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Insights 36: 23 September 2016
Our latest report: What's the Catch? The state of recreational fisheries management in New Zealand
Roger Partridge - Denial is not a river in Africa
Dr Randall Bess provides an update on the Fisheries Project

The Human Cost of Welfare
Dr Oliver Hartwich | Executive Director |
In the world of international organisations, there is probably none quite like the Mont Pelerin Society. Founded by a small group of academics in 1947, its mission is to keep the idea of classical liberalism alive – not by PR or propaganda but simply through facilitating discussions among members.

Nearly seven decades later, the Society has developed into a global network. Its biennial meetings attract several hundred economists, philosophers, lawyers, historians, and business leaders. Together with three of my colleagues, I am attending this year’s meeting in Miami.

Though the conference itself is a private event, there is one thing I can share. It is a book which was presented by its authors in one of the breakfast sessions: The Human Cost of Welfare by Phil Harvey and Lisa Conyers.

Published earlier this year, it is an overview of the failings of the US welfare state. If it was only that, it would hardly be worth mentioning. There have been thousands of articles, papers and books written about the sorry state of welfare in America.

What makes Harvey and Conyers’ book different is that the authors have travelled the country to talk to the people that matter most: welfare recipients. What they wanted to find out was not just what circumstances caused them to go on benefits but also how they felt about their situations.

After more than 100 in-depth interviews with beneficiaries across the US, they could not find one person who was happy to be on benefits. Sure, beneficiaries were grateful about the support they received. But to be on benefit was not their lives’ aspiration.

What beneficiaries actually wanted to do was to regain control over their lives and enjoy the fruits of their achievements – just like everyone else. 

The tragedy of the US welfare system is that it often prevents just that. Instead, it traps people. It makes it nearly impossible to move to another state. It punishes people from accepting small jobs by withdrawing their benefits immediately.

In variations, such welfare state failures can be found in many countries. Therefore, the main lesson from the book should apply elsewhere as well: That welfare may sometimes be necessary but that it cannot give life meaning as work does.

For an academic society dedicated to liberty and truth, hearing beneficiaries’ stories rather than only seeing them as anonymous data points, is a good idea. For me, it was one of the highlights of the conference. And it is a book I look forward to reading.

For all the wrong reasons
Martine Udahemuka | Research Fellow |
School exam papers do not often make the headlines, but when they do it is always for the wrong reasons. The recent saga about an unexpectedly difficult NCEA algebra exam may be a case in point.

The Year 11 exam had many students and their teachers ‘in tears’. The questions were reportedly harder than expected and the usual ‘ease-into-it’ questions were not at the beginning of the paper. Many students did not even attempt the questions.

This has generated divided views on the topic.

Many are blaming NZQA for setting an exam beyond the capability of students. NZQA has defended itself, saying that the test was developed by a team of mathematics experts and was reviewed by several secondary school teachers.

Others are blaming teachers for not preparing the students well enough, which allegedly left students high and dry when the questions veered away from what they were expecting.

It is too soon at this stage to tell who is correct. But there is also a third option that has not received much attention, namely what if the way we teach maths is at fault.

The New Zealand Initiative’s report on the topic, Un(ac)countable found that the way we teach maths has moved away from an emphasis on basics, such as multiplication tables, to providing various means and strategies for tackling problems. That suits the brightest students, who can cope with the complexity, but it can leave those with less maths aptitude struggling to cope.

The move away from the basics was made several years ago and student performance in this area has declined. In the latest 2012 international benchmarking test, TIMSS, our nine-year olds came last equal in maths among their peers in developed countries.  Almost half could not add 191 and 218.

As the recent NCEA example shows, the problem carries forward into the high school years.

Our report argued that the education system needs to strike a better balance between teaching the basics and equipping students with a mastery of maths. It is not just about the curriculum, but about boosting the skills and abilities of those who teach the subject.

Without such changes, another maths paper making headlines is inevitable.

A collection of tools
Dr Rachel Webb | Research Fellow |
Departing MP Kevin Hague’s valedictory speech this week offered us this astute insight: "The economy is not some force of nature. It is a collection of tools that we can re-engineer to help us meet social goals."

It is such a shame so few politicians view the economy in this way.

Indeed, the economy is not a force of nature. Forces of nature obey the laws of physics.

Instead, the economy is the combined forces of millions of people making hundreds of individual and group decisions each day at the mercy of unique desires, needs, and aspirations. There is no reason to think people would resist these forces being ‘re-engineered’. Of course they can’t be trusted to pursue the right social goals.

Achieving social goals through the economy is simply a matter of treating it like an engineering problem. Human desires, property rights, these are just pesky obstacles to the perfect design of society. Surely, no sane person would object to the grand design of our elected superiors.

Engineers are great masters of figuring out how to overcome the forces of nature to construct incredible designs. Surely, the forces of human decision making are just as easy to predict and control. If only we could get more engineers into politics. Nick Smith has a background in engineering and you don’t hear anyone complaining about his performance.

It is an intoxicating idea that achieving some ideal state of the world is as easy as giving well-intentioned politicians the appropriate economic levers. Economists are always trying to ruin the party with sobering quotes like Friedrich Hayek’s: “The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.”

What rubbish! We all know good intentions always produce good outcomes. History is filled with examples of great leaders achieving great things by keeping the economy tightly under their thumb. If Venezuela can do it, so can we!

Sure, politicians may struggle with high school algebra questions, but that is no reason to suggest they could not handle the enormous number of calculations required to engineer the economy. Unlike the individuals that make up the economy, no one would ever suggest that politicians are a collection of tools.

On The Record
All Things Considered
  • Graph(s) of the week: As we watch the Trump/Clinton popularity polls, it's important to remember that the electoral vote matters too.
  • Famous people: Why do they get paid so much for a speech?
  • Wireless signals: What information are they getting from you?
  • Homemade lunches: Don't bring them if you are a school student in Milan.
  • The Top 10: Most uplifting songs - do you agree?
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