Monday, 27 May 2013

On Why the Neanderthals became extinct and lessons for our modern world

The Neanderthals are generally considered to have lost the competition with Homo sapiens because of their inability to compete with “modern man”.  Neanderthals get bad press, they are portrayed as “lowbrows” and of being a coarser strain. 
But what if that wasn’t the case, what if the truth is that Homo sapiens was just nastier.  There is plenty of evidence to support this contention.  Indeed the history of intercultural competition is filled with vivid examples of the nastiest prevailing over the good and the clever.  Prince Vlad the Impaler anyone?
 Maybe it wasn’t that Homo sapiens was smarter than other hominids , maybe it was because H.sapiens had developed a greater tendency for psychopathology.    Even within the different cultures there are varying propensities for psychopathology.  Hunter gatherer and nomadic people tend to have high levels of social cohesion and non-aggressive interactions because the group needs to be cooperative rather than competitive to survive. 
A good example of the vulnerability of a population with low tendency to psychopathology to one of a high level of psychopathy is illustrated by the fate of the Moriori who inhabited Rekohu now known as the Chatham Islands.  The Moriori lived on a  small island and chose birth control and infanticide over warfare as their means of living peacefully within the sustainable limits of their small world.  All was good until they were invaded by the most psychopathic of invaders a warrior party of Maori from mainland New Zealand who promptly ate most of them and enslaved the rest.  The conquerors were not superior in any way to the conquered other than that they were more violent.
Was it simply that the Neanderthal were too peaceful?  The fact that they had bigger brains on average suggests that they certainly were unlikely to be less intelligent.
It is an interesting observation that psychopaths for all of their lack of empathy seem to cluster and bond tightly with like-minded others.  Hitler and his band of brotehrs is a great example of how eveil clusters as is Stalin.  They have their trademark view that the majority of the population are prey upon which they have a right to live - but they need henchmen and have little trouble finding them.   Odd also that company CEO’s and high fliers in the banking industry are often considered to display strongly psychopathic traits.  Maybe that explains why the world seems to be forever doomed to progress in destructive lurches.  When psychopaths gain too much power the good and the meek, that is the rest of us, face increased risk going the way of the Neanderthal.   
Are we seeing this happening now with ever more power being concentrated in the hands of the greedy and unscrupulous?
And then there is the paradox that without the psychopaths unreasoned greed we might all still be living caves as hunter gatherers.

Wednesday, 22 May 2013

On Winston Peters and Xenophobia

Look deeper Armchair Critic have you ever read NZFirst policy? 

 Much of it is good old fashioned common sense and I suspect you might find youself a closet supporter.    As with much in politics it is the lurid that dominates in the media and the substance is ignored.  Which is why as the western world teeters on the brink of financial crisis gay marriage dominates the head lines - the big issues are too scary and incomprehensible while the visceral pros and antis of gay marriage have everyone in a froth.
It is diversionary and sufficently unthinking on one side and indulgent on the other that it is easy to have a position.

Also being unhappy with the current level of immigration is not the same as racism. 

Xenophobia is not the same as wanting to preserve our own cultural identity

Being of Maori Ancestry Winston has the benefit of experience with regard to open door policies on immigration and land sales.  The policies being run now will in the long run have the same effect on what we currently see as being a New Zealander as the sale of land to British settlers did to Polynesian culture

And harking back to learn from history China is at the same point in its development as Britian was in the late 1700's.  then Biritian had a huge and dominant position in world trade, it was resource hungry and it had a surplus of labour resulting from industrialisation.  What better way to address all of these problems than to put the surplus labour into boats and send them elsewhere to displace the less assertive inhabitants of other lands.  Lo and behold resources aplenty, a familiar culture to deal with, and new and growing markets to invest in and sell to -  a happy empire!

We will never overwhelm China but they could overwhelm us in weeks that innitself breeds insecurity in a culture such as ours.  They simply need to move in and buy us out and put us onto the bad lands and we become second class citizens in our own land - or at least our children do while the few who sell us out retire rich to Hawaii.  Me I will be dead before it has happened but is it the world we want to leave to our kids? 

I have a huge respect for the Chinese and Chinese culture and they are govened by people collectively of far greater vision and intellect than the vacuous twits currently running our own country but I like being a Kiwi and I would like this special little part of the world to be available to evolve culturally in its own maner for our next generation. 

We see China as an oppressive regime but are we any less repressed and are our business leaders any less corrupt?  The finance industry would suggest that our lot are every bit as good at fleecing the innocent as any and our political process does little about it - but put a tear into the fabric cover over a spybase aerial and watch out -the full force of the state is upon you. 

We kid ourselves that we have effective democratic government but why do so few vote - becasue it has become largely meaningless.  The communist party leadership process in China  is arguably at least as democratic as our own and as much of the population is involved.  It is also more effective process for selecting a leadership and a strategy for the colelctive future if the talent that gets to the top is anything to judge by.

As we sell everything off and drive our children to leave New Zealand to find  a decent career and a living wage we collectively commit cultural suicide.  So being against excessive levels of immigration is not being racist it is being pro-Kiwi. 

We have had a series of governments who seem to hate us.  they destroy communities by amalgamating local government into super cities and by destroying the insitutions that hold community together.  They make everyone who is not wealthy poorer with wages lowering and house prices inflating.  The last socialist government thought the state knew best and the current one seems to think that corporations know best but both are anticommunity and anti the individual. 

Immigration is another tool the state uses to undermine the existing sense of community and our culture of social justice - it does not make us wealthier, instead it puts downward pressure on wages and upward pressure on house prices.

China does not want millions of foreigners living in China for just the same reasons that most here do not want to be overwhelmed by a culture that is not our own.  It is not that our culture is superior to any other culture - it is just that it is home.   And I like it the way it is.

Friday, 10 May 2013

The Reserve Bank, Debt and the Property Market

The issues of house price rises in Auckland and Christchurch is prompting comment that it may be time for the Governor of the Reserve Bank to raise interest rates.   It is noted in the media that an increase in interest rates will result in foreign money seeking higher returns to enter the domestic market and this will also increase the value of the already overvalued dollar. 
What hasn’t been commented on is that an increase in interest rates will also penalise every business and household in the country including everyone resident in Auckland and Christchurch who already have a mortgage and have no intention of buying or selling a home.  There will be no beneficial behaviour change within that wide group who are not seeking to get further into debt but it will impose hardship and constrain the rest of the economy.  The interest rate rise would be imposed simply as an attempt to limit price rises in response to artificial shortages of housing in two localised parts of the property market. 
The more sensible action would be to address the cause of these shortages rather than attempt to alter the market response by raising interest rates.
The Reserve Bank Act is not only completely ineffectual at slowing property prices it is the root cause of property price inflation.  Because the Reserve Bank Act obliges debtors to pay over the market price for debt, it also guarantees lenders greater than normal market returns on investments.  The result is that foreign cash looking for high and secure returns has flooded into the New Zealand property market.  The banks are incentivised to actively inflate the property market because of the high returns it provides (thanks to the Reserve Bank Act) and because of the flood of money that they have to invest.  As a result the more the Reserve Bank increases interests rates above the natural rate for the marketplace the more money that flows into the property market, the less risk averse lenders need to be because they receive higher margins on loans and this results in banks adopting laxer lending practices, this then leads to property price inflation which results in the rate of increase in capital value of the property (in the overheated parts of the market) to exceed the cost of debt - for a while at least – the negative real rate of interest in this small part of the property market consequently further incentivises borrowing.
The end result is that we are as a nation carrying far more debt than is necessary for the economy to function effectively, we have a ruinously over valued property market, we have a grossly overvalued exchange rate, we are bleeding our scarce foreign earnings on interest payments on all the debt and meanwhile our productive sector is crippled by both the cost of borrowing and by the over-valued and highly unstable exchange rate, Instead of suppressing inflation, the Reserve Bank act causes inflation.
The Reserve Bank Act is singularly the most stupid element of the reforms of the 1980’s.  It is utterly illogical in that it defies the simplest of precepts of economics.  The answer to the problem of inflation is simple.  If a government wishes to increase the cost to the consumer of any element of the economy without increasing the supply of that element it imposes a tax not a compulsory price increase – alcohol and tobacco are excellent examples of this concept in action.   The government also targets only those activities it wants to constrain.  So when it taxes alcohol it does that based on alcohol content – it doesn’t tax all liquids.
A tax also allows for redistribution and targeting by the government to occur so if the tax imposes on lower income households this can be resolved through social payments with the tax on debt as a source of funds.  Similarly the tax can be linked to the asset class or region causing the problem so there may be a lower tax on business debt.  This is not difficult; the banks already set interest rates by the manner in which the debt is secured, the tax could be similarly targeted.   This is only one possible mechanism as there are is a range of possible taxation responses to this problem which these need to be linked into a wider strategic review of the role of taxation in the economy.
At a more fundamental level any market failure or physical circumstances causing the price pressure also needs to be addressed.  Auckland prices are being driven by a range of other policy actions by government that put inflationary pressure into the market.  These include allowing uncontrolled foreign ownership of residential real estate, immigration – from both within New Zealand and from off-shore - and from a failure to fully price the true cost to the national economy of growth of the major cities and the cost of internal migration of business and residents.  Property in the larger cities but particularly in Auckland is being subsidised in a number of ways while the rest of the national market is in one form or another languishing with surplus housing and infrastructure.  In addition to fostering policy that actively inflates the cost of housing nationally and causes our international debt to be excessive and our currency to be over-valued we are not as a nation using our existing investment in infrastructure wisely. 
We need to be asking ourselves collectively why we, who as a nation have the highest natural capital per capita and arguably the best system of society in the world, are one of its debt basket cases.  We are only being prevented from being another Greece or Cyprus by the dairy industry.  We also need to ask why we are not so much better off as a nation when countries like China and Singapore are doing so much with so comparatively little.  The answer is quite simple and that comes down to the vision and courage of their political leadership, could I commend you to read George Monbiot’s recent post as it very accurately describes the malaise that we have inflicted upon ourselves with our reforms and our reliance on “The Market”  to provide.