The New Zealand Initiative's Oliver Hartwich on liberalism in the trenches, elusive grains of sand, Islamic fashion, an apparently unfunny German, the decline of the white working class American man and more

Today's Top 10 is a guest post from Oliver Hartwich, the executive director of the New Zealand Initiative.

As always, we welcome your additions in the comments below or via email to david.chaston@interest.co.nz.

And if you're interested in contributing the occasional Top 10 yourself, contact gareth.vaughan@interest.co.nz.

See all previous Top 10s here.

1. Liberalism in the Trenches

Former Spanish Foreign Secretary  Ana Palacio has written a timely reminder that liberalism is more than just the cold hard economic facts. If economic liberals want to win public debates, they need to reach the minds and hearts.

But why is it that most politicians only start to write compelling opinion pieces when they are no longer in office?

As it stands, the case for the liberal international order is not compelling enough for a large – and growing – swath of the population. This is partly because that order has not lived up to its promise of shared prosperity – a failure that must be addressed.

But it is also because supporters of the liberal international order have not connected with people emotionally. Their liberalism has become a matter of cold economics, rather than values and common humanity.

2. Alitalia no more

I still remember the old Alitalia fondly. The best coffee I ever had on a plane (Segafredo), fresh prosciutto and antipasti as well as some Fernet Branca Menta to complete the meal – all on a short-haul flight in economy.

That was the 1990s but ever since Alitalia has been fighting bankruptcy (little wonder with meals like that).

This week we might finally see the end of a once iconic airline. And I am not even sure who to blame: stubborn Italian trade unions or just the general decline of traditional airlines’ business models? In any case, the days of la dolce vita on shorthaul flights are long gone – che vergogna! 

Alitalia - owned 49% by Abu Dhabi-based Etihad Airways - has been bailed out repeatedly by Italian governments and private investors, though Rome says it will not renationalize Alitalia if creditors are losing patience.

3. Sand shortages

Milton Friedman once quipped that socialism could create a shortage of sand in the desert. Well, as The Economist reports, capitalism can achieve the same result. It is just a question of supply and demand.

Sand is in high demand. In some parts of the world, people are going to increasingly great lengths to get their hands on the golden grains. A “sand mafia” in India intimidates locals in order to extract and transport the material.

4. Under wraps

Speaking of The Economist, the magazine also takes a look at Islamic fashion. And surprising as it may seem, the fact that fashion is big business in Islamic countries means that capitalism also finds a way of dealing with Islamic dress standards.

Islamic fashion could be big business. Worldwide, Muslims spend close to $300bn a year on clothes and shoes, only a bit less than America does, though only a fraction goes on fashion. In Western countries, at least, observant Muslim, Jewish or Christian women who want to cover their flesh often mix-and-match from collections which care little for modesty. That could change. Earlier this year, Debenhams, a British department store, began running an Islamic line. Tommy Hilfiger and Mango, two high-street outlets, have both launched Ramadan collections for Middle Eastern clientele.

5. Lost in translation

Germans can do almost anything, but they are not necessarily good at nuances. At least that is how Handelsblatt comments on the bizarre case of a German top CEO losing his job in the United States.

It wouldn’t be the first time that a German businessman in America tried to be funny and hit a wrong note. But in this case, the consequences were dire. At just twenty lines, the letter that ended the reign of Klaus Kleinfeld, a German national, over Arconic, a US metal parts company, was rather brief. Moreover, much of it must have been lost in translation, for Mr. Kleinfeld seems to have attempted irony but sounded menacing instead.

6. The Death Rate of White Americans

What do we know about the conditions of white working-class Americans, the very people who are thought to have made Donald Trump President? Economist Tim Harford investigates for the BBC World Service.

Throughout the 20th Century the developed world saw mortality rates fall and people lived longer and longer. But there is one group who may no longer be seeing a fall in their mortality rate –middle-aged White Americans. This is according to research from the eminent economists Anne Case and Angus Deaton. It is this shocking research that adds to a view that times are tough for white working class men, a group that contributed to Donald Trump’s electoral success. But the work has been criticised for statistical problems and for not focusing enough on black Americans. Tim Harford attempts to explain what is really going on with mortality rates in the US.

7. Too beautiful to hide in Swiss bank accounts

Cash may be on the way out – but not in Switzerland. The Swiss are not only defending big denominations at a time when other countries are banning them. They are also ensuring that banknotes are not just useful but beautiful as well.

The Swiss National Bank’s 50-franc ($50) bill was named banknote of the year by a group of international connoisseurs, beating out 18 competitors including the Bank of England’s controversial polymer note as well as ones from the Seychelles and Macedonia.

8. Alan Gibbs: Luxury cars and laissez-faire economics

Ideological worlds collided last Saturday when Kim Hill interviewed Alan Gibbs on Radio New Zealand.  Altogether the perfect recipe for compelling radio.

One of New Zealand’s wealthiest – and most outspoken – businessmen, Gibbs is known to most as a merchant banker who made his fortune after the economic reforms of the 1980s, and went on to fund the ACT Party.

But apart from his fortune, his forays into politics, and his patronage of the arts, Gibbs is also a life-long car enthusiast – and someone whose foiled attempts to grow a car manufacturing business in New Zealand sparked a life-long belief in free markets.

Gibbs talks to Kim Hill about his life and love of motor cars in advance of his involvement in MTA100, a celebration of the centenary of the Motor Trade Association in Wellington.

9. $53 million for what?

When was the last time Winston Peters and David Seymour agreed?  However, in this case it is hard not to agree with the unlikely couple: A $53m investment in a world expo in Dubai may not do much to put the country on the world’s radar. And the time for big exhibitions is over anyway.

New Zealanders must be told what the return on investment will be from the $53 million cost of exhibiting at a world expo in Dubai, NZ First leader Winston Peters says.

The high cost of being at the 2020 World Expo has already been slammed by Act leader David Seymour as wasteful "corporate welfare" that will disproportionately benefit politically-connected businesses.

And Peters today also questioned the spending, saying past experience showed the cost could increase beyond $53m. However, he did not oppose the project outright.

"We are talking about a huge sum of money and there are plenty of causes that money could have gone towards," Peters said.

10. And finally: A scientific explanation for The Scream

I have always been puzzled by Edvard Munch’s The Scream. Not just by the fact that it was once stolen and nobody heard it. But mainly by the psychedelic colours used in the painting. What drugs was Munch on?

Well, as it turns out he the Norwegian painter may have been entirely sober. Scientists found a perfectly rational explanation for Munch’s cloud colours.

No wonder that economists sometimes feel science envy. These natural scientists really can explain anything.

In 2004, American astronomers theorised that Munch had painted a sky brightly coloured by particle pollution from the 1883 Krakatoa volcanic eruption.

But the new paper, presented at a meeting of the European Geosciences Union in Vienna, said he more likely depicted a rare sighting of "mother-of-pearl" clouds over Oslo.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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17 Comments

Re #1 and the link to Project Syndicate; I'm not sure many would welcome that outfit "reaching into their hearts and minds". These pro globalist/neo lib/elitist/new world order fanatics (George Soros and Tony Blair types) and their bought and paid for so called think tank should be treated with the utmost suspicion. Is there some sort of connection with the NZ initiative you have to wonder.

Don't disagree with you. Indeed Jim Bulger has also identified that neo-liberal economic policies have failed dismally. while there are the decriers of this comment I think the evidence is pretty clear that he is essentially correct.

But there is a more intriguing question ending this piece; "But why is it that most politicians only start to write compelling opinion pieces when they are no longer in office?" The answer is simple, any politician in a party political system, especially new ones have to toe the party line when holding a seat. In other words, unless they are in the power lines of the party they have to shut the hell up and do as they are told. This makes a mockery of democracy and produces a farcical result, but is never the less the reality of modern politics the world over. thus it is only after they have left office that they are able to be truly honest.

Yes, strange little article and if that's the most "compelling" opinion piece that Ana can come up with, better than anything while in office you really do have to wonder.
From the article:
"As it stands, the case for the liberal international order is not compelling enough for a large – and growing – swath of the population. This is partly because that order has not lived up to its promise of shared prosperity – a failure that must be addressed.
But it is also because supporters of the liberal international order have not connected with people emotionally."
Even after acknowledging the damage, with whole swathes of working people and their communities across the western world having been eviscerated by this New World Order ideology, the belief is that the ideology is just fine. These privately funded propaganda outfits just need to get into our hearts and minds so we want more of the same: more offshoring, more immigration, more big business, more government and more financialisation.

Yes look at Enoch Powell who was sacked by Edward Heath even though between 67–82% of the public agreed with his 'rivers of blood' speech.

http://i.imgur.com/6cdcx30.jpg

#5. Lost in translation is right and confusion continues. Couldn't see the menacing bit. What I got was something on the dopey/cute range. Maybe ??.

#9. $53 million for what ? It'll be great. Squads of beltway folk get free flights and hotels in Dubai. Lots of dodgy art advisors get to paid to buy pastiche art and design. (see the meeting house in Te Papa if you want an example). PR folk get paid to plant lashing of praise in the NZ media - no international media would touch that with a long stick.
And the world will sail on without noticing.

$53 MILLION ..... As a Scouser would say : "Bloody 'ell "

What are we getting for such an outrageous sum of money , that could build over 100 houses for the homeless .

Corporates need to stump up with the money , not the punch -drunk middle class New Zealand taxpayer struggling with his mortgage repayments (or rent) .

Where's the outrage ?

I mean just look at the outrage when we spent half of that on the flag referendum

I will do it for half. I will put New Zealand on map.

I will even print a copy for the nutters who have not got...Google Maps....in Government.

I was confidently expecting this piece of Hartwich's to be the usual hardcore stuff from his paymasters at the NZ Initiative - you know, cut out benefits, cut taxes for the rich, destroy state education, remove all environmental and planning restrictions, etc etc. Not this fluffy pap about Alitalia etc.

Do you think it is a bit of a charm offensive before the election, trying to make the NZ Initiative look a little bit more cuddly?

Re #6 and increasing mortality among (formerly?) working class Americans. A lot of this is, at root, the result of despair, a future with no future among folk that lack the skills and resources to cope. It's happening here as well.
Here's James K. in his inimitable style: "While the news waves groan with stories about “America’s Opioid Epidemic” you may discern that there is little effort to actually understand what’s behind it, namely, the fact that life in the United States has become unspeakably depressing, empty, and purposeless for a large class of citizens. I mean unspeakably literally. If you want evidence of our inability to construct a coherent story about what’s happening in this country, there it is.

I live in a corner of Flyover Red America where you can easily read these conditions on the landscape - the vacant Main Streets, especially after dark, the houses uncared for and decrepitating year by year, the derelict farms with barns falling down, harvesters rusting in the rain, and pastures overgrown with sumacs, the parasitical national chain stores like tumors at the edge of every town.

You can read it in the bodies of the people in the new town square, i.e. the supermarket: people prematurely old, fattened and sickened by bad food made to look and taste irresistible to con those sunk in despair, a deadly consolation for lives otherwise filled by empty hours, trash television, addictive computer games, and their own family melodramas concocted to give some narrative meaning to lives otherwise bereft of event or effort".
http://kunstler.com/clusterfuck-nation/the-national-blues/

A lot of those individuals voted for Trump, some as protest, some for nationalistic and some for rascist reasons. A lot of rust belt whites can't stomach the idea that their poorer circumstances were not just reserved for Afro-Americans. Having Obama as POTUS was the last straw. The incredible thing is 92% still support Trump. Just as they are about to lose health cover with repeal of the ACA; see tax cuts only for the rich; endure further loss of jobs if trade protectionism kicks in with Mexico and Canada and see the gutting of the EPA so more bad air and water. They voted for a lying conman funded by Russian mob money, he will do nothing for his voter base.

I don't know why you felt compelled to bring race into it, there is no mention of it in the link I posted and most of the problems facing displaced workers and their communities apply regardless of race. Perhaps the Trump vote was all of the things you say and more, a symptom, a recognition of the collapse of the American dream perhaps.
Sounds like you didn't even read the link (couldn't wait to have a rave about Trump?) but the point of the lead article and JK's observation of his town and its people is concerning I'm sure you will agree.
JK finishes with the following:
Trump was just a crude symptom of the sore-beset public’s longing for a new disposition of things. He’ll be swept away in the collapse of the rackets, including the real estate racket that he built his career on. Once the collapse gets underway in earnest, starting with the most toxic racket of all, contemporary finance, there will be a lot to do. The day may dawn in America when people are too busy to resort to opioids, and actually derive some satisfaction from the busy-ness that occupies them.

Yes, Trump may let them down but his election proved that the people could form a movement for real change. Maybe better luck next time or let's see how things pan out? Or maybe Trump was just the messenger.
People should get busy and reject the opiates of all kinds offered. Maybe reject politics as a way of improving their lives. I see the legalizing of drugs, UBIs and the general trend of making all sorts of behaviour and beliefs permissible as ways of crushing the spirit of the people. It's telling that the only thing the authorities crack down on are any attempts to preserve, honour and develop European heritage.

One thing resonated - he would drain the swamp

They now wait in despair

Interesting article. Same thing happened here too to some extent.I don't think there is a happy ending. Because there is no market principle which solves the problem.

It is great that a senior Spanish (ex) politician is thinking about how to win hearts and minds to economic liberalism, sadly a novel approach in recent times. I am not sure that Ana Palcio is on quite the right track as yet. Decent jobs win hearts and minds much faster than warm fuzzies.
I am an economic liberal myself but I can't criticise the approach taken by Trump supporters. They acted democratically when they felt, with some justification, that the government and public sector were hostile to their interests. It is a shame they picked such a dud as their mouthpiece but they didn't have a lot of choice.
1# tied in neatly with #6. The criticism of Case and Deaton's work (other than a valid technical point) in this and other items appears to be that the work excites unjustified sympathy for poorly educated whites (especially males). First I am sure that the males want decent jobs and would be humiliated by sympathy. Second it is not a victory if the health gap between whites and other ethnic groups is closed by an increase in white mortality. Surely an improvement in everyones health outcomes is most desireable. Finally, and the hardest to take, is the sight of a privileged class all but ignoring a significant health issue on the grounds of white privilege when many of them have it in abundance and the victims have barely any. Imagine if life expectancy for middle class mothers, wives and daughters was stagnating. The noise would be deafening.

Well said.