[Canta reject] “Simple lessons in economics” – Not as valid as you think?

I originally wrote this for Canta, in response to Canta article. Technically they didn’t reject it – they suggested I reshape it into a 200-word letter, said they’re “trying to balance out the voices” on inequality, and assured me they’d keep it on file and “try and get it in one of our issues next term.” Well, the term is over and it hasn’t appeared in Canta. So here it is in Counta!

 “Simple lessons in economics” – Not as valid as you think?
by Caleb Day and the UC Marxist Studies Network

The most galling thing about Elisha Nuttal’s recent article “Inequality: Not as Bad as You Think?” is the total lack of references or evidence. Elisha confidently offers his “simple lessons in economics,” blissfully unaware of how empirical evidence suggests the opposite of many of his “lessons.” Space only permits dissecting a few.

Elisha offers a rosy view of the minimum wage as something only 18-yr-olds and the lazy receive. The statistics paint a very different picture.

True, 61.3% of minimum wage workers are under 25 (not 18), mostly part-time students. But the other 38.7% are mostly full-time (ie, working more of the min-wage hours). They’re 57.9% women, and the ethnic divisions are striking: only 37.2% Pākehā (67.7% of total workforce), 21.4% Māori/Pacific (16.4% of total workforce), and a staggering 41.4% other ethnic groups (15.8% of total workforce).

In other words, if Elisha was Asian or African or Eastern European instead of Pākehā, his mum would be five times as likely to be on minimum wage and he’d be a lot more likely to realise how bullshit his description of min-wage work is.

Elisha also rewrites history shockingly, declaring that our “hunger for influence and affluence” has brought us “out of tyranny and poverty, and into the free world we live in today.” According to Elisha’s logic he should be a Maoist communist – the fastest sustained increase in living conditions in history was experienced between 1949 and 1980 in China. Industrialisation – capitalist or communist – has indeed increased standards of living for those able to industrialise; though not without significant social and environmental costs largely borne by everyone else.

One cost of capitalist industrialisation is inequality: Elisha suggests economic growth “benefit[s] all groups in society, especially the poor,” but under normal capitalist functioning, growth accrues mostly to the already-wealthy. And, since we’re social animals (not the atomised individuals Elisha sees), inequality matters to us. Research has linked inequality to everything from violence to mental illness to obesity, and suggested it threatens the economic growth Elisha is so fond of and the survival of our entire civilisation.

Elisha doesn’t mention NZ’s world-leading increases in inequality over the last 30 years, mostly due to our governments following ideas like Elisha’s. This hasn’t brought the sunshine and lollipops he predicts. Economic growth has concentrated in the hands of the rich while real wages have stagnated for the bottom half (p. 6-7). We work longer and less secure hours, have more debt, and pay more for housing (p. 13, 68-70). Poverty has skyrocketed, especially among the young; one in ten kids lived in poverty in the 80s, and now it’s more like one in four (p. 14-26, 96-147).

Elisha’s article is full of these unsubstantiated, anti-historical assertions, along with leaps of logic, internal contradictions, and circular reasoning. He’s obviously completely out of touch with the experience of the poor, and apparently equally disconnected from any standards of empiricism or reason – let alone awareness of more than one economic theory. All he offers is fundamentalist adherence to the dogmas of neo-liberalism: greed is good, economic growth is a panacea for all our problems, wealth and poverty are produced entirely by personal choice, the rich deserve more money, workers are more productive when earning poverty wages, and giving them a fairer share of the wealth they produce is “hand-outs” spoiling them and endangering the economy.

This is not surprising, considering this is the dominant ideology offered by post-1980s New Zealand society, all our recent governments, and Canterbury’s economics department. If we really want to “improve [our] person,” we’ll stop confusing this essentially religious ideology with “simple lessons in economics,” and start letting the facts expose it for what it is: propaganda by the exploiters, for the exploiters.