Capitalism, caring and Canterbury

Last week in an article titled The Real Meaning of Welfare I noted:

…the compassion, generosity and big-heartedness New Zealanders show to their fellow human beings when tragedy and hardship strike.

It’s the same instinct that gave rise to New Zealand’s welfare system in the 1930s and we have seen it at its best this week in the actions of countless individuals, community organisations, businesses and the government in seeking to relieve the suffering of those stricken by the disaster.

While Christchurch’s tragedy has pushed the Welfare Working Group’s final report onto the back-burner, it is at such a time that a well-functioning welfare system is at its most needed and important.

Yesterday, in a great post on capitalism, caring and Canterbury, Cactus Kate wrote about the role of the welfare state at times like this:

The cost of the earthquake may never truly be known. Right now businesses in Christchurch have no premises for their employees to work from, sole business owners have their families to look after rather than their clientele. Company records have been ruined, buildings are in a questionable state of safety and even if employees can make it into town over broken roads, through broken streets and broken churches, how broken are the poor souls to start productive output so soon after their trauma?

This is what the welfare state should be about. Providing temporary assistance to those who need it for acts truly beyond their control. Welfare for Christchurch doesn’t even need a question. The answer is “yes”.

Welfare isn’t to subsidise earnings of those on the top tax rate due to WFF. It isn’t to pay for those to breed more children into the world when they cannot afford it. It isn’t to pay for interest free student loans to children of those who can most afford to assist their children through a University education. It isn’t for lifestyle choices of knowing the taxpayer will always prop them up no matter what. Or state housing for life in areas most New Zealanders can’t afford to live.

She also describes the critical role of private enterprise and endeavour in helping people and their businesses get back on their feet and keeping the rest of the country running while the government rightly focuses on spending to support those hit by the disaster.   She notes in particular the huge generosity of Business Roundtable member Owen Glenn:

… entrepreneur Owen Glenn who has dipped into his pocket equaling a donation of $1 million with that of New Zealand’s largest protected corporate Fonterra….

and that many others – individuals and firms – will follow with equally generous donations.  While New Zealanders are willingly contributing to the costs of the earthquake, she points out that:

The EQC and private insurances should cover a lot of it. As should prudent government spending and years of “saving for a rainy day”.

Tragically, as Cactus Kate notes, our excessive welfarism of the past few decades, administered to so many who are quite capable of supporting themselves, has destroyed New Zealand’s ability to prepare for “this rainiest of days”.   Read the full post here.

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How economics saved Christmas

 I noticed Cactus Kate blogged recently – albeit in a most flattering way – that I suffer random bouts of ‘Kiwiblogitis’ (an urge to over-quote other people’s work).

I take her point on overzealous cutting and pasting, but I make no apologies for sharing other people’s work that I admire – or indeed sharing and commenting on work I disagree with. That was a significant reason for starting this blog.

So, in the spirit of Christmas sharing, I will copy and paste an entire article: a poem by Art Carden that first appeared on Forbes.com (hat tip: Café Hayek).

Below is: ‘How Economics Saved Christmas’.

Season’s greetings!

How Economics Saved Christmas

From Wikipedia

 

 Every Who down in Whoville liked Christmas a lot.

But the Grinch, who lived just north of Whoville, DID NOT.

He stood and he hated the Whos and their noise

He hated the shrieks of the Who girls and boys

For fifty-three years he’d put up with it now—

He had to stop Christmas from coming, somehow.

He asked and he questioned the whole thing’s legality

Then his eyes brightened: he screamed “externality!

He reached for his textbooks; he knew what to do

He’d fight them with ideas from A.C. Pigou

This idea has merit, he thought in the frost

A tax that was equal to external cost

At the margin, would give all the Who girls and boys

An incentive to stop all their screaming and noise

Failing that, an injunction to make them all cease

And they’d have to pay him to have their Roast Beast.

Low costs of transacting meant that if the Whos

Were the high-value users and wanted to use

All the rights to have feasts and the rights to sing songs

Then they’d have to buy them, to right their Who wrongs

They’d buy a noise easement, if they wished to sing

Until then, the Grinch could stop the whole thing.

On Christmas Eve Night, the Grinch went to town

He stole all the presents, he took their wreaths down

He stole their Who Hash, everything for their feast!

He swiped their Who Pudding!  He swiped their Roast Beast!

He looked at his sled loaded up with Who snacks

‘Twas quite an efficient Pigovian tax!

Then late in the night, when he got to Mount Crumpit

For he’d taken the load, and he threatened to dump it

The Whos, with one voice crying out in the night

Screamed “bring back our stuff!  You haven’t the right!

“We know that we’re noisy all through Christmas Day,

But if you don’t like it, it’s you who should pay!

“For we were here first, and homesteaded the rights

To sing, to make noise, and to hang Christmas lights

“The costs of our Christmas joy helped you to save!

They were fully reflected in the price of your cave!”

“We’ll all be good neighbors, and we’ll be polite

“But you’ve done us wrong on this Christmas Eve Night!”

The Grinch was crestfallen, he knew he had lost

For he was the source of the “external” cost

He’d come to the nuisance, and yes, he was wrong

He’d now have to live with their noise and their songs

He realized that day, though, that they could be friends

His heart grew three sizes (you know how this ends)

The Whos asked the Grinch to join them in their feast

And he—he, the Grinch—carved the Roast Beast.

The holiday season brings specials galore

They teach us that Christmas can’t come from a store

Reflect, as you watch them, as day turns to night

On good economics, and property rights