In the midst of the blanket news coverage of the coronavirus outbreak, how many people registered the news report that the Chinese government had taken action to counteract the adverse effects of the outbreak on the Chinese economy?

The report was to the effect that the Chinese government was to inject around $170 billion of new money into the economy, so as to provide a stimulus that would help to offset the slump in economic activity brought about by the virus outbreak.

And how many people would have wondered, on hearing this news, how the Chinese government could find such a large volume of new money. Was it, up to that point, just lying around doing nothing? Or did they borrow it from somewhere? Or did they sell off assets in order to produce the cash?

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The answer is that they did none of those things. The Chinese understand very well that, as a sovereign country with their own currency, their government is able to produce money at any time in whatever quantity and for whatever purpose they like. They understand that the one thing that a modern country should never be short of is money. They understand that, as a modern western economist has recently said, “we can afford whatever we can do”. They realised that money is their servant, not their master.

This, after all, is how the Chinese are able so often to buy up foreign assets, including New Zealand assets, whenever they wish. When New Zealand enterprises languish for lack of capital, they can be easily picked off by a Chinese purchaser, usually government owned or backed, and able to raise new money by a stroke of the pen.

The Chinese are not alone in realising that they need never be short of money, provided their government is ready and willing to create the money that is needed. The Japanese have followed a similar strategy and used it to transform a war-torn and shattered Japanese postwar economy into a manufacturing powerhouse.

It is tempting to say that we, in the western world more generally and in New Zealand in particular, have never been clever or brave enough to follow suit – but that is not quite true. In the Depression years before the Second World War, the Labour government headed by Michael Joseph Savage used exactly this technique to finance and build thousands of state houses.

The result? The government found itself, as the owner of the new houses, sitting on a major new income-producing asset. Thousands of construction workers had jobs they wouldn’t otherwise have had, and wage packets that enabled them to buy goods produced by other Kiwis, while yet others were able to settle into affordable homes for the first time – and New Zealand escaped the Depression in better shape than virtually any other country.

Sadly, the lesson learnt then has long been forgotten, and we have found ourselves taken over by the timid and the ignorant, convinced by orthodoxy to the effect that “printing money” must always be a bad thing – and this in a world where the banks are allowed a monopoly on creating money out of thin air and when governments have used “quantitative easing” (just a fancy way of saying “printing money”) to bail out the banks when they behaved irresponsibly and produced the Global Financial Crisis.

But, while we might wait in vain for a New Zealand government to learn this simple lesson, hats off to the Chinese, who have not been held back by stultifying orthodoxy and who have taken effective action to ensure that the coronavirus does not ruin their economy as well as the health of their people.

If only we had politicians with similar vision and ability to think for themselves.

Bryan Gould

5 February 2020

For the Polly Toynbees of this world, the battle continues, though quite what victory might look like for them is not clear. We can only assume that, having done all they could, as the exit process took place, to predict Brexit doom, they are now pulling out the stops to try to ensure that their predictions are validated and justified.

Now that the UK is no longer a member of the EU, they have changed their focus. They now profess to see a myriad of obstacles standing in the way of a sensible and mutually beneficial trading arrangement between the EU and a newly independent UK. So, both British remainers and EU leaders to some extent, prepare to “cry havoc and let slip the dogs of war”.

What they do not seem to have grasped is that the bargaining position of the parties has changed fundamentally in light of the British departure. The UK and the EU are both now sovereign entities; whatever the obligations that might have been owed by one to another in an earlier relationship are now consigned to history.

The UK is fully able and entitled to approach negotiations on a new trade deal, unencumbered by any concern for customs unions and single markets or any other EU preoccupation. And the EU, as would be the case in a negotiation with any other sovereign country, has no power to insist that acceptance of the rules enjoined by either or both a single market and a customs union, is the pre-condition of a trade agreement.

The extent to which such preoccupations are implicit in the EU negotiating position is a matter for the parties to decide once the negotiations are under way, but they cannot be treated ab initio as an immutable feature of the negotiating landscape, as some seem to favour. The UK is no longer subject to the obligations of EU membership – that was the whole point of Brexit.

It would be a major departure from normal practice if a trading partner were required by the EU, as part of the deal, to comply with EU domestic laws – not only existing laws but laws made in the future as well – that would dictate to that trading partner what it could or could not do in matters of its own domestic economic and industrial policy.

If any such an ambition lurks in the EU negotiating position, then the EU should get over themselves. They no longer hold the trump cards; the UK is no longer subject to their jurisdiction. The EU have no choice but to enter the negotiations as anyone else would do – seeking the best possible and most beneficial trade outcomes for themselves, and using such cards as they hold in order to secure that outcome.

They are, in other words, in no different a situation from that of the UK. Like the EU, the British have no power to lay down compliance with their domestic laws as the pre-condition of a trade deal. The extent to which the British might comply with any specific EU preferences is a matter for negotiations yet to be held.

There is one other sense in which the situation has changed fundamentally. The British are no longer demandeurs or supplicants. They enter the negotiations like any other negotiator, and like the EU, eager to protect and further their own interests and to arrive at a deal that suits all parties.

There seems to be no reason why negotiations entered into on this basis should not produce an outcome that is acceptable to everyone.

Bryan Gould
4 February 2020

Even at 12,000 miles distance, I was able to celebrate the moment when the UK left the EU. There was a personal element to my celebration. I recalled that, as I record in my published memoirs, I was shocked when I found myself – in a debate on the Maastricht treaty – speaking to an almost empty chamber, and my sense that, if British MPs couldn’t be bothered even turning up when significant powers of government were being handed over to an outside agency, I couldn’t see why I, as a Kiwi, should bother either – it was a significant factor in my decision to leave British politics and return to my native New Zealand.

So, as the whole ill-judged episode was brought to an end on 31 January, I celebrated – but my principal feelings were those of relief, regret and anger.

I felt relief that the British people’s decision to regain their sovereignty had at last been honoured. I felt regret at the wastage – of opportunity, of prosperity, of self-belief – that 47 years of vassalage had meant for us. And I felt anger at those who had led us into such a damaging dead end and who had more recently striven might and main to keep us there.

It was, after all, the predecessors of today’s remainers who had persuaded us to sign up to the ill-fated venture in the first place. They sold the idea to us on a false prospectus – that it would open the door to greater prosperity and that it would mean no loss of the powers of self-government.

I think I can claim to have been one of the few to have debunked such claims from the outset. I knew from my work in the Foreign Office and my years in our embassy in Brussels that the terms on which we were urged to join what was then the Common Market could hardly have been more calculated to weaken, rather than benefit, us.

The record shows beyond doubt that my fears were justified. The British economy languished, our trade deficit swelled, our manufacturing industry was decimated, our trading links with the rest of the world were weakened, our cost of living was pushed up – not entirely the consequences of our European involvement, it is true, since domestic policy mistakes also played a part – but the operations of the Common Market, then the EEC and then the EU, were clearly inimical to British interests over the whole period.

And all the while, as our economy faltered, we found that assurances that there was no intention to create a European super-state were just hot air. We found ourselves in an entity with its own central bank, its own supreme court, its own powerful executive and its own so-called parliament – all with the power to tell us what we could and couldn’t do, and all enjoying powers superior to those of our own institutions.

We have discovered just how far-reaching those shackles have been as we have struggled to disentangle ourselves from them through the exit process.

Those who had urged us on in the first place closed their eyes to these consequences. They were driven by what seemed to be an almost religious fanaticism, but which was in reality, I think, an expression of what they believed was a kind of cultural superiority. They saw themselves as European, rather than British, because they felt that, unlike their fellow-citizens, they alone were able to enjoy the great glories and pleasures of European civilisation – the music, art, literature, food and architecture. As a consequence, they were impervious to the concerns of those they regarded as their inferiors.

Leaving the EU has at last restored to us the chance to shape our own future. There seems no reason, looking forward, why two entities – the UK and the EU – with so many shared interests and so geographically close to each other, should have any difficulty in agreeing on a mutually beneficial trading arrangement and on a range of other useful cooperations on what I like to describe as functional opportunities – that is, we work together where it makes obvious sense to do so.

Our future is indeed bright if British energy and ambition are now put at the service of our own interests, rather than of some fanciful and elusive European identity. It might even be that Commonwealth countries like my own, so long cold-shouldered by the British, might be persuaded to forgive their ill-treatment and enter new arrangements that will benefit all parties.

Bryan Gould
2 February 2020

Most television viewers will recognise that the advertisements that punctuate the programmes we watch are a “necessary evil”; they are the price we pay for the service we receive. Without television commercials, it is said, there would be little to watch.

But viewers might also conclude that, unavoidable as TV commercials are, there are techniques that can be used to reduce their impact – and it is a safe bet that many viewers will have grown accustomed to using the “mute” button on their remote so as to cut out the sound of the incessant voices urging us to buy this or that.

The imperative to resort to this tactic is of course much strengthened if the advertisers continue to bombard us with commercials that irritate or annoy us. One might have thought that advertisers would be constantly alert to the possibility that their advertising, rather than inducing us to want and therefore to buy their product, might actually dissuade us from doing so.

Yet we don’t have to think very hard to come up with television commercials that, in one way or another, lead us not only to suppress the sound but also to turn off the product that is being touted.

And it is relatively easy to identify those advertising techniques that are off-putting in this way. There is, for instance, those ads that seem to appear at every commercial break – the opening scene of such repetitive selling efforts is enough to make one scream every time they appear. In our family, “not again!” is the usual response to this kind of blitzkrieg. Who would have thought that two women paying hotel bills would warrant so much attention?

And then there are the ads that are selling products offered by different providers but that are all selling essentially the same product. This kind of advertising, for some strange reason, seems particularly prevalent when it comes to products thought to be of special interest to elderly viewers.

So, we have endless advertisements from different advertisers for what is called funeral expense insurance (which is, in reality, merely a small-scale form of life insurance); and there are similarly repetitive ads for stair lifts, hearing aids, retirement villages, and “sitting down” exercise machines, repeated examples of each of which can be found on television programmes scheduled for around lunchtime.

This is to say nothing of the advertising frenzy that we all had to endure late last year and that was apparently engendered by something called “Black Friday”, a date which seemingly had no recognisable significance for us other than to produce an excuse for an advertising blitz.

Then there are the ads that go out of their way to irritate and annoy – those that employ super-excited voices or -“wait, there is more”! – voices that are deliberately (and insultingly) made to sound unpleasant in the misguided belief that people will identify with them more readily and therefore take heir custom to one particular supermarket. And there are some advertisers who apparently believe that their product can be made saleable only if supported by an American accent.

And there are the commercials whose pitch assumes that the viewers are cretins and will believe, for example, that adding caffein (what next?) to shampoo is an example of “German engineering for your hair”.

And I haven’t even mentioned the constant attempt to persuade us that various forms of fast food are super-alluring and are essential to “having a good time” at any social or family or sporting gathering.

Advertising on television is not, one assumes, inexpensive. How long before advertisers wake up to the fact that much of it is actually off-putting. What is the pojnt of producing and screening tv commercials at considerable cost if their effect is to associate the product being advertised, in the minds of viewers, with feelings of irritation and annoyance.

If we must have television commercials, let them at least be worth watching and listening to. Advertisers! Wake up, and try harder, and – if you expect advertising to work for you – learn to treat your viewers with more respect.

Bryan Gould
4 February 2020