Martin Wolf, writing in the Financial Times, touches on a few points that resonate with my readings over the years.
He believes capitalism, as a system, is not a bad one, but it is bad when it is âriggedâ; and that Aristotle was indeed right (as history has since proved) that a sizeable middle class is necessary for the functioning of a democracy.
We know that the US, for instance, doesnât really do much about monopolies, having redefined them since the 1980s as essentially OK if no one gets charged more. Hence, Wolf, citing Prof Thomas Philipponâs The Great Reversal, notes that the spikes in M&A activity in the US has weakened competition. I should note that this isnât the province of âthe rightââPhilippon also shows that M&A activity reduced under Nixon.
I alluded to the lack of competition driving down innovation, but Wolf adds that it has driven up prices (so much for the USâs stance, since people are being charged more), and resulted in lower investment and lower productivity growth.
In line with some of my recent posts, Wolf says, âIn the past decade, Amazon, Apple, Facebook, Google, and Microsoft combined have made over 400 acquisitions globally. Dominant companies should not be given a free hand to buy potential rivals. Such market and political power is unacceptable. A refurbishment of competition policy should start from the assumption that mergers and acquisitions need to be properly justified.â
History shows us that Big Techâs acquisitions have not been healthy to consumers, especially on the privacy front; they colluded to suppress wages before getting busted. In a serious case, according to one company, Google itself commits outright intellectual property theft: âGoogle would solicit a party to share with it highly confidential trade secrets under a non-disclosure agreement, conduct negotiations with the party, then terminate negotiations with the party professing a lack of interest in the partyâs technology, followed by the unlawful use of the partyâs trade secrets in its business.â (The case, Attia v. Google, is ongoing, I believe.) Their own Federal Trade Commission said Google âused anticompetitive tactics and abused its monopoly power in ways that harmed Internet users and rivals,â quoting the Murdoch Press. We see many undesirable patterns with other firms there exercising monopoly powers, some of which Iâve detailed on this blog, and so far, only Europe has had the cohones to slap Google with massive fines (in the milliards, since 2017), though other jurisdictions have begun to investigate.
As New Zealand seeks to reexamine its Commerce Act, we need to ensure that we donât merely parrot the US and UK approach.
Wolf also notes that inequality âundermines social mobility; weakens aggregate demand and slows economic growth.â The central point Iâve made before on Twitter: why would I want people to do poorly when those same people are potentially my customers? It seems to be good capitalism to ensure thereâs a healthy base of consumers.
Prof Jane Kelsey, in her critique of the still-secret Comprehensive and Progressive Agreement on Trans-Pacific Partnership (formerly the Trans-Pacific Partnership Agreement [TPPA]) notes in The Spinoff:
The most crucial area of the TPPA that has not received enough attention is the novel chapter on electronic commerceâbasically, a set of rules that will cement the oligopoly of Big Tech for the indefinite future, allowing them to hold data offshore subject to the privacy and security laws of the country hosting the server, or not to disclose source codes, preventing effective scrutiny of anti-competitive or discriminatory practices. Other rules say offshore service providers donât need to have a presence inside the country, thus undermining tax, consumer protection and labour laws, and governments canât require locally established firms to use local content or services.
If this new government is as digitally illiterate as the previous one, then we are in some serious trouble.
I’m all for free trade but not at the expense of my own country’s interests, or at the expense of real competition, and the Green Party’s position (I assume in part operating out of caution due to the opaqueness of the negotiations) is understandable.
Protecting a partly corrupt oligopoly is dangerous territory in a century that will rely more heavily on digital commerce.
While there may be some valid IP reasons to protect source code, these need to be revealed in legal proceedings if it came to thatâand one hopes there are provisions for dispute settlement that can lift the veil. But we don’t really know just how revised those dispute settlement procedures are. Let’s hope that Labour’s earlier stated position on this will hold.
Google has already found itself in trouble for anticompetitive and discriminatory practices in Europe, and if observations over the last decade count for anything, it’s that they’ll stop at nothing to try it on. Are we giving them a free ride now?
Despite Prof Kelsey’s concerns, I can accept that parties need not have a presence within a nation or be compelled to use local content or services. But the level of tax avoidance exhibited by Google, Facebook, Apple et al is staggering, and one hopes that our new government won’t bend over quite as easily. (While I realize the US isn’t part of this agreement, remember that big firms have subsidiaries in signatory countries through which they operate, and earlier trade agreements have shown just how they have taken on governments.)
She claims that the technology minister, the Hon Clare Curran, has no information on the ecommerce chapter’s analysisâand if she doesn’t have it, then what are we signing up to?
However, Labour’s inability to be transparentâsomething they criticized the previous government onâis a weak point after a generally favourable start to 2018. The Leader of the Opposition is right to call the government out on this when his comment was sought: basically, they were tough on us when we were in government, so we hope they’ll live up to their own standards. Right now, it doesn’t look like it. I suspect Kelsey is now the National Party fan’s best friend after being vilified for years. Bit like when Nicky Hager (whom one very respected MP in the last Labour government called a right-wing conspiracy theorist) wrote Seeds of Distrust.
And the solutions that Kelsey proposes are so simple and elegant that it’s daft they weren’t followed, since they are consistent with the Labour brand. I know, trade agreements can stay confidential at this stage and this isn’t unprecedented. But that’s not what Labour said it wanted. At least these suggestions would have shown some consistency with Labour’s previous positions, and given some assurance that it’s in charge.
What should a Labour-led government have done differently? First, it should have commissioned the revised independent economic assessment and health impact analyses it called for in opposition. Second, it should have shown a political backbone, like the Canadian government that also inherited the deal. Canada played hardball and successful demanded side-letters to alter its obligations relating to investment and auto-parts. Not great, but something. New Zealand should have demanded similar side-letters excluding it from ISDS as a pre-requisite for continued participation. Third, it should have sought the suspension of the UPOV 1991 obligation, which has serious Treaty implications, and engaged with MÄori to strengthen the Treaty of Waitangi exception, as the Waitangi Tribunal advised. Fourth, it should have withdrawn its agreement to the secrecy pact.
I once joked that National and Labour were basically the same, plus or minus 10 per cent. On days like this, I wonder if I was right.
A photo taken in Wellington with a test car I had for Lucire. White cars aren’t the over-represented colour in New Zealand: guess from this photo what is.
A friend of mine put me on to this Fairfax Press Stuff article, entitled ‘Silly Car Question #16: Why are there so many white cars?’. It’s a silly question all right, because I haven’t noticed this phenomenon in New Zealand at all, and if any colour is over-represented, it’s the silverâgrey tones. It seems like “fake news”, and if you read on, then there’s more to support that assertion.
âIt’s because every second car imported from Asia is white – literally. Latest research tells us that 48 per cent of all vehicles manufactured in Asia, particularly Japan, are painted white.’ (My friend, of Chinese descent, summarized jokingly, ‘It’s our fault,’ and my thought was, ‘Not again.’)
Let’s break this one sentence down. The author says that we source a lot of our used cars from Japan, hence this 48 per cent figure is reflected in the New Zealand fleet. But you only need to ask yourself a simple question here: how many of those white cars made in Japan (or Korea, or India, or Thailand) stay in those countries to become used imports to New Zealand? These nations are net exporters of cars, so whatever trickles on to the Japanese home market will be a smaller percentage of that 48. How many are whiteâwe don’t have that statistic, but, as I noted, it’s certainly not reflected in the cars on our roads. Now, if we’re talking Tahiti, where there are a lot of white cars, then that’s another storyâand that is likely to do with white reflecting light in a hot climate. As this is a foreign-owned newspaper group, then perhaps the author does not live in New Zealand, or if he does, maybe he hangs around taxi ranks a lot.
Let’s go a bit further: ‘Statistics gathered by Axalta Coating Sytems, a leading global supplier of liquid and powder coatings, showed that worldwide 37 per cent of all new vehicles built during 2016 were painted white, which was up two percentage points on 2015’ and ‘All this leads to the next obvious question: why are all these cars painted white? / It may be because that’s what the manufacturers want.’
From what I can tell, this article was cobbled together from two sets of statistics. A bit of research wouldn’t have been remiss. However, it is a sign of the times, and even we’re guilty of taking a release at face value to get news out. But the result on Stuff just doesn’t make much sense.
James Newburrie, a car enthusiast and IT security specialist, has a far more reasonable answer to the high number of silver (and dull-coloured, which includes white) cars, which he gave me permission to quote in May 2016:
Car colours are fairly well correlated with consumer confidence. In an environment where consumer confidence is high, regular cars are likely to be available in all sorts of bright and lurid colours (purple, green, yellow, etc). As consumer confidence tanks, people start to think more about resale value and they chose more “universal” colours (the kind of colours no one hates: Silver, conservative blues, etc).
Cars directed at young people tend to be cheaper and maintain strong colours throughout the cycle – but to keep costs down they tend to stay around red, black, white, blue and silver, perhaps with one “girly” colour if it is a small car. Cars directed to financially secure people as second cars, like sports cars for instance, tend to be more vibrantly coloured, because your buying into the dream.
So, in the 1950s while the economy was good, people bought cars in bright colours with lots of colours, the oil crisis comes along and they go to white and beige, the 80s come along and we all vomit from car colours, the recession we had to have leads to boredom, then everything is awesome again and you can buy a metallic purple Falcon, or a metallic orange commodore – then the great recession and we’re all bored to death again.
Consumer confidence probably is just starting to recover now. If history is any indication, there will be a point where people just go “oh screw worrying” and then they will see that other people aren’t worried anymore and they’ll say “screw worrying” etc ⊠and we will snap back.
Follow that up with what car dealers are now selling, and bingo, you might have a serviceable article.
Iâve had a 52 Insights interview with Douglas Rushkoff open in a Firefox tab for nearly half a year. Itâs a fascinating piece, and I consider Douglas to be spot on with a lot of his viewpoints. Iâve revisited it from time to time and enjoyed what Douglas has had to say.
Here are a few ideas I took from it. The italicized parts were added by me to the Medinge Group version of this post.
There are a lot of idealistic ventures out there, but to grow, often founders have to compromise them. It comes back to our thoughts at Medinge over a decade ago about âFinance is broken.â Because of these compromises, we donât really advance as much as we should, and some brilliant ideas from young people arenât given the chance they deserve. This needs to change. We already have branding as a tool to help us, and we know that more authentic, socially responsible brands can cut through the clutter. When these ventures start up, brands are an important part of the equation.
How are governments going to fund this universal basic income if they themselves arenât getting a decent tax take? Itâs the same question thatâs plagued us for decades.
Douglas sees ventures like Ăber to be the same-old: its customer really is its investor, and thatâs not a new concept at all. Itâs why we canât even consider Ăber to be a good brandâand the tense relationships it often has with governments and the public are indications of that. Itâs not, as Douglas suggests, even a driver co-op. Itâs still all about making money the old-fashioned way, albeit with newer tools.
Worrying but true: some of the biggest companies in the world are required to grow because of their shareholders. As a result, theyâre not creating sustainable revenue. âIf youâre one of the top fifty biggest companies in the world and youâre still required to grow, thatâs a real problem.â
Kids these days arenât as into all this technology and social networks as we are. Thank goodness. When Facebook reports another billion have joined, youâll know theyâre BSing you and counting all the bots.
Many people see things as though they were created by God and accept them. Douglas gives the examples of Facebook and religion. I can add the capitalist and socialist models we have. If people believe them to be God-given, or natural, then they feel helpless about changing them. We need to wake people up and remind them these are human-made constructsâand they can be unmade by humans, and replaced with better ideas that actually work for us all.
I was surprised to see that Autocade managed its 7,000,000th viewer some time this month, five months after the 6,000,000th. Considering it took three years to get to the first million, this means people are willing to use Autocade more regularly as a resource on the web. As something that started on the side, this is very heartening news, especially as there have been relatively few updates since the 6,000,000th due to general busy-ness.
Here’s how the numbers stack up:
March 2008: launch
April 2011: 1,000,000 page views (three years for first million)
March 2012: 2,000,000 page views (11 months for second million)
May 2013: 3,000,000 page views (14 months for third million)
January 2014: 4,000,000 page views (eight months for fourth million)
September 2014: 5,000,000 page views (eight months for fifth million)
May 2015: 6,000,000 page views (eight months for sixth million)
October 2015: 7,000,000 page views (five months for seventh million)
The Geely King Kong Hatchback, one of the new entries on the Autocade website.
Not that I blogged it at the time, but Geelyâs multi-brand strategy in 2009 felt doomed. Earlier this year, the company retreated, and brought everything from Englon, Gleagle and Emgrand back under its parent brand again.
It wasnât unlike Mazdaâs attempt to do the same in the early 1990s, when it began selling cars under marques such as Efini, Autozam and Eunos, as well as its own brand. The bursting of Japanâs bubble economy didnât help things, but the problems went deeper than that. Those who were used to buying a Mazda Capella from a certain outlet were surprised to find that it had become one of these new channels, and there was no Capella or equivalent to be seen. In fact, for those years, there was no Capellaâa nameplate Japanese buyers had become accustomed to for decadesâas Mazda decided to offer cars such as the Cronos, which went over the 1,700 mm width that landed it in a higher tax bracket.
We never noticed much of these issues outside Japan, as these cars were simply sold as Mazda 626, and there were fewer signs of the companyâs ambitious plans that landed it in such trouble then-shareholder Ford installed a Scot in charge. It was the first time a Caucasian wound up running a car maker there. Mazda felt embarrassed it wasn’t one of their own.
Geely might not have had the Chinese economy collapse on it, and it may have been buoyed through the 2000s as it went from being a manufacturer of recycled Daihatsus to a major Chinese automotive force, but there was the obvious problem of increasing its marketing costs dramatically. Could it also develop lines for four marques all of a sudden? Remember, too, it would swallow Volvo around this time, giving it a fifth marque.
The answer was no: Geely wound up shifting various models to different marques, badge-engineering others, and generally confusing the state of affairs for Chinese consumers. Thereâs a solid argument to be made for Geely at the time though: the automotive market was clearly segmenting, and there was a need to have budget and luxury brands. But it didnât seem organic, but dramatically forced. I take my hat off to Geely for carrying it out, nevertheless, even if some of the models were lacking: the Emgrand EC7, for instance, had rear torsion beam suspension, and it was supposedly a premium product for the well-to-do upper-middle-class Chinese buyer.
It all came crashing down earlier this year, when Geely realized that it lost economies of scale in marketing, and the most important player in all of thisâthe consumerâreally couldnât follow what was what. To top it off, these new brands had no goodwill, just as Mazdaâs didnât 20 years before. Unless youâre willing to push these brands like crazy, itâs a hard battle to win, especially in the most competitive market on earth. China, too, has had a downturn in car sales this year, and the heady days of thinking one can adopt multi-brand strategies without the numbers to support them are over.
Why has it come up? Today, Autocade has successfully recorded the entire current line of Geelys, and there are quite a few historical models in there, too. It was incredibly confusing, too, tracking the new identities of a lot of the modelsâdid the Englon SC5 get renamed? Which lines were dropped because there was a badge-engineered equivalent? And, as is particularly common among Chinese models we put on Autocade, how on earth shall we translate some of these model names? (The practice is to use the Chinese companyâs own translations, where available, and not succumb to using the export names to index them.)
While some pages had the new Geely names appended to the old Englon, Emgrand and Gleagle model pages, there were new entries for the Geely New Emgrand, the old King Kong line along with the Englon SC5-based King Kong hatchback, the two generations of GeelyVision, and the historical Geely Haoqing (an old car based around a 1980s Daihatsu Charade: to think, at the turn of the century, this described pretty much every car in the Geely range) as well as the new flagship SUV that now bears the name.
The reason for being a bit obsessive over the Geelys, as well as some other models (we added nearly all the current Cadillacs and a few more Changâans), is that with the demise of Auto Katalog, I believe more will go online. If we can present a credible new-car siteâalthough we have a long way to go before we get every current model line upâwe may go some way to filling the void with Autocade.
I know Iâm not alone among expats watching the Occupy Central movements in Hong Kong. More than the handover in 1997, itâs been making very compelling live television, because this isnât about politicians and royalty, but about everyday Hong Kong people. I Tweeted tonight that if I were a student there, Iâd be joining in. While the idea of direct elections is a recent developmentâthey started in 1985 for the Legislative Council, itâs important to remember that all UN member nations should permit its subjects the right of self-determination. It doesnât matter when they started, the fact is they did. The latest protests arenât about Legco, but the election of the Chief Executiveâthe successor to the role of Governorâwhich Beijing says can only be for candidates it approves.
Legal arguments aside, protesters are probably wondering why they could enjoy free and fair elections under colonial rule from London, and not by their own country from their own people.
I cannot speak for Beijing, but their perspective is probably more long-term: in the colonial days, the Legislative Council was appointed by London, not voted by Hong Kong subjects, for most of its existence. The Governor was always appointed by London. Surely what it is proposing for 2017 is far better?
And given that the Chief Executive currently is selected by an election committee of Beijing loyalists, then 2017 presents something far more open and akin to universal suffrage.
Those are the issues on the surface as I understand them, but they ignore some of the history of Hong Kong.
Hong Kong was a backwater until 1949, when the Communists revolted, and refugees poured in. My father was one of them, having made the trek from Taishan with his mother and sister. Other members of the family had got there on other journeys. The stories can happily fill chapters in a novel.
He recalls in his first days in Hong Kong, police officers had three digits on their shoulder. âI donât know how many policemen there were,â he recalls, âbut there couldnât have been more than 999.â
Hong Kongâs population swelled, and the colonial authorities found a way to accommodate the new arrivals.
I donât have the exact figures but at the dawn of the 1940s, the population of Hong Kong was 1·6 million, and it was close to 2Âœ million in the mid-1950s. When I left in 1976, it was 3 million.
The reason most people went there and risked their lives to escape the Communists: freedom. Most were skilled workers and farmers fearing prosecution.
Dad recalls that in the lead-up to the family home and farm being seized things were getting tough at school, with false accusations made against him by teachers and students. The vilification of land-owning families had begun.
The day he left, he saw a notice on the front door and the family departed for Hong Kong, where my paternal grandfather already had contacts from his military days.
Assuming a million people came across from the Peopleâs Republic of China, then itâs not hard to imagine a sizeable part of the modern population of Hong Kong to have grown up with negative impressions of Beijing.
Those same impressions saw to the mass exodus of Hong Kongers in the lead-up to the handover, with most expecting doom and gloom despite assurances under the Basic Lawâthough of course many have since returned to Hong Kong since things hadnât changed as badly as they feared.
They were the reasons my parents left in 1976. My mother simply thought a generation ahead and figured that by the 1990s, it would be hard to leave Hong Kong since some western countries would start going on about yellow peril again. (She was right, incidentally.)
While in the post-colonial days, there is more contact between Hong Kong and the rest of China, it will take a while for those impressions to subside.
It would be fair to say that culturally, we are predisposed to taking a long view of history, and the Cultural Revolution and the mismanagement of the economy in the earlier days of the Peopleâs Republic stick in our minds.
Even if the PRC proved to be a benevolent nation and made no wrong moves since 1997, the suspicion would remain.
It hasnât been helped by June 4, 1989 and its aftermath, continued censorship within China, and, more recently, some Hong Kongers feeling that theyâre a second class in their own city when mainland tourists pop over for a holiday.
Then you get people like me who cannot understand a word of Mandarin, which these days tends to be the second language many people learn. When the language of the colonials is easier to grasp, then that doesnât bode well for our northern friends. Thereâs a sense of separation.
This may explain a natural resistance to Beijing, because the way of life that the Chinese Communist Party envisages is so very different to what Hong Kongers believe they should enjoy.
Scholarism, meanwhile, from which Occupy Central has spawned, has come from this culture: a group protesting the introduction of âmoral and national educationâ as a compulsory subject in Hong Kong. The subject was seen by opponents to be pro-communist, with the teaching manual calling the Communist Party an âadvanced, selfless and united ruling groupâ.
Itâs hard, therefore, for Hong Kongers who grew up in this environment not to be suspicious of Beijing.
That explains the solidarity, the sort of thing that would have inspired me if I was a young uni student today in Hong Kong.
Now we are looking at two sides, neither of which is famous for backing down.
One possible resolution would be for Beijing to accede yet bankroll a pro-Beijing candidate come 2017, which could, in the long term, save face, but provide the protesters with a short-term victory. Itâs not what they are fighting forâthey want everyone to be able to stand for the post of CEâbut it may be one way events will play out.
Hong Kong isnât prepared to risk its economic freedom and progress, and it remains proud of its stance against corruption which has helped the city prosper. Citizens also place faith in the rule of law there, and the right to a fair trial.
Beijing, meanwhile, isnât prepared to risk the danger of an anti-communist CE being elected and having that trip up the development of the rest of the nation.
I have to say that such a fear is very remote, given the overriding desire of Hong Kongers to get ahead. If Hong Kongers are anything, they are pragmatic and ambitious, and a Chief Executive who is imbalanced to such a degree would never get elected. With the rise of the orient and the sputtering of the occident, the âcompetingâ ideas arenât so competing anyway. The United States and Australia have laws either enacted or at the bill stage in the name of national security that they can hardly serve as an ideal model for democracy. After all, Edward Snowden went to Hong Kong first.
The Cold War is over, and what is emerging, and what has been emerging, in Hong Kong and the rest of China since the 1990s has been a distinct, unique, Chinese model, one that has its roots in Confucianism and which takes pride in the progress of the city.
The ideal Chief Executive would more likely be a uniter, not a divider, balancing all sides, and ensuring those they represent a fair go. They would be a connecter who can work with both citizens and with Beijing.
Under my reading, there shouldnât be any concerns in Beijing, because pragmatic Hong Kongers would never elect someone who would risk their livelihoods or their freedoms.
And when Beijing sees that such a development can work in Hong Kong, it could be a model to the rest of China.
Taiwan, too, will be watching.
