Entry 949, on 2009-02-19 at 20:53:28 (Rating 3, Politics)
How bad do things have to get before certain people understand that free market ideology doesn't work? I know that there was more than one cause for the current world economic disaster but most people now realise that a large part of the cause was an uncontrolled free market system getting out of control.
So when one of the great supporters of the free market pokes is head up and suggests we should let important New Zealand businesses fail because that's the way the market works I'm afraid I find it hard to take him seriously. The person I am referring to here is none other than our old friend, Roger Kerr, executive director of the New Zealand Business Roundtable. I have mentioned him in this blog on several occasions in the past - and generally in not too complimentary terms!
The company currently in trouble is Fisher and Paykel, an iconic New Zealand appliance manufacturer which I discussed in a blog entry titled "Social Responsibility" from 2008-04-18 because at that time they had decided to move manufacturing overseas to reduce costs. Well maybe that didn't work.
Kerr insists the economic crisis is not the result of greed and stupidity in the private sector - he would never admit that possibility no matter what the circumstances were because ideologues always live in a fantasy world where their simple minded ideas always work. Well the real world is more complicated than that.
So maybe the government should bail out F&P, just like they have had to do with all the other failings of the private sector: our national airline, rail system, the list goes on. If they do help there should be significant strings attached. The company should be forced to make a commitment to New Zealand, the upper echelons of management should restrict their salaries significantly, etc. That seems fair. If they were bailed out by another private company through investment I'm sure there would be conditions too.
One thing we certainly don't want to do is listen to people like Roger Kerr who still follow the discredited ideologies of the past. We tried his ideas and they didn't work. Thanks for your opinion Roger but please keep it to yourself in future. Your credibility, if it ever existed, is gone!
Comment 1 by JK on 2009-02-25 at 17:37:05:
One thing you should consider is whether the alternative to having the private sector control our resources and facilities is even worse. OK so the private sector sometimes fails but that doesn't mean that government control or some other form of ownership might not be even worse. There is a good reason the US won and the USSR lost don't you think?
Comment 2 by OJB on 2009-02-26 at 08:45:00:
I think there is room for both. It seems to me that the government can provide both the worst and the best management depending on the details of how its done. It can be better than the private sector because it is not as constrained by short term requirements to maximise profit for shareholders, etc. The thing I find most annoying is the mindless confidence of people like Kerr that private ownership and management is always the best option.
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