Hard News by Russell Brown

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Hard News: The Vision Thing

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  • BenWilson, in reply to Keir Leslie,

    You have a really weird division between real things and fake things which has no economic or factual foundation.

    Perhaps we have a fundamental difference of opinion on economic facts, deriving from a fundamentally different way of accounting for them. I'm not sure, I don't really know your position.

    I don't think that one shouldn't have accountant or lawyers, or that such things have no value at all. But to speak of them as export industries, and then to quote something so damned tiny in such a rich, powerful country as the UK suggests to me you have no sense of scale at all. JK Rowling on her own exported nearly as much as the entire industry you are talking about. That is because she made an actual product, which was mass produced, and then people purchased it. That is what makes capitalist countries rich. Exporting services could only possibly make a tiny country rich, and it would probably need to be rich in the first place to pull it off. To be a banking center, you have to have powerful banks. We have almost no local banks now. To be a legal center, you have to have powerful political influence - NZ has next to no political influence.

    But I'm not sure if you're really suggesting that NZ actually intensifies the process of growing the already growing non-productive industries. Really, I'm not. Are you?

    (Suppose an accountant tells me not to make a thing no one wants, so instead I make a thing someone does. Has he contributed nothing real to the economy? Surely he has contributed more than I have, given he has saved us the existence of an unwanted thing and caused the existence of a wanted thing, whereas all I have caused is the wanted thing!)

    I have an accountant and he's never done any such thing. It's not what he does. Instead, he gets paid to make sure my taxes are done properly. On the whole, that usually saves me a little tax, sufficient to cover his costs to do something I really don't want to do. Overall, it costs the country, because they don't take that tax from me - it goes to him.

    IF he was the kind of guy to research my products and make a wise choice about the prospects of a piece of software I was writing, then yes, that would have been a valuable money saving service. But that isn't what he does. That's what market researchers do. It's not the skill set of the accountant at all.

    Auckland • Since Nov 2006 • 10469 posts Report Reply

  • BenWilson, in reply to ScottY,

    I am oversimplifying, for sure, ScottY. I'm well aware that legal services do a heck of a lot more than just represent in courts. I fully agree with you that they're facilitatory services that make the system work. But that's really the point - they facilitate. They aren't the product in the end, they are services that make other industries work. If those industries die, those facilitatory services also die. And is there any real indication in NZ of a shortage of lawyers supplying services to industries that need them? Or is the shortage before that point - a shortage of industry for lawyers to facilitate?

    They can even help to "grow the pie" (even if I despise that term) rather than merely divide it.

    Practically every lawyer I know has expressed a wish that they could do more of this, because being a servant is not really what they had in mind when they went to law school, but it's what they end up doing. Their problem is almost always that they don't actually have any ideas about that, though - that's simply not what they're trained to do, to think of products, and build the infrastructure to make them. This is their own words, not mine. They see brilliant ideas crossing their desks every day, patents they wish they'd thought of, businesses with products they can see are valuable (after they become valuable) etc. But the idea generation and building part, that's tech work.

    I don't deny that lawyers occasionally contribute even quite big new ideas. But it doesn't happen that often because it's not their interest or training, mostly. If it was, they'd have become engineers, or just turned capitalist and made whatever product they had thought of.

    Auckland • Since Nov 2006 • 10469 posts Report Reply

  • ScottY, in reply to BenWilson,

    Ben, a lot of the advice I give to my clients is more commercial and business in nature, not legal. I imagine it would be the same with a lot of accountants. Sure, the inventors and creators I work with may well be making smart products, but without the service providers to help advise on getting those products to market the efforts of those talented people would be wasted. Believe it or not, solving legal or business problems can sometimes require a great deal of creativity.

    New Zealanders are an inventive and creative bunch, but one of the reasons why we do so poorly at commercialising our inventions is we often don't get the right help. Quite often the people who invent or create are the worst people to actually commercialise, because they don’t know what they’re doing when it comes to the world of law, commerce and business. I see this time and again in my role, and I have lost count of the amount of times a valuable IP portfolio has been destroyed because of someone’s bush-lawyering.

    That's where the business expertise offered by lawyers, accountants and other business advisers can often help people. If through my particular expertise and experience I can help a client navigate a complex IP licence arrangement in a way that secures a good revenue stream and protects the client against commercial risk, then I may well be saving my client from a lawsuit that destroys their business, as well as protecting their income.

    Your accountant who merely helps you with your tax is (if he/she does his/her job properly) also contributing to your wealth by making sure the IRD doesn't destroy you. Try writing and commercialising software when you're bankrupt.

    I know plenty of unfulfilled lawyers who wish they could do more. Indeed I was once one. But I also know of engineers and scientists trapped in unfulfilling roles doing what they feel are menial tasks for no real purpose.

    I wonder if the problem here is that you are placing a value on only one form of creativity?

    West • Since Feb 2009 • 794 posts Report Reply

  • BenWilson, in reply to ScottY,

    I wonder if the problem here is that you are placing a value on only one form of creativity?

    Nah, it's because when talking about economics, one has to generalize. It's a huge topic, and I'm already talking at far more length than I intended to. Adding caveats to everything would only make it longer.

    I don't dispute anything you are saying, unless you are hoping to contend that legal services are in themselves an exportable product that we could invest more heavily in for big returns. The things you're talking about are growing the real economy, the legal work is funded by the products of the other organizations.

    Indeed, I kind of feel like talking about a legal sector of the economy is like talking about the mathematics sector of it, or the writing sector. These are skills that people learn how to use, and can be used in any business. Computing is like this in spades - it's now a basic skill expected from a wide range of graduates. Computer programming is something that is learned in many faculties, and I've known many people who became programmers without any training at all, just to make an idea of theirs happen. Also, people in all walks of life are capable of becoming conversant with history, not just historians, who have a much more specific role.

    Essentially, I think trying to drive economic growth by targeting sectoral educational outcomes is ridiculous. Business has to exist for graduates to move into, or they will move out of the country to find it, or squander their education on low paid work. To try to hold the education system accountable for the failure of NZ society to find work for the graduates is nuts. It's guaranteed to kill the diversity of our education. Instead, the focus of government should be on growing the economy, so that the diversity of education we already produce can find work here, rather than taking the skills offshore with them.

    And that's worth doing, regardless of education. For a heck of a lot of people, their job is not their life anyway, nor have they ever wanted it to be. They'd be happy doing whatever work needs to be done, so long as it was paid enough for them to live comfortably on. It is a very poor outcome that NZers need tertiary education to get decent wages. It's a massive squandering of potential, tens of thousands of people who think tertiary is a waste of their lives, but they are told that they have to do it. So they have to take on debt, and lose years to end up doing something that 3 weeks on the job training would have been sufficient for.

    Auckland • Since Nov 2006 • 10469 posts Report Reply

  • Keir Leslie,

    I don’t dispute anything you are saying, unless you are hoping to contend that legal services are in themselves an exportable product that we could invest more heavily in for big returns. The things you’re talking about are growing the real economy, the legal work is funded by the products of the other organizations.

    What is the `real' economy? Seriously, when the courts solve a commercial dispute that produces real value. (Imagine if there was no law; the difference between that and what we have is real value.)

    The idea of setting up the NZ legal system up as a massive export earner is clearly slightly fanciful, but then again, there's no reason we shouldn't look to find way to turn NZ's reputation as an honest independent and incorruptible nation into money. After all, it works for the Swiss.

    (Like I say Ben, the UK legal industry has an export profile comparable to their universities, their pharma industry etc. That's pretty solid for what is a comparatively small industry.)

    Essentially, I think trying to drive economic growth by targeting sectoral educational outcomes is ridiculous.

    I agree! I think that the claims we don't have enough engineers or wevs, or that law is luring high quality undergrads away from sciences etc are basically unfounded.

    Since Jul 2008 • 1452 posts Report Reply

  • giovanni tiso, in reply to Keir Leslie,

    there's no reason we shouldn't look to find way to turn NZ's reputation as an honest independent and incorruptible nation into money. After all, it works for the Swiss.

    Yes, Switzerland is honest, independent and incorruptible, and not at all a place where people of other nationalities hide their money.

    Wellington • Since Jun 2007 • 7473 posts Report Reply

  • Keir Leslie,

    In the sense that once bought, they stay bought.

    Since Jul 2008 • 1452 posts Report Reply

  • BenWilson, in reply to Keir Leslie,

    I agree!

    I thought so. This is a very easy discussion to get into cross purposes over.

    What is the `real' economy?

    Big question. I can't formulate exactly what I mean with that right now. I'm thinking it's a straw man on my part, particularly since you say now that you think law as an export is fanciful. Essentially, I guess I do mean an economy that derives back to a product rather than a service. So the word "real" is unfair. Fair call.

    Auckland • Since Nov 2006 • 10469 posts Report Reply

  • Rich of Observationz,

    I suspect Scott must be a very good lawyer.

    When I was extensively involved with the legal profession (VC funded startup in the late 90's) there was a great deal of expensive work by both sides in us explaining to the lawyers what we actually wanted to achieve and avoid. There certainly wasn't any advice from the legal side on how to do it better.

    And these were top-tier London lawyers,

    Back in Wellington • Since Nov 2006 • 5508 posts Report Reply

  • Sacha, in reply to BenWilson,

    an economy that derives back to a product rather than a service

    so, last century's economy then?

    Ak • Since May 2008 • 19362 posts Report Reply

  • ScottY, in reply to Rich of Observationz,

    I suspect Scott must be a very good lawyer.

    Of course! (but I would say that)

    I also know plenty of bad ones. Some of them work in big firms. Some in small firms. I imagine in any occupation or profession you'd find useless people.

    West • Since Feb 2009 • 794 posts Report Reply

  • BenWilson, in reply to Sacha,

    so, last century's economy then?

    I guess we'll see. It's a bit early to be calling the 21st century economy.

    Auckland • Since Nov 2006 • 10469 posts Report Reply

  • Sacha, in reply to BenWilson,

    I don't think it's controversial to say that it has been over half a century since western nations moved out of a predominantly industrial economy that made stuff, into a service and information based one. The subsequent shift to a creative value focus has been underway for many years already too. It doesn't mean we stop doing the previous stuff, just that it becomes less profitable.

    Design adds value. For instance, if our fashion industry were only about the value of the raw materials, Karen Walker wouldn't be bringing in nearly as many export dollars. Nor if she didn't have creative business and deal-making expertise from her partner and others.

    Negotiating deals has been part of human endeavour for millenia. No doubt some ancient Greeks had the same argument about goat-herders rather than traders constituting the only 'real' economy. The villages and families of both still benefitted nonetheless.

    Ak • Since May 2008 • 19362 posts Report Reply

  • BenWilson, in reply to Sacha,

    I don't think it's controversial to say that it has been over half a century since western nations moved out of a predominantly industrial economy that made stuff, into a service and information based one

    That isn't controversial. But the question of whether it was actually good for those economies, in a capitalist world, is controversial. Very much so. Because we still need stuff, we still consume stuff, and it still has to be made somewhere. I question very much whether or not average wealth levels in western nations have been on the rise over that period, at anywhere near the level that they have been on the rise in the countries to which they have given up that industrial economy, and to which they can also lose the service economy too, even more rapidly (and have been doing so). Both means and medians are important here.

    Which shouldn't mean my own preference is to move back towards industrialization. It's more that we should move away from neoliberal capitalism. But given that we're actually rolling back our state in favour of more neoliberalism (is that a given? Do you dispute it?) are we not also in the direst danger of totally screwing up our capitalist economy too, and finding ourselves in similar straits to Eastern Europe emerging from communism, with a highly skilled population that's destined to clean toilets for countries that have plenty of skilled people themselves, and also an industrial base to support them?

    Auckland • Since Nov 2006 • 10469 posts Report Reply

  • Paul Williams, in reply to ScottY,

    I suspect Scott must be a very good lawyer.

    Of course! (but I would say that)

    Can't be, he went to one of those post-modern PC law schools that teaches only feminist theory... </irony>

    Sydney • Since Nov 2006 • 2269 posts Report Reply

  • Angus Robertson, in reply to BenWilson,

    It's more that we should move away from neoliberal capitalism. But given that we're actually rolling back our state in favour of more neoliberalism (is that a given? Do you dispute it?)...

    If you are talking about the Western world, then I'd dispute that it is becoming more neo-liberal. The Western world is spending $trillions to socialise losses of too-big-to-fail enterprises that are seemingly perma-linked into their governments. That is not neo-liberal.

    Auckland • Since May 2007 • 984 posts Report Reply

  • ScottY, in reply to Paul Williams,

    Can't be, he went to one of those post-modern PC law schools that teaches only feminist theory... </irony>

    One can never quite escape one's past...

    West • Since Feb 2009 • 794 posts Report Reply

  • BenWilson, in reply to Angus Robertson,

    That is not neo-liberal.

    Might have to agree to differ on that. It's not the self-image of neoliberalism, but it's what a world run by neoliberals looks like. I'm not going to be the one to say they're never hypocrites, or that their position is at all consistently applied.

    Auckland • Since Nov 2006 • 10469 posts Report Reply

  • Ross Mason,

    I sat in on a private discussion of the ideas in this speech at this year's Kiwi Foo Camp. It was Shearer who ordained the discussion, but Cunliffe who demonstrated a grasp of policy and a striking articulacy in talking about...

    Did RB contribute to the speech writing???

    Upper Hutt • Since Jun 2007 • 1580 posts Report Reply

  • Russell Brown, in reply to Ross Mason,

    Did RB contribute to the speech writing???

    Nah. I actually have a picture of the room: David Shearer and David Farrar are sitting next to each other! About 40 people there, from various sectors. Shearer had the innovation theme in mind and was looking for ideas.

    I observed for about an hour, it went on quite a bit longer.

    Auckland • Since Nov 2006 • 22148 posts Report Reply

  • Ross Mason,

    So.......Ferrar wrote the speech!

    Heh.

    Upper Hutt • Since Jun 2007 • 1580 posts Report Reply

  • giovanni tiso,

    The detail of the speech having been workshopped at Kiwi Foo is almost too good to be true.

    Wellington • Since Jun 2007 • 7473 posts Report Reply

  • 81stcolumn,

    I found this article about the fate and fortunes of Apple and engineers in America most interesting. My biased interpretation is that when manufacturing goes offshore the market for engineers diminishes, and later when we need them to re-start or re-establish manufacturing there aren't enough of them for the venture to be competitive. I'm tempted to suggest that similar market forces do not apply to Lawyers or Accountants.

    AFAIG. I have yet to read an effective defence of patent litigation as a productive device for any industry anywhere.

    Nawthshaw • Since Nov 2006 • 781 posts Report Reply

  • Ross Mason,

    Well well well.

    It WAS a a timely release of local body debt wasn't it.

    http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10792674 | Local Body Shakeup

    Upper Hutt • Since Jun 2007 • 1580 posts Report Reply

  • merc,

    Ahahhahahhha classic, leave the council's to play in the fields of the Lord, especially re. striking The Rate and Valuations, and now suddenly they is bad and need some schoolin'
    Projection much?

    Since Dec 2006 • 2471 posts Report Reply

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