supply is not land supply.

    Factors other than land availability are driving our developers to insist on building single-storey detached houses. Intensification mostly involves building *groups* of dwellings. That can be done either inside or outside planning boundaries which balance infrastructure supply costs, environmental sensitivity, opportunity cost of productive land and other aspects. It may require some industry upskilling and regulatory change to enable other development typologies or timeframes. In any case, it demands stronger leadership at both local and national levels that we've seen before.

    Our current system works wonderfully if you are a debt-hungry bank or a lazy developer who wants maximum return for minimum effort. It's time other people's interests got more attention, like our children and theirs.

    Ak • Since May 2008 • 19680 posts Report Reply

First ←Older Page 1 2 3 4 5 6 Newer→ Last

Post your response…

Please sign in using your Public Address credentials…

Login

You may also create an account or retrieve your password.