Election: National’s economic story

08/11/2011 § 1 Comment

Drawing on McCloskey and others, I have been thinking about the ‘economic story’ that the parties are telling for the election. Stories have heros who are transformed by their trials. They have obstacles or villains to test the heros. They start with a setting – the world pottering along as it does – until a dark stranger comes into town or a change falls over the land.

What story is the National Party telling?

Let’s start with what they’ve said. They will balance the books to lower debt and interest rates. They will create incentives ‘ for people to work hard, save and get ahead’. They will also build ‘better roads, broadband and other infrastructure so businesses can grow’.

In this story, the People and Businesses are caught in a grey muddling-through. There is no reward for working hard, and poor infrastructure makes it too hard, anyway. This will all change when the government pays off its debts, aligns the incentives, and rebuilds the infrastructure. Then, our economy will prosper and life will be in Technicolor (once more).

In this story, People and Businesses will not be transformed because they don’t need to be. They are already capable of the economic growth we could have.  They merely need to be released.

If the hero of a story is the one who is transformed, then the hero is Government. Government starts as dissolute spendthrift and becomes a mate helping spruce the place up. But that’s a political story. The economic underpinning is of People and Businesses who are good-hearted and creative, who are sufficient unto the task but held back.

Not all the policy details fit the story. The $150 million advanced technology institute, for example, seems like a poorly connected sub-plot. The obvious fudge is calling it investment that unlocks the existing creativity, but the spending targets specific industries. It suggests that maybe some Businesses aren’t quite sufficient enough.

‘Asset sales’ play a central role in the story. National has identified two different obstacles that Government must overcome to become our mate. For People, the problem is too much taxing and even more spending. For Businesses, the problem is not enough infrastructure. Government must therefore both spend less and spend more. Asset sales are a deus ex machina to resolve this conflict and allow the story to be internally coherent. It’s like finding out in chapter 20 that Great-Auntie’s little book of poetry from chapter 1 is really a signed first edition and you really can buy a gown, go to the ball, and meet the prince.

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