Interestingly, but coincidentally, I had previously talked about the paths that some rich nations (measured by GDP per capita) had taken. One of them was the financial services approach. My observation was that this seems to work only in relatively small countries (smaller than New Zealand) and that it generally means making the kind of compromises that I don't believe New Zealand would make.
Now, John Key has made the switch from national cycleways to financial services with the same level of consideration as the cycleway choice - ie not much. Financial services do not appear as primary industry for any country of any size that is rich, including Ireland (which is supposedly the model for Key's ideas). Being wealthy is about adding value not hanging on coat tails and that is what financial services is.
Very small countries can do very well by hanging on coat tails but there is one of two prerequisites for this. You either, first, have to be a country hanging on the coat tails of much larger neighbours (and I mean much larger - such as Liechtenstein to Switzerland and Austria and the rest of Europe); or second, you have to be willing to, perhaps not quite turn a blind eye, but certainly be very poor of sight.
You either represent a neutral and acceptable option to powerful neighbours (by virtue of not being a threat, somewhat dependent on the neighbours and culturally similar); or you don't ask questions about where all that money came from and you certainly tell no tales (ie you struggle to recollect any details of that particular transaction). Let's be clear, despite a national small man syndrome New Zealand does not fit the first category and I don't for a minute believe that we want to be in the second.
Hear is the fundamental problem with expecting financial services to lead to financial wealth. Capital is an enabler. Capital enables someone else to substitute for resources or labour or both. If you are specialising in financial services then the truism is that you are enabling someone who isn't you. Unless a country's wealth needs are at the margin of large neighbours wealth generation then enabling someone else will not generate sufficient wealth for a country to be wealthy. Despite the self-promoted importance of the financial community all money is dumb money. Money is basically a wildcard for resources or low skilled labour. If you don't have low skilled labour or resources then money can substitute, but it is no more wealth generating than iron ore.
Wealth comes only from high skilled labour. The kind of skill that can't be substituted for by capital no matter how much you can throw around. The kind of labour that doesn't make things but designs the things that others then make. The high skill atracts plenty of money which then pays for plenty of relatively cheap resource and cheap labour. Rich countries make some things, they can afford to pay their lower skilled populace lots of money (after all why not keep it in the country when you can) but what they do - fundamentally - is design the electronics, the ultra-lightweight ultra-strong materials, the robots that make robots, the processors that make processors, etc.
Assuming that New Zealanders are willing to hang up their morals then financial services might produce enough wealth to fund a population of, say, the Cayman Islands (about 49,000). That's enough to cater for two years of New Zealand's population growth - max! We could achieve the same economic outcome, in per capita terms, by restricting immigration for two years.
Subscribe to:
Post Comments (Atom)
nike air max
ReplyDeletecoach handbags
uggs on sale
uggs sale
ugg boots on sale
miu miu bag
ugg boots for women
ugg boots sale
ugg boots clearance outlet
discount ugg boots
ugg boots uk
ugg boots uk
ugg boots on sale
ugg outlet online
ugg boots outlet store
coach factory outlet
uggs for cheap
ugg outlet
cheap ugg boots
nike air max 95
ugg outlet
uggs for cheap
replica ray bans
nike outlet
ugg boots cheap
ugg clearance
cheap uggs
cheap uggs
vera bradley black friday 2014
mulberry outlet
ugg outlet
cheap beats by dre
discount ugg boots
uggs on sale
2016-03-05keyun
ReplyDeleteuggs outlet
coach outlet
mont blanc mountain
michael kors outlet online
abercrombie & fitch
coach outlet
polo ralph lauren
abercrombie and fitch
louis vuitton handbags
canada goose outlet online
abercrombie and fitch
lebron 12
coach factory outlet
ugg outlet online
true religion
toms outlet
tory burch shoes
micheael kors outlet
oakley outlet
tods outlet store
coach outlet
louis vuitton outlet
oakley vault
coach factory outlet online
tods outlet online
nike trainers sale
kate spade handbags
kate spade purses
abercrombie and fitch
longchamp handbags
tory burch outlet
toms shoes
burberry outlet online
ray bans
sunglasses oakley
louis vuitton handbags
louis vuitton purses
swarovski crystal
cheap toms
lebron 11
ReplyDeletetoms outlet
michael kors outlet online sale
coach factory outlet online
gucci handbags
nike outlet
michael kors outlet
michael kors outlet
coach factory outlet online
adidas superstar trainers
lebron 12
coach outlet store online clearances
toms outlet
michael kors outlet
adidas uk
air jordan homme
louis vuitton
nike roshe one
michael kors outlet clearance
michael kors outlet clearance
michael kors outlet clearance
kate spade handbags
michael kors handbags
polo ralph lauren
air jordan 4
true religion outlet
oakley sunglasses
ray ban sunglasses
burberry handbags
chenyignying2016730
miami heat
ReplyDeletemichael kors handbags
michael kors outlet
michael kors handbags outlet
michael kors outlet clearance
under armour outlet
bills jerseys
michael kors handbags
detroit lions jerseys
michael kors outlet online
ralph lauren
ReplyDeletenike outlet store
nike roshe shoes
discount oakley sunglasses
coach outlet store
hermes outlet online
michael kors
michael kors outlet online
coach factory outlet
kd shoes
20170407yuanyuan
michael kors outlet clearance
ReplyDeleteugg boots outlet
ugg outlet online
burberry sale
ugg boots
ugg shoes
moncler
coach factory outlet
ugg ustralia
canada goose outlet
ralph lauren sale clearance
ReplyDeleteoakley sunglasses
air jordans
canada goose jackets
moncler outlet
cheap nfl jerseys
puma shoes
ralph lauren sale
jordan shoes
coach outlet
mt0412
http://www.kobebasketballshoes.us.com
ReplyDeletenike air force 1
fenty puma
nike air zoom
adidas yeezy
nike roshe
nike huarache
The web site is lovingly serviced and saved as much as date. So it should be, thanks for sharing this with us. unicc
ReplyDeleteGet the facts Check Out Your URL visit the site Continue Reading his response moved here
ReplyDeletediscover this info here x8i11y1f62 replica ysl replica chanel bags ebay c9l59m4q63 replica bags louis vuitton Visit Website b0h06l5z55 replica prada nylon bags louis vuitton replica bags neverfull my site p5y85u3p49 replica bags philippines
ReplyDelete