Massey Vice-Chancellor bans Don Brash

In many ways, it isn’t surprising that Massey University’s Vice-Chancellor has barred Don Brash from speaking on campus at an event organised by Massey students.   So-called “no-platforming”, in response to pressure of mobs –  often threatening disorder if a speaking engagement were to proceed – has become rather too common in the United States and in the UK.  It was only a matter of time until this practice arrived here, and perhaps almost a matter of chance which speaker/group would be the first victim.  As it happened the lot falls to a 77 year old former corporate chief executive, former Governor of the Reserve Bank, former MP and leader of the National Party invited, by a student politics group, to talk about his time as leader of the National Party (the party that has led governments in the country for 47 of the last 70 years).

And what offence has this lifelong New Zealander given to Massey’s Vice-Chancellor, an Australian who has lived in New Zealand for all of 18 months?  She tells us that her concern is

Mr Brash’s leadership of Hobson’s Pledge and views he and its supporters espoused in relation to Māori wards on councils

This is the group whose website outlines a vision

Our vision for New Zealand is a society in which all citizens have the same rights, irrespective of when we or our ancestors arrived. 

It might not be your vision, I’m somewhat ambivalent about it myself, but it clearly isn’t Professor Thomas’s view of the country.  Which probably shouldn’t really matter greatly because (a) she isn’t a citizen herself, and (b) because the nature of politics in a democratic country is about conflicting views, not just about means but also about ends.

But Professor Thomas appears to regard such views –  and opposition to Maori wards on local councils (which have been defeated in most/all places where a referendum has been held on them) –  as simply illegitimate, and having no place in New Zealand, let alone on the campus of Massey University, an organisation founded and substantially funded by the New Zealand government and taxpayers.  She was terrified that Dr Brash might make some negative comment about Maori wards on campus

Whether those views would have been repeated to students in the context of a discussion about the National Party may seem unlikely, but I have no way of knowing.

And presumably no one at the university she manages could cope with knowing that somewhere on campus, an elderly former politician was expressing a view they might disagree with –  a view which, on this particular occasion, appears to be held by a fairly large chunk of the population.

In a startling display of casual inaccuracy (one hopes not deliberate) Professor Thomas is also upset that Dr Brash was part of the Free Speech Coalition, that supported the right to be heard (in public premises), of two controversial recent Canadian visitors.  She claims

Dr Brash was also a supporter of right-wing Canadian speakers Lauren Southern and Stefan Molyneux, who were due to address a public meeting in Auckland.

Had she done any research at all, she would know that Dr Brash had indicated publicly that he had little or no knowledge of the views Southern and Molyneux had espoused but –  like left-wing activist Chris Trotter for example –  did not approve of public facilities being denied to people who wanted to use them to hear from visiting speakers, however much their views might be controversial or provocative. (Disclosure: I am part of the Free Speech Coalition myself, and as I noted in my earlier post on this issue, had never heard of either Southern or Molyneux until the Auckland Council banned use of its facilities, the mayor boasting –  inaccurately – that he had done so.)

For a private university to have banned such a meeting, and a speaker such as Dr Brash, would have been unwise and generally inconsistent with the sort of ethos universities generally sought to represent (contest of ideas etc).  But, being private institutions, they’d be quite free to make that choice.

But Massey is different: it is a public institution (establishment, funding, appointments to the council).  And if the (foreign) Vice-Chancellor of a public university thinks Dr Brash  –  who has given decades of public service to this country – shouldn’t be allowed to speak on campus, when invited by students (what, one wonders, would she do if one of the professors invited him to speak to a class?), you have to wonder who –  and which views –  are next in the line for a ban.  Dr Brash is prominent enough –  even if not always liked –  that there will be an outcry against his ban, while this sort of insidious censorship can be applied more broadly to less prominent people.

Professor Thomas really should be called into line, by her own Council (her employers), by the Minister of Education (funding agency), the Prime Minister (if she is at all serious about her claims to support free speech –  to her credit, I see she has come out a little critical of Professor Thomas).  But where, one might wonder, is the Leader of Opposition on this?  It is a pretty sorry picture if the leader of the National Party won’t forthrightly defend the right of students at Massey to hear from one of his predecessors about his own time as National Party leader.   Does he believe in free and open debate, notably at our universities, or doesn’t he?

As it happens, Professor Thomas had conveniently laid out her perspective on free speech a few weeks ago when the Southern/Molyneux debate was raging (and no one was talking about university facilities). In a lengthy Herald op-ed she sought to build her argument around the concept of “hate speech” –  a concept that, fortunately, still has no place in New Zealand law.  Even Professor Thomas can sound reasonable at times

Beyond the reach of the law, however, the battle against hate speech is fought most effectively through education and courageous leadership, rather than through suppression or legal censure.

And this is where universities can take positive action by providing a venue for reasoned discussion and cogent argument.

Which you might have thought could include a lecture to a student politics society by the former Leader of the Opposition, former Governor of the Reserve Bank?  But apparently not.

Perhaps she justifies her stance this way

Given the current dominance of wall-to-wall social media and the echo chambers of fake news, universities are in many ways obliged to make positive societal interventions.

But one can’t help suspecting that in this case she means “we need to put a stop to the expression of any views we disagree with”.   That certainly seems to be the practical import in the current case, and rather at odds with her very next sentence.

Universities support our staff and students to push boundaries, test the evidence that is put to them and challenge societal norms, including examining controversial and unpopular ideas.

Ah, perhaps it is only societal norms that (recent arrival) Professor Thomas disapproves of that should be challenged?  Certainly, from her op-ed and her statement today, she seems to think no space at all should be given to any debate around how, or how best, to think about the Treaty of Waitangi and its place in modern New Zealand.  Which would be outrageous coming from any university CEO, but perhaps all the more so from one fresh off the plane.

In her statement on the Brash case, Professor Thomas made passing reference to security concerns –  even though it is equally apparent from her statement that she was just looking for an excuse to ban the meeting (having put her prejudice against Don Brash on display in that earlier op-ed.    Her approach isn’t that of the courageous leader defending freedom and debate, but rather of aligning herself with the mob to veto the ability of student groups to invite speakers (ones uttering controversial views) to campus.  That sort of mobocracy, if allowed sway, would be the very antithesis of democracy as we’ve come to practice it in countries like ours (even Professor Thomas’s Australia) in the last couple of centuries.  Thugs and bullies rule, at the expense of those who respect the ability of decent people to disagree.   Thugs and bullies can come from either side of the political spectrum.  These days, in New Zealand (and other Anglo countries) they are almost all from the far-left.

(Much as I support what should be the freedom of the Massey student group to invite whoever they wish to have to speak to them (supported if necessary by the Police to keep law and order, and allow law-abiding citizens to go about their business), I increasingly wonder at the prospects for such a world.  Process liberalism –  you do your thing, I do mine, and we leave each other alone –  is very slender reed around which to organise any society, and I rather doubt it can hold: perhaps it will prove to have been just a very brief historical interlude as society moved from one set of largely shared beliefs to another.   Human societies seem to need more than just process rules to hold them together, and that process tends to involve the marginalisation or exclusion or forced suppression of minority views.  Since most of my own more important views these days are distinctly minority ones in modern New Zealand, I hope it isn’t true, but I suspect it is.  If so, of course, in New Zealand issues around the Treaty and Maori/non-Maori perspectives could prove a very nasty and dangerous fault line.)

NB  As I imagine all regular readers will know, Dr Brash was my boss in years past, and these days I count him as a friend.

UPDATE: So the most Chris Hipkins can say is that it isn’t the decision he would have made and the most the Prime Minister can do is call it an “over-reaction”.  In context, they are little more than weasel words, washing their own hands of owning responsibility, without full-throatedly condemning Professor Thomas and calling on her to reverse her decision.  Simon Bridges has described the ban as a disgrace.


Disconnected thoughts on the economy

I wrote a post a month or so go about some comparisons between the drop in business confidence after the previous Labour government took office at the end of 1999 and the current fall.   At the end of that post, I concluded that the current situation should probably be more concerning than the earlier episode which, intense as it was at the time, blew over fairly quickly.  Perhaps the biggest difference, I suggested, was around the exchange rate:

The current level is about 30 per cent higher than it was in 2000, and it had fallen a long way to get to those 2000 levels (and not on heightened risk concerns etc).  Those falls created a credible prospect of new business investment in the tradables sectors.  There is nothing comparable now, and we’ve probably exhausted the limits of domestic demand (especially residential investment) as a support for headline GDP growth.

The Reserve Bank’s TWI measure of the exchange rate has averaged about 74.4 this decade to date, with a standard deviation of about 3.7.   Thus, although the current TWI is now a bit lower (72.6) than it was at the time of last year’s election, in both cases the numbers were within one standard deviation of the mean.  Those sorts of fluctuations are often little more than noise.   There is nothing yet visible in the current government’s plans and policies that is likely to reverse the longer-term structural overvaluation of the exchange rate.

Another comparison I’ve seen in recent days is with early 2008.  Some of the business confidence measures are back to the sort of levels we saw in early 2008.  I saw one prominent journalist opining that “current conditions are nothing like 2008”.   No doubt true if one has in mind the final (global crisis) quarter of 2008, but in April/May 2008 –  when business confidence had weakened to similar levels to the present –  New Zealand was already in recession (so the published data tell us) but few people realised it.   Here, for example, was the Reserve Bank in June 2008, still asserting that GDP growth that year would be positive (and they weren’t alone in that view).

Another comparison relevant to making sense of business surveys (and the like) is population growth.    For better or worse (mostly worse, on my telling), the current population growth rate is still much higher –  at least twice as high – than it was in either 2000 or 2008.

popn growth aug 18

When the population is growing that rapidly, business surveys don’t mean the same thing as they would if (say) the population was flat.    A typical business survey will ask whether things are rising, falling, or much the same, and report the net of those saying higher and those saying lower.  With 2 per cent population growth, one should expect net positive responses even if per capita activity was going backwards a bit.   At present, 2 per cent annual GDP growth would be a really bad outcome.

At her post-Cabinet press conference yesterday, the Prime Minister seemed to be flailing.  She preferred, we were told, to look at real data to judge how things were going. Here is one such chart from my earlier post

gdp pc to mar 18

How have things been going on real GDP per capita? Not well, and that included late in the term of the previous government.  Perhaps there is some element of businesses slowly realising just how mediocre our economic performance has been.  Perhaps the Prime Minister –  who during the election campaign was too ready to grant that things were going well economically –  should wake up to the underperformance.

What about other real indicators?

The Prime Minister talks of our “low” unemployment rate, and yet seem conveniently oblivous to the fact that among the G7 leading advanced economies, the UK (Brexit and all), the US (Trump and all), Germany, and Japan all have unemployment rates lower than New Zealand’s.  Ours is better than it was, but it is nothing much to be proud of –  roughly one in 20 New Zealanders keen to get a job, ready to start work next week, can’t find one (and that is narrowest definition of excess labour capacity).    Labour would once, rightly, have regarded that as pretty shameful.

There has been very little growth in productivity at all for five or six years now, and last week’s labour market data (showing quite reasonable employment/hours growth, even as no one expects stellar GDP growth this quarter) suggests the trend has continued.   And for all that we are suppposed to be impressed by yet another board, this time to consult on trade agreements (chaired by a competent former diplomat who now works for the propaganda arm of MFAT/NZTE, the New Zealand China Council), the reality remains one in which exports (and imports) as a share of GDP have been shrinking not rising.  That isn’t how things go in successful economies.

exports aug 18

Business investment has been weak too, especially once one takes account of the needs of a rapidly rising population.

The Prime Minister tell us that in a speech later this week the Minister of Finance will outline how the government expects things to be turned around, with our economy becoming more productive, more outward-oriented etc.  I will, I’m sure, read the speech with interest, but there is little sign that anyone near the top of government really has a sense of what might make a useful and substantial difference to the medium-term performance of the New Zealand economy.  You will, for example, never hear them talk of a real exchange rate out of line with the relative productivity performance of the New Zealand economy, or show any understanding of how that might come about.  In practice, they seem wedded to much the same failed economic strategy as the previous government –  notably the “big New Zealand” rapid inward migration strand –  made worse, at least in prospect, by things ranging from large increases in minimum wages to aggressive headlong pursuit of net-zero emissions targets with not a decent cost-benefit analysis in sight.   Whatever the merits of, say, capital gains taxes or R&D tax credits (and I’m not persuaded of either), they simply aren’t game-changing stuff.

One of the uncertainties about New Zealand economic data is what happens to the outflow of New Zealanders (mostly to Australia).   Because the wage differentials are so large, the normal state of affairs is for the outflow to be quite large.   Those income and productivity gaps haven’t closed in recent years –  if anything they’ve widened –  and as the Australian labour market has recovered, the outflow of New Zealanders has been picking up again.  If things remain more positive across the Tasman we can expect that trend (growing outflow) to continue.  If so, it might dampen activity here a bit further, offset by the increased sales New Zealand firms can make in a better-performing Australian economy.  Then again, business confidence measures in Australia don’t seem stellar at present either (the latest manufacturing PMI number is very similar to that in New Zealand).

I try to largely avoid economic forecasting.  Mostly, it is a mug’s game (the future, beyond perhaps a couple of quarters ahead, is basically unknowable), and it is a very rare forecaster who will prove right for the right reasons (and more than randomly so).  Perhaps the economy will weaken from here –  there is a lot running against it, and not much for it – but perhaps not.    But what really disconcerts me is that lack of much sign of serious thinking of how the next serious downturn –  which will happen, it is only a matter of when – should be handled.   That sort of complacency, especially in officialdom, was never really excusable even when things seemed a bit more buoyant – after all, we pay these people (so they tell us) to take a rather longer-term view.  But it is even more worrying now.   The official view that interest rates would soon move higher again has been falsified by experience, year after year.

As a reminder, the OCR now is 1.75 per cent.  That is lower than official interest rates were in every country in the world, bar Japan, going into the last recession (our own OCR was 8.25 per cent then).  The Reserve Bank tells us that they agree the OCR probably can’t usefully be cut below about -0.75 per cent, which just isn’t that far away –  even if people have been lulled by almost a decade in which the OCR has been in a range of 1.75 per cent to 3.5 per cent.

We’ve had a new Governor now for 4.5 months, and have not had a single substantive speech from him on monetary policy (his only on-the-record speech notes have been about climate change, for which he has no responsibility at all).  And, of course, we’ve heard nothing on these issues (and threats) from the Minister of Finance or the Secretary to the Treasury.    And while there is lots of talk of how much fiscal room New Zealand supposedly has, remember that revenues will drop away quite quickly in the next recession, the NZSF will be booking big losses, and the political process will almost inevitably balk at really large, repeated, fiscal stimulus.  For those doubting that, look at the political limits to fiscal stimulus in the last US recession, or the UK, or….well, almost anywhere.

But if our officials and politicians are letting us down, the contribution of the leading market economists doesn’t seem to be any better.  I’ve read the MPS previews (for this week’s RB announcement) of three of the four main banks, and not one seems to devote any space to the “what if” questions.   They all seem to believe that we’ll get through the current confidence dip in reasonable shape, and so the real question is when the OCR will be raised.  Perhaps they will be right about that.   Perhaps too they are mainly interested in foreshadowing what the Governor might say or do this week (and he and his institution have been pretty complacent for a long time).  But what if things don’t work out fine?  What if we do find ourselves in a recession in the next 12 or 18 months?  And how best should we think about the probabilities, and about the best possible policy responses, given the uncertainties and the very real limits of the OCR instrument much beyond the current level?  It doesn’t seem to be something our leading market economists even want to address.

(My own view isn’t an unconditional forecast, but a conditional statement: if there is an OCR change in the next 12 months it will be a cut.)

There is a serious need for some hard thinking, and sober realisation, about the disappointing performance of the New Zealand economy.  It would be a shame if the current downturn in business confidence (whatever specific mix of factors, political  and otherwise, is driving it) were just used for another round of patting people on the head, and reassuring them “don’t worry, after all, we are one of the best-performing economies in the world”.  In truth, we are anything but, and nothing either of our main political parties has to offer gives any reason to expect change for the better.