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Insights 7: 11 March 2022
AFR: Decades of German pacifism gone in a day
Podcast: Dr Michael Johnston on his education research agenda
Newsroom: Eric Crampton on the Commerce Commission's supermarkets inquiry

The economic consequences of the war
Dr Oliver Hartwich | Executive Director |
Putin’s war is a tragedy for Ukraine. Yet its economic implications will be felt far beyond Ukraine’s borders for years to come.

Russia’s actions have set in motion a chain of events that could plunge the world into a serious economic crisis.

The war is not only fought in Ukraine but also in the world’s energy markets.

Interdependencies are strong. Parts of Europe rely on Russian oil and gas, just as Russia relies on energy export revenues. The US and UK announced embargoes on Russian goods this week, and the Kremlin threatened to shut off Europe’s gas supply.

Energy prices will rise as the West scrambles to find alternative fuel suppliers, even in countries hostile to the US like Iran and Venezuela. From US$90 a barrel in mid-February, oil has risen to around US$130 today. It could rise even further.

Another concern is food prices. Ukraine and Russia are major exporters of maize and wheat. It is unclear whether there will be a large harvest this year, and no major shipping lines service Black Sea ports.

The price of wheat has skyrocketed as a result. In January, it was about US$7.50. Now it is US$13. It is a catastrophe in many poorer countries where households spend most of their budgets on food. It could trigger famines.

An increase in fertiliser prices - another major export from this region - will exacerbate agricultural crises. The fertiliser price in Britain increased by almost 50% in the past week alone.

Metals and rare earths are also a concern. Nickel, for example: From US$18,400 per tonne in January to US$80,000 today. Best of luck to any industry needing such resources.

The war has business implications everywhere. Airlines must make huge detours to avoid restricted airspace. Car manufacturers are closing factories because some of their parts suppliers are based in Ukraine. McDonald’s lost 9 percent of its global revenue from leaving the Russian market.

This is before we get to the question of how central banks will respond. Will they fight the wave of massive inflation? Or will they support their struggling economies?

And this is also before the small but real possibility that the war could involve other countries or – perish the thought – become nuclear.

New Zealand cannot influence much of this. But at the very least, we must know what is happening out there – and our media and our politicians must tell us.

Not even in New Zealand is this crisis far away. It will affect us all.

The education agenda
Dr Michael Johnston | Senior Fellow |
I am excited to have commenced work at the New Zealand Initiative in early March. I come from ten years as an academic in the Faculty of Education at Victoria University of Wellington. At the Initiative, I will be responsible for research and policy advice on education. In this, my first Insights column, I lay out some education policy problems that need urgent attention and my plans to address them during 2022.

It’s no secret that New Zealand has a problem with declining literacy and numeracy. There is a lot of evidence that this decline is largely due to ineffective teaching. During 2022 I will organise symposia on the science of learning in each of these areas. The symposia will marshal scientific evidence on reforming the teaching of these vital skills. I will produce short reports with advice for teachers based on this evidence.

In my first major report I will investigate changes to classroom environments. The Ministry of Education is pushing a shift to (so-called) ‘Modern Learning Environments’ (MLEs).  MLEs don’t just change the physical environment for learning, but also the way in which students and teachers operate.  They are large rooms with multiple teachers and many more children than traditional classrooms. Students don't all focus on the same lesson at the same time but select their own activities. This approach is known as 'student-led learning'. It is part of a broader ‘child-centred’ educational philosophy under which a teacher is seen as ‘the guide on the side’ rather than ‘the sage on the stage’.

The trouble with this philosophy is that it goes against research evidence on effective teaching. Skills like literacy and numeracy must be taught explicitly or there is a substantial risk that they will not be adequately learned. But MLEs are not set up in way that facilitates this, more traditional, kind of teaching. Unless they are very well managed, they tend to be noisy and chaotic. MLEs, therefore, may well be contributing to the decline in literacy and numeracy achievement.

Looking ahead, I will build on my predecessor Briar Lipson's excellent report, titled New Zealand’s Education Delusion. Briar’s report is a wide-ranging critique of the ‘child-centred’ philosophy of education. I will review the scientific evidence on effective teaching in a report to appear in the second half of 2022. The report will include recommendations for reforming teacher training based on that research.

Michael discusses his academic experience, interests, and upcoming education research projects in our latest podcast.

Defending satire
Ben Craven | External Relations Manager |
From the Ancient Egyptians, Greeks, and Romans to the masterful wit of Jonathan Swift and Frederic Bastiat, authors have used satire to highlight follies and vices, lampoon political figures, and point out pressing societal issues.

Fast forward to our modern age of content warnings, censorship, and accusations of fake news. It is no coincidence that satire itself is poorly understood and at times derided.

Here at The New Zealand Initiative, we may not have the satirical penmanship of Swift or Bastiat. But we do like to dabble with our #3 Insights columns.

And so it was two weeks ago when my colleague Roger Partridge published a fantastic piece of satire, Ministry of Health to block retail sale of thermometers. In the column, he described how, “Flushed with the success from restricting Rapid Antigen Tests, the Ministry of Health is considering regulating other ‘at home’ medical testing devices.”

Roger explained how innocuous self-testing devices such as thermometers, blood pressure kits, oximeters, and pregnancy tests, would benefit from the same level of Ministry of Health supervision given to RATs.

It was, of course, ridiculous. And that is entirely the point.

Unfortunately, Government policy can also sometimes seem ridiculous. So much so, that some readers took Roger’s column at face value.

Some worried that the column was factual.

Others told us of they had heard people were panic-buying thermometers out of an abundance of caution.
The column was a clear example of Poe’s Law, that any parody of an extreme position could easily be mistaken for truth.
The Ministry’s position on RATs was simply too absurd.

Sadly, it is not the first time our satirical columns have caused concern.
Over the years, we have parodied the Resource Management Act by proposing a Vehicle Management Act.

We have poked fun at heritage restrictions constraining housing supply by suggesting we blow up Wellington’s inner-city suburbs.

And we have called for the rollout of technology to censor unkind speech.

All of these columns gave readers pause for thought.

Satire inflates the truth, so it becomes clearer. It should help us think more critically about issues and question our assumptions.

And if satire causes misunderstanding, it does so only because it has amplified an important issue we had until then failed to see.

In recent times, the line between absurdity and reality has become far too blurred.
So, what better time than now to poke fun at all the madness?

On The Record
Initiative Activities:   
  • Podcast: Introducing Dr Michael Johnston, our new Senior Fellow leading our education programme
All Things Considered
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