Narratives to policies

11/11/2011 § Leave a comment

Alright, we’ve had the set-up; now, the punch line.

The parties have different stories about how the economy works. Policies are evaluated first on whether they fit these stories. If they fit, they are prima facie ‘good’.

Take the asset sales policy. TVHE has sparked a good discussion with several posts about how to evaluate the economic impacts of sales. I’d suggest, however, that asset sales are already good or bad (or possible) because of the way they fit the story.

For National, the selling is the point . It isn’t a question of how much value can be realised, or what trade-offs get made. National’s story is that Government will be transformed; selling major government assets is proof of the commitment to change. It doesn’t matter what we get for them. The important thing is to do it.

Labour, by contrast, already knows the deal will be bad. Market prices for everything are already wrong, and in particular are skewed against labour (small ‘l’). Regardless of the outcome, the mere fact of a market transaction signals that investors, particularly foreign investors, are going to rip off the New Zealand public. That’s how the story goes.

The minor parties (leaving aside the New Economic Party, of whose existence I was ignorant until I saw a hoarding last night) have stories that don’t commit them one way or the other. The sales can fit their narratives as long as they have the right details. This is sensible politics – keeping their options open – but it also means that the real economic analysis and debate should come out of the minor parties.

The Act Party can explain how removing the governmental impediment will allow the market to provide power efficiently and encourage innovation. The Greens can describe how sales might be good, as long as the right measurements/policies/incentives are in place to foster sustainability. The Maori Party can focus on the impacts on Maori. How does it affect power prices for lower-income families, development of Maori resources, and employment or training for Maori workers?

We could take the same approach to thinking about employee skills training. I’m contributing to an MED workshop next week on the topic. If we have stories that tell us Workers are already skilled and capable, it is hard to see where skills training fits. National, Labour, and Act have this narrative. Workers are capable; they are either held back by Government or swindled by investors. Why would they need training? The Green and Maori Parties can fit skills training more easily into their narratives. They are saying that workers need to be prepared for the future economy (Greens) or the wider economy (Maori), in order to benefit from it. Training is therefore already a good idea, before we even know what it entails.

The point, I guess, is that economic analysis is an afterthought. The narratives determine whether the policies are ‘good’ ideas.

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