On 1 December 2021 the CCCFA (Credit Contracts and Consumer Finance Act) entered Aotearoa New Zealand with more stealth than the Omicron BA2 variant. It resulted in unintended consequences that were (and are) entirely predictable.

There are two sets of ‘unintended but predictable consequences’: those consequences that make anxious and desperate people more anxious, more desperate, and more detached from mainstream law-abiding living; and those consequences which aggravate the systemic problems of our system of primitive capitalism.

Anxious People

A starting point for this topic might be the Swedish novel Anxious People (now condensed into a Netflix series, that should appeal to the same people who enjoyed The Detectorists). Set in a small city not-too-far from Stockholm, the story starts with a man committing suicide. The trigger for his suicide turned out to be the rejection of an application for a bank loan. Then, the main antihero of the story also found herself in an incredibly difficult situation, in part because of the Family Court and social assistance bureaucracies, and in part because of petty ‘rules-based’ rejection by the bank, following her attempt to gain a small personal loan. The story was bittersweet, neither tragedy nor comedy; uplifting because of the way that the community of ‘ordinary people’ (people each with their own issues) resolved their personal issue through what might be called ‘genuine community kindness’.

In New Zealand we have many anxious people, brought to critical states of anxiety for a number of different reasons. (In this RNZ story, The Science behind a Broken Heart 21 Mar 2022, the interviewee states that “scientists are figuring out that when we feel lonely, when we feel abandoned, our immune systems change”. This is an important undisproved hypothesis – that escalating anxiety itself may be the equivalent of a pandemic, in terms of physical health – that needs much more discussion and scientific investigation. We remind ourselves that ‘scientific’ truths are not ‘facts’; rather they are undisproved hypotheses, with some of these truths having been subject to more scrutiny than others.)

One of the most important reasons relates to housing: both getting home loans, and negotiating the rental market. Too many twenty-somethings are too anxious, and/or too poor, to leave the parental home. Many people in Aotearoa need to borrow money in order to forestall immediate problems in their lives. The last thing that they need is to have to confront an intrusive lender bureaucracy; a form of officialdom that can be as stressful to face as the government ‘we are here to help’ bureaucracy.

Banks lend to people who can jump certain hurdles. The government’s ‘here to help’ agencies target people who cannot jump similar hurdles. One day an anxious person may visit a government agency, dressing downbeat, and spinning their answers to emphasise their incapacity. On another day, such an anxious person may go to the bank, dress upbeat; and must re-spin their answers to essentially the same questions, to emphasise their capacity. Always there are lengthy forms to complete, so that the assessors can tick – or not tick – their formulaic boxes. The banks tended to be the lesser evil; that is, until 1 December 2021.

Capitalism works well when the income distribution system is working well. Government-targeted welfare is a part of the income distribution system; albeit a charity band-aid to a market system that fails. Primitive capitalism fails because it emphasises private property rights – including labour rights – while rejecting public property rights. And we note that the word ‘targeted’ is a euphemism for ‘allocation by means of intrusive bureaucracy’.

Lending and borrowing – credit and debt – is capitalism’s number one backstop for when the income distribution system fails to maintain its necessary equity and circulation objectives. Borrowing, while indeed a backstop, is actually much more than a backstop. It’s an integral component of any form of capitalism, primitive or developed.

People with less income than they need to meet their reasonable aspirations have just a few options; options which may help them get by in the present (eg as renters instead of home purchasers), or may give them sufficient means to escape from an income trap. These options are: borrowing, gambling, private charity, disreputable self-employment, and overt crime. If we take away the better of these options, that pushes people towards the worse of these.

Despite (or because of) the failings of the income distribution system, the lending/borrowing system in New Zealand was working surprisingly well. It was getting much money into the bank accounts of those who needed it to meet their aspirations, and the aspirations of the many resilient but stressed businesses who sold goods and services to people spending borrowed as well as earned funds.

The CCCFA was an attempt to fix a problem, which, except at the margins, did not exist. Once again from the government, a solution in search of a problem. And where, at the margins, a problem of exploitation did exist, there were better solutions available than deterrence through bureaucracy.

What happens if we make our financial markets under-accessible to ordinary households and small businesses? It means a circulation problem; see below. And it means that ordinary New Zealanders must increasingly look to these: the bank of mum and dad, gambling, private charity, disreputable self-employment, and overt crime.

Gambling gives people a chance of meeting an aspiration; it makes rational sense when they would otherwise have no chance of meeting that aspiration. Private charity includes various forms of individual and community ‘giving’: foodbanks is an obvious one, as is giving money to street beggars. Less obviously, it includes the many and varied forms of charity that parents may provide to their adult children. Related to this last form of charity is the bank of mum and dad, where loans – usually soft-loans – are made between parents and adult children. The bank of mum and dad tends to reinforce existing privileges in the income distribution landscape.

Overt crime here is theft, which includes running businesses that sell illegal goods or services. Disreputable self-employment is either selling marginally legal services – such as prostitution – or working as a ‘contract employee’ for an illegal or a marginally legal business. These activities represent the ‘black’ and ‘grey’ economies.

The key point here is that, as people’s lives become more precarious, and as relatively good options (such as borrowing money) diminish or close, then people get pushed into the much worse options to either maintain a basic living standard, or to meet aspirations of success.

We note that even bankruptcy represents an important part of the better options. Life for the economically insecure does involve hopeful borrowing that in some cases leads to bankruptcy. In practice, undertaking debt with a risk of bankruptcy is a far better option – for individuals, businesses, and society in general – than is resort to the criminal underworld. One doesn’t have to read or watch too many Dickensian stories to appreciate the need for an alternative to crime and criminalised debt. Indeed, the modern concept of bankruptcy – the decriminalisation of debt default – was one of the most important and socially progressive developments of the Victorian era.

Policies which make personal debt harder to access represent a reversal of post-Dickensian social progress.

Circulation of Money and Wage Goods

The other, and in some ways even more important problem with the bureaucratisation of household and small business finance, is that of impaired circulation of income and spending. Income and spending together make up ‘the circulatory economy’; or, for short, ‘the economy’.

An important concept here is that of ‘wage goods’; a term used a lot by economists in the period from circa 1850 to 1950, but not a lot these days. Wage goods are the goods and services that ordinary people buy; they include ‘necessities’ but go well beyond being necessary goods. They include basic aspirational goods and services. Thus, they represent mass markets. The key to the success of industrial capitalism – an extension of primitive capitalism which arose from the industrial revolution – is the ability of ordinary people to buy goods manufactured at scale, through the ‘factory system’.

During the twentieth century, cars and houses became wage goods. In the more-populated early twenty-first century, we might say an apartment rather than a detached or semi-detached house. The larger wage goods – which include household devices – always have and always will require recourse to borrowed money. This recourse is called ‘personal finance’; and involves a lifecycle mix of borrowing and saving. Further, large wage goods can be either rented or purchased; ideally with the lessors being people and businesses embedded in the circulatory economy.

To these wage goods we can add ‘social wage goods’. Think of education, healthcare, defence, and environmental and public health subsidies. In normal times, these will be funded from public revenue; taxation for the most part. But, and especially when public revenue systems are under strain, it is essential that they be funded by other means, rather than being unprovided or underprovided.

An efficient monetary circulation system has two requirements. The first of those is an income distribution system that maintains a stable (and not excessive) degree of inequality. By ‘stable’, we mean that the distribution of income inequality should be essentially the same in 2022 as it was in 1972; and (assuming that 1972 was a good year) in all years in-between, and all years in the future.

The second requirement is that there is a stabilising financial system (including an international system, which is beyond the scope of this essay). Such a system has three components: personal finance, business finance, and government finance.

Personal finance has already been alluded too. Business finance represents the core of capitalism; in particular, the financing of businesses which supply (create and sell) goods and services. Businesses invest in capital goods, and in inventories. Government finance – the third leg of the financial stool – is a critically important for investment in capital infrastructure, to maintain the income distribution system through what would otherwise be ‘hard times’, and to maintain the supply of social wage goods. As the third leg of the stool, government finance stabilises the stool – the system – compensating for the collective vagaries associated with personal spending and business investment. Of particular importance is the privileged (and necessary) ability of central governments to maintain a ‘balance sheet’ that enables them to be ‘borrowers of last resort’ while undertaking their core roles even in – no, especially in – hard times.

What I have outlined above is what we call ‘the economy’. When functioning well, with due recognition of public as well as private rights, the economy has transitioned from primitive to democratic capitalism.

What happens if we have legislation that hobbles the efficient cycling of money into the production of wage goods (including social wage goods), and capital goods (private and public)? Where does the money go when it doesn’t go where it should go? The short answer is that it flows to a relatively small number of asset-rich people. Part is this is cycled back into the economy through their purchases of luxury goods (those private goods and services which are not wage goods). Part of it just sits in banks and other repositories; it does not circulate at all. And the third part circulates in another place; a place that may be called ‘the casino’.

The casino is a whole suite of secondary markets – real estate, company shares, bonds, financial derivatives, foreign bank deposits, crypto-currencies, gold, artefacts, artworks, football teams, non-fungible-tokens; once upon a time there was even a speculative secondary market in tulip bulbs. Capitalism always has its casino, inhabited in the main by oligarchs and plutocrats. The circulation system is inefficient – and unstable – when ‘the casino’ is too big relative to ‘the economy’; and particularly when the casino grows faster than the economy.

In this last ‘uneven growth’ case, the flow of unspent money into the casino from the economy exceeds the flow of spent money from the casino back to the economy. It is in these times – a net flow of money from the economy to the casino – when most asset prices rise; this may be facilitated by monetary policies which inject new money into the casino rather than into the economy.

The easiest way by far for injecting new money into the national economy is via the government’s balance sheet. The big problem here is when debt-averse governments resist this process, thereby forcing money that should be going into the economy, into the casino instead. When this happens, the casino grows faster than the economy; asset prices increase, creating an illusion of wealth creation, but really only pumping up the prices of tradable assets. Rather than a bottomless money pit, the casino is a gravityless monetary sky.

New Zealand’s present regime of ‘Authoritarian Social Neoliberalism’

Finally, I will present this label that I think fits. Neoliberalism, by the way, means – more than anything else – the centrality of both private property rights (as a basis for the distribution of income) and restrictive public finance (aka government debt-aversion).

The government takes an authoritarian ‘top down’ approach to execute both a social policy agenda and its responses to exogenous events. The alternative is a democratic approach where informed – through discussion, not narrative – populations find their own solutions, and are supported by governments to do so. And the government pursues its debt-averse interpretation of neoliberalism, both with respect to its own balance sheet, and in its supposition that households and businesses also should behave as debt-minimisers.

The result is that both personal savings and new money flow, substantially and excessively, into ‘the casino’; the financial stratosphere inhabited by those with large portfolios of ‘financial wealth’, meaning the tradable assets mentioned above. When subject to this kind of casino-enriching policymaking – albeit policy making that is not understood by the policymakers in this way, due to regime wilful blindness – there are necessarily large net flows of money entering the world of asset trading. That is the consequence of public policy developed in the spirit that underpinned the CCCFA.

If we don’t allow money to flow towards where it can be usefully spent within the economy, then we push people towards more desperate options, such as crime. And we prioritise the casinoisation of the economy, which includes the designation (and resigned acceptance) of land as an appreciating asset, rather than as places to live and grow food. Authoritarian social neoliberal governments don’t understand that this is what they are doing; nevertheless, that’s what they do, though they would rather not know it.

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References to CCCFA:

Increase in loan rejections sharpest for people with high 700-plus credit scores, Centrix says, Rob Stock, stuff.co.nz, 3 Mar 2022

Credit Madness Inquiry Must Be Open and Transparent, Act NZ, scoop.co.nz, 14 Jan 2022

David Clark: Govt will move fast on Credit Contracts and Consumer Finance law changes, NZ Herald, 17 Feb 2022

Govt Updates Responsible Lending Rules, NZ Government, scoop.co.nz, 11 Mar 2022

Government’s controversial home lending rules: Minister David Clark announces tweaks less than four months after law change, NZ Herald, 11 Mar 2022

Debtfix supports Common Sense returning to CCCFA but Stands by Protecting New Zealand’s Safe Lending Laws, 11 Mar 2022

Open letter – Backing our safe lending laws will bring financial wellbeing to our communities, Debtfix, 8 Mar 2022

*******

Keith Rankin (keith at rankin dot nz), trained as an economic historian, is a retired lecturer in Economics and Statistics. He lives in Auckland, New Zealand.

How determined are Labour to take the necessary steps to fix inequality and poverty? Will electoral calculations triumph over their principles and stated ambitions?

These are some of the questions being asked on the political left, as Prime Minister Jacinda Ardern’s government looks determined to stand by while social problems continue to get worse under their watch.

During their last term in government, Ardern and colleagues failed to be transformational on their key promise of fixing inequality and poverty. And now they are choosing policies that massively increase inequality, while ignoring the plight of those at the bottom.

That’s why this week more than 60 charities and NGOs made an open plea to the government to increase welfare benefits before Christmas.

Despite the extraordinary conditions at the moment, Ardern response was a firm “no”. Poverty advocates say Labour should be “ashamed”, with many suggesting that the prime minister’s own advocacy of kindness and compassion is directly contradicted by her actual decisions.

Writing in The New Zealand Herald today, Matthew Hooton argues that the poverty advocates “have a point” in their dissatisfaction, as “Ardern’s response to these issues is unsatisfactory”. He argues that this week’s rejection of benefit increases “has prompted the first mini-rebellion on her left”.

Hooton is particularly dismissive of Ardern’s plea for more time to consider benefit levels: “she says more ‘work’ is needed but it is not clear what ‘work’ is required to make a basic decision on benefit levels.

Why is more ‘work’ needed?
Ruth Richardson, after all, took just 53 days after the October 27 1990 election to announce her benefit cuts. It is not obvious why any more “work” is needed to make the opposite decision.

In any case, the “work” was presumably already done in Ardern’s now eight and a half years in the children’s portfolio and by her [Welfare Expert Advisory Group].”

So should the left be rebelling? And is Labour putting hanging on to power above tackling poverty? Hooton seems to believe so: “The Prime Minister just emotes her usual concern.

“This is not economically or socially sustainable — and surely not politically sustainable either. There must come a time when Ardern’s own political base demands something more on such issues than her frowny-concerned face.

“It will be another 100 years before Labour again wins a mandate like the one Ardern secured last month. If she won’t act now on the issues she says concern her, left-wing activists will be entitled to ask whether hungry children and young couples struggling to buy a house really mean anything to her beyond being useful walk-on parts during election campaigns.”

Similarly, writing in the National Business Review yesterday, Brent Edwards says the debate “is a pointed rejoinder to Ardern from those who do not believe she is as committed to reducing child poverty as her rhetoric suggests”, and he argues that the decision to keep benefits down is unsurprising, given that Ardern’s decisions are guided by electoral considerations.

Brent Edwards contrasts the benefit decision with the first policy announcement of the Finance Minister: “Grant Robertson announced the Cabinet had decided to extend the small business cashflow loan scheme, which was due to end next month, for another three years and extend the interest-free period from one to two years.

Wooing the business community
“It is also looking at other changes to make the scheme more accessible for small businesses. It was the new government’s first decision of this term and is part of its attempt to woo the business community.”

So, just how long will beneficiaries and others in poverty have to wait until Labour delivers? Today’s Stuff newspaper editorial asks: “It takes more than one term to solve it, but will it take more than two?”

The editorial says Ardern is risking damage to her own brand by talking about kindness but doing the opposite: “Poverty advocates are used to hearing governments say one thing about poverty, especially the emotionally powerful issue of child poverty, but do another.”

They also ask: “What is the political cost of kindness? Or conversely, what is the political cost of doing nothing?”

Poverty advocates are understandably upset by Ardern’s rejection of action on poverty, and some are starting to speak out strongly against her and the government. Auckland Action Against Poverty’s coordinator Brooke Stanley Pao has said that Ardern is “choosing to keep people and families in poverty”.

According to this article, Pao “challenged the prime minister and other politicians to try and live on the current benefit for a month and ‘see how they find themselves’.”

Brooke Stanley Pao also wrote about this just prior to the election, saying, “You can’t eat kindness“. Responding to Ardern’s mantra, she says “We want more than kindness. We want the political bravery necessary to lift people out of poverty. Anything else is lip service.”

Leftwing bloggers losing faith
Other leftwing bloggers are losing their faith that Labour and Ardern really believe in progressive politics. For example, No Right Turn says: “The message is clear: their ‘kindness’ extends only to rich people, who will be exempted from paying their fair share of the costs of the pandemic (or society in general).

“As for poor kids, they can keep on starving. Which once again invites the question: what is Labour for, exactly, if they’re not going to ever deliver anything?”

The Child Poverty Action Group reports “the dismayed, disappointed and, in some cases, furious response to its dismissal” of benefit increases by Ardern and asks of the Government, “What, exactly, are they waiting for?”

She argues that increased payments would have an immediate impact on alleviating poverty.

McAllister also draws attention to the Government making decisions in the Covid environment that are likely to worsen inequality while ignoring the needs of those at the bottom: “Using children as economic shock absorbers – that’s unreasonable.

“Covid-response policies that stretch inequity even further – that’s unreasonable. Child Poverty Action Group research this year has shown that core entitlements for those receiving benefits are mostly far below key poverty lines, and in some cases will be tipping people into severest poverty.

“We modelled a scenario that shows 70,000 additional children are at risk of poverty due to Covid-19 on current policy settings.”

Why Labour is ‘tinkering’
For more on what Janet McAllister thinks is wrong with the current government policies, see Why Labour’s tinkering of our welfare system just isn’t enough.

Looking back at what Labour have implemented over the last term, she concludes: “By themselves, these policies are disappointing. It’s still just tinkering around the edges and far from big, bold moves to cut the mustard.

“They’re of no use to many of our poorest families.”

Another poverty advocate, Max Rashbrooke of Victoria University of Wellington, has written in The Guardian about how disappointed he is with progress on child poverty under the government, and how things look set to get worse unless policies are implemented that live up to the lofty targets set by Ardern.

The problem according to Rashbrooke is that Ardern “has relied largely on the ‘third way’ policies of her Labour predecessor, Helen Clark, in her fight against child poverty.”

And so although there has been some “modest progress” on some poverty measures, these are essentially the result of picking the low-hanging fruit. He points to Treasury modelling showing that “the number of families in ‘material hardship’ – those reporting they are unable to afford basic items – will ‘rise sharply’.”

Is it true that the government can’t afford to increase benefits? Not according to business journalist Bernard Hickey, whose must-read column this week argues that Ardern and Robertson seem determined to massively increase inequality by following outdated economic philosophies.

Making homeowners richer
He asks: “Is it more important that homeowners are $100 billion richer? Or that hundreds of thousands of children are left unnecessarily in poverty?”

Here’s Hickey’s main point: “It is bizarre that a Labour government and a Reserve Bank that talk a big game on their social responsibilities and sustainability are choosing to pump up to $150 billion into increasing housing market valuations for the richest half of New Zealanders who own homes, but don’t think they can afford increasing benefits at a cost of $5.2 billion for the hundreds of thousands of kids and their parents living in poverty.”

He points out that “economists as conservative as those at the OECD, the IMF and the World Bank are now begging Governments to do things differently by spending money on the poor and on infrastructure, rather than just pumping up asset prices to make the rich even richer.”

Hickey also refers to a report out this week with findings from the Growing Up in New Zealand longitudinal study. You can read the report here: Now we are eight: Life in middle childhood.

Hickey sums up the inequality findings: “Nearly 40 per cent are living in cold, mouldy and damp homes. About a third are obese. About 20 per cent of the families surveyed did not have enough money to eat properly.

“Nearly 15 per cent of the eight-year-olds had already moved school twice, largely because of having to move from one rental property to the next.”

Not everyone is criticising Labour’s rejection of benefit increases. Newstalk ZB’s Mike Hosking says that giving into such a demand would take the government down a “slippery slope”, and be too expensive for little real gain.

Urgent need for relief
There is no doubt there is urgent need for relief for those at the bottom. And this week the Auckland City Mission launched a campaign to replenish their run-down stocks of food, noting that prior to covid they estimated “10 percent of Kiwis experienced food insecurity on a regular basis.

“Due to covid-19, it believes the figure is now closer to 20 percent – or one million people – who do not have enough good food to eat on a weekly basis.”

And today it’s being reported that the government’s two-tier welfare payments have come to an end.

Finally, what’s to be done about poverty and inequality, given this government has no great interest in being transformational on this issue? According to veteran leftwing commentator Chris Trotter, “it’s time for some ‘earnest struggle’”. He argues that Labour will only ever carry out leftwing reforms if they are forced to.

Trotter wants to see less reliance on appeals to Ardern and Robertson to “be kind”, and more mass marches down Auckland’s Queen St.

Dr Bryce Edwards is a New Zealand-based political scientist of reliability and prominence. His analysis and commentary is regularly published on EveningReport.nz. This article is republished by the Pacific Media Centre with permission.

Article by AsiaPacificReport.nz

This 21st century epoch is coming to be one of ‘existential crises’, meaning that various large-scale dangers are increasingly coming to be seen to threaten ‘our’ existence, where ‘our’ most commonly relates to people, but may also relate to multicellular life on Earth. An existential catastrophe might fall short of human extinction; a loss of civilisation would also qualify.

The greatest threats to humanity?

In May on RNZ (Radio New Zealand), Toby Ord discussed a whole range of threats, but emphasised ‘man-made’ threats of human origin over geological and celestial risks such as volcanoes, earthquakes, and asteroids. In his discussion, pandemics were treated as essentially ‘man-made’.

The main existential threats of human origin mentioned were – in no particular order – pandemics, artificial intelligence, climate change, world war, and global poverty. The latter – global poverty – was particularly noted as a problem of ‘moral paralysis’. He believes that “if global poverty was to no longer exist [in the future] at the current levels it was it now, then people would look back and be dumbfounded by the moral paralysis of people”.

While he said, “it was crucial to devote resources to ensure we do not fail the future or past generations”, it is not clear that the form of ‘effective altruism’ that he subscribes to is the answer to the conundrum posed. In our cynical world, we are much better at identifying problems than at actually addressing them.

The Social Dilemma

I watched this Netflix feature documentary about social media and artificial intelligence – The Social Dilemma – a few days ago. The trailer finishes: “If technology creates mass chaos, loneliness, more polarisation, more election hacking, less ability to focus on the real issues, [then] we’re toast. This is checkmate on humanity.”

The existential issue here is the way that, in commercial societies, the mass of people are manipulated (‘influenced’, ‘nudged’) to behave in ways that enable a small elite to successfully pursue the petty yet destructive end of ‘making money’. (In market economies, money works as a ‘means’, not as an ‘end’.) While advertising and other forms of persuasion and guided misinformation have been around for as long as people have existed – and there’s also plenty of deception practiced in nature by other species – the nature of 21st century social media technology makes the processes of manipulation and deception so much faster and more overwhelming. The manipulators now have the means to ‘win’ by creating something akin to a monetary black hole, an outcome that represents the destruction of manipulated and manipulators alike.

This is the ‘artificial intelligence’ variant of the ‘moral paralysis’ problem identified by Ord.

Non-Existence

Of course, to properly understand existence, we have to have some sense of non-existence. Human extinction is no more non-existence than is the death – or non-birth – of an individual person. To appreciate the boundaries of the universe – boundaries in time and space – many of us turn to cosmologists and their astrophysicist colleagues.

On Sunday, RNZ listeners heard astrophysicist Katie Mack discussing cosmic endings, including the eventual fate of the universe. (Interestingly, although the scenarios posited related to billions of years in the future, listeners were engaging from a human-centric viewpoint, pretty much in denial that humans may well be practically extinct by the year 2525, as the famous song goes, long before any cosmic event could possibly affect us.)

The problem with this scientific approach is that it is unable to give any meaning to the concept of ‘non-existence’. We are left to, sort of, imagine a universe that is infinite in both space and time, and also completely empty of mass and energy. But that’s not non-existence.

For non-existence we have to go outside the realm of physical science, and to imagine a ‘being’ that does not exist; an ‘entity’ that does not exist, except, that is, in the imagination of those with a capacity for abstract thought. Such a ‘being’ is of course ‘God’, Who exists only in the non-physical realms of human experience, and Who therefore is not subject to the laws of physical existence. ‘God’ is a very neat and universal solution to the problem of non-existence, and can be applied through literature or mathematics to all aspects of non-existence; not only to the non-existence of the physical universe.

I learned maths before the era of Google. And I was fortunate to have had the same very very good maths teacher from the third form to the fifth form. (I remember him carefully erasing the blackboard of modular arithmetic calculations, so that the next class to use the classroom would not think that he was mad; in one useful version of modular arithmetic, 7+7=2. I also remember learning about Group Theory, and the reaction of one classmate who cried out “What is the use of this?”; and the story told about how the foundations of Group Theory were rapidly scribbled in 1831 by a 20 year old youth – Évariste Galois – who knew he would die in a duel the following morning. That’s a personal existential crisis, if ever there was one.)

As a young man, there were two numbers that particularly fascinated me. One was googol. In those days, ‘googol’ was unambiguously a number, a very big number. The name was coined by a nine-year old, in 1920, so we should actually be celebrating the centenary of googol this year. A googol is 10¹⁰⁰; that is, 1 followed by 100 zeros. Googol took hold of my youthful imagination. (Actually, since then, the number that fascinates me more, today, is 1 googol minus 1. That’s 100 nines; or IG in post-modern Roman Numerals. Quite easy to write, but I challenge anyone to name that number.)

The other number that truly fascinated (and fascinates) me is the number that, for me, best describes God. It is the solution to the simple equation:

•   x²+1 = 0      (alternatively, this means that x is the square root of minus one)

There is no solution. The solution for x does not exist. But, just as the physical universe (universes?) may be best described mathematically as an 11-dimensional multiverse, this little problem of non-existence is not going to get in the way of a creative mathematician. It turns out that, while non-existent, this particular entity is mathematically useful. Just as God is useful enough to have been imagined. The solution to this little algebraic problem is ‘i’, which stands for ‘imaginary number’; it could also stand for ‘abstract intelligence’. Or for God. God is the intelligent construct of the imagination, that enables us to conceive non-existence in a practical and useful way. Practical abstract intelligence, through mathematics and through faith, was the precursor to civilisation.

Our Maker as an Accountant

This brings me to Judith Collins, putative Prime Minister of a National Party led government.

Two weeks ago, she invoked our Maker in an ambiguous political speech, and proceeded over the next few day to reiterate her belief in God – and to pray in view of the television cameras after she voted.

Collins said that a prominent critic of hers “still needs to meet his Maker”. She subsequently explained that we all die one day, and that we all meet our Maker. This idea is an excellent example of the practical utility of God. The idea is that we should live our lives as if – at our ‘end of life’ – we will have to account for our actions and choices. It’s an idea that no doubt helps many of us to lead better – more moral – lives than we otherwise would.

Accountancy is the world’s oldest profession; no other occupation could be called a profession in the absence of an accounting mindframe. So, it is appropriate that our most practical image of God is as an Accountant Creator, deft in the art of existential double-entry bookkeeping. The cosmic Big Bang is most practically thought of as the Creation of the universe from which nothing (literally nothing) became a universe of matter and energy, and a parallel universe of anti-matter and anti-energy. The end of the universe will be when God’s ledger once again balances at zero on both sides.

The universe is a miracle. Indeed, it is good to have political leaders who believe in miracles. And so, each individual life is also a miracle. It is a matter of practical convenience to think of our Maker as also our Accountant (as distinct from our accountant). We are in our Maker’s debt. Should we pay the debt back? Is that what we do when we meet our maker? Or, could we think as a good life as ‘servicing’ our existential debt?

Should we pay the debt forward instead of paying it back? Paying the debt forward would seem to me to be the central concept that underpins the effective altruism which Toby Ord understands as necessary to get us past the year 2525.

Indonesia’s West Papua province has again been recorded as having the worst democracy index in the republic, reports CNN Indonesia.

This year (2019), the West Papuan Democracy Index (IDI) was 57.62, even dropping lower from 2018 when it was 58.29 points.

Based on data from the National Statistics Agency (BPS), West Papua has the lowest score and is in last position – below South-East Sulawesi with a score of 65.21 points.

[Pacific Media Centre editor: West Papua in the Pacific is generally taken to mean the combined mainly Melanesian region of two provinces – Papua and West Papua.]

Following next is Papua province with a score of 62.25 points, North Sumatra with 67.65 points, West Sumatra with 67.69 points, Maluku with 68.22 points, West Java with 69.0 points and Jambi province with 69.76 points.

The BPS Democracy Index categorises the level of democracy as being good, moderate and poor. A Democracy Index score under 60 is classified as a poor democracy while a score of 60-80 represents a moderate democracy and a score above 80 is a good democracy.

Among all 32 provinces in Indonesia, West Papua was the only province with a poor Democracy Index.

BPS head Kecuk Suhariyanto said that there were seven provinces in Indonesia that were categorised as good.

Two provinces improve
“In 2018 there were only five provinces, in 2019 there are seven provinces with a category of good. From five there have been two additions making seven, namely Riau Islands and Central Kalimantan provinces,” he said during an online press conference.

Suhariyanto said Jakarta was the top rated province with a score of 88.29 points followed by North Kalimantan Utara with 83.45 points and Riau Islands with 81.64 points.

This is followed by Bali with 81.38 points, Central Kalimantan with 81.16 points, East Nusa Tenggara with 81,02 points and Yogyakarta Special Province with 80,67 points.

Nationally, Indonesia’s Democracy Index rose slightly to 74.92 in 2019. Last year in 2018 it was recorded at 72.39 points. As a whole, Indonesia’s democratic score is still categorised as moderate.

Nevertheless, looking at this in detail there are six indicators which still rated poorly in the index.

Namely threats of or the use of violence by the public which obstructs freedom of expression with a score of 57.35 points followed by the percentage of women elected as members of provincial parliaments (DPRD) with a score of 58.63 points.

This is followed by violent demonstrations or labour strikes with a score of 34.91 points, regional regulations imitated by DPRDs with a score of 46.16 points, DPRD recommendations to the executive with 16.70 points and finally efforts to provide budgetary information by regional government with a score of 53.43 points.

The Democracy Index is assessed based on three main aspects, namely civil freedoms, political rights and democratic institutions. Each of these three aspects has 11 variables and 28 indicators which are used to make an assessment.

Decline in civil freedoms
Although there was a 4.92 point increase in political rights and a 4.48 point increase in democratic institutions, there was a 1.26 decline in civil freedoms. The score for civil freedoms based on the IDI for this year stood at 77.20 points.

“The index for civil freedoms in 2019 was 77.20. A slight decline compared with the position in 2018 and its respective category is moderately [democratic]”, said Suhariyanto.

Civil freedoms were assessed using four variables with freedom of assembly and freedom of association scoring 78.03 points, a decline of 4,32 points compared with 2018.

Freedom of expression, which stood at 84.29 points, declined by 1.88 points, freedom of belief scored 83.03 points, rising by 0.17 points compared with 2018 and freedom from discrimination scored 92.35 points, rising by 0.58.

If looked at in detail, there was a step back in the indicators which covered threats of or the use of violence by government agencies which obstruct freedom of expression, assembly and association, and the threat of or use of violence by social organisations related to religious teachings.

Next, actions or statements by government officials which were discriminative in terms of gender, ethnicity or other vulnerable groups and or which restricted the freedom to worship.

Meanwhile improvements were found in the indicators covering the threat of or use of violence by the public which obstructed freedom of expression, assembly and association and or on the grounds of gender, ethnicity or other vulnerable groups.

Discriminatory regulations
There were also improvements in written regulations which restrict freedom of worship and religion and or which discriminate against gender, ethnicity or other vulnerable groups.

In the aspect of political rights, two variables were assessed. The breakdown was the right to vote and be elected which scored 79.27 points, rising by 3,5 points, public participation in decision making and government supervision which scored 56.72, rising 2.44 points.

Although this was still categorised as poor.

In terms of democratic institutions, five variables were assessed. The breakdown was free and fair elections which scored 85.75 points, declining by 9.73 points followed by the role of regional parliaments (DPRD) with a score of 61.74, a rise of 2.82 points.

Then the role of the political parties which scored 80.62 points, a decline of 1.48 points followed by the role of regional government bureaucracy which scored 62.58 points, a rise of 6.84 points and the role of an independent judiciary which scored 93.66 points, a rise of
2.94 points.

This abridged translation by James Balowski of IndoLeft News is based on two articles by CNN Indonesia published on August 3. The original title of the first article was “Indeks Demokrasi Papua Barat Paling Buruk, Jakarta Terbaik”. The title of the second article was “Kebebasan Sipil Turun, Indeks Demokrasi Indonesia Naik.”

Article by AsiaPacificReport.nz

Most of us realise that there is something wrong with capitalism as we know it. We also accept that capitalism is here to stay; the only practicable alternatives are evolutions of capitalism, not from capitalism.

For most of its history we have experienced capitalism as processes of inequality and contradiction. Capitalism as we know it exhibits the growth dynamics of a runaway train for which both stopping and not-stopping spell present or future disaster. We opt for future disaster. Economic growth is understood as the process of making money at an accelerated rate.

This is primitive capitalism. And it is the manifestation of a ubiquitous mode of modern thought that I refer to as liberal mercantilism. The principal metaphor of liberal mercantilism is gold, which in turn is the principal metaphor for money. Liberal mercantilism is the belief that the economic purpose of life is to make money, that the amount of money each of us makes is a measure of our success in life, and that the amount of money a country makes is the measure of its success.

There are two main strands of liberal mercantilism; conservative liberal mercantilism (which, in the past few decades, has embraced both neoliberalism and neoconservatism) and progressive liberal mercantilism (which embraces both social democracy and socialism). Progressive liberal mercantilism is about making money, taxing it, and governmental spending of it; conservative liberal mercantilism is just about making money. Progressive liberal mercantilists argue that you have to make money before you can spend it. Conservative liberal mercantilists argue that you have to spend (invest) money in order to make money. Both emphasise making money, and economic growth..

Liberal mercantilism is underpinned by a primitive capitalism that only acknowledges private property rights, or public property rights (as in state capitalism; government ownership) that are equivalent to private property rights. Primitive capitalism has no public hemisphere. It’s analogous to a single-hemisphere brain.

Liberal mercantilism represents a wrong path; indeed a false path, much as Ptolemaic astronomy and alchemy have represented false paths in the history of science. In another sense, however, it is a real path, in that liberal mercantilism is truly the existential path that modern humanity is on, and uncritically so.

The alternative to liberal mercantilism is economic capitalism. Economics began as a project to rid capitalism of mercantilism, the crude belief that the economic purpose of countries was to operate ongoing trade surpluses. (Donald Trump is an unreconstructed mercantilist; in his way of thinking, countries wage trade wars, seeking victory through ongoing trade surpluses.)

Economics both succeeded and failed; in economics, wealth is utility (and the sources of utility), not money. Economics, though liberal in its origins, is not a part of liberal mercantilism. But most economists are, to a greater or lesser extent, infused with the liberal mercantilist belief system; especially those economists who, through specialising in finance, clearly equate wealth with money and monetary derivatives.

Capitalism – proper capitalism, full capitalism, economic capitalism – represents a balanced economic order that draws on both private and public property rights; that has private and public hemispheres that complement each other. Private income sources are both private equity (property) and labour; what individuals (and groups of individuals) own, and what they make and sell. Public income is sourced from public equity (the essence of capitalism’s inchoate public hemisphere); it may be retained by public organisations (governments) to be spent on collective goods and services, or distributed, principally as benefits (using the proper capitalistic meaning of that word), to individuals (as economic citizens).

Most ‘capitalists’ are not proper capitalists; they are liberal mercantilists. Most people who advocate for capitalism as we know it are primitive capitalists. And many people who run businesses are mercantilists, drawn in the main by wanting money as an accumulating store of wealth, and not simply by wanting the means to acquire the consumer services that represent the actual purpose of market economic activity.

In economic capitalism, money is a means, not an end. It is not wealth; rather it is a social technology; arguably our most important social technology. Money is important as a technology, not as wealth. Wealth is the services that give us utility; wealth is whatever has value because of the happiness that such wealth enables us to enjoy. The economic purpose of life is to survive and prosper, where ‘prosper’ means to attain the higher forms of happiness.

Capitalism must evolve. Embrace that evolution.